Last week the EU Commission released the much anticipated “Fit For 55” legislative proposal, covering the measures that will need to be taken to reach the legally binding target of a 55% reduction in carbon emissions (compared to 1990 levels) by 2030.
This is the first step of a long legislative process which will first see the European Council , and eventually the European Parliament, consider which of the proposals to adopt and how to implement them. So, whilst this isn’t yet a definitive statement, it’s certainly a strong indication of how the bloc intends to tackle emissions strategy.
The key points of the package include:
A separate ETS for buildings and transport (including end of aviation exemption), to be integrated into the existing ETS in the next decade.
Inclusion of imported goods under carbon pricing regime through the Carbon Border Adjustment Mechanism (CBAM), essentially an import tax.
Increased targets for renewable energy in EU mix, to 40% by 2030 (the current target is 32%).
Removal of aviation and shipping energy taxation exemptions.
Targets designed to help phase out combustion engine cars.
Support for sustainable fuels such as hydrogen and synthetic aviation fuel.
These proposals have already generated both praise and criticism, as might be expected. There’s concern that they place too much of a burden on consumers (the inclusion of transport and buildings under the carbon pricing scheme), and that the CBAM will do little to help with global inequalities. Others have praised the package’s ambition, even as they underline the need to get the details right.
What’s clear at this stage is that the EU intends to continue with a hybrid approach to emissions policy: robust targets and expansive measures, combined with market-based instruments.
Across the Montel Group, we have put the energy transition at the centre of our business. Fit for 55 goes beyond legislation and targets - it’s changing the way energy markets work - so our services, from news to data, fundamentals to AI projections, optimisation tools to advisory services, are all designed to help our customers navigate this new era for energy.