Sustainability Outlook European Union - July 2021

European Commission proposes a landmark “Fit for 55” package of climate and energy legislation.

Delivering a key component of the European Green Deal umbrella policy that it adopted in December 2019, the European Commission issued 15 legislative proposals, accompanied by three non-legislative communications. With the supporting documents, e.g. impact assessments, the package adds up to around 4,200 pages. It includes the following initiatives:

Legislative Amendment to the Renewable Energy Directive 2018/2001 (REDII) – increasing the overall binding target to 40% of renewables in the EU energy mix (please see below).

Revision of the EU Emission Trading System (ETS) Directive 2003/87 and related laws – increasing greenhouse gas emissions reductions from covered sectors to 61% by 2030 (please see below).

Regulation establishing a carbon border adjustment mechanism (CBAM) – please see below.

Revision of the Market Stability Reserve (MSR) Decision 2015/1814 – maintaining that 24% rather than 12% of allowances are placed in the reserve after 2023.

Revision of the Effort Sharing Regulation (ESR) 2018/842 – increasing the reduction target for covered sectors by 11 percentage points.

Revision of Energy Efficiency Directive 2018/2002 (EED) – increasing the energy efficiency targets at EU level and making them binding. Revision of the Energy Taxation Directive 2003/96 – to align the minimum tax rates for heating and transport fuels with EU objectives, while mitigating the social impact.

Amendment of ETS Directive 2003/87 – regarding aviation. Amendment of ETS Directive 2003/87 – regarding notifications under Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

Amendment of the Regulation 2019/631 setting CO2 emission standards for cars and vans – setting a 100% reduction target for new cars by 2035.

Revision of the Alternative Fuels Infrastructure Directive (AFID) 2014/94 – ensuring the necessary deployment of interoperable and user-friendly infrastructure for recharging and refuelling cleaner vehicles.

Revision of the Land Use, Land Use Change and Forestry (LULUCF) Regulation 2018/841 – setting higher ambitions for the expansion of natural carbon removals.

Proposal for a Social Climate Fund Regulation – providing dedicated funding to Member States to help citizens finance investments in energy efficiency, new heating and cooling systems, and cleaner mobility.

Proposal for ReFuelEU Aviation Regulation – promoting sustainable aviation fuel blends, as well as synthetic fuels, known as e-fuels.

Proposal for FuelEU Maritime Regulation – to promote sustainable maritime fuels by imposing a maximum limit on the greenhouse gas content of the energy that ships use.

Francesca Zuccarello Cimino and Josep Nicolas Bellot also contributed to this article.