Fit for 55: The EU’s impressive dive into deep and whole-economy decarbonisation

While 75% of the world’s GDP is now covered by climate neutrality goals, there is no blueprint for how to get there by 2050. On 14 July, the European Commission released a dozen Fit for 55 legislative proposals in an attempt to initiate the EU’s deep and whole-economy decarbonisation. This is a step towards climate neutrality, making climate action fair and affordable, and contributing to the global fight against climate change.

These proposals focus on the EU’s clean energy, heavy industry, transport, and forestry sectors and reduce the bloc’s greenhouse gas emissions by 55% below 1990 levels by 2030. The proposals are impressive in their scope and lay out the necessary architecture and measures to drive this reform. If implemented, the proposals would provide significant incentives to drive the uptake of clean technologies, services, and behaviours, but may be insufficient to deliver concrete emission cuts across all sectors at the necessary pace.

This first package will be complemented by additional proposals by the end of the year. This will provide a fuller picture of how the Commission intends to shape the energy, industry, and buildings sectors. All ‘Fit for 55’ proposals will be fiercely negotiated over the next 2-3 years before they become law. The ambition, consistency, and scope of the proposed reforms will in all certainty be changed in the process, for better or for worse.

Quotes on Fit for 55

Manon Dufour, Head of E3G Brussels, said:

“What the Commission is attempting today is impressive in scope and its ability to lay out the necessary architecture and measures to drive a fair socio-economic transformation to climate neutrality. Key elements must however be strengthened through negotiations or with new proposals to accelerate the transformation of EU heating, power, and industrial sectors and boost its social and international credibility.”

Lucie Mattera, Head of EU Politics, said:

“Walking the talk was never going to be easy. Today the EU is taking concrete and far-ranging steps to translate political commitments into actual policy proposals that can put our continent on track for climate neutrality by mid-century. Political negotiations to agree the package will be tense; they can also be an opportunity to strengthen proposals where they currently fall short.”

Brick Medak, Head of E3G Berlin, said:

„Der EU-Kommission ist ein anständiger Start in den jahrelangen Klima-Marathon der EU gelungen. Deutschland kommt hier eine Schlüsselrolle zu. Schon jetzt im Bundestagswahlkampf muss deshalb das gesamte Paket zum Thema werden, nicht wie bisher vornehmlich nur Emissionshandel und CO2-Preise. Zudem muss ein überzeugender Plan zur sozialen Flankierung des Pakets vorgelegt werden. Die derzeitigen Pläne greifen zu kurz.“

Johanna Lehne, Senior Policy Advisor, Industry & Trade said:

“The CBAM proposal released today sends a strong signal about the EU’s intention to transform heavy industry in the EU and abroad in the shift to net zero. But there are still lots of details to fix if that intention is going to be turned into reality. We need a faster phaseout of free allowances to boost incentives for industrial decarbonisation and, crucially, targeted support to help developing countries invest in cleaner technology.”

Jennifer Tollmann, Senior Policy Advisor, Climate Diplomacy & Geopolitics said:

Today’s proposals put the EU at the frontier of governance for credible net zero transition. The proposals however fall short on how the EU is going to support net zero transition in global allies and trade partners. While there are some hooks for cooperation built into the CBAM proposal, the Commission missed a trick by not coming with clarity on a complementary support package to help EU neighbours and developing countries invest in greening their own industry. This will be the real key to not just preventing carbon leakage but accelerating global action.

Domien Vangenechten, Policy Advisor, Industry & Trade said:

“The ETS proposal released today sets out an ambitious pathway for achieving the 2030 target. The strengthening of the low-carbon funds and earmarking 100% of auctioning revenues for climate purposes should be welcomed. But it risks once again letting industry players off the hook. They stand to gain a CBAM, carbon contracts for difference and potentially another 15 years’ worth of free allowances without being asked for strong commitments in return.”

Raphael Hanoteaux, Senior Policy Advisor, Climate-neutral Energy Systems said:

“The fit for 55 package unveils ambitious renewable and energy efficiency targets and a welcome reshuffling of the taxation of energy, taking clear steps to favour clean over fossil energy. But a few uncertainties remain and we can only really deliver the reduction in gas use needed for our climate targets, if this is followed by an update of gas market rules in December that is consistent with this pivot to clean energy and our climate ambitions.”

Eleonora Moro, Researcher, Climate-neutral Energy Systems said:

“The renewable energy directive revision clearly highlights the importance of deploying renewable power and renewable fuels in parallel, without one cannibalising the other. Upcoming related policy should ensure this clarity is maintained and proposals are not weakened through the back door.”

Rebekka Popp, Policy Advisor, Fossil Transitions said:

“The Commission’s proposals will take the EU out of coal power by 2030. But its reluctance to clearly say so will hamper its efforts to bring the rest of the world along to achieve rapid global coal phase out.”

Adeline Rochet, Senior Policy Advisor, Place-Based Transitions said:

“We welcome proposals for a binding target for energy efficiency, more stringent targets for renewable heating and cooling, and a new Social Climate Fund. We need the package to ensure that the EU gets on track for efficiently decarbonising 3% of its buildings every year from 2030, phasing out fossil from heating, cutting fossil subsidies, and, critically, that this is engaging, affordable and fair for people.”

Namita Kambli, Senior Researcher, Place-Based Transitions said:

“The Social Climate Fund rightly focuses on the distributional impacts of climate policies but does not on its own reflect the scale of the challenge to make the transition fair and affordable for everyone. Beyond compensation, the EU has an opportunity to build shared ownership by fostering greater inclusion and participation in climate decision making, including the Fund.”

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