Europe’s “Fit for 55” Package must be fit and just

Editor’s Blog: Produced in collaboration with the EU Buzz team 

Last September, the European Commission presented the 2030 Climate Target Plan acknowledging that the present European Union’s climate target is insufficient and that the 2030 climate and energy policy framework needs updating. The Commission also announced its intention to increase the EU’s climate target to achieve a reduction of at least 55% of greenhouse gas emissions (GHG) by 2030 compared to 1990. In December 2020, at the European Council meeting, the new Climate Target Plan was officially endorsed by the EU members states.

To achieve its goal, the Commission identified a set of actions needed to decarbonise the different sectors of the economy and announced that a few key pieces of legislation will be revised including the Emission Trading System Directive, the Effort Sharing Regulation, the Renewable Energy Directive, the Energy Efficiency Directive, the Energy Performance of Buildings Directive, the CO2 Emissions Performance Standards for Cars and Vans and the LULUCF Regulation. These revisions and the new legislative proposal for a Carbon Border Adjustment Mechanism (CBAM) constitute the so-called “Fit for 55 package”. 

This June, the European Commission will put forward this legislative package for adoption with the new and enhanced policies. The Commission projects that at least a ten percentage point gap of emissions reductions can be achieved by 2030 based on the current scenarios. Quick and decisive action is thus needed across all sectors of the economy to meet this target and to prepare for climate neutrality by 2050. 

The Commission’s current strategy of achieving net-zero Europe is based on three pillars: energy savings, boosting renewables and increasing low-carbon fuels. Ecosystems for renewables and low-carbon gases will also be necessary through regulatory incentives for production, consumption and to address methane emissions along the value chain. 

The TEN-E Regulation proposed last December will need revising alongside the requirement for integrated network planning which should add hydrogen projects into the scope. Current trends of increased electrification, energy system integration, decarbonisation of gas and digitalisation are expected to be reinforced. Furthermore, the TEN-E Regulation will have to trigger increased investments if the goals are to be achieved. From now until 2030, investment estimations of more than €50 billion per year are necessary for electricity grids alone, a doubling compared to the last decade. For offshore grids, Europe requires more than €530 billion of investments by 2050, whilst hydrogen strategy investments will amount to around €65 billion. Not insignificant amounts in a time of constrained financial resources across the globe. 

Public hearings and consultations have already begun and whilst the European Commission is pushing its highly ambitious agenda, it is far from being on track to reach its objective. The public consultation and dialogues will no doubt raise significant concerns from civil society, industry groups, and the less wealthy EU states due to the potential distribution and competitiveness impacts. Not forgetting that, all these challenges are taking place in the shadow of the COVID-19 pandemic crisis.

The European Green Deal will have to consider and encourage the use of social partner collaborations for social dialogue and collective bargaining to manage the transition process. At the European, national and regional levels, trade unions and employers should contribute to the development of sectorial decarbonisation roadmaps and transition strategies, parallel to public authorities and community consultations. The European Trade Union Confederation (ETUC) advocates that at a workplace level, worker’s participation through information, consultation, and codetermination can help translate higher climate targets into concrete, locally relevant solutions and manage restructuring or transformation processes in a way that leaves no one behind.

In September 2020, business and investor bosses from across Europe outlined their determination to work with the EU to tackle the impacts of the coronavirus pandemic whilst delivering a more climate-resilient and regenerative recovery. European businesses supported an increased climate ambition with a fifty-five per cent target.

To transform the European economy into one which complies with climate neutrality, in less than three decades, and for this transition to be economically and socially just, civil society, businesses, employees and communities must be at the core of the decision-making process. 

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