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The EU launches massive package “Fit for 55”, the world’s most ambitious project on climate change / What it means for Romania

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The European Commission will launch the world’s most ambitious climate change package on Wednesday, with a series of policies that could reshape everyday life, from the end of gas-engine cars or a kerosene tax for air transport to the reform of the emissions trading system.


Entitled “Fit for 55”, the energy and climate law package is the EU’s plan to reduce greenhouse gas emissions by 55% by 2030 and achieve climate neutrality by 2050.

The package consists of 13 legislative proposals – some new and some revisions of existing laws.


The changes will have an impact on both people and businesses. Rapid emission reductions will therefore require a dramatic revival of the way people drive, insulate their homes, produce things like steel and cement, the way forests and land are managed and much more.


Politico has made a synthesis with the 5 most important things to know about “Fit for 55”.


  1. “Greening” of cars, ships and planes

Transport accounts for about a quarter of the EU’s greenhouse gas emissions. And, unlike other sectors such as energy and industry, emissions are rising. However, the Commission estimates that they will have to fall by 90% by the middle of the century.


This makes cars an important target. The package will come with more ambitious targets than the current emission reduction targets of 37.5% by 2030. EU officials are considering whether to set a neutrality target by 2035 and increase the existing 2030 target to 60%.


To reach zero-emission cars will require a huge jump in public charging and refueling stations – also part of Fit for 55.


The package also includes measures to increase the use of sustainable fuels in aviation and to reduce maritime emissions – which will have an impact by making flights more expensive and increasing the prices of goods shipped by sea.


  1. A price on pollution

The main vehicle for pollution assessment is the Emissions Trading System (ETS), which currently determines who gets carbon permits, who gets them for free, and what the price of emission certificates is. It is a scheme that includes over 11,000 power plants and industrial installations, as well as airlines, covering about 40% of the greenhouse gases of the European bloc.


After years of very low prices, prices have risen to more than 50 euros per tone of carbon emitted this year due to a mix of reforms and the pressure of tougher climate legislation.


“Fit for 55” is likely to reduce the number of carbon permits, limit free permits and extend the scheme to new parts of the economy, such as shipping and imposing tougher conditions for aviation.


The extension of carbon certificates to road transport and construction, in particular, poses a problem, especially for high-emission countries such as Poland or Luxembourg, which are concerned that higher fuel prices will severely affect economies and people.


  1. Carbon wars at the borders

High carbon prices in the EU create the danger of so-called carbon relocation – a term that describes the situation in which producers move to countries with weaker rules and then transport goods back to the EU.


The EU’s plan to stop this is called the border adjustment mechanism for carbon dioxide emissions. According to a draft for a tax in this regard obtained by Politico, Fit for 55 will suggest that the EU will impose a tax on imports of steel, aluminum, cement, fertilizers and electricity, to be introduced gradually from 2023. The tax would reflect ETS prices.


This will lead to a rupture of relations with the United States, which does not have a national carbon price, and create panic among the EU’s neighbors, such as Turkey and Ukraine – which will be hit hard.


EU intensive industries such as steel or cement companies are also frantically lobbying for the Commission not to end free permits for energy.


  1. More renewable energy

“Fit for 55” also means a big boost for renewable energy sources.


The package will increase the European bloc’s renewable energy target from 32% at present to 40% by 2030. There will be proposals to reduce bureaucracy, which will make it easier to obtain permits and connect to the grid for wind and solar projects.


Brussels will also consider the use of green biomass, which accounts for most of the EU’s renewable energy sources, will stimulate the use of renewable energy sources in buildings and expand storage to cushion renewable energy fluctuations.


The package will also introduce regulations for renovating buildings and preparing homes for more frequent climate shocks.


  1. Avoiding populist blockades

The images of the protests organized by the yellow vests in France are still quite fresh, so Fit for 55 will try to share the reductions and costs of emissions throughout the block, without triggering a populist reaction.


In order to reach the 55% emission reduction target, EU countries will have to reduce emissions by about 10 percentage points above the current target, according to Commission calculations. However, countries do not want to receive higher national targets (as well as unpopular and costly ones) under the Effort Sharing Regulation.


What impact will it have in Romania?

Overall, Romania starts from good premises for meeting these targets, but there are certain sectors where problems could arise.


“Romania is in the top 5 in the world in decoupling the economic growth from emissions. It is the country in Central and Eastern Europe with the most renewable energy and the fewest tons of CO2 per capita. There is still a lot to do, but we must be aware of where we are coming from “, says the former Minister of Energy Răzvan Nicolescu.


Instead, Iulian Iancu, chairman of the Romanian National Committee of the World Energy Council (CNR-CME), believes that Romania will be most affected by the EU Fit for 55 package for reducing carbon emissions, and following the implementation of this plan will greatly increase the number of vulnerable consumers, writes Financial Intelligence.


Instead, in March this year, Romania, along with the Czech Republic, France, Hungary, Poland, Slovakia and Slovenia, sent a joint letter to the EC on the role of nuclear energy in EU climate and energy policy.


Also, according to a recent study, Romania, together with Bulgaria, the Czech Republic, and Poland must step up its renewable targets included in their national energy and climate plans for the EU to reach the new reduction target of at least 55%, and the Hungarian goal is questioned by the European Commission.


Translated from Romanian by Service For Life S.R.L.

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