The targets to reduce greenhouse gas emissions to 55 % below 1990 levels by 2030 and to achieve climate neutrality by 2050 have been enshrined in the European Climate Law. The Commission has now presented its “Fit for 55” package, outlining which concrete measures will be taken to accomplish these targets. Comprising of no fewer than eight Regulations, five Directives, two Communications and two Decisions, this package covers important sectors, which are needed to achieve climate neutrality.
A key element of the “Fit for 55” package is the expansion of the emission trading system, which has existed since 2005 for energy-intensive industrial sectors and thermal power plants. This is to be reformed by gradually reducing the free allocation of allowances, which should ensure that production plants are not moved outside Europe, to zero by 2035. In order to continue to prevent this carbon leakage, it has been planned to introduce a carbon border adjustment mechanism instead, which in a first step shall apply to cement, iron, steel, aluminium, fertilizers and electricity.
Apart from that, a separate emission trading system shall be set up for transport and the building sector. However, the Austrian Chamber of Labour is clearly opposed to this proposal because heating, warm water and mobility are basic needs, which must not be left to a market mechanism. Due to the principle to reduce the number of allowances per annum, these sources of energy might experience extreme price fluctuations, which might hit households on low and medium incomes particularly hard. It will also be impossible to cushion these with the Social Climate Fund for Member States, which the Commission is providing for within the scope of the package.
It should be regarded as positive that the Commission proposes to set up additional Energy Efficiency National Funds as well as an expert network on energy poverty within the scope of the Energy Efficiency Directive, which is one of the key demands of AK. Households on lower income cannot afford investments into a new heating system or remedial measures, but this Fund will be able to provide a remedy. AK also regards the network of experts within the scope of a single point of contact and competency centre as being particularly important. It is also very welcome that the Commission – within the framework of the Energy Efficiency Directive – intends to enshrine consumer rights in the district heating sector. Many years ago, the Austrian Chamber of Labour were the first in Brussels to point out this gap in consumer protection – now at last it is to be closed.
Another focus within the scope of the package is more sustainable mobility. In aviation, kerosene shall be taxed at last; sustainable aviation fuel additives shall be introduced and gradually increased. Maritime fuel shall also become cleaner. With regard to road traffic, it has been proposed to ban new registrations of petrol-run or diesel vehicles from 2035. Apart from that, the electric car charging network along Europe’s motorways shall be densified by 2025 to allow reaching a charging point after 60 km at the latest.
It is without any doubt to AK that the path towards a climate neutral future requires a Just Transition, which does not leave anybody behind. Hence, particular importance has to be attached to all distributional effects. AK will analyse the presented proposals in detail and actively participate in further negotiations, as on European level the negotiations are only entering into crunch mode once the Commission proposals have been published: now it is the turn of European Parliament and Council, hence the EU Member States, to outline their position on every single proposal. If they reach agreement, the trilogue negotiations between the three key EU institutions will finalise the legislative texts. However, this process will probably take at least two years.
AK Factsheet: Just Transition (German only)