Following the climate targets set in the Paris Agreement, the European Union aims to make Europe the first climate-neutral continent by 2050. On 12th December 2019, the European Council, together with the European Commission, established the European Green Deal (EGD), the core EU strategy to fight climate change and achieve climate neutrality. As a first step, the Commission proposed an initial set of targets to be met by 2030. On 14 July 2021, the European Commission adopted “Fit for 55”, a set of policy proposals preparing the implementation of the EGD. In particular, Fit for 55 aims to reduce greenhouse gas emissions (GHG) by at least 55 percent by 2030.
Fit for 55 policy package
While the EGD represents a general action plan to fight climate change, the Fit for 55 package offers the preparatory path to meet the targets of the EGD. More specifically, Fit for 55 focuses on specific topics that need particular attention (see Figure 2) and need a strong green transition to achieve climate neutrality. In particular, this package aims to reduce 55 percent of the GHG emissions by 2030 (compared to 1990 levels).
The primary objectives of the package include:
- Guaranteeing environmental integrity and addressing solidarity
- The European Union Emissions Trading System (EU ETS) will be tightened and strengthened, helping to ensure effort sharing with relevant targets
- Additional policies will help ensure the implementation of carbon prices
- All revenues from carbon pricing aim to positively influence final consumers.
In the attached document, KPMG introduces the energy package proposals; Renewable Energy Directive and Energy Efficiency Directive and provides relevant insights for various sectors of the economy.
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