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Fit For 55 Package: European Union

Fit For 55 Package

On July 14, 2021, the European Commission gave the thumbs up to the Fit To 55 Package, a set of ideas aimed at getting the European Union (EU) in shape to cut its greenhouse gas emissions by a whopping 55% by 2030. This package covers a bunch of areas like climate, energy, land use, transport, and taxes. The goal is to match up with the EU’s big plans, like the Green Deal and the EU Climate Law, which are all about being eco-friendly and tackling climate change.


  • The new plan aims to hit the targets for reducing carbon emissions and achieving climate neutrality. This means making sure that whatever emissions a country produces are offset by efforts to absorb or remove greenhouse gases. The ultimate goal is to reach a state of net-zero emissions.
  • The proposed changes aren’t just about the environment; they’re designed to influence the economy, society, and industries. The idea is to transition to a system that’s not only environmentally friendly but also fair, competitive, and geared towards sustainability. All of this is set to happen by the year 2030 and beyond.
  • Achieving climate neutrality, in simple terms, means finding a balance. It’s like keeping a checkbook where what you spend is equal to what you earn. In this case, it’s about making sure that the amount of greenhouse gases released is offset by measures that remove or absorb them.
  • The strategy wants to find a sweet spot between “regulatory policies” (rules and laws) and “market-based carbon pricing” (putting a price on carbon emissions in the marketplace). This approach aims to avoid the potential problems that can come with relying too heavily on one method over the other. The goal is to strike a balance that works for everyone.

Major Proposals

Renewable Sources:

  • The EU aims to increase the use of renewable energy to 40% by 2030, up from the previous goal of 32%.
  • They also want to improve energy efficiency by 36% by 2030, compared to the earlier target of 32.5%.

Vehicular Carbon Emissions:

  • The plan is to reduce carbon emissions from vehicles by 55% by 2030 and achieve a 100% reduction by 2035, meaning a phaseout of petrol and diesel cars by that year.
  • Public funds will be used to build charging stations every 60 kilometers on major highways to encourage the adoption of electric cars.
  • Funding will also support the establishment of hydrogen fueling stations.

Emissions Trading System:

  • A new Emissions Trading System (ETS) is proposed for buildings and road transport, separate from the current system, starting in 2026.
  • ETS are market-based tools to encourage emission reduction where it’s most cost-effective.

Social Climate Fund:

  • To support low-income citizens and small businesses adjusting to the new ETS, the EU plans to create a Social Climate Fund.
  • This fund will provide support for building renovations, access to low-carbon transport, and direct income support.
  • The fund will be financed using 25% of the revenues from the new ETS.

Carbon-Border Adjustment Mechanism:

  • The EU is considering a carbon-border adjustment mechanism, which would put a price on imports from places with carbon-intensive production processes.
  • Some concerns have been raised about potential negative impacts on developing countries.

Enhance Sink Capacity:

  • The EU aims to increase its ability to absorb carbon emissions by setting a target to enhance its sink capacity to 310 million tonnes of CO2 equivalent.
  • Member countries will have specific national targets to contribute to achieving this goal.


EU’s Ambitious Goals: The EU aims to cut greenhouse gas emissions by 55% from 1990 levels by 2030 and achieve carbon neutrality by 2050, setting more aggressive targets than the US but falling short of the UK’s commitment.

Global Comparison: While the US commits to a 40-43% reduction, the UK leads with a 68% pledge. China, the largest emitter, plans to peak emissions by 2030.

Fit for 55 Package: This initiative positions Europe as a leader in innovative technologies such as electric car batteries, offshore wind, and hydrogen-powered aircraft engines.

Potential Impact: While promoting new tech, the transition may increase costs for consumers and companies. Imported goods like video monitors or vacation flights could become pricier. Even a full tank of gas may cost more.

Business Adaptation: Companies in industries facing obsolescence, like those producing parts for traditional engines, must adapt or face closure.

Reshaping Industries: The proposals may reshape industries like steelmaking, affecting 330,000 EU employees, as the focus shifts towards greener practices.

Way Forward

  • Let’s make sure fairness is at the heart of our climate efforts. The principle of climate justice should be our guide as we negotiate this package.
  • The Fit for 55 initiative is like putting the pedal to the metal for the EU’s efforts to cut down on carbon emissions. It’s not just a policy on paper – it’s becoming a part of everyone’s daily life in Europe, from regular folks to big companies. And it’s even starting to affect our global trade buddies.
  • The key to making this whole climate transition work in the long haul? We’ve got to make sure it’s fair for everyone, whether you’re talking about people at home or our friends around the world. Fairness is the name of the game.

Read Also: Impact of Climate Change on India’s Dairy Industry

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