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Welcome to another interesting and informative blog brought to you by Hranker.com. In today’s blog we are going to learn about Fit to 55.
Fit for 55 marks Europe’s climate moment of truth
With Fit for 55, Europe is the global first mover in turning a long-term net-zero goal into real-world policies, marking the entry of climate policy into the daily life of all citizens and businesses.
Although it sounds like an exercise program for the middle-aged — Fit for 55 is actually the European Commission’s plan to set the EU on course to slash greenhouse gas emissions by 55 percent by 2030.
The European Commission’s long-awaited ‘Fit for 55’ package, intended to facilitate a European Union greenhouse gas emissions cut of 55% by 2030 compared to 1990, has as its core mission to turn the 2020s into a transformative decade for climate action. If agreed and implemented, the Fit for 55 proposals would both deepen and broaden the decarbonisation of Europe’s economy to achieve climate neutrality by 2050. Without the package, under current EU climate legislation, Europe will only achieve a 60% emissions reduction by 2050.
Here’s how the plan would affect industries in Europe:
Automakers
Most automakers have announced plans to shift to electric vehicles, but many have resisted putting an expiration date on the fossil-fuel powered vehicles, which still generate the most profits. The European Commission plan would effectively require all new cars to be emissions-free by 2035, removing any flexibility for companies like Volkswagen, Mercedes-Benz or Renault to continue selling some gasoline or diesel vehicles, including hybrids.
The commission’s plan also includes some provisions that benefit the industry. Public funds will be used to help build charging stations every 60 kilometers, or 36 miles, on major highways, a move that will encourage sales of electric cars. The commission will also help finance a network of hydrogen fueling stations, benefiting companies like Daimler and Volvo that are planning to build long-haul trucks that run on fuel cells that convert hydrogen to electricity.
The European Union should “focus on innovation rather than mandating, or effectively banning, a specific technology,” Oliver Zipse, CEO of BMW and president of the European Automobile Manufacturers’ Association, said in a statement.
Airlines
Aircraft are major producers of carbon dioxide emissions but also difficult to convert to emission-free operation. According to the commission proposals, airlines would be compelled to begin mixing synthetic fuel with the fossil fuels they now use, and they will no longer receive tax breaks on fossil fuels. In other words, they will have to pay more to pollute.
Airlines for Europe, an industry lobbying group representing Air France-KLM, easyJet, IAG, Lufthansa Group and Ryanair — Europe’s largest flagship and low-cost airlines — has said that its members back a green transition but that they would seek simpler regulations and financial support.
“Taxes siphon money from the industry that could support emissions’ reducing investments in fleet renewal and clean technologies,” Willie Walsh, director general of the International Air Transport Association, said in a statement.
Shipping
The deal singles out companies that ship cargo by water, making them pay more for the emissions they generate to encourage their transition to cleaner energy. Most ships plying the seas today run on low-grade oil and are major polluters.
Shipping industry lobbyists have already complained it was unclear how the plan would be applied and which shipping routes would be affected. “Is it just going to be European ones, or half the trade between China and the EU?” S&P Global Platts said in a note.
Heavy industry
The European Commission plan would raise the cost of polluting by tightening the European Trading System, which compels companies to effectively pay for the dangerous carbon dioxide they release into the environment. Anticipation of the changes has already helped drive up the price of credits by about 50%.
Steelmakers have warned that the proposals could further erode their competitive advantage over producers in China and discourage the investment needed to shift to lower emissions.
“We will be facing increased carbon costs, that is going to be the ultimate result,” said Koen Coppenholle, CEO of Cembureau, a cement industry trade group.
Energy
Electricity producers will be pushed to speed up the switch to wind, solar and hydropower from coal. Renewables already account for 20% of the electricity produced in Europe. The goal is to raise the figure to 40% by 2030, largely by increasing the penalty that utility companies pay for power generated by fossil fuels, which would make wind and solar more attractive financially.
Given how many business interests are at stake, the plan is likely to face furious lobbying by industry representatives as it makes its way through the legislative process in Brussels. The commission’s proposals require endorsement by the European Parliament and leaders of European national governments before they become law, a process that is expected to take around two years.
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