EU fit-for-55: direction is right, but the devil is in the details
Enhancing climate ambition while ensuring EU industry’s competitiveness
Today, the European Commission published its Fit-for-55 package. Its aim is to align the European legislative arsenal with the new European ambition to reduce greenhouse gas emissions by 55% by 2030. The package contains numerous legislative proposals, such as the reform of the EU emissions trading system, the Carbon Border Adjustment Mechanism (CBAM) or the renewable energy directive. European business at large, including energy providers, heavy manufacturing industry, technology and product developers, manufacturers of consumer goods and services, will all be impacted by this massive reform.
BusinessEurope is committed to making Europe the first climate-neutral continent. Our millions of companies are ready to take on their share of this challenge, with plenty of opportunities and solutions to enable society to decarbonise. At the same time, Europe represents only 8% of global emissions, while our competitors operate much more emission-intensive production process and bear little to none of the carbon cost. As Europe increases its climate ambition and uncertainties about the decarbonisation plans of our trading partners persist, this disparity becomes even starker, guaranteeing fair competition and making the protection against carbon leakage more relevant than ever.
BusinessEurope President Pierre Gattaz commented: "European industry supports the European Union's climate ambition. It is ready to take its share of responsibility and has a lot of technological solutions and breakthrough innovations to provide. Today, we are starting a new phase. The direction set by the Fit-for-55 package is the right one and the legislative tools presented today help to pave the way to achieve the EU's decarbonisation goal. This clarity is important to investment decisions by industry.
While the overall direction is right, the devil is in the details with lots of extremely important details in finding the right balance between climate ambition and economic and technological challenges. We will be very vigilant, regarding, for example, the consistency between different legislative measures to avoid double regulation of European industry. It is also necessary to ensure a fair distribution of efforts within society. Over the past 15 years, European industry has already reduced its emissions by almost 35%.
We remain concerned about the plans by the Commission to reduce the amount of Free Allocation to be received by the sectors covered by the Carbon Border Adjustment Mechanism. The reduction path, together with some of the open questions around the effectiveness of CBAM, risks destabilising the investment outlook for these sectors enormously. We call on co-legislators to step up their efforts in favour of a predictable business environment that allows all of European industry to make the investments necessary to decarbonise."