The European Commission's "FIT FOR 55" package

The European Commission published a long-awaited package of energy and climate legislation on 14 July 2021 in order to help reach the EU's climate protection targets. The legislation requires both an increase to energy taxation and EU emissions trading and we will also see changes to carbon border adjustments and fleet limits. The European Union is facing a task of historic proportions. The Federal Constitutional Court states that climate protection must be our highest priority and that it is our duty towards future generations. For this reason, the EU aims to cut greenhouse gas emissions by at least 55 percent by 2030 compared to the levels of 1990 by also introducing European CO2 pricing for the buildings and transportation sectors as well as a massive expansion of renewable energies.

Minimum energy taxation

As well as increasing energy taxation and the EU emissions trading system, the EU Commission also plans to restrict the free allocation of industrial pollution allowances. In the course of raising of these climate protection targets, the EU Commission also wants to adjust its energy efficiency targets by doubling the national annual savings requirements. An amendment to the Renewable Energy Directive (RED) is also on the agenda.

Brussels wants to adjust the minimum taxation rates on energy. For example, this could mean that in future taxes are levied on aviation fuel, something which has not yet been subject to taxation. Other industries also face significant challenges that are only feasible with simultaneously improved technologies and an infrastructure that is set up for alternative means. To achieve this, the EU Commission intends to place greater responsibility on the member states.

Planned carbon border adjustment

The "Fit for 55" climate protection package is supplemented by a carbon border adjustment mechanism (CBAM). This is intended to protect European industry from unfair competition and prevent carbon leakage. In future, the EU wants to impose a climate levy on imports of cement, aluminium, steel, basic chemical products, plastics and fertilisers. The allocation of free pollution allowances is to be scaled back for sectors covered by the CBAM.

All proposals are subject to approval by the member states and the European Parliament. We will continue to provide up-to-date reports.