ESG Thema #2 – EU Fit for 55 package

August 9, 2021

The EU formally adopted in June its new objective of cutting the bloc’s greenhouse gas emissions by 55% by 2030 versus 1990. This represents a substantial increase in the bloc’s ambition compared to the previous 40% reduction target and sets an interim target close to the range of domestic emissions reductions of 58-70% deemed consistent with the Paris Agreement by Climate Action Tracker. As such, this objective places the European Union as a leading region on climate change mitigation efforts.

However, with existing and planned measures, the EU’s carbon emissions are expected to fall only 36% below 1990 levels by 2030. The new target therefore required to strengthen and extend climate policies. This is the very purpose of the “Fit for 55” package: a comprehensive list of policies proposed by the European Commission on 14 July, 2021 to achieve its greenhouse gas emissions reduction target of 55%.

The Commission has conducted impact assessments before presenting these proposals to measure the opportunities and costs of the green transition. In September 2020, a comprehensive impact assessment showed that the 55% emissions reduction target by 2030 is both achievable and beneficial.

These proposals are also aligned with the EU’s recovery plan, which dedicates unprecedented resources to support a green and fair transition as economies emerge from Covid-19. The EU continues to focus on unlocking investment to finance a sustainable and inclusive recovery1, while the NextGenerationEU tool will contribute at least 37% to the green transition2.

The objectives set out by the Commission’s proposals are multiple. First, the package aims to set a more ambitious and costeffective path to achieving climate neutrality by 2050. It is also aligned with the objective to continuing the EU’s track record of cutting greenhouse gas emissions, whilst growing its economy and creating decent green jobs. Finally, this set of proposals should encourage international partners to increase their ambition to limit the rise in global temperature to 1.5°C.

All in all, “Fit for 55” constitutes a key milestone for the European Union on the road to Glasgow. It will be the backbone of the EU’s delivery on its commitments to fight climate change, as laid down in the 2015 Paris Agreement.

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