Key breakthrough in Fit for 55 package

Member States reached agreement on a raft of climate laws in the EU’s Environment Council this week, including a phase-out of internal combustion engine cars by 2035, and an extension of the EU Emission Trading System.

Environment ministers from the European Union’s 27 member states agreed their joint positions on five laws within the Fit for 55 package:

  • EU Emissions Trading System (ETS): Maritime shipping emissions will be included within the scope of the EU ETS, and a new, separate emissions trading system will be created for the buildings and road transport sectors. The new system will apply to distributors that supply fuels for consumption in the buildings and road transport sectors. Free emission allowances for the aviation sector will be gradually phased out by 2027. This applies to intra-European flights (including the United Kingdom and Switzerland).
  • Social Climate Fund: To support the creation of the emissions trading system for buildings and road transport, a Social Climate Fund will be created to support vulnerable households, micro-enterprises and transport users. The fund will provide financial support to member states to increase the energy efficiency of buildings, the renovation of buildings, the decarbonisation of heating and air-conditioning in buildings and the uptake of zero-emission and low-emission mobility and transport, including measures providing direct income support in a temporary and limited manner.
  • Effort sharing regulation: The Council agreed to keep the increased national targets assigned to each member state by the Commission, to achieve the EU-level emissions reduction target of 40% by 2030. To aid effort sharing, the amount of annual emission quotas that can be transferred between member states will be increased to 10% from 2021, and 20% from 2026.
  • Land use, land-use change and forestry (LULUCF): An overall objective of 310 Mt CO2 equivalent of net removals in the LULUCF sector in 2030 at EU level was confirmed. Though it was agreed to enhance flexibilities to support Member States that have difficulties in meeting their targets owing to factors beyond their control affecting the LULUCF sector.
  • CO2 emission performance standards for cars and vans: The targets for reducing CO2 emissions by 2030 will be raised to 55% for new cars and 50% for new vans. The Council also agreed to introduce a 100% CO2 emissions reduction target by 2035 for new cars and vans, essentially prohibiting the sale of fossil fuel powered vehicles by that date.

Read more in the Council of the EU Press Release.

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