Fit-for-55: Fit for industry?

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Europe faces the unprecedented challenge of proving to the world that a climate-neutral industrial continent is feasible. This requires an overall societal transformation of unprecedented scale, speed and investment, affecting all sectors and areas of the economy, research and innovation and cooperation at all levels. On 28th June 2021, the EU has adopted its first ever Climate Law including an increased binding EU target of a net domestic greenhouse gas reduction of at least 55 % by 2030 compared to 1990 and the EU´s long-term objective of climate neutrality by 2050. To implement its increased ambition, the European Commission presented the Fit-for-55 package on 14th July 2021, thereby moving on in its climate debate from “how much to do” to “how best to achieve it”. To stay ahead in the global race for the best climate and energy technology solutions, companies need a clear and reliable fit-for-55 implementation plan providing a clear commitment to Europe as an attractive business, investment and innovation location. Besides ensuring the cost-effectiveness of its measures, such an implementation plan must set the necessary framework and concrete toolbox for supporting industry in elevating its global competitiveness and climate and energy technology leadership on the road to climate neutrality. The BDI acknowledges the fit-for-55 package as a bold and ambitious first concrete step forward, notably with respect to advancing carbon pricing or promoting renewable energies, sustainable alternative fuels, sustainable mobility or energy efficiency. However, critical framework conditions for the implementation of the fit-for-55 package and the future innovation and investment capability of EU industries remain missing. These include for example access to sufficient amounts of renewable energies at competitive prices, fit-for-purpose infrastructures, a scaled hydrogen economy or reliable carbon leakage protection measures. Instead of effectively putting an end to vehicles with internal combustion engines, the transport sector needs to be decarbonised in a way that is open to all technologies and charging and refuelling infrastructures must be bindingly expanded. An overarching governance mechanism should be introduced to continuously inform and consistently govern the implementation of the EU´s new climate targets as a whole across different EU policies and instruments, including the present fit-for-55 policy measures, infrastructure development or climate financing measures. Europe's future viability stands and falls with a reliable carbon price not only at EU but global level. It is right to rely on separate systems when introducing emission trading in the buildings and road transport sectors. It is also important that the Energy Taxation Directive provides incentives for CO2-neutral energy sources and relief for hydrogen and alternative fuels. Distortions of competition for European air and sea transport through isolated solutions however should be avoided. A European go-it-alone approach to climate protection will neither help the global climate nor EU industry or the acceptance of the wider societal transformation. In the future, the EU must strive even harder for a global level playing field in climate protection and converging carbon prices, at G7, G20 and UN-FCCC level. Energy and climate diplomacy for a sustainable Europe in a sustainable world must be given even more weight with an EU standing united in external and trade policy in the face of system competition
Industry, EU Climate Policy, Growth
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Monday, November 8, 2021
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Fit-for-55: Fit for industry?
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