🇪🇺💥 Major news in Europe: European Parliament adopts “Fit for 55” laws to reach 2030 climate targ

Yesterday, the European Parliament approved key pieces of legislation in the #Fitfor55 package that will help the EU reach its 55% emissions reductions target by 2030. This includes reforms of the EU Emissions Trading Scheme (#ETS), the Carbon Border Adjustment Mechanism (#CBAM), and a new Social Climate Fund (#SCF).

Here’s what we know so far about this exciting development and how carbon removal (#CDR) fits into all this:

The Emissions Trading System reform

❗This increases the ambition of the ETS to at least 62% emissions reductions by 2030 (compared to 2005 levels).

💶 There will be a new ETS that now includes transport and buildings, for which #CDR and #biochar can be useful tools for #decarbonisation, with a price cap (for now) of €45 from 2027 until 2030.

📝 This ETS reform reinforces the EU objective to foster negative emissions for reaching #netzero and mandates the European Commission to find a way of including negative emissions and CDR in the ETS in future proposals.

EU Carbon Border Adjustment Mechanism (CBAM)

🌐 This aims to ensure that EU and global climate efforts are not undermined by production being relocated from the EU to countries with less ambitious policies.

💹 Importers of iron, steel, cement, aluminum, fertilisers, electricity, hydrogen and certain indirect emissions will have to pay any price difference between the carbon price in the country of production and in the ETS.

📆 The CBAM will be phased in from 2026 until 2034 at the same speed as the free allowances in the ETS are being phased out.

New increases to Social Climate Fund

🔋 The EU SCF will roll out in 2026 with funds from auctioning ETS II allowances of up to €65 billion, with an additional 25% covered by national resources (totaling an est. €86.7 billion). This aims to support vulnerable households affected by energy poverty.

📈 The #InnovationFund will increase from 450 to 575 million allowances.

🔑 The #ModernisationFund will auction an additional 2.5% of allowances to support EU countries with GDP per capita below 75% of the EU average, which could signal more opportunities for CDR grants.

As someone in the CDR policy space, I am optimistic about this landmark legislation. The Fit for 55 package is a major step forward from EU policymakers to speed up the green transition and further codify mechanisms for reaching climate targets for the whole European region. We need to see more impactful legislation like this throughout the EU and across the world that support a wide portfolio of projects ranging from emissions reductions to support from CDR.

Learn more here: https://lnkd.in/dJsM_3Px

How do you feel about the EP’s decision? Which component of the “Fit for 55” package are you most excited to see? Where can we see improvements?