EU ministers agree on Fit for 55 climate crisis negotiating positions

EU ministers have adopted negotiating positions on a package of laws tackling the climate crisis under the ‘Fit for 55’ package to reduce net greenhouse gas emissions by at least 55% by 2030 and climate neutrality in 2050.

The Council will negotiate with MEPs on concluding the package, which includes reforms on the emissions trading system (EU ETS), effort-sharing between member states in non-ETS sectors (ESR), emissions and removals from land use, land-use change and forestry (LULUCF), the creation of a social climate fund (SCF) and new CO2 emission performance standards for cars and vans.

Malta welcomed the outcome of the Energy Council where EU energy ministers voted on proposals to revise the Renewable Energy Directive and the Energy Efficiency Directive, which are part of the Fit-For-55 package. “With increased ambition by the European Union, Malta included, we need to decrease countries’ dependency on fossil fuels, an imported and polluting source of energy. Investing in renewable energy will not only strengthen the country’s independence but also be a step closer to a decarbonised economy,” energy and environment minister Miriam Dalli said.

Dalli said Malta had worked to ensure sensitive sectors for Malta such as the maritime and aviation sectors, would not be affected negatively during this recovery period. “The EU is moving ahead and Malta needs to be ambitious, where ultimately it is the consumers who benefit and crucial sectors are protected. In this recovery period it is imperative to ensure realistic solutions.”

 “We want to see the Fit-for-55 Package implemented successfully, with a proper transition that also takes into account the social aspect, particularly when it comes to vulnerable consumers.”

Fit For 55: ETS, CBAM, and the social climate fund

The EU Emissions Trading System (ETS) is a carbon market that caps emission allowances and also creates a trading system for energy-intensive industries and the power generation sector.

The Commission’s original proposal is to keep 61% of emission reductions by 2030 in specific sectors, with a one-off reduction of the overall emissions ceiling by 117 million allowances and increasing the annual reduction rate of the cap by 4.2% per year.

The Council also endorsed the proposal to end free allowances for the sectors concerned by the carbon tax (CBAM) progressively, over a ten-year period between 2026 and 2035. But the Council wants a slower reduction at the beginning and an accelerated rate of reduction at the end of the 10-year period.

The Council agreed to include maritime shipping emissions within the scope of the EU ETS. As member states heavily dependent on maritime transport will naturally be the most affected, the Council agreed to redistribute 3.5% of the ceiling of the auctioned allowances to those member states.

The Council agreed to create a new, separate emissions trading system 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.

The Council also agreed to phase out free emission allowances for the aviation sector gradually by 2027 and align the proposal with the global Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

A Social Climate Fund will support vulnerable households, micro-enterprises and transport users to support the creation of an emissions trading system for the buildings and road transport sectors.

Each member state will have to submit a ‘social climate plan’, containing a set of measures and investments to address the impact of carbon pricing on vulnerable citizens. The fund will provide financial support to member states to finance the measures and investments identified in their plans, 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.