Explained: Europe’s ‘Fit for 55’ climate plan and how it will affect industries


Airlines will have to mix synthetic fuel with traditional jet fuel and will no longer get tax breaks for buying fossil fuels.

Explained: Europe’s ‘Fit for 55’ climate plan and how it will affect industries
The European Commission (EC) unveiled on July 14 the latest details of the European proposal for fighting climate change. The ‘Fit for 55’ plan, as it is being called, will ask the members of the European Union (EU) to cut their emissions by 55 percent by the year 2030. It proposes sweeping regulations that will see the phasing out of combustion engines completely, along with measures for other polluting sectors.
What is the Plan? 
The ‘Fit for 55’ is a proposed legislation by the EC that seeks to reduce carbon emissions of the 27 countries that form the bloc by 55 percent by the year 2030. This is part of a greater commitment to become carbon neutral by 2050. It will be a crucial milestone that needs to be met if countries are to succeed in the goal set out by the Paris Agreement -- of keeping the global increase in temperature below 2 degrees Celsius.
The plan is to cut down the fossil fuel usage of cars, energy companies and some other sectors which are the largest emitters of greenhouse gases like carbon dioxide.
Most Affected Industries
The plan outlines that the sale of all fossil fuel guzzling cars, including hybrid vehicles, will be halted from 2035 onwards. In order to facilitate the ease of switching to electric vehicles, the plan also highlights that the bloc will help build charging stations every 60 km on major roadways like highways. The EC will also help fund the building of hydrogen fuelling stations as companies plan to manufacture long-haul trucks -- currently one of the most polluting class of vehicles -- that will run on hydrogen fuel cells.
Apart from the automotive industry, the commercial airline industry will also be forced to adapt. Jet fuel is one of the bigger contributors to carbon emission and the new plan envisages that airlines shift to cleaner fuels. Airlines will have to mix synthetic fuel with traditional fossil fuels to use in aircraft, and will no longer receive tax breaks and subsidies for buying fossil fuels.
A major user of low-grade oil -- the type which creates more emission for each unit of energy produced – is the international cargo shipping sector. The new legislation proposes that shipping companies pay higher taxes for these emissions.
The proposed legislation will also introduce changes into the European Trading System, the carbon emissions trading system where polluting companies can purchase carbon credits to “offset” their emissions. The changes will drive the price of carbon credits higher and will tax polluting industries more harshly than before.
Energy companies will also be asked to shift to renewables at a faster pace. While renewable energy already accounts for 20 percent of energy production in Europe, renewable usage is concentrated in a few countries like Germany, France, the UK and Spain while other countries like Poland and Greece still rely on fossil fuels.
Pushback Likely
Considering the wide-ranging changes being proposed, all affected industries are expected to lobby against the plan. Industries say the extra taxes and cost would be better diverted to developing greener alternatives instead. Further, countries that are more reliant on fossil fuel for power generation will also be hesitant to fully support the legislation. Apart from pushback from countries and industry leaders, experts also believe that the plan has a few glaring holes.
Experts have stated that plans like ‘Fit for 55’ do very little to combat the use of fossil fuels, and instead allows companies to pass the buck to the customer by increasing prices.
Comprehensive legislation and executive support are necessary for the world to achieve carbon neutrality and be on track to achieve the goals set out in the Paris Agreement. Whether the ‘Fit for 55’ proposal, if it even manages to pass all legislative and diplomatic hurdles, can be that effective package is yet to be seen.

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