This article was written by Bruno Grippay. Bruno is an expert in procurement and project management with a passion for smart and sustainable mobility.
When I decided last year to follow the development of the “Fit for 55” climate plan, I was under the impression that it would be an effortless journey, then I realized that I was way off my mark. I guess that for people working at the European Commission, the political process to get such a roadmap approved, and the communication around it, is a crystal-clear exercise. However, for an outside reader like me, it has been a challenging task.
This plan will impact the future of our mobility, such as media statements announcing the ban of sales for petrol and diesel vehicles by 2035. Looking back at the intense debates over the past 18 months of deliberation, I must recognize the tremendous effort, passion, and dedication of all participants, but I see this work as an “impenetrable jungle” that requires an arduous effort to work through the maze of discussions and numerous validation steps.
1. While Walking We Wondered Where We Were
In June 2021, the European Parliament approved a Climate Law to reduce net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels and to reach carbon neutrality by 2050. A few weeks later, a plan was published by the European Commission with fourteen detailed proposals to support this goal, under the name of “Fit For 55”. Here is the report.
Since the publication of this plan, there have been intense reviews and amendments by different official committees and influential groups in many working and plenary sessions. Dr2 Consultants did a great job in reporting on a weekly basis the progress of all these discussions. Since the beginning, I have read all of the weekly reports from Dr2 Consultants (here), and I can say again that it was not a walk in a park
In order to safely enter this rainforest, I drafted the table below to clarify as much as possible the definition and objectives of each proposal as it was presented in the initial document from the European Commission. Follow me on this journey as we move step by step, so I do not lose you during this reading.
The mobility sector will be highly transformed by the regulatory framework which will be implemented after the adoption of the “Fit for 55” proposals, such as the EU Emissions Trading System (#2), the cars/vans CO2 emissions (#5), the Alternatives Fuels Infrastructure Regulation (#6) or the Energy Taxation Directive (#11).
I will follow the different categories of initiatives to structure my review below: Fund & Pricing, Targets and Rules. The policy makers stated that they have carefully balanced the mix between these type of actions. It is nicely said, but, in fact, the ones on Pricing were the most debated because they will certainly have an immediate and tangible impact on business. So, let’s start with this one.
1.1 Fund and Pricing Proposals
Within this category, the most important proposal (#2) is the Emissions Trading System (EU ETS). This scheme launched in 2005 and has since then been improved by four successive phases of expansion. The EU ETS is equivalent to a market where actors can sell and buy carbon credits: each credit corresponds to one ton of carbon dioxide – or equivalent of another greenhouse gas – either reduced, sequestered, or avoided. The revenues generated by this system are supposed to feed the Climate Fund (proposal #1) that will provide financial support to individuals or companies who are affected by climate change. There were a lot of debates around the scheme of the EU ETS, with more than 1,700 amendments, but very few about the way that the Climate Fund will work and will be administrated. It looks like the participants spent a lot of time debating how to collect taxes, but very few on how to smartly manage the revenues from the Fund.
In this revision of the ETS, there was a focus on the extension to the Aviation and Maritime sectors. The Aviation industry is an interesting case showing the complexity to implement such a proposal within a context of high interdependences between the different markets in the world. The European Commission did a first attempt in 2012 to add the aviation sector to the scope of the ETS phase 2. But, at that time, there was a strong opposition not only from international airlines, but also from major countries like USA, China or Russia who threatened Europe to ban their own carriers from the European trading system. This led the Commission to only implement the scheme for the flights inside a clearly delimited zone, the European Economic Area (EEA).
Now, with the “Fit for 55” plan, this is a second attempt to bring back the international aviation under the scope of emission trading. To reach this goal the European Commission has agreed to adopt the new international policies (called Carbon Offsetting and Reduction Scheme for International Aviation: CORSIA) which are less stringent than the EU ETS, according to the carbonmarketwatch.org website , who stated that “relying on CORSIA alone would therefore jeopardize the attainment of European climate goals and the implementation of the Paris Climate Agreement.” This case demonstrates the need for international cooperation, and the difficulty for one Region (like Europe) to impose its views to the rest of the world.
The carbonmarketwatch.org website raised another gripping point on the ETS mechanism, which applies not only to the aviation sector, but also to other industries impacted by this policy. As the ETS system is increasing the cost of the regulated sectors, to protect the competitiveness of these companies, the European Commission is offering free emission allowances (auctioning for non-aviation sectors). The distribution and administration of these allowances is another dark forest in which I will not set one foot. I read a couple of articles (http://diposit.ub.edu/dspace/bitstream/2445/128408/1/683073.pdf and https://cadmus.eui.eu/bitstream/handle/1814/46048/RSCAS_FSR_PB_2017_02.pdf?sequence=1&isAllowed=y) that are not highly enthusiastic about the positive impact of these policies, stated that politicians were giving for free too many allowances, “even more free pollution permits than the amount of CO2 emitted by the Industrial sectors”.
In fact, without these allowances, the companies would be tempted to transfer their activities to countries which do not apply taxes or obligations about greenhouse gas emissions reductions. This transfer of activities to avoid paying carbon taxes is called “Carbon Leakage”. The drama of this legal trick is that the companies playing this game are reducing their costs, whilst at the same time increasing their total emissions. There is an official list of sectors “which are deemed to be at risk of carbon leakage” (see: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2019:120:FULL): it goes from mining of minerals to diverse manufacturing activities (clothes, sugar. Gases…) up to products like concentrated tomato puree or milk powder. The existence of free allowances to fight against carbon leakage is another way for Europe to “run with the hare and hunt with the hounds”.
The improvement of the Carbon Leakage policy is the purpose of the proposal #14, called Carbon Border Adjustment Mechanism (CBAM). This has been, after the ETS, the second proposal with the highest number of amendments (more than 1,300). Many participants highlighted the interlinkage between ETS and CBAM mechanisms. A lot of discussions were about the phasing out of the free allowances (final agreement has been to move from 93% allowances in 2027 to 0% in 2032), about the expansion of the CBAM mechanism (not only industries with a risk of carbon leakage, but also the most polluting sectors such as plastic and chemicals), and about the way to involve and motivate other countries to join the plan. We still have a long way to go on this last intention: for instance, Senegal raised a request to have the whole of Africa excluded from CBAM based on the argument that this continent represents only 3% of the global emissions. It might be true for today, but what about tomorrow?
Regarding the maritime sector, a consensus seems achievable to add this sector to the scope of the trading system. However, there were some recommendations to postpone the introduction and modify the conditions of application. In this situation as well, the European Commission will likely face the need of compromise with the International Maritime Organization and the risk to undermine the ambition on emission reductions.
The other important proposal in this category is the Energy Taxation Directive (proposal #11) to update tax rates for heating and transport and remove other exemptions for aviation and maritime sectors. It seems that the discussions were quite emotional around the risk on “social impact”, which means that the energy bills for citizens could eventually represent an unsustainable portion of their total income. Other disagreements appeared around the need to protect specific activities (like fisheries, agriculture, or forestry), the requirement to differentiate the transport modes (goods vs. people transportation), and the possibility to differentiate taxes by source of energy. Eventually, the discussions never ended, and a drastic decision has been taken to freeze the debates at least until March next year. Exit the proposal #11.
Although the expansion of emissions trading (proposal #4) for road transport and buildings (heating) was highlighted as a key objective to meet European climate targets, many participants raised again, on several occasions, the risk of severely impacting consumers and having negative socio-economic consequences. Similar to the previous Energy Taxation Directive, this proposal with high social impact is still under debate and might have a hard time to be adopted.
1.2 Targets Proposals
In this category, the indicators were already approved in the past, but a more aggressive target was required for each one of them to achieve carbon neutrality. These targets are defined at European level and then broken down by country.
The Proposal #3 on Effort Sharing Regulation covers the sectors which are not included in the EU ETS scheme and represent 60% of European emissions. The average emission reduction target at European level has been increased from -29% to-40% by 2030 compared to 2005 level. Here, I discovered a new word, because several participants were asking for a better control of the “loopholes” in the mechanism. What is this? Simply, when a system has some ambiguities or omissions, a loophole is a way to legally escape from it or take cleverly advantage of its weaknesses. For instance, countries will be trading ETS allowances to reach ESR goals or mixing LULUCF with ESR objectives. Adding complexity in a regulation mechanism is obviously the opening for more loopholes and tricky behaviors.
The second one, Renewable Energy Directive (proposal #9) is related to the increase of renewable energy ratio in the energy mix by 2030. Due to Russia’s invasion of Ukraine, a large consensus was reached to go higher on this objective to reach a 45% in renewable energy mix. There were intense discussions about the scope of renewable energies, and particularly the request to add advanced biofuels and green hydrogen. An open question remains around the possibility to add nuclear energy as a source of electricity to produce green hydrogen.
Nuclear energy was also part of a big discussion for its inclusion in sustainable energy taxonomy. At the beginning of the year, several countries were ready to take legal actions and block the overall “Fit of 55” plan if this energy was going to be included in the scope. The Russian war has tempered the emotion of many participants, although it is still very sensitive. On top of nuclear energy, gas has been added to the taxonomy and will be labelled as green source of energy. But the battle is still on going, as at the end of September, a few NGOs have raised a claim to the European Union Court of Justice who has been asked to rule on this matter.
The revision of the proposal #10 on the Energy Efficiency Directive (EED) was consensual amongst the participants, where everybody recognized the imperious need to accelerate building renovations to reduce the amount of energy consumed. They even agreed to increase the target to 14.5% (instead of 9% in the initial proposal). The obligation to move away from Russian fossil fuels has been a decisive factor. However, this did not prevent intense discussions on the calculation method and on the scope of application (for instance, the exclusion of social housing and district heating).
The last target revision proposal (#12) is about land use. It is called LULUCF which stands for “Land Use, Land Use Change and Forestry Regulation”. The land use is of critical importance for biodiversity, also it can significantly impact the level of emissions. Here, the objective is to reverse the negative trend and expand carbon removal lands, such as forests, wetlands, and other natural carbon sinks. This topic has not been commented during the weekly reports which was a surprise. Would it not be of the outmost importance to reforest and bring back natural protected lands in our environment?
This Land Use target is linked to a new Forest Strategy (proposal #13), which includes the reforestation of the European Union by planting 3 billion additional trees by 2030, as explained in the document here.
1.3 Rules & Standards Proposals
This final category provides new rules mainly for the mobility domain. One of the most controversial proposal has been the #5 about the revision of the CO2 emissions standards for new cars & vans. Countries with important automotive industries were worried that companies would not have enough time to develop alternative technologies by 2035, and that the ban would cost jobs. Others claimed that the uptake of charging infrastructures will not be fast enough to move to a full Electric Vehicle fleet in such a short lead time. There were also discussions about the phase out of the regulatory incentive mechanism for zero and low emission vehicles by 2030. Eventually, the proposal has been approved by several committees, but with a tough validation process. For instance, the Committee on the Environment, Public Health, and Food Safety (ENVI) adopted the report with only 46 votes in favor, 40 against and 2 abstentions. This tiny deal has been struck by the European Union on October 27th.
Regarding charging infrastructures, there is a specific proposal (#6) dedicated to it. Here, the decision was less controversial (for instance, the ENVI committee voted with 71 in favor, 11 against and 3 abstentions). The discussions were around the availability of future charging stations. Along the main European roads, the distance between two charging pools should be at maximum 60 kilometers by 2026 for battery vehicles, and 100 kilometers by 2028 for hydrogen refueling stations. Currently, for gas stations, the recommended maximum distance is between 40 and 60 kilometers. Considering the level of autonomy of electric cars, it is counterintuitive to agree on a lower implementation. This risk has been highlighted by several participants warning on a “deadlock of the adoption of electric vehicles due to a lack of charging points”.
The proposals #7 and #8 promote the uptake of sustainable fuels in the aviation and maritime sectors. At the end of the debates, the European Parliament recommended a higher target than the initial one: for aviation sector, the objective will be to reach 85% of sustainable fuels in 2050, instead of 63%. We could applaud for that. However, the International Council on Clean Transportation (ICCT) made a comparison study and discovered that the initial lower target would provide more greenhouse gas savings, because it was restricting the scope of Sustainable Aviation Fuel (SAF) to only qualify advanced biofuels with lower lifecycle emissions. However, the proposal from the European Parliament was to qualify a wider range of biofuel feedstocks to produce sustainable fuel, including some which are less effective in reducing emissions and “make use of significant quantities of arable land”. This is a good example to illustrate how a simple focus on higher percentages can be misleading.
For Maritime, participants proposed to increase the uptake of sustainable fuels to 20% by 2035 (instead of 13%) and 80% by 2050 (instead of 75%). Regarding this topic, the Nordic West Office raised a red flag about sustainable fuels becoming a competition between aviation and shipping for scarce resources.
Are all these targets available? With this question in mind, we are reaching the end of our stroll in this tangled park. We have covered the 14 proposals of the “Fit for 55” plan. Now, let’s take a step back and reflect on this journey.
2. Candid & Constructive Comments
I have been quite impressed by the density and the deepness of the debates between members on this Climate plan. The experience of having 27 countries trying to reach consensus and agreements on such complicated topics is fantastic. We can see how difficult it is to build a compromise between the interest of each member and the effort to find a way forward for the benefit of all. The final result is never the most optimized one but reaching the approval of all without exception is a major achievement. Sometimes, we feel that the writers of the report are treading on eggshells, careful to not offend anyone. My sincere congratulations for all the participants of this adventure.
Having said that, I would like to share a few more comments.
In the introduction of the “Fit for 55” document, the main argument to justify the plan is “that it is built on the knowledge that what is good for the planet is good for people and the economy, as reflected by the economy growing by over 62% since 1990 with emissions falling by 24% over the same period, thus clearly decoupling growth from CO2 emissions.”
I don’t think it is an appropriate promotion statement because it opens an endless quarrel between advocates and opponents of this trend. One of the counterarguments comes from the effect of Carbon leakage where the emissions released by non-European countries for products that are eventually consumed within Europe are not considered in the report. In a year when many experts are celebrating the pertinence of the Meadows report on the “Limits to growth”, this introductory sentence is not the most suited.
Another surprise was that nowhere in the plan is there any reference about restraint, as if this transition would enable us to continue to live, spend energy, travel, or consume as before without any restriction. It seems that our life will continue the same way, and the unique transformations will be invisible for the citizen: he will continue to drive a car, but an electric one; he will continue to take flights, but powered by sustainable fuels; vessels will continue to deliver goods in a global supply chain, with sustainable fuels as well; he will continue to live in low density residential areas, and maybe the house renovation will come but at a later stage to secure his income level. At the same time, we want to plant trees and regenerate wetland, but we are not reducing our soils utilization…
I can imagine the wish of the authors to draw a plan as positive and enthusiastic as possible to ensure that European citizens will adhere to it: “We all share in the benefits of more space for nature, cleaner air, cooler and greener towns and cities, healthier citizens, lower energy use and bills, as well as new jobs, technologies, and industrial opportunities. The challenge at the heart of the EU’s green transition is how we can bring these benefits to all as quickly and as fairly as possible, while strengthening our competitiveness, creating the jobs of tomorrow and effectively addressing the costs and impacts of the transition.”
I am an optimistic guy, but I think that this sentence is a sign of overconfidence. To achieve carbon neutrality, we will have to transform the way we live. For instance, to move from ownership to a shared-use model: not only sharing of cars, bicycles or trucks, but also workspaces, facilities, equipment, living places, etc.; to reconsider our urban planning, bring back forests, wetlands and nature realms in replacement of highways, malls, industrial districts, residential houses… to get enough space to grow the promised billions of trees; to reduce our number of trips by flight; to reduce the global maritime trades and localize activities; to expand public transportation and make them safer and more frequent (why not every 3-5 minutes even for remote areas?). There is nowhere in the “Fit for 55” a comment about sharing mobility and the development of a European public transportation scheme. It seems that politicians are putting the burden on industrials (ETS, electric vehicles…) but do not take their part in defining an infrastructure plan for cities development, land use, public transportation, on the long-term and large-scale European investment projects.
In some other proposals, I felt there was a tendency to pass on the hard decisions to the next generations, particularly for Building renovation, Aviation and Maritime sectors. In several instances, some participants expressed that putting high targets would not mean that they would be achieved, particularly when the date of reaching these objectives is in twenty or thirty years down the road. The individuals who are taking these objectives are not the ones who will be accountable to achieve them. And it will be easy for the next persons in charge to disregard these goals arguing that they are not reachable.
At the beginning, I said that I had the feeling of walking in an inaccessible forest while I was following the progress of “Fit for 55”. A major reason is because all the proposals are intertwined, and it is close to impossible to breakdown the contribution of each one to the overall objectives for 2030 and 2050. In addition to that, the mix of pricing and targets, the uncertainty around percentages impact, the difficulty of the reporting, the different reference points, the change in the scope of applications, and the evolution of calculation rules, are bringing more complexity and limbo to the plan which turns out to be a headache for an external observer.
Europe has unique challenges to overcome, and in that sense, it cannot always be a model for all the other countries. I have some kindness to this mission to be exemplary and admirable. In the “Fit for 55” plan, we can perceive, on a few occasions, this intention to be considered as the flag-bearer of the emissions reduction, wishing that the rest of the world will follow its path. This reminds me the popular character of Agnan, in Le Petit Nicolas from Goscinny and Sempé, who is the teacher’s pet of the class. He is always trying to do better than the others, being volunteer to take initiatives, showing great results and sometimes blaming other schoolboys for bad behaviors… During the COP27 hosted by Egypt on November 6-18, Europe might confirm its ability to reach Paris Agreement contribution, thanks to “Fit for 55” plan, whereas other COP members will not be able to demonstrate the same performance. In the fight to climate neutrality, I feel sometimes that Europe is a kind of Agnan who would like to be recognized as the best “student of the world”.
3. Today’s Teenagers’ Tending Task
The “Fit of 55” report emphasized the influence of “today’s teenagers” who are qualified as the “agents of change who are calling on governments to act decisively and without delay to protect the climate and environment for next generations”.
When I was a teenager, I remember the first time that my parents bought a colored television. It was such an excitement at home that I still recall the arrangement of the ground floor, the menu of the dinner with my favorite dessert, the crème caramel, the enjoyable faces of my family, the warm and cozy atmosphere in the living room, the soft lighting, and a pleasant fragrance of lavender. It was going to be a great evening! After the meal, my mum prepared the traditional herbal tea, and we all sat down on the sofa, ready to watch our first ever color movie at home. This evening, the program broadcasted a motion picture that touched me deeply: The Planet of the Apes (1968) by Franklin J. Schaffner, with the artist Charlton Heston, based on a French eponym novel from Pierre Boulle. It was just the first one of a series of three impressive science-fiction movies with the same actor that remained in my mind forever. A few weeks later, our television channel presented the second one, The Omega Man (1971) by Boris Sagal, inspired by a page-turner novel from Richard Matheson, I am a Legend. Finally, shortly after, we had the chance to watch the third one: The Soylent Green by Richard Fleischer, again with Charlton Heston.
This third movie had been released in 1973, but it takes place in the year 2022, in an over-populated and devastated city due to global warming. The temperature is always high, the atmosphere is irrespirable, oceans are dying, the planet is totally polluted. There is no more fresh food, and people are eating artificial rationalized tablets.
Charlton Heston is the main character of the movie. His name is Thorn, he is a detective. He is living with his old friend Sol (Edward G. Robinson) who is one of the last person who has lived and enjoyed our world before its deterioration. The movie has two impactful sequences.
The opening which shows pictures of the progression of our civilization from a rural country, towards the development of the oil industry, and particularly the automotive expansion, until the crash and the destruction of the planet. It clearly sets the link between the world in 2022 and the exponential increase of cars, pollution, and overpopulated cities.
The second one happens later in the movie when Thorn’s old friend, Sol, decides to die with the help of doctors who have organized a ceremony after giving him a mortal substance to drink. This is the climax of the movie. During the remaining few minutes of his life, Sol can admire on a big screen some beautiful images of the world of his infancy: elegant deer, horses in a green field, colorful fishes in a transparent ocean, flying birds under the sunset, intact streams, magnificent mountains, spring flowering trees, etc. Thorn appears during the ceremony and Sol reveals the beauty of our planet to his friend who were born after the catastrophe and had never seen these splendid wonders.
At the end of this sequence Sol says goodbye to Thorn and shares his happiness of viewing the awesome nature. In the seventies, when a teenager like me was watching this movie, he was shocked by the tragedy of our civilization, but at the same time he was comforted to live in peace and in a beautiful environment, he could not imagine that this terrifying destruction could one day become a threat for our humanity, and 2022 was too far away in the future to be a reason of fear.
This movie is like a boomerang coming back to haunt us with all the recklessness in which we have been living over the past decades. I agree with the wish of “Fit for 55”, who is calling for the “today’s teenagers” to not wait anymore and take the role of “agents of change”. I want to watch again the Soylent Green in 50 years and still enjoy it as a good science-fiction movie, and not as a historical drama. But how could these teenagers be wiser than their ancestors, how could they resist the temptation of power, the cupidity and the greed which are the source of our climate drift?
There is a tragic moment in the movie that should never happen in the life of our future generations. The one when Thorn breaks down in tears while he is watching the vanished beauties of our planet and whispers: “How could I know? How could I ever imagine?”
- Future of mobility #17: Once upon a time there were five young scientists…
- Future of mobility #14: “Reinventing cities” by C40.
- Future of mobility #1: Bringing women onboard the Mobility Revolution.
This article was written by Bruno Grippay. Bruno is an expert in procurement and project management with a passion for smart and sustainable mobility.