The EU’s “Fit for 55” package: a primer on the EU ETS and other main policy levers

On July 14 the European Commission will present the much awaited “Fit for 55” legislative package. Lara Dombrowski and Simon Göss at Energy Brainpool have written a very useful primer on what’s at stake for the EU ETS, along with a summary of the other main policy levers that will be decided upon. The authors describe the EU ETS as the central instrument for reducing greenhouse gas emissions. It caps emissions for 10,000 power sector, industrial and aviation installations, covering 40% of the region’s greenhouse gas emissions. Issues covered include the all-important emissions caps, emission allowances, the Market Stability Reserve, and the CO2 price. Other policy matters include carbon leakage, the Carbon Border Adjustment Mechanisms, carbon removal credits, extending the ETS (to buildings, road transport, maritime), carbon capture through land use/forestry, the Renewable Energy and Energy Efficiency Directives, alternative/sustainable fuels, and CO2 emission standards for cars and vans. Come back for their follow-up article in July when the authors present their summary of the results of this fundamental milestone in Europe’s journey to net zero. [...]