In addition to adaptations of existing legislation, the Commission has also proposed new legislative initiatives with the Fit for 55 package. It proposed, for example, an initiative to combat carbon leakage by means of a carbon border adjustment mechanism (CBAM). Given that the EU cannot tackle climate change on its own, it is crucial that its climate objectives are not undermined by EU-based companies moving carbon-intensive production abroad to take advantage of less ambitious standards. Therefore, the CBAM aims to equalize the price of carbon between domestic products and imports while ensuring compatibility with the rules of the World Trade Organization (WTO), encouraging foreign producers and EU importers to reduce their carbon emissions. The CBAM proposals also aims to prevent that EU products could be replaced by more carbon-intensive imports.
Besides the CBAM, the EU has also proposed initiatives to stimulate the fuel transition in the maritime and aviation sectors, the FuelEU Maritime and ReFuelEU Aviation Initiative, respectively. In addition to the ReFuelEU Aviation Initiative, which focuses on accelerating the use of sustainable fuels, two other proposals of the Fit for 55 package are specifically relevant for the aviation industry: the revision of the EU ETS, which aims to reduce the overall emission cap and phase out free emission allowances for aviation, and the revision of the Energy Taxation Directive, which will remove outdated tax exemptions and incentives for the use of fossil fuels in EU aviation transport.
The Commission is also proposing a social climate fund, aimed at mitigating any negative financial impacts that will arise from extending the EU ETS to the building and road transport sector on vulnerable households, micro-businesses, and transport users. The latter initiative fits well into the EU’s goal of ensuring that the climate transition will be a just and socially fair transition that leaves nobody behind. It is also especially relevant considering the current developments regarding high energy prices, causing an increase in energy poverty in Europe, with currently between 50 to 125 million people unable to afford proper indoor thermal comfort. An overview of the proposals for new legislative initiatives can be found in Table 2 below.
