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15July 2021.
Introduction:
European Union’s executive branch released new legislation to meet its pledge of cutting emissions of gases causing global warming by 55% this decade.
Highlights of “Fit for 55” legislation
- EU’s ‘fit for 55’ legislation includes a controversial plan to tax foreign companies for pollution caused by them.
- Legislation also provides for de-facto phasing out of gasoline and diesel cars by 2035.
- It comprises of new levies on gases from heating buildings.
- It also involves a revamp of bloc’s emissions trading program. Under this programme, companies pay for carbon dioxide they emit.
- Taxes on shipping and aviation fuels was also introduced for the first time.
- It also provided for a “Carbon Border Adjustment Mechanism.” This plan imposes duties on foreign companies that in turn will increase price of certain goods like steel, aluminium, concrete and fertilizer.
Endorsement of legislation
Legislation provided that, most of the proposals were built on existing laws and are designed to meet EU’s old goal of 40% cut in greenhouse gas emissions by 2030 as compared to 1990 levels. It must be endorsed by 27 member countries and EU lawmakers.
Aim of the legislation
- ‘Fit for 55’ legislation was released by EU with the aim of freeing the continent from fossil fuels and take better care of environment by policy design as opposed to being forced into desperate measures at future climatic tipping point.
Paris Climate Deal
- EU’s legislation was released in line with the Paris Climate deal.
- World leaders had agreed six years ago in Paris to make efforts towards keeping global temperatures below 2 degrees Celsius, ideally no more than 1.5 degrees C by the end of century.
Social Climate Fund
- EU also proposing for creation of “social climate fund” worth several billion euros.
- This fund will be used to help those who might be hardest hit and support income & investments to tackle energy poverty.
- It will also cut bills for vulnerable households and small businesses.