EU Climate targets: How to make your company “Fit for 55”!
On 14 July 2021, the European Commission presented the “Fit for 55” package for climate, energy, land use, transport and taxation. The aim is to drastically reduce net greenhouse gas emissions through twelve measures by 2030 as part of the European Green Deal. Emission levels are to be reduced by at least 55% compared to 1990. From 2050 onwards, Europe is to become the first climate-neutral continent by implementing climate targets.
In the following, we have summarised the most important aspects of the EU climate targets for you:
What effects can be expected for the real estate sector and road transport?
Expansion of emissions trading
The EU Commission proposes to extend emissions trading to road transport and the building sector from 2026. This is expected to accelerate the switch to environmentally friendly heating and propulsion fuels and to shorten the payback periods for investments to improve the energy efficiency of buildings. Emissions are to be subject to maximum limits that can be lowered over time to reduce overall emissions.
Settlement is to take place – separately from the existing emissions trading system – via the fuel and heating fuel suppliers. The participation of individual households or transport users in emissions trading is not planned.
Amendment of the Energy Taxation Directive
In addition to emissions trading, the EU Commission has revised the Energy Taxation Directive. The fuel taxation provided for therein is intended to offer incentives for efficient energy use and the phasing out of fossil fuels.
Updating the Energy Efficiency Directive
The updated Energy Efficiency Directive aims to reduce energy consumption by 9% by 2030 compared to baseline projections through binding energy efficiency targets.
Revision of the Energy Performance of Buildings Directive
The Energy Performance of Buildings Directive will be revised this year to facilitate building renovations.
How should environmentally friendly mobility, energy sources, and production methods be promoted?
Stricter CO2 standards
The “Fit for 55” package includes stricter CO2 emission standards for cars and light commercial vehicles and commits to the development of public charging stations and hydrogen refueling stations to accelerate the transition to zero-emission mobility. The planned inclusion of traffic and transport in emissions trading and the revised energy taxation will create incentives to switch to means of transport using clean fuels. Tightening measures are also planned for air and water transport.
TPA Note: In Austria, the standard consumption tax (NoVA) was raised as of 1 July 2021 depending on the CO2 emissions of a vehicle. At the same time, some exemptions from the NoVA were abolished. However, vehicles that do not emit CO2 are exempt from the NoVA and are often tax-privileged.
TPA Tip: Austria’s total electricity consumption is to come from 100% renewable energy sources by 2030; the aim is to achieve complete climate neutrality by 2040. Since last year, the Renewable Energy Expansion Act (EAG) has included targeted subsidies for photovoltaics, wind energy, hydropower, and biomass. For the first time in Austria, it is also possible to establish energy communities.
CO2 Border Adjustment Mechanism – CBAM
However, the climate will not be helped if, in view of the tightening, industrial enterprises migrate to third countries and release higher emissions there. To ensure the same CO2 price for European and imported products, a Carbon Border Adjustment Mechanism (CBAM) is planned.
From 2023, the energy sector and energy-intensive industries, above all iron and steel, cement, fertilisers and aluminium, will be covered. In these sectors, the CBAM for imported products and raw materials will be gradually ramped up while the free certificates are gradually phased out. Innovative and energy-efficient companies in the EU and third countries are expected to benefit.
How to make your organisation “Fit for 55”!
The EU climate targets for entrepreneurs: The “Fit for 55” package contains numerous individual measures to reduce greenhouse gases, for example through greener new vehicles and fuels and more energy-efficient buildings. One focus is the taxation of energy sources in line with the climate and environmental goals of the European Green Deal. The regulatory provisions are intended to create the necessary planning security for investments and innovations to drive the ecological transformation.
Grants for the implementation of the climate goals
To support business, unprecedented levels of funding from various funding pots are earmarked for the climate targets of the EU Green Deal, in particular
- EU budget and NextGenerationEU stimulus package
- Horizon Europe research framework programme and EU Innovation Fund
- European Social Fund Plus (ESF+) and InvestEU
Some calls for projects are already underway and many more will be launched in the near future. In addition, Member States will be required to allocate revenues from emissions trading to climate and energy-related projects.
Of course, all climate targets are also part of the internal control system of companies or have an impact on the design of the tax control system (tax ICS).
Contact our experts to receive timely information on greening funding offers and plan your personal “Fit for 55” corporate strategy with us!
