On Tuesday Parliament endorsed the agreements reached at the end of 2022 between its negotiators and country representatives EU in terms of series of important legislative acts in the framework of the package of measures for adaptation to target of 55% for 2030. The package, also known as ‘Fit for 55’, is the EU’s plan to reduce greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels, as set out in European legislation for climate.

Reforming the emissions trading system

The European Parliament approved the reform of the Emissions Trading System (ETS) by 413 votes to 167 with 57 abstentions. The new rules include higher targets for the ETS, as greenhouse gas emissions in the sectors it covers should be reduced by 62% by 2030 compared to 2005 levels. from 2026 to 2034 free emission allowances for companies will be phased out, while a separate, new ETS II will be created for fuels used in road transport and buildings. The new system will set specific prices for emissions from these sectors in 2027, which could come into force from 2028 if energy costs are extremely high.

Parliament also voted to include shipping’s greenhouse gas emissions in the ETS for the first time (by 500 votes to 131 with 11 abstentions), while also giving the ‘green light’ to the revision of the aviation ETS ( with 463 votes in favor, 117 against and 64 abstentions). This revision will phase out free emission allowances in the aviation sector by 2026 and promote the use of sustainable aviation fuels.

New mechanism to prevent carbon leakage

By 487 votes to 81 with 75 abstentions, Parliament also approved the new EU Carbon Border Adjustment Mechanism (CBAM). This mechanism provides incentives for third countries to set higher climate targets, while ensuring that efforts in the EU, and globally, are not undermined by the relocation of production from the EU to countries with less stringent rules.

CBAM covers iron, steel, cement, aluminium, fertilisers, electricity, hydrogen and, in some cases, indirect emissions. Importers of such goods would have to pay the difference between the carbon price paid in the country of production and the price that would have been paid in the ETS if the good had been produced in the EU.

CBAM will be phased in from 2026 to 2034, alongside the phasing out of free allowances in the EU emissions trading system.

A Social Climate Fund against energy poverty

MEPs approved by 521 votes to 75 with 43 abstentions the agreement with member states to set up an EU Social Climate Fund (SCF) in 2026, which will aim to ensure that the climate transition is implemented with way fair and without social exclusions. The new Fund will support vulnerable households, micro-enterprises and transport users who are particularly affected by energy poverty and financial weakness in transport. When fully operational, the SCF will be financed by the auctioning of ETS II allowances with a maximum amount of €65 billion, while an additional 25% will be covered by national resources: the total value of the financing is estimated to reach €86.7 billion. euro.

Next steps

The texts will now have to be formally adopted by the Council. They will then be published in the EU Official Journal and enter into force 20 days later.

By passing these pieces of legislation, Parliament is responding to the expectations of citizens, who have called for the EU to achieve and accelerate the green transition – see propositions 3(1), 3(8), 3(9), 11(1) and 11(7), of the final report of the Conference on the Future of Europe.

Lena Flitzani