EU Environment Ministers discuss Fit for 55 Package – agenda includes emissions trading, emission limits for cars and LULUFC Regulation
The EU ministers for the environment and climate issues meet in Luxembourg on 28 June, where they will discuss the EU’s Fit for 55 Package. Finland’s representative at the meeting will be Minister of the Environment and Climate Change Maria Ohisalo.
The European Commission issued an extensive package of proposals for climate legislation in July 2021. The aim is to implement the obligation set by the European Climate Law to reduce net greenhouse gas emissions of the EU by at least 55% by 2030 compared to 1990 levels. The agenda of the Environment Council is an exceptionally weighty one.
“Climate crisis and loss of biodiversity are matters of fate for our planet. This Environment Council is an important milestone for the achievement of the EU-wide climate targets and 55% emission reductions. To slow down climate warming and phase out fossil fuels, we must continue our work on these effective means,” says Minister of the Environment and Climate Change Maria Ohisalo.
Six legislative proposals of Fit for 55 Package on agenda
The Council will seek a general approach on six key legislative proposals of the climate package that are within the mandate of the Environment Council. The legislative proposals are:
- Emissions Trading Directive and Market Stability Reserve
- Amending Emissions Trading Directive with regard to aviation
- Social Climate Fund Regulation
- Effort Sharing Regulation
- Regulation on CO2 emission performance standards for new cars and vans
- LULUCF Regulation
Proposal to expand emissions trading
The Environment Ministers are set to decide on strengthening and expanding the current Emissions Trading System of the EU and to establish a new Emissions Trading System for road transport and individual heating of buildings. The present EU Emissions Trading System (ETS) covers major industrial and energy production plants and aviation within the European Economic Area. Finland considers it important that through the reformed emissions trading the EU will achieve emission reductions of 61% by 2030, compared to 2005 levels. Finland also supports the establishment of a new Emissions Trading System for road transport and individual heating of buildings. Together with the other measures in the Fit for 55 Package, emissions from road transport and individual heating of buildings could be reduced by 43% compared to the 2005 levels by 2030. The key questions include the time when the new system would become applicable and its scope. Finland’s aim is that the Council would adopt a general approach on emissions trading.
The French Presidency also aims for a general approach on more efficient emissions trading in the aviation sector. Finland supports a more efficient emissions trading system for aviation and the abolition of the free allocation of emission allowances.
The proposal for establishing the Social Climate Fund is closely linked to the proposed extension of emissions trading to road transport and individual heating of buildings, which Finland supports. Emissions trading would set a price for road transport and heating of buildings, and the costs of this could have harmful impacts on households, microenterprises and users of transport who are in a vulnerable position. The purpose of the fund would be to reduce such negative impacts. The government finds it important to make the transition to a carbon-neutral society in a way that is socially and regionally fair and just. Many questions related to the Social Climate Fund are still open, and the negotiations on these will continue.
Effort Sharing Regulation and emission limits for cars to be tightened
The Effort Sharing Regulation sets out national obligations for Member States on how much emissions must be reduced in the non-emissions trading sectors. The regulation applies to emissions from e.g. transport, agriculture and construction. The amendment will tighten the emission reduction obligations in the effort-sharing sector in the EU by 10%, i.e. from the current 30% to 40% by 2030, compared to 2005 levels. Finland’s obligation is 39% and now the Commission is proposing that it should be raised to 50%. Road transport and individual heating of buildings would be included in the effort-sharing sector until 2030.
The aim of the Regulation on CO2 emission performance standards for new cars and vans is to increase the manufacturing of zero and low emission vehicles. The limits would be much tighter than now. The new limit for new cars in 2030 would be 55%, which means that, at the EU level, the car manufacturers should reduce carbon dioxide emissions by 55%. Now the target is 37.5%. In practice, the only feasible option for car manufacturers would be to only produce fully electric or hydrogen vehicles in 2030.
Aim to agree on LULUCF Regulation
The Environment Council will also discuss the proposal to amend the LULUCF Regulation. The regulation specifies how emissions and sinks of land use, land use change and forestry can be included in the EU’s climate targets. The aim of the proposal is to guide EU Member States to strengthen carbon sinks and reservoirs and to reduce emissions from the land use sector.
The Environment Council will also try to agree on a proposal for a regulation concerning deforestation and forest degradation. Finland is committed to a target to halt global deforestation by 2030. The measures taken so far have not been adequate to stop deforestation, and further actions are needed. In the proposal efforts have been made to find a balance between feasibility and ambition.
In addition, a report on the progress made with the Waste Shipment Regulation will be presented to the Council. The regulation lays down provisions on the notification and control procedures for transboundary movement of waste.
If the Environment Council agrees on the climate initiatives of the Fit for 55 Package, trilogues will probably begin in the early autumn to seek agreement between the European Parliament, the Commission and the Member States.
Special Adviser to Minister Ohisalo (requests for interviews with the Minister)
+358 50 406 6855
Ministry of the Environment
+358 295 161 000
Senior Ministerial Adviser
Ministry of the Environment
+358 295 250 272
Director of Unit
Ministry of Transport and Communications
+358 295 342 101
LULUCF Regulation and deforestation
Ministry of Agriculture and Forestry
+358 295 162 074