Finish line nears for 'Fit for 55' transport laws (2023)

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Aviation Maritime Road transport

This article is part of our special report What lies ahead in 2023.

The ‘Fit for 55’ climate law package, which aims to reduce CO2 emissions in the EU by 55% by 2030 compared to 1990 levels, dominated the transport legislative agenda in Brussels in 2022.

Lawmakers from the European Parliament and Council, having defined their positions before the summer break, spent much of the year’s second half locked in negotiations – known in EU vernacular as trilogues.

While major deals have been struck, some transport files proved more challenging to reach an agreement on than others, leaving the EU institutions at loggerheads.

Next year will see renewed efforts to break the remaining deadlocks, shifting the “Fit for 55” package from a Commission proposal to the new EU reality.

Below, EURACTIV looks at what has been agreed upon and what is left to negotiate.

Aviation

Despite sky-high expectations, ReFuelEU, the EU’s green jet fuel law, failed to land in 2022. Instead, negotiators will reconvene in January, when Sweden takes over the EU Council presidency from Czechia.

Under the regulation, all aircraft departing from an EU airport will be required to refuel using rising quantities of sustainable aviation fuels (SAFs) – low-carbon alternatives to kerosene made from advanced biofuels and green hydrogen-derived synthetic fuels.

The European Parliament and Council differ on what percentage of SAFs should be mandated – the Parliament wants 85% by 2050 while the Council has stuck with the Commission’s suggestion of 63% – and what feedstocks should be designated as “sustainable”.

Finish line nears for 'Fit for 55' transport laws (1)

Airlines and NGOs join forces ahead of EU vote on green jet fuels

Climate NGOs and airlines have called on lawmakers to narrow the definition of sustainable aviation fuels (SAF) ahead of a European Parliament vote on Thursday (7 July).

While haggling over targets is de rigueur, it was the specificities of the green fuels that saw discussions collapse.

EURACTIV understands that including nuclear as a potential power source for creating electro-fuels was a red line for the Parliament’s socialist and green lawmakers.

A Commission suggestion to use a negative multiplier of 0.75 for nuclear-based e-fuels – which would essentially allow but disincentive them – failed to break the stalemate.

Additionally, the two groups wanted to see the possibility of national SAF mandates included in the final agreement.

The centre-right European People’s Party (EPP) group wasted no time blaming the Socialists & Democrats, and Greens for the lack of progress, calling their manoeuvre “incomprehensible”.

The year also saw the contentious revision of the carbon market for aviation.

The crux of the controversy was the decision to restrict the Emissions Trading System (ETS), which puts a price on carbon, to flights within Europe.

Green activists and budget airlines had hoped that long-haul flights, which are the most polluting, would be captured by the ETS, superseding the UN’s much weaker international offsetting system, CORSIA.

International airlines welcomed the EU’s decision to allow the considerably cheaper CORSIA to continue long-haul flights to and from the continent.

Finish line nears for 'Fit for 55' transport laws (2)

Lawmakers agree to restrict EU carbon tax to flights within Europe

A surprise deal struck by EU legislators early Wednesday morning (7 December) affirms that the tax on aviation carbon emissions will continue to apply only to flights within Europe, a blow to environmental campaigners who had lobbied for complete coverage.

Maritime

The EU will soon become the first market to require ship operators to pay for their carbon emissions.

Under the ETS Maritime deal, ships travelling within the EU will be required to pay for 100% of their emissions, while 50% of the emissions of journeys to or from a non-EU destination will be covered.

Non-CO2 emissions, such as methane and nitrous oxide, will also be included in the ETS from 2026.

Finish line nears for 'Fit for 55' transport laws (3)

In world first, EU legislators agree to price shipping emissions

EU legislators agreed to include maritime transport within the EU’s emission trading scheme (ETS) during talks that lasted until late Tuesday evening (29 November), a move that will force ship operators to pay for their carbon emissions for the first time.

While the carbon market extension was agreed upon smoothly, another major maritime file continues to be debated.

FuelEU Maritime, the sister legislation to the aviation sector’s green fuel law, aims to spur ship operators to choose lower-carbon fuels over heavy oil. Unlike ReFuelEU Aviation, the law does not specify the fuels that must be used but rather sets progressively stricter carbon intensity limits.

To the outrage of environmentalists, this approach leaves the door open to natural gas. Supporters, however, say the EU’s approach is “technology neutral”, empowering the industry to decide how best to decarbonise.

The second round of inter-institutional negotiations took place on 8 December, with the file expected to be agreed upon in the new year.

Finish line nears for 'Fit for 55' transport laws (4)

Parliament backs EU's maritime fuel law to curtail shipping emissions

The European Parliament voted Wednesday (19 October) to rein in maritime emissions by strengthening greenhouse gas intensity limits for maritime fuels and obliging large ship owners to use a percentage of green-hydrogen derived fuels by 2030.

Road transport

One EU law dominated debate in the road transport sector in 2022: The CO2 emissions standards for vehicles regulation, which essentially bans the sale of petrol and diesel cars from 2035.

The law locks in the bloc-wide shift to electric vehicles, consigning the internal combustion engine to automotive history.

But one inclusion in the final text has raised eyebrows.

At the behest of Germany, a non-binding recital clause asks the European Commission to make a proposal to permit vehicles “running exclusively on CO2-neutral fuels” beyond 2035.

For some, this was seen as a reprieve for combustion engines, so long as e-fuels power them.

For others, the recital was merely an example of “strategic ambiguity” – a means to allow politicians of all stripes to claim victory in the negotiations.

Finish line nears for 'Fit for 55' transport laws (5)

EU finalises deal spelling death of diesel and petrol cars

European Union legislators agreed to a deal late Thursday evening (27 October) requiring new cars and vans to be zero-emission as of 2035, a momentous agreement that sets Europe on a trajectory to a largely electric automotive future.

This EU-mandated shift to clean vehicles will require a rapid increase in the number of charging points available throughout Europe.

The car industry and green NGOs formed an unusual alliance this year to lobby EU officials to speed up the rollout of electric vehicle charging stations, arguing that the low number has hurt consumer confidence in the technology.

Legislatively, this is being tackled by the Alternative Fuels Infrastructure Regulation (AFIR).

AFIR will set targets for the number of charging points along key EU motorways while making it easier to pay for charging, particularly when travelling across borders.

Negotiations are ongoing, with a third trilogue set to take place in early 2023.

Finish line nears for 'Fit for 55' transport laws (6)

Will paying for EV charging be as easy as refuelling petrol cars?

The European Parliament wants to make charging for electric vehicles easier by making payment terminals for credit and debit cards obligatory at all charging points. But charging operators warn that a requirement to retrofit existing stations might slow down infrastructure roll-out.

A new ETS for buildings and road transport was agreed on 18 December, putting a price on carbon emissions from heating and driving for the first time.

Lawmakers were careful to ensure the new tariff did not stir public anger.

The carbon price of the ETS2, which will come in 2027 at the earliest, will be capped at €45 per tonne – significantly less than the main ETS price. According to Green lawmaker Michael Bloss, it will mean a maximum increase of around 10 cents per litre on petrol or diesel.

The agreement will also see the majority of the ETS2 revenues ringfenced for the Social Climate Fund, a reserve intended to alleviate the impact on the poorest in society.

December additionally saw the EU tackle the sustainability of batteries sold in the bloc. Lawmakers struck a deal that promises to address supply chain abuses and make EU batteries the greenest in the world.

Finish line nears for 'Fit for 55' transport laws (7)

EU batteries to be the world's greenest under new rules

Batteries produced in Europe will be the most sustainable in the world, under new rules agreed upon by EU lawmakers on Friday (9 December).

[Edited by Nathalie Weatherald/Zoran Radosavljevic]

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