Towards fit for 55: making sense of where negotiations stand

Digital panel discussion with Nicola Rega, Director of Energy, CEFIC; Elisa Giannelli, Senior Policy Advisor on EU Politics, E3G; Dimitri Vergne, Team Leader Sustainability, BEUC; and chaired by Giorgio Corbetta, Senior Associate, Global Counsel, discussing the current state of the package.

Highlights from the discussion:

• Time is of the essence, but co-legislators should focus on quality rather than quantity. The later the package is agreed, the less realistic achieving ambitious targets becomes, which is putting pressure on both Parliament and Council to keep momentum and flesh out an agreement. Some stakeholders are concerned that a tight schedule might lead to ill-designed targets, which won’t help end consumers and industry enable the EU to become carbon neutral by 2050.
   
• New proposals and announcements in December risk taking momentum from Fit for 55. Negotiators will soon be overwhelmed by the review of the state aid guidelines, the taxonomy delegated act on nuclear power and natural gas, and especially the new winter package the commission published on December 14 on decarbonised gas markets. Work on those files will start immediately in January under the French Presidency of the Council, in particular on the future of hydrogen, competing with the Fit for 55 negotiations for attention. However, the panel was hopeful that the practical need for specific targets on renewable energy and energy efficiency – at the heart of Fit for 55 – will focus minds and remove the option for policymakers of agreeing on general political statements.
   
• The costs of Fit for 55 need to be weighed up against the costs of a “non-transition”. Our speakers agreed that there are significant opportunities from the package and from the discussion it has triggered on the need for a “just” transition”. This was about end consumers already being at risk of fuel poverty as well as for businesses struggling with volatile fossil fuel prices. Protecting consumers is about involving them in decision-making, as well as financial compensation. The latter may also be a key sticking point in the negotiations as several member states are increasingly sensitive to higher disbursements by the EU following the recovery plan funding.