Hear! Hear! The Fit for 55 Package mammoth is released

Yesterday (14 July 2021) the European Commission released its long-awaited massive Fit for 55 Package. This includes a first batch of legislative proposals to reduce the EU’s greenhouse gas emissions by 55% below 1990 levels by 2030. EU is now attempting to develop the tools and policies to deliver its ambition.

The climate mega-package includes a reform of the EU’s cap-and-trade carbon market, a carbon border levy pricing dirty imports, a ban on new internal combustion engine car sales from 2035, and a slew of updated targets for renewable energy, energy efficiency and carbon removals from the land-use and forestry sectors, among other measures. E.DSO applauds the ambitions laid out in the new package, while highlighting the need for distribution grids investment that will facilitate the uptake of technological solutions required for a successful and timely green transition.

The package contains 13 cross-cutting legislative proposals of which 8 revisions of existing legislation and 5 new proposals. It will be complemented by additional proposals by end of the year, and fiercely negotiated over the next 2-3 years before it becomes law.

E.DSO welcomes this balanced package aiming to ensure a transition which makes Europe fair, green and competitive, sharing responsibility evenly across different sectors and Member States, and providing additional support where appropriate. E.DSO remains however vigilant to monitor the coherence between all energy and climate-related rules.

Christian Buchel, Chair of E.DSO and Director for Territories, Customers and Europe, commented: “This package provides the EU with a unique opportunity to put the right policies in place and aligning these with the Energy System Integration. We consider the investment needs in distribution grids to be highly important. These are asking the DSOs an effort calculated up to €400bn until 2030. This could only be achieved via a supportive and comprehensive regulatory framework to accelerate cost-effective, clean and renewable based electrification across sectors.”

E.DSO members are ready to take on their share of this challenge, with plenty of opportunities and solutions to enable society to decarbonise. To attain this, electrification is the solution. It would increase energy security, with less need for imported energy alongside the reduction in fossil fuel use. Clean and renewable electrification comes with major socio-economic benefits, in terms of jobs, health and system efficiency, and can put citizens at the heart of the energy transition. These benefits should be fully exploited in the package while delivering on the spirit of the European Green Deal.

Roberto Zangrandi, Secretary General of E.DSO, underlined that: “The package will only be fit for 55% if it is fit for electrification. Continued investments in electricity infrastructure is the way forward since direct electrification will be the basis of the decarbonisation.”

Part of the package are the Renewable Energy Directive (RED II) and the Energy Efficiency Directive (EED). E.DSO considers that EED should capture efficiencies from electrification across the energy system due to the shifting and savings achieved through demand-side flexibility.

With regard to Renewable Energy Directive (RED II), E DSO welcomes the revamped regulation and considers that promotion and acceleration of demand-side flexibility efforts to accompany and support higher electrification in all end-use sectors remains crucial.

What happens next?

The package will now be subject to negotiations between the Council and the European Parliament to determine the final scope of the laws. The Commission will have to defend its position in negotiations between the Council and the European Parliament that will determine how the EU implements the laws. On our side, it remains to be seen how effective this approach will be in practice, and there is undoubtedly scope for the interdependencies of the policies to manifest in challenges and shortcomings.