Clifford Chance

EU Launches "Fit for 55" Initiative - Crucial Changes to Carbon Trading Introduced

29 July 2021

On 14 July 2021, the European Commission adapted a package of proposals to make the EU's climate, energy, land use, transport and taxation policies fit for reducing net greenhouse gas emissions by at least 55% by 2030 (compared to 1990 levels). Achieving these emission reductions in the next decade is a crucial step for Europe to become the world's first climate-neutral continent by 2050 and making the European Green Deal a reality.

The 2030 target is in line with the Paris Agreement objective to keep the global temperature increase to well below 2°C and pursue efforts to keep it to 1.5°C. In its proposals, the European Commission is introducing the legislative tools to deliver on these targets. An important part of the European Commission's proposals relates to carbon trading. Carbon trading has been and continues to be a key factor of the EU's climate initiatives. In this briefing, we are summarising the European Commission's new and most relevant proposals for carbon trading.

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