12 July 2021

‘Fit for 55’? Here’s how it can truly be a game-changer for the environment

It is time for the EU to walk the talk of its climate ambitions. The Commission’s proposal for a ‘Fit for 55’ package can be a step in the right direction… or a faux pas. Will the new climate-related EU rules be enough to reach the continent’s climate ambition? We dive into some of the key details for hydrogen, transport and heating.

With its new ‘Fit for 55’ package, the European Commission wants to update the EU’s climate and energy policies to meet the bloc’s goal of a 55% reduction of greenhouse gas emissions by 2030, compared to 1990 levels.

Expected for adoption on 14 July, the policy package will include a wide array of climate-related proposals, ranging from carbon-border taxes to updates in energy and transport policies. If bold enough, ‘Fit for 55’ can enhance the role of clean and renewable energy sources, contribute to the decarbonisation of the heating sector and facilitate the transition from combustion to electric vehicles.

Can ‘Fit for 55’ be a true game-changer for the environment? We have looked into what needs to be done in three key areas: hydrogen, electric vehicles, and heating.

 

The role of hydrogen and its certification

Hydrogen can play a role in the energy transition, but for this to happen, a number of clear and strict conditions need to be met. It must come from renewable energy sources and be used wisely in hard-to-abate sectors only, such as heavy industry, aviation and maritime transport.

Renewable hydrogen will be specifically addressed in the updated Renewable Energy Directive (RED3), which is part of ‘Fit for 55’. The RED3 should only include references to hydrogen from renewable sources and offer a certification scheme that is clear, transparent and coherent with the objective of the directive.

Certification schemes will be key in decarbonising a system that is often too opaque. Renewable production of hydrogen should come from additional production of electricity, so as to keep on promoting the production of renewable power and its direct consumption. No fossil fuels should be employed to make hydrogen.

However, the current system of Guarantees of Origin is not able to create extra renewable capacity that would reduce the amount of energy produced from fossil fuels (it does not ensure the so-called “additionality” principle). In fact, the existing system risks promoting fossil non-renewable hydrogen.

To make sure we know the origin of our hydrogen, we need a more robust certification system for renewable energy sources. Otherwise, hydrogen will not be fit for 55.

 

The roll-out of electric vehicles and smart charging

The ‘Fit for 55’ package must reinforce our transition to electromobility.

To electrify transport, the Commission’s proposal must foresee the deployment of a large and well distributed network of charging stations. The Alternative Fuels Infrastructure Directive (AFID), also part of the package, should set a clear framework for public charging infrastructure across the EU, and make sure that smart charging is widely rolled out as soon as the appropriate standards allow.

A proper integration of EVs into the electricity network is equally important. Only this way can we ensure that the grid absorbs the increased demand, while advancing towards a more renewable and stable electricity network.

Most charging will be done at home and at work, so the Commission needs to go further than simply spreading public plugs. It is essential that all buildings are pre-equipped to allow for the installation of EV or e-bike chargers by 2035. This should be achieved by strengthening the charging requirements of the Energy Performance of Buildings Directive (EPBD) as it is the only Directive currently supporting residential charging.

To ensure a future-proof roll-out of smart charging, EVs should not only drive on renewable electricity but also act as storage for excess renewable electricity. To this end, the EPBD must include provisions for non-proprietary, interoperable smart charging and building energy management supported by harmonised standards.

 

Decarbonisation of the heating sector

Decarbonisation of the heating sector should be addressed by three pieces of legislation in the ‘Fit for 55’ package: the Energy Efficiency Directive (EED), and the previously mentioned EPBD and RED3.

Overarching, consistent and binding requirements for home heating systems should help reduce energy demand and shift towards efficient and zero carbon alternatives. These requirements should set stringent CO2 emission limits for boilers, insulation, and other criteria aiming to mainstream zero-emission buildings.

The package should support direct and renewable electrification of heating, as this is the most efficient way of decarbonising the heating sector. As already mentioned above, the use of hydrogen should be limited to heavy industry, aviation and maritime transport only – not in buildings.

Concretely, the EED should strengthen requirements for deep renovation and energy efficiency in all public buildings. Complemented by ambitious minimum levels of renewables in buildings, RED3 should ensure that heating systems are genuinely decarbonised.

When defining ‘Zero Emission Buildings’ (ZEBs) and setting stringent ‘Minimum Energy Performance’ requirements (MEPs), the EPBD should prevent the installation of fossil-fuel operated heating systems in new buildings, and in existing buildings when a heating system is replaced. The EU Energy Label for space heaters could support the fossil fuel phase-out. For this to be effective the revised energy label should set a very ambitious threshold for heaters to reach the highest energy-efficiency classes, making it impossible for systems fired with fossil fuels to get A or B labels. This ambitious label could then be used to indicate whether a building can be dubbed ‘Zero Emission’.

The EED, EPBD and RED3 may sound rather cryptic, but we might as well become familiar with these acronyms already. The initiatives behind them can deliver a set of measures that will require manufacturers to shift to renewable heating systems. This will be more effective than requiring owners or occupants to pay for their buildings’ emissions.

Finally, if the EU Emissions Trading System (ETS) is extended to buildings, the relevant benchmark should be aligned with high energy efficiency-rated systems and the lowest CO2 emission performance across all available heating solutions.

  

The Fit for 55 package has the potential to set the rules that enable a true transformation for many sectors, with energy, transport and heating being key. This transition needs to be grounded in robust regulations, irrevocably closing the backdoor for fossil fuels, all the while giving incentives to people so they choose zero-emission transport and dwellings. Cosmetic change will not cut emissions – only future-proof rules will.

ECOS is co-funded by the European Commission and EFTA

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