What's in the EU's second 'Fit for 55' package?

The much-awaited revision of gas-market legislation, officially known as the hydrogen and decarbonised gas market package, aims to facilitate the market entry of renewable and low-carbon gases, such as hydrogen.

But the major novelty of the initiative is the proposal for joint gas-purchases on a voluntary basis – a measure first suggested by Spain after energy prices surged to record-levels in October.

This would create a more integrated approach to gas storage, in case of an emergency or lack of supplies - reducing future exposure to price volatility and dependency on third countries.

Natural gas represents around a quarter of the EU's energy consumption - but 90 percent is imported from third countries, in particular Russia and Norway.

While Spain and France called for a fundamental reform of gas-buying rules, nine EU countries voiced concerns, arguing that the long-established rules governing the bloc's internal gas and electricity market contribute to security of supply.

Boosting the renovation wave

Under a revision of the Energy Performance of Buildings Directive (EPBD), the commission aims to boost renovation rates of existing buildings to reduce emissions.

In the EU, buildings are responsible for 40 percent of the bloc's energy consumption and 36 percent of greenhouse-gas emissions - from construction, usage, renovation and demolition.

It is estimated that EU climate targets require three percent of buildings to undergo deep renovations by 2030. However, the current rate is only 0.2 percent.

Boosting the renovation wave would require an increase of investments of around €2.75 trillion during this decade, according to estimates from the NGO E3G.

It is still unclear whether the revision of the EPBD will include minimum energy performance standards linked to a specific timeline, as there is some opinion that such a measure would be at odds with national competences.

Last month, Green MEPs urged the commission to introduce minimum energy performance standards for all types of buildings before 2030, especially those considered to be the "worst-performing buildings".

As part of its first Fit for 55 package, Brussels proposed to create a new separate carbon market from 2025 to 2032 to reduce emissions from road transport and buildings - two sectors that have struggled to reduce emission in recent years.

However, some MEPs and consumer groups fear that this approach will put a major burden on poor households.

Green mobility

Although urgent action is needed across all sectors of the EU economy to reduce emissions, this is particularly important in the transport sector - one of the few economic activities that has seen emissions increase in recent years.

The EU executive is expected to unveil reform of the Trans-European Transport Network (TEN-T) rules governing roads, railways, and other transport infrastructure across the EU – with new intermediary targets for the completion of core corridors.

Additionally, Brussels will also adapt a new urban mobility strategy to increase the use of public transport and cycling to reduce congestion, air and noise pollution in cities.

Just transition?

The new package of proposals will also include a recommendation for member states to address the social and labour aspects of the climate transition.

This will include the implementation of the so-called Social Climate Fund, aimed at tackling energy poverty which today affects to some 34 million Europeans who are unable to warm their homes adequately.

Green groups, however, have warned EU officials that the most vulnerable households cannot solely rely on this new fund.

Meanwhile, the commission is also expected to publish the revision of the existing Environmental Crime Directive after an internal evaluation found a series of shortcomings and loopholes for enforcement.

"The EU needs to send a clear signal that harming the environment does not pay and should be criminally sanctioned effectively in all member states," said Francesca Carlsson from the European Environmental Bureau.

The EU's police agency Interpol and judicial agency Eurojust have both reported an increase in environmental crime, and the need to further harmonise criminal law and penalties.