15.07.2021    |    Ostalo

Successful event of the first presentation of the "Ready for 55" climate and energy package

Today we listened to the presentation of the "Fit for 55" package published yesterday. Representatives of the EU and national decision-makers, financial institutions, creators of the business landscape and the future presented their views on what opportunities and dangers it brings and what will need to be done to achieve the set goals to which the EU and Slovenia are ambitiously committed.

Minister Vizjak: “I believe that the package will shake the entire EU.”

The EU has announced milestone 55, which is a decisive step towards the first climate-neutral continent by 2050. 

In light of the recent floods in Germany, Belgium, and Switzerland, the fires in the Balkans, Siberia, and the infernal temperatures in Canada that have killed a billion sea creatures, it is increasingly clearer that the world needs an ambitious plan to mitigate climate change. The European Commission's (EC) legislative package thus brings about fundamental changes and modernization of the economy. The topic of a comprehensive legislative package will also be important for Slovenia during its presidency of the Council of the European Union, especially the treatment of the comprehensive package as a whole, although it consists of 12 diverse legislative acts. Among other things, the package will change business conditions, which will affect all economic sectors.

On the road to change

In December 2020, the EU voted to reduce greenhouse gas emissions by 55% compared to 1990. Experts spoke at an international online event in the organization of CER – Sustainable Business Network Slovenia and the Representation of the European Commission in Slovenia about how the new legislative package will affect the economy, how the economy should become prepared, and what novelties the package of measures will bring. In the context of the European Green Agreement and especially the mentioned new climate and energy package, the online event highlighted the adopted legislative proposal to the relevant Slovenian stakeholders from different fields concerned by the package (environment, energy, economy, and finance) even before the discussion at the Council of the European Union and the European Parliament.

The Slovenian Presidency will enable a broad discussion in the design of the Fit for 55 package, which was unveiled by the European Commission on Wednesday, 14 July. According to Minister Andrej Vizjak, the Slovenian Presidency wishes to ensure coherence and a coherent approach within the package. “Our goal is to make as much progress as possible on this package,” he said at the online event. He said that Slovenia was already starting a discussion on the level of the working group by working on the package. At an informal meeting this week, ministers will be briefed on the details of the package, which means that the first political debate will take place already. Next week, at an informal meeting of ministers who will get acquainted with the package, there will also be room for the first political discussion.

What are the expectations?

“At CER, we expect the green transition to be ambitious, transparent, and fair, that it will be based on open dialogue and that it will be inclusive and connective. We expect encouraging and coordinated action from legislators and financial institutions. Decisive and immediate action by all stakeholders is necessary. The costs of inaction will be much higher than the costs of green investments,” said CER Executive Director Ana Struna Bregar among others in her address to the participants. Jerneja Jug Jerše, Head of the European Commission Representation in Slovenia, emphasized that with this package we are moving towards a better, green future: “We all know that something needs to be done in the light of climate change. Change is necessary. Both Member States and citizens want the EU to become climate neutral. The presented package answers how to do it. The package is an opportunity. The cost, any change for participants in the economy, is also a challenge. For those who find it harder to adapt to change, therefore, a social climate fund is proposed. The transition must be fair to all. In this case, the Commission is for dialogue. I would like to see how we can still help in the better implementation of the package. However, opinions are still divided over whether the package is ambitious enough, too much, or too little.” In connection with this, Vizjak hopes for a rich discussion and suggestions not only on the goals, because an exchange of views is expected, but also on how to approach responsibly and implement objectives in the most appropriate, fair, and responsible manner. Namely, the goals regarding the competitiveness of the Slovenian and European economies must also be pursued.

“It is right and we support the EC's ambition in the fight against climate change. However, we are only a single continent and we must, therefore, connect these efforts with other continents too,” Vizjak reminded and added that “we want a sustainable green recovery”. The Slovenian Presidency will try to go as far as possible with this package and leave it as coordinated and prepared as possible to the successor, France. In his opinion, however, this will be a difficult task.

What does the package offer?

According to Vizjak, the package will shake the entire EU. It will be presented in more detail in the future by Frans Timmermans, Vice-President of the European Commission. “The emissions trading system (ETS) remains the cornerstone of European climate policy. At its core, there is the principle that the polluter pays and it contains market incentives to reduce emissions. This means that the package will strike the budgets of all those who use fossil fuels, not only economic entities. It will also cause quite a bit of discussion and a lot of analyses in this direction. The negotiations will show how the new ETS system will be implemented. The latter also includes emissions from buildings and road transport, which is a key novelty,” said Vizjak. “In the process, the key role of the proposed instrument will also be the social climate fund with which the European Commission wants to compensate for the negative effects on the social situation of the most vulnerable to the green transition,” he explained. In terms of the consequences for the situation of households and economic entities, he said that the effects and consequences for the position of households and business entities are yet to be determined in the coming weeks and months.

In addition to the ETS system, coordination on the effort-sharing regulation will be a demanding task. “The EU Environment Council must agree on new targets on the level of the member states which will then help achieve emission reductions of 55 percent and climate neutrality by 2050,” said Vizjak about the most demanding work. The Minister also stressed that Europe must become a leader in this process. However, it must not stand alone.

What does the economy say?

“The economy mainly welcomes the proposed package and measures towards a low and neutral society,” said Gregor Benčina, president of Slovenijales Group and vice president of the CER council. He added that the measures represent an opportunity for Slovenia from an environmental, economic, and social point of view. He estimates that the consequences of emission coupons will be an increase in energy prices and, consequently, transport. There will also be challenges in the field of the energy system, such as the method of obtaining electricity. “Thermal energy is saying goodbye. Nuclear energy and renewable energy sources are coming to the fore. There is also the question of whether to invest more in energy production or in reducing its consumption,” he said. He also mentioned that the economy needs clear guidelines, clear regulatory frameworks, and a coherent fiscal policy. Time for transition is also important.

Slovenia will have to do more

“More and more Europeans are supporting a more determined Europe in terms of achieving green development and climate neutrality,” said Ivo Schmidt of the European Commission's Energy Directorate. “Most Europeans believe that we need to address climate change immediately. One in four Europeans believes that national governments need to do more in this direction. We need to make better use of resources and care for the environment. And this requires a radical change in all sectors of society. The architecture that ensures the achievement of climate goals is complex,” he said. “It also includes the aviation and shipping sector, as well as transportation that will be included over time. More environmentally friendly biofuels and the use of biomass in all sectors will also be emphasized.” On the EU's remaining ambitions, he said the EC's goal was to plant 3 billion trees. “This package will live on and there will be money available,” Schmidt said and added that countries will receive money for certain environmental projects. He also said that Slovenia will have to do more to reduce emissions because we are below the European average. “Penetrating programs are available, such as the Just Transition Fund, InvestEU, the Cohesion Fund, the Common Agricultural Policy, the Recovery and Resilience Facility, from which 1.8 billion euros are available for Slovenia, etc., which will help Slovenia achieve these goals,” he added.


Package Fit for 55
Ivo Schmidt, European Commission, Directorate General for Energy

Energy and other green projects 
Francesco Ferrero, Head of the EIB Office in Slovenia

What are necessary next steps for EU countries and business regarding Fit for 55 Package 
Martin Porter, Executive President of the Cambridge Institute for Sustainability Leadership in Brussels 

Business for active climate responsibility. A study on 200 companies’ profitability and their climate efforts
Nina Ekelund, Executive Director Haga Initiative, Sweden

Energy of Slovenia
Ana Vučina Vršnak, Assistant Executive Director, Slovenian Energy Chamber representative