“Fit for 55” package gives increased recognition to the local level but fails to deliver systemic change

Our analysis of the European Commission's proposals


Publication date

July 16, 2021

On the 14th of July, the European Commission released a mammoth legislative package made up of 13 proposals in order to be “Fit for 55”. As the catchphrase eloquently suggests, the aim is to align the current climate and energy policies with the new objective of 55% of reduction of Green House Gases by 2030 compared to 1990’s level.

Local authorities and communities featured prominently

For Energy Cities, this legislative firework has been quite colourful. Indeed, local authorities are very much under the spotlight and their role in the energy transition has been well underlined by the European Commission in the whole package.  For example, the proposed revision of the European Energy Efficiency Directive encourages the Member States to implement a requirement for local heat planning among cities of at least 50 000 inhabitants while calling for appropriate financial and technical support from member states.

The role of the local level and the recognition that the benefits and control of projects need to be more evenly shared with citizens is also acknowledged through the boost given to citizen energy communities, which are featured prominently in the package.

No silver bullet for the energy transition

Leading up to the adoption of the package, debates have raged around controversial energy sources like hydrogen energy and biomass, with supporters and opponents putting up a fierce fight. This shows there is still a widespread tendency to think the energy system in terms of silver bullet solutions, a relic from the century-old habit of relying on a one-way delivery of a single source of (fossil) energy. This is essentially distracting attention from the fact that there will not be one energy transition but many, each adapted to the local context and opportunities.

The shift toward locally-based energy systems will require an arsenal of measures that concretely and effectively support cities in implementing this structural change. As our report shows, cities however lack the human, financial and technical means to do so. More thus needs to be done at the EU, national and regional level to bridge this resource gap notably through programmes such as the EU City Facility (see our guide on the topic) or the LIFE programme ( check our position paper EU Environmental funding: five building blocks to trigger a systemic shift to climate neutrality)

Looking ahead, we look forward to seeing how new orientations within the Multiannual Financial Framework and the EU semester will help deliver that change.

The reformed carbon pricing system

Cities are best placed to initiate a just transition as they know best the citizens and the needs of certain vulnerable populations. The fit for 55 package has set up a “Social Climate Fund” to compensate for the consequences of creating a new carbon allowance system, separate from the current EU Emission Trading System (ETS), covering buildings and road transport. To make the best use of these resources at the local level, cities should be involved in the design of the projects pipelines and national plans that will be fed by this new fund

While the creation of the social climate fund is a welcomed move, we nonetheless need to acknowledge that market forces alone have proved to be a very unreliable ally to solve climate issues, let alone social ones. What we need is to create a systemic shift of our economic model, that makes the most of our local resources without creating social and planetary imbalances (here is our new Agenda for a transformative decade).