"Fit for 55" refers to the European Union's comprehensive legislative package introduced in July 2021, designed to transform the EU's climate, energy, transport, and taxation policies. The name comes from the EU's target to reduce net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels.
This package represents a pivotal framework that affects carbon pricing, emissions trading, and investment strategies. It notably strengthens the EU Emissions Trading System (EU ETS), introduces new carbon pricing mechanisms, and creates additional requirements for energy-intensive industries. This package has significant implications for financial markets, as it influences investment decisions, creates new opportunities in green finance, and affects the valuation of carbon-intensive assets.