To fulfill its commitments under the Paris Agreement, the European Union plans to increase the ambition of its 2030 greenhouse gas emissions reduction target. As a basis for this debate, in December 2020, the EU Commission published the communication "Stepping up Europe's 2030 climate ambition" and a related Impact Assessment (IA) on raising the 2030 target in September 2019. In the communication, the Commission proposed to increase the EU target to -55% compared to 1990 and presents different policy approaches to reach this target.

The EU has raised its climate target for 2030 to at least -55 %. Agora Energiewende and Ecologic Institute sketch a "Fit for 55" package that can ensure both environmental integrity and solidarity. It investigates four options how to regulate heating and transport emissions, focusing in particular on the pros and cons of expanding emissions trading to these sectors. The paper makes the case for a smart mix of EU-level carbon pricing and companion polices.