EU Energy & Climate Policy Update | No. 30

Dear reader,

Welcome to the new edition of Publyon’s EU Energy and Climate Policy Update. In this bi-weekly update, Publyon provides you with the latest insights on the ‘Fit for 55’ negotiations as well as updates on the energy transition, the energy crisis and the EU’s response, including other relevant news on the EU’s climate and emissions reduction policies.

The spotlight

Heavy-duty vehicles: EU gears up for green trucks

The EU is making headway in reducing transport emissions. Most transport-related files in the Fit for 55 package have now been wrapped up. However, the Euro 7 emission standards are being discussed by the EU institutions. Driving on, there is still more to come: the European Commission will present a Greening Transport Package in mid-July. The package was originally planned for 21 June. The delay raises questions on the appetite to conclude further climate files as Member States are discussing a possible ‘regulatory break’ and the Commission wants to give the EU time to implement the recently adopted climate laws, such as the Fit for 55 files.

In this edition of the newsletter, we turn our attention towards another file: the revision of the CO₂ emission standards for heavy-duty vehicles (HDVs), presented by the Commission in February. MEP Andris Ameriks (Latvia, S&D), Rapporteur in the Parliamentary Committee on Transport and Tourism (TRAN), published his draft opinion last week. The proposal is also set to be discussed by ministers during the next Transport Council on 1 June. High time to get you up to speed!

New truck targets 

The Commission proposes that new trucks, lorries, trailers and long-distance buses should on average reduce their CO₂ emissions by 90% by 2040 compared to 2019 levels. Intermediate targets are set for 2030 (30%) and 2035 (65%). The proposal does not include a 100% zero-emissions target yet. Urban buses, however, will need to be zero-emission by 2030.

The lack of a 100%-target caused criticism from environmental groups, which argue that the Commission has taken into account too many wishes of the transport sector. In the responsible Parliamentary Committee on the Environment, Public Health and Food Safety (ENVI), Rapporteur Yannick Jadot (France, Greens/EFA) has also indicated that he is aiming for more ambitious targets. This means that are still changes expected to the proposal.

The transition to a greener fleet which complies with the new HDV targets can pose significant challenges to road transport operators. Do you want to know what the HDV proposal or other upcoming transport initiatives might mean for your business specifically? Reach out to us! If you want more information on the impact of EU policy on the road transport sector, check out our recently updated blog post.

What’s next?

MEPs in the ENVI and TRAN committees are expected to vote on the Parliament’s position after the summer. A date for adoption in the Council is not yet known, but the EU institutions will surely hope to wrap up work on the file before the European Parliament elections in June next year.

Policy update

European Green Deal agenda not so green anymore ahead of European Parliament elections?

Political challenges ahead of the 2024 European elections are impeding the EU’s green agenda implementation. According to a leaked document seen in Brussels, multiple files on the European Commission agenda would be delayed, such as the Greening Transport Package, making it unlikely for new initiatives to be adopted before the elections.

In the past days, Ursula von der Leyen, President of the European Commission, stated the need to evaluate the capacity of the EU and its economy to handle the numerous new climate laws which have been proposed in the past years.

French President Emmanuel Macron recently called for a “regulatory break” to allow industries time to adapt to the recent surge of regulations. This declaration follows months of heated discussions, especially within Member States, on several contentious files such as the CO₂ standards for cars and vans and the Energy Performance of Buildings Directive.

France and Germany plan to subside own industries

In response to the US Inflation Reduction Act, Germany and France are launching subsidy plans for energy-intensive industries and net-zero companies in their own countries, raising concerns about potential divergence from a coordinated approach at EU level. Both plans aim to prevent companies from shifting their production abroad and give favourable tax cuts and new financial opportunities for businesses.

Executive Vice-President, Margrethe Vestager, openly criticised the German proposal and said that EU countries must abide by the EU State aid rules to ensure that no Member State can gain a competitive advantage over another one.

State of play of ongoing energy discussions

MEP Michael Bloss (Greens/EFA, Germany) reacted to the draft report on the reform of the electricity market design by Rapporteur Nicolas Casares (S&D, Spain). The proposal aims to prepare the European electricity market for 100% renewable energy with incentives for renewables and non-fossil energy storage. MEP Bloss heavily criticised the draft report by Rapporteur Nicolas Casares (S&D, Spain) stating that the amendments unnecessarily restrict the expansion of renewables. The report by the Parliamentary Committee on Industry, Research and Energy (ITRE) is due to be adopted on 19 July.

In the same week, rapporteur Nicola Beer (Renew, Germany) published a draft report on the proposal for establishing a Critical Raw Material Act (CRMA), which aims to ensure a secure and sustainable supply of raw materials in the EU. She welcomes the Commission’s proposal and puts forward amendments to foster innovation and incentives for companies. For instance, she proposes more ambitious targets for EU recycling capacity (+7.5% for each strategic raw materials) and reduces from four to two years the revision of the CRM list. The ITRE Committee plans to adopt its report on 7 September.

EU aims to squeeze Russian oil loopholes

Last week, Member States met to discuss the 11^th package of sanctions against Russia. This time, the spotlight is on third-country tankers, the so-called “shadow fleet”, carrying Russian crude oil. The push to swiftly enforce existing energy embargoes faces no major opposition within the EU.

These oil measures are just one component of a broader package aimed at curbing trade between third countries like China, Iran and Russia. The upcoming package seeks to strengthen previous sanctions, delivering a crippling blow to the Russian economy and undermining the Kremlin’s capacity to fuel conflict against Ukraine. 

All Member States must agree with the new package before it enters into force.

Timmermans bullish on future of hydrogen, industry more cautious

European Commissioner for the European Green Deal Frans Timmermans on 11 May delivered a speech at the World Hydrogen Summit in Rotterdam. Timmermans underlined how the EU has already delivered on increasing hydrogen capacity and is further increasing ambition through legislation such as the revised Renewable Energy Directive. Looking forward, Timmermans stated that hydrogen plays a key role in securing a carbon-neutral future.

However, the Financial Times reported that industry representatives were not quite as positive about the future of hydrogen in the EU behind the scenes. Industry leaders argue that the EU needs to accelerate roll-out significantly and provide a more stable legislative framework if it wants to meet its lofty targets.

Bickering over car emissions continues

In November 2022, the European Commission proposed new stringent pollution standards for vehicles, causing uproar among the sector. As discussions proceed, the future of the new rules faces strong opposition from the automotive industry, which claims the standards are unnecessary due to the planned phase-out of combustion engine cars by 2035.

With the support from some Member States (such as Italy, France and Poland) and MEPs (from the ECR and EPP group), the industry has advocated for a postponement of the Euro 7 implementation beyond the proposed 2025 deadline set by the European Commission, arguing the new rules will require more time for the implementation.  However, the European Environment Agency argues that the updated Euro 7 rules will save lives, as air pollution causes diseases as asthma. 

The leading Parliamentary Committee for Environment, Public Health and Food Safety (ENVI) will debate on the matter on 15 June and the adoption of the report is scheduled on 20 September.

Swedish minister for EU affairs calls for action on EU competitiveness

Due to crisis management in the past years within the EU, the Swedish Presidency wants the EU to think more seriously about long-term competitiveness. The Swedish Minister for EU Affairs Jessika Roswall said that especially COVID-19 and the US Inflation Reduction Act (IRA) caused the EU to invest in competition.

But reacting to imminent crises is not enough and now the Swedish Presidency wants the EU to consider competitiveness more broadly. Currently, Member States have low productivity compared to other countries and spend less on research and development. The Competitiveness Council will meet on the 22 and 23 May, where Member State’s ministers of industry meet in Brussels, and the Swedish Presidency emphasised this as a moment to bring forward the policy debate to boost EU competitiveness.

What’s next?

• From 19 to 21 May, the next G7 meeting will take place in Hiroshima, Japan, where G7 leaders will discuss various pathways to achieve the net-zero goal by 2050.
• On 22 and 23 May, the Parliamentary Committee on Industry, Research and Energy (ITRE) will debate about the Critical Raw Material Act (CRMA), Net Zero Industry Act (NZIA), Euro 7 and the electricity market reform.
• On 24 May, the Parliamentary Committee on Transport and Tourism (TRAN) will vote on the political agreement on the Alternative Fuels Infrastructure Regulation (AFIR) and ReFuelEU Aviation.
• On 1 June, the next Transport Council will take place. Among other things, Member States will discuss developments on Euro 7 and CO₂ emissions standards for heavy-duty vehicles.

Blog

Packaging and Packaging Waste Regulation: Is your business ready for new packaging requirements?

On 30 November 2022, the European Commission published the Packaging and Packaging Waste Regulation (PPWR). It aims to reduce packaging waste produced by the EU and move away from linear packaging models, in line with the EU’s ambition to transition to a circular economy. For businesses making use of packaging, the revision sets new challenges. All businesses will need to review their packaging portfolios and make sure that they are aligned with new requirements for recyclability, reuse, recycled content, and packaging minimisation.

READ ARTICLE

Events update

Where can you run into our team?

Attending the policy conference “How to get Europe ready for electric trucks and buses?” in the European Parliament on 23 May? You might run into our transport expert Sara there.

On 25 May, say hello to our hydrogen expert Arnaud at the event “Hydrogen – Tale of the future or a real game changer?”.

Sara Orcalli

Hi, my name is Sara and I am curating the Energy & Climate Policy Update to bring you, every week, the latest news on ‘Fit for 55’ as well as energy and climate insights. Do not hesitate to reach out should you have any questions or if you want to know how EU energy and climate policies might impact your business.

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