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
Will the requests for an EU ‘regulatory break’ slow down the EU’s green agenda?
In mid-May, President of the European Commission Ursula Von der Leyen acknowledged the need to assess the EU’s capacity to handle the influx of new regulations stemming from the European Green Deal. The statement came a week after Macron’s call to introduce a ‘regulatory break’ at EU level to give industry time to adapt.
As a result, certain initiatives parts of the green agenda might face delays, with the next European Parliament elections set for June 2024. Over the course of its five-year mandate, the current European Commission presented 46 legislative proposals under the Green Deal agenda, with 29 already successfully concluded.
Macron’s domino-effect
Speaking at an event focused on re-industrialisation at the Elysée Palace, President Macron outlined the key aspects of France’s future green industry policy. He emphasised the need for a pause in EU-level regulations to allow businesses sufficient time to adapt and implement the necessary changes. Facilitating the green transition with financial support should be prioritised rather than introducing additional green policies into the existing framework.
Macron’s speech kicked off a spill-over effect leading other EU leaders to echoing his concerns, for instance, the Belgian Prime Minister Alexander De Croo called for a pause on environmental regulations, such as Euro 7, to avoid overburdening companies. Also, the German Justice Minister Marco Buschmann argued that the EU industry needs less bureaucracy to be competitive.
With the EU elections in sight, what does this mean for the post-2024 EU agenda?
With the upcoming European Parliament elections in June 2024, support for the EU green agenda is waning. EU leaders and policymakers are concerned about the impact of climate laws on citizens and industries, citing higher prices and burdensome regulations. They fear European companies will face unfair competition from non-EU rivals. Governments are therefore calling for increased support for their industries.
Germany’s refusal to approve a ban on new CO2-emitting cars from 2035 and France’s demand for nuclear energy in the revised Renewable Energy Directive reflect cracks in the EU’s climate change efforts. President Macron has also proposed a “regulatory break” to allow EU companies time to adjust to new climate rules.
The future of the European Green Deal and the post-2024 EU agenda are in question. While the European Commission plans to continue working on climate and environmental legislation, some files are delayed, such as the Greening Transport Package, and others face strong opposition, like the Nature Restoration Law. The EPP Group called for a pause on some green legislation, and Belgium, which supports a ‘regulatory break’, will play a key role in finalising pending files as it will take over the Presidency of the Council of the EU in January 2024.
In the past weeks, Green Deal chief Frans Timmermans has been meeting with several EU policymakers voicing his frustration over this trade-off on climate legislation. He reminded that the European Green Deal is a package and not ‘an à la carte menu’ where EU legislators can pick-and-choose what to support and what to block.
These next months are therefore crucial for determining the EU’s direction as the European Commission has started discussions on the 2024-2029 priorities – will it continue with the Green Deal or adopt a more industry-friendly agenda? Publyon closely monitors these developments and can help companies shape the post-2024 EU priorities. Contact us to learn more and get involved.
Policy update
ENVI votes to curb industrial emissions, but includes fewer farms than Commission’s proposal
The EU is working on setting stricter rules for industrial emissions. On 24 May, the Committee on the Environment, Public Health and Food Safety (ENVI) adopted its position on the revision of the Industrial Emissions Directive (IED). Installations covered by the revised Directive (including mines, large farms, and certain battery production sites) need a permit to operate, which is granted by national authorities. MEPs argue that pig and poultry farms with more than 200 “livestock units” (LSUs) and cattle farms with more than 300 LSUs will be covered by the IED. This prompted criticism from environmental stakeholders as the ENVI Committee weakened the original Commission’s proposal.
What’s next? The European Parliament expects to vote on the IED in a plenary session this summer. The Committee for Agriculture (AGRI) had earlier called for cattle farms to be exempted entirely from the IED. AGRI’s coordinators may decide to table their own amendments at the plenary session to secure the exemption. Once a common position in the European Parliament is reached, negotiations with the Council of the EU – which adopted its respective position in March – can begin.
Europe gears up for new infrastructure charging requirements: AFIR nears approval
Europe will have to get ready for new infrastructure charging requirements. In March this year, the European Parliament and the Council of the EU already reached an agreement on the Alternative Fuels Infrastructure Regulation (AFIR), which sets requirements for the EU’s network of charging and fuelling stations for alternative fuels. These alternative fuels include batteries, hydrogen and natural gas.
On 24 May, the Parliamentary Committee on Transport and Tourism (TRAN) gave its green light to the agreement. Under the deal, electric charging stations for cars will have to be deployed along the EU’s most important roads by 2026. The Parliament will now have to give its final approval to the agreement in a Plenary session. Once the Council of the EU also approves it, the AFIR will enter into force and become law.
Ministers want quick position on raw materials
On 22 May, EU Industry Ministers met to discuss the Critical Raw Materials Act (CRMA), proposed by the Commission in March. The CRMA should make the EU less dependent on China and other countries for strategically important raw materials – a good example is lithium, which is important for batteries and wind turbines. To do so, the CRMA proposal aims to relax licensing rules for new mining projects and create a joint buying platform for EU companies.
During the Council of the EU meeting, ministers stressed the importance of speeding up processes, but also pointed to concerns, such as the social unrest that European mining projects often face. Concluding the discussion, Swedish Industry Minister Ebba Busch underlined that the Swedish Presidency aims to reach a common position in the Council of the EU before summer.
Net Zero Industry Act faces nuclear questions
Do we hear a nuclear echo? It seems like nuclear questions are set to rule yet another piece of EU legislation: the Net Zero Industry Act (NZIA). The NZIA is a piece of legislation aiming to enable the production of 40% of clean technologies needed for the green transition in Europe. The EU’s concern is to scale-up production to level up with other parts of the world, such as the US or China.
The Commission presented the draft law in March, which is now being considered in the parliamentary Committees and in the Council of the EU. On the European Parliament’s side, procedures follow their usual course. On 26 March, Rapporteur Christian Ehler (EPP, Germany) in the Committee on Industry, Research and Energy (ITRE) published its draft report on the NZIA. A key amendment was the removal of small modular reactors, which perform nuclear fission, from the text. Other committees are expected to hand in their draft opinions throughout the months of June and July.
However, in the Council of the EU, there’s trouble on the horizon. A coalition of Member States is pushing for the inclusion of nuclear energy as a strategic net-zero technology. Surprise, surprise, France is again leading an alliance of countries including Finland, Slovenia, Croatia, Bulgaria, Czechia, Romania and Hungary. Stay tuned for more, as we at Publyon follow the NZIA legislative developments closely.
Energy security strengths are fuelling clean energy investments
Good news on the renewable energy front: according to a publication of the International Energy Agency (IEA) solar energy is expected to surpass oil production this year. The global energy crisis is a key enabler for these important developments, as investors are increasingly concerned with energy affordability and energy security.
Clean energies are said to develop faster than what people might anticipate, with an expected 24% annual clean energy investment rise. However, this is only the mere beginning, as fossil fuels are predicted to rebound in 2023, coal demand peaked in 2022, and many emerging and developing economies still struggle with investment in renewable energies.
What’s next?
- 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.
- On 5 June, the Parliamentary Committee on the Environment, Public Health and Food Safety (ENVI) will meet to discuss on the Net Zero Industry Act.
- On 12 – 15 June, the European Parliament will meet in Strasbourg for a Plenary session. A draft agenda may be found here.
- On 11 July, it is expected the European Commission will present a Greening Transport Package.
Blog
European Cyber Resilience Act: can new requirements for products strengthen your organization’s cybersecurity resilience?
Have you heard of the European twin transition before? The European Union has made a point of pairing the green and digital transitions, as developments in each transition are intimately linked to meet the climate targets set by the EU. Digitalisation has an important role to play in the entire energy value chain, including transport, distribution, supply and consumption. This means questions surrounding data and cyber security are intrinsically linked with the energy and transport concerns of your business. This month, we suggest you to get familiarised with one key legislation piece in our blogpost on the Cyber Resilience Act.
READ ARTICLE
Where can you run into our team?
- On June 8, you will find our colleague Nicolas at Green Deal 2.0: a renewed governance for the Green Deal, organised by the European Committee of the Regions.
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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