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
Greening Freight Package: bumpy road?
On 18 September, Publyon EU hosted its Annual Transport Networking Event around the Greening Freight Package and its implications for the industry. The keynote and discussions during the event brought forward important insights on the proposals, stakeholders’ concerns, and what can be expected in the future.
The clock is ticking, with less than a year before the European elections, the co-legislators will need to move swiftly to conclude the negotiations on the Greening Freight package. Much remains to be done with the three published proposals enticing debates between stakeholders and legislators.
Balancing between green goals and market reality
The Covid-19 crisis has showed how vital logistics is for our economy and society. However, freight operations need to contribute to the green transition and, at the same time, increase efficiency and competitiveness. Policymakers and stakeholders seem to agree about the need to decarbonise freight transport. Nevertheless, the Commission’s recipe left a bittersweet taste and raised many questions.
Are consumers willing to pay higher prices for their deliveries? Is the EU infrastructure ready for a shift to electric trucks and increased rail freight? How can SMEs survive and compete in the decarbonisation of freight operations?
For instance, the revised Weight and Dimensions Directive was praised for the focus on electric trucks. However, the incentives to continue to use road transport, even though via electric heavy-duty vehicles is criticised by green and some socialist legislators, who want stronger support for rail freight.
Industry stakeholders voiced concerns about the current market demand for sustainable freight operations. Lacking infrastructure, poor efficiency in multimodal operations and high prices often lead companies to choose the less green option. The EU should work to not only regulate but also incentivise a shift in B2B and B2C behaviour.
Another directive getting a lot of attention was the Combined Transport Directive which would regulate truck transport carrying goods to rail and water links. The proposal is part of the package; however, the European Commission has delayed the publication due to ongoing discussion about the support framework. The delay and uncertainty of this publication sparked critiques of stakeholders in the logistic sector, who argued that this is a missed opportunity to facilitate a modal shift in freight operations.
Despite the several questions and concerns, it is certain that both policymakers and the transport industry share a pivotal role in achieving carbon-neutral goals and ushering in a net-zero transport era. As Ms. Annika Kroon (DG MOVE) stated “We can do a lot at the European level, but it is up to everyone to make it actually happen”.
Next steps
With the Combined Transport Directive still in the pipeline there is a lot of pressure to finalise the other proposals. The Spanish Presidency has indicated that the Weights and Dimensions Directive holds priority with the aim of achieving a General Approach by December. Regarding the CountEmissionsEU, a more detailed analysis is necessary before progress can be made; hence, a Council’s position is unlikely before the end of the legislative term. In the European Parliament, Rapporteurs have been appointed and the Committees can finally start internal discussions.
If you want to know more about how the Greening Freight Package could impact your company or if you want to stay informed about political developments please reach out to our transport expert, Mr. Niels van den Ouden at N.vanden.Ouden@Publyon.com.
Policy update
Council of the EU adopts position on Euro 7 emissions regulation for vehicles
The Council of the EU has approved its position on the new Euro 7 standards, a comprehensive framework covering emissions, battery durability, and performance of motor vehicles. This regulation, covering cars, vans, buses, and trucks, aims to establish more stringent emission rules and reduce air pollutants from road transport. It retains existing emission limits for light-duty vehicles but lowers limits and adjusts test conditions for heavy-duty vehicles.
Member States sided with the carmakers who have been calling for less stringent requirements arguing that the impact of the rules would be detrimental for the industry. During the negotiations, a group of Member States (read Czech Republic, France and Italy) has been vocal in amending the Commission proposal to ensure Europe’s automotive competitiveness.
Despite being one of the EU major car-producing nation, Germany voted against the compromise text noting that the Council’s position would see the EU falling behind international air quality standards. Negotiations with the European Parliament will start as soon as the European Parliament adopts its position. On 12 October, ENVI Committee, which is responsible for the proposal, will vote on its draft report.
Opinions on Net-Zero Industry Act are adopted, waiting for Industry Committee’s report
On 20 September, several Committees in the European Parliament, Committee on Environment (ENVI), Committee on Employment and Social Affairs (EMPL) and Committee on the Internal Market and Consumer Protection (IMCO), adopted their opinions on the Net-Zero Industry Act.
Notably, ENVI’s opinion removes nuclear power from net-zero technologies and excludes sustainable biogas and biomethane technologies from the list of strategic Net-Zero technologies. Moreover, it specifies that carbon capture and storage (CCS) technology should be used in particular for unavoidable industrial process emissions.
The vote in the responsible Industry Committee is scheduled on 25 October, while the Council of the EU plans to reach its position on 7 December.
EU agrees to ban misleading green claims in consumer products
The Council of the EU and European Parliament have reached a provisional political agreement on a directive designed to empower consumers for the green transition. The directive seeks to combat misleading greenwashing practices and ensure that sustainability claims are substantiated.
The agreement introduces several provisions, including addressing unfair claims related to greenhouse emissions offsetting, combating early obsolescence, clarifying trader liability in certain cases, and introducing a harmonised label for commercial guarantees of durability.
The deal still needs formal adoption by both institutions and is part of a broader package of proposals addressing environmental claims and the right to repair. Biljana Borzan, MEP from the S&D leading the negotiations on behalf of the Parliament, expressed satisfaction with the agreement, emphasising that it’s a significant step to combat greenwashing and ensure claims are substantiated.
Germany considers energy price subsidy for industries, raising EU controversy
Germany is exploring the possibility of implementing a multi-billion Euro subsidy program to alleviate high energy costs for industries. This move, aimed at preventing an exodus of businesses, marks a significant shift in policy. Previously, the government had ruled out such subsidies due to concerns about conflicting with EU regulations limiting State aid for industry.
However, with Germany’s economic challenges and the threat of companies relocating to countries with lower energy prices, Chancellor Olaf Scholz has expressed openness to the idea. The proposal may involve tax cuts for energy-intensive industries or expanding an existing price subsidy. This initiative is likely to raise concerns about fair competition within the Single Market, especially considering Germany’s substantial state subsidy spending in recent years.
Germany already introduced a massive €200 billion package to reduce energy costs for consumers and companies last year, with limited benefits for energy-intensive industries. Despite this, Germany accounted for a significant 53% of the EU’s total €672 billion in state subsidies last year, raising concerns about fair competition and unlevel playing field within the EU Single Market.
Spanish Presidency raises concerns over the EU’s battery dependence on China
The Spanish Presidency’ paper states that by 2030 the EU could become as dependent on China for lithium-ion batteries and fuel cells as it was on Russian gas before the war in Ukraine. The EU’s net-zero goals by 2050 create the necessity for energy storage which in turn increases the demand for lithium-ion batteries, fuel cells and electrolysers.
While the EU has a strong position in the intermediate and assembly phases of making electrolysers, with a more than 50% global market share, it is heavily dependent on China for fuel cells and lithium-ion batteries. The need for strategic autonomy from China goes further than mere batteries, according to the paper the same is true for the digital-tech space.
The paper will feed the discussion on competitiveness and strategic autonomy with EU leaders during the informal European Council meeting on 6 October.
What’s next?
- On 2-3 October, the hearing of Hoekstra and Šefčovič will be held in ENVI Committee to become new Commissioner for climate action and executive vice-president of the Commission in charge of the Green Deal.
- On 6 October, the EU leaders will convene for an informal European Council meeting, where the competitiveness of EU businesses will be one of the main topics.
- On 12 October, ENVI Committee will vote on Euro 7.
- On 17 October, the European Commission is expected to publish its Work Programme for 2024.
- The Industry, Research and Energy Committee will vote on Net-Zero Industry Act on 25 October 2023.
Blog
EU elections 2024: which way is the wind blowing?
In June 2024, European Parliament elections will shape the EU’s future. Key issues include economic recovery, sustainable growth, and the single market, with less focus on climate change.
READ ARTICLE
Events update
Recap of our Annual Transport Networking Event
Read more on linkedin
Where can you run into our team?
On 10 October, you can grab a drink with our colleagues Lennert and Martijn at the ‘‘CountEmissionsEU: Why transport needs more transparency in GHG reporting?’’ event organised by European Logistics Platform.
Sara Orcalli
Hi, my name is Sara and I am curating the Energy & Climate Policy Update to bring you 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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