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.
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Dear loyal readers, the Publyon’s EU Energy and Climate Policy Update has been keeping you up to date on the latest developments for the past year and with the European elections ahead of us, we want to take some time to reflect on the next steps and ask for your feedback.
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The spotlight
EU’s Critical Raw Material Act: one step closer to strategic autonomy
Since 20 September, the European Parliament and Council of the EU have been hammering away at an agreement on the Critical Raw Material Act (CRMA). After three inter-institutional negotiations, the co-legislators reached a provisional agreement on 13 November. The deal keeps the overall objectives of the Commission’s proposal but strengthens several elements of the Act.
Why is it important?
Raw materials are crucial to Europe’s economy, they form the base for all our industries across the supply chain and are essential to produce among others semiconductors, batteries, and clean technologies that drive the European Green Deal.
The EU is highly dependent on non-EU countries, and especially China when it comes to mining and processing critical raw materials. EU’s dependence on the international market for raw materials threatens its strategic autonomy, proven by Chinese export restrictions on gallium and germanium, two essential metals in semiconductors. The CRMA tries to reduce these dependencies by strengthening domestic supply chains while reinforcing international agreements with several non-EU countries.
EU companies need to start reviewing their supply chains and identify possible shortcomings when it comes to the availability of certain materials and technologies. Mapping CRMs, engage with suppliers and invest resources to optimise the recyclability of materials will safeguard companies’ resilience in the medium- and long-term.
What’s new?
The CRMA has multiple targets for the EU to achieve by 2030 like: increasing the extraction of raw materials in the EU with 10%, increasing the EU’s processing capabilities with 40% and the EU’s recycled materials with 25%. Lastly, the EU wants to minimise, its dependency on one supplier to a maximum of 65% per material.
The final list includes 34 critical raw materials, which includes 17 strategic raw materials. Compared to the original proposal, the agreement adds aluminium to the list of strategic raw materials (synthetic graphite is also included for three years) and obliges the Commission to update the list every three years instead of the original four-year review cycle.
The simplified permit procedure should not exceed 27 months for extraction projects and 15 months for recycling projects. Also, companies exposed to shortages of CRM’s in strategic technologies should regularly carry out a risk assessment of their supply chain.
Next steps
Parliament and Council must now formally approve the agreement before it can be published in the Official Journal of the European Union. A vote in the Parliament’s Industry, research and Energy Committee (ITRE) is scheduled for 7 December, followed by the vote in Plenary on 11 December. The Council of the EU will also have to formally adopt the text before the CRMA enters into force early in 2024.
Policy update
European Parliament approves stricter CO2 targets for trucks and buses
The Parliament has taken a significant step forward in curbing CO2 emissions from heavy-duty vehicles like buses and trucks. The Parliament’s position retains the original targets for a 45% reduction from 2030-2034, 65% from 2035-2039, and 90% from 2040 onwards, and includes vocational vehicles in the scope (garbage trucks, tippers, and concrete mixers). Notably, MEPs include biofuels and synthetic fuels in the definition of carbon-neutral fuels.
The plan aligns with the Green Deal and REPowerEU objectives, emphasising the transition to zero-emission trucks and buses for improved air quality. Rapporteur Bas Eickhout (Greens, NL) has stressed the significance of cleaner air and creating incentives for investments in electric and hydrogen-powered technologies.
The Parliament’s move is not the final step, though. The next phase involves sitting down with the Council of the EU for Trilogue discussions, which will commence soon.
European Parliament pushes for global fossil fuel subsidy ban by 2025 at COP28
During a busy Plenary in Strasbourg, MEPs voted their recommendations for COP28, the UN Climate Change Conference set to start on 30 November. They call for an immediate and global halt to direct and indirect fossil fuel subsidies globally by 2025.
MEPs are also pushing for an ambitious global target: tripling renewable energy and doubling energy efficiency by 2030. To achieve this, phasing out fossil fuels and ceasing new investments in extraction would be needed.
The resolution does not stop there. It emphasises strengthening climate commitments, boosting international climate financing, and reducing the climate impact across various sectors. The resolution forms the Parliament delegation’s mandate for COP28 in Dubai from 30 November to 12 December 2023.
MEPs take strides toward self-sufficiency in clean tech
The European Parliament geared up to bolster its clean energy technology production with the Net Zero Industry Act (NZIA), addressing the EU’s dependence on imported technologies. The NZIA seeks to enhance manufacturing capacity for solar, wind, and storage technologies.
Key measures include ensuring the EU produces 40% of its green tech needs by 2030 and storing 50 million tonnes of CO2. MEPs broadened the legislation scrapping the original limited technologies list and opted for a dynamic approach. Now, it spans the entire supply chain from components to machinery. The Commission will have to regularly update the list to keep pace with innovation.
Not stopping there, MEPs introduced ‘Net-Zero Industry Valleys’ to fast-track green tech permits. It is Council of the EU’s turn to adopt its position on 7 December. Then, Trilogue negotiations between two institutions will determine the final legislation shape.
EU advances certification scheme for reliable carbon removals
The EU is intensifying its commitment to achieve climate neutrality by unveiling an EU-wide certification scheme for carbon removals. Acknowledging the ongoing importance of emission reduction, the EU recognises the necessity of actively removing carbon from hard-to-abate sectors such as agriculture, cement, steel, aviation, and maritime transport.
The EU’s certification framework aims to ensure accurate measurement, long-term carbon storage, and alignment with environmental goals. The European Parliament supports this initiative, advocating for transparency through an EU-wide registry and distinctions between carbon removal methods.
In the recent vote, MEPs tightened requirements, preventing companies from receiving certifications for reversible carbon removal practices. They clarified definitions for carbon removals, carbon farming, and carbon storage, with carbon farming now requiring emission reduction for at least five years. Negotiations with the Council of the EU will finalise the legislation’s text. Check out our last newsletter’s deep dive for more insights on carbon removal certifications.
EU institutions come to an agreement on rules to cut down methane emissions
Part of the Fit for 55 package, the Council and Parliament have agreed on new rules to monitor and reduce methane emissions in the energy sector. Methane, a potent greenhouse gas second only to carbon dioxide in its climate impact, is targeted under the broader EU Methane Strategy of 2022 and the Global Methane Pledge from COP26. which commits countries on slashing methane emissions by 30% by 2030 in comparison with 2020 levels.
The legislation enhances monitoring, reporting, and inspection of potential methane emissions, along with the detection and repair of leaks. Additionally, it establishes global monitoring standards for transparency in methane emissions from gas, oil, and gas imports into the EU. The legislation awaits now formal endorsement by both EU institutions before it can be published and come into force.
What’s next?
- On 27 November, the Committee on Industry, Research and Energy will vote on the European Hydrogen Bank.
- On 29 November, the European Commission will publish its action plan to facilitate grids roll-outs.
- From 30 November – 12 December COP28 will take place in the United Arab Emirates.
- On 4 December, the Transport Council will decide on its General Approach for a CountEmissions EU and on the revised Directive on weights and dimensions for heavy-duty vehicles.
- On 7 December the Competitiveness Council will vote on its General Approach for the Net-Zero Industry Act.
Blog
EU AI Act: what does it mean for your business?
The AI Act is a pioneering legislation aimed at regulating AI technologies within the EU. It categorises AI systems into risk-based groups, imposing specific obligations. Prohibited systems violate fundamental rights, while high-risk ones, like biometric identification, face stringent rules. The Act applies to all involved in AI development and use, with potential sanctions for non-compliance, but also fosters innovation and trust-building in the sector.
READ ARTICLE
Events update
Where can you run into our team?
On 28-29 November, you can grab a drink with our colleagues Lennert and Arnaud at European Business Summit.
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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