EU Energy & Climate Policy Update

Dear reader,

Welcome to a new edition of the monthly Energy and Climate Policy Update. As the European elections come closer, the European Parliament is wrapping up as many energy and climate files as possible. At the same time, the Commission unveiled some new (non-legislative) initiatives, which we also take a closer look at.

Before you move on…

Undoubtedly, 2024 is a time of political shift. The upcoming European and Belgian elections taking place in June, are a unique moment for businesses as they provide an exceptional chance to proactively shape the political dialogues and decisions that will influence the forthcoming term in Belgium and the broader EU.

Publyon is proud to introduce you to our Beyond the Ballot series of webinars and reports that will help your organisation to be well-informed about the political developments in Brussels and provide you with guidance on how to effectively take advantage of opportunities stemming from the elections.

Request a copy of our ‘Beyond the Ballot’ reports on the European and Belgian elections here.

If you are curious and want to dig more, we also have a ‘Beyond the Ballot’ podcast with short updates on the future of the EU.

For more information, visit our dedicated page.

The spotlight

EU needs to do more to address climate risks, EEA warns

On 11 March, the European Environment Agency published its first-ever European climate risk assessment. The report identifies and assesses 36 climate risks which could have consequences across Europe in five theme areas (ecosystems, food, health, infrastructure, and economy and finance). It further identifies priorities for future EU policy action.

The EEA’s key message is that the EU is unprepared for climate disasters, which are likely to occur a lot more often as temperatures rise: extreme heat, wildfires and floods will become more frequent and destructive.

Among other things, the EU is not sufficiently prepared for climate change when it comes to energy security, the report warns. Prolonged droughts could hamper energy sources such as hydropower and nuclear power. Electricity grids will also struggle under extreme heat – especially in Southern Europe.

The EEA issues a stark warning: policies which address climate risks are made for the long term and their immediate benefit might not always be clear, but they are needed nonetheless. Urgent action is needed to better plan land use and address infrastructure risks, for example.

In response to the report, the European Commission on 12 March published a Communication on Managing Climate Risks. The Communication sets out how the EU can become more resilient to the impacts of climate change by getting ahead of climate-related risks.

What measures does the Commission envision? It calls on Member States to act quickly and implement existing climate adaptation measures. Further-reaching measures, which might require a legislative proposal, are absent from the Communication. The Commission says it will update the Natura 2000 guidelines to reflect adaptation needs, reinforce soil health monitoring and help EU countries to boost climate resilience to the Common Agriculture Policy. Climate risks relating to infrastructure will be integrated into a 2026 update of European infrastructure standards.

Next steps

As a Communication, the new Commission initiative mostly contains measures aiming to improve coordination on climate adaptation. The EEA report, however, concerns stark warnings which might warrant legislative action in the coming Commission mandate. At the same time, climate adaptation has not been a major campaign theme (yet). Whether it will be a major theme after the European elections remains to be seen; while there has been a growing backlash against the Green Deal, the EEA also notes that preventing climate disasters is usually less controversial than broader climate policy.

Policy update

Nature Restoration Law vote postponed due to growing opposition

Final approval of the Nature Restoration Law – a crucial aspect of the EU’s Green Deal aimed at addressing ecosystem degradation and biodiversity loss – has been postponed in the Council of the EU due to the opposition or abstention of several Member States. Despite passing the European Parliament, the future of the law is now uncertain. The delay has sparked frustration among environmental advocates and raised concerns. The law is encountering opposition from conservative and farming interests, reflecting broader resistance to the EU’s green agenda.

Conditional support for the European Commission’s 2040 climate target

On 25 March, a debate between the EU’s environmental ministers resulted in conditional support for the Commission’s proposal to set a 90% climate target for 2040: ten were in favour, three were against, and thirteen asked for additional concessions. Climate Commissioner Wopke Hoekstra sensed significant support, although work still must be done. Czech Republic, Greece, and Poland opposed the proposal pointing towards too much ambition, the need for more analysis, and potential public dissatisfaction. Countries with conditional support emphasise the need for flexibility to accommodate national specificities, a lack of sufficient resources, and concerns of harming industrial competitiveness due to overburdening. Twelve ministers stated their support to include nuclear energy in the EU’s energy mix beyond 2030.

Energy Charter Treaty exit plan presented by the European Commission

The European Commission on 21 March presented a plan to the European Parliament to withdraw the EU from the Energy Charter Treaty, with Member States having the option to remain if they choose. Parliament’s consent is required for the withdrawal to be finalized. The treaty, criticised for hindering climate and energy targets and allowing companies to indict signatory countries, saw some Member States like Germany, Poland, and France already withdrawing. The Commission’s proposal allows member states to remain, waiting for the modernisation of the treaty to address climate concerns. Response to the proposal among MEPs was divided, with some supporting modernisation efforts and others advocating for a coordinated exit from the treaty. Parliament’s priority is seen as supporting Member States’ requests to consent to the EU’s withdrawal.

European Parliament approves Energy Performance of Buildings Directive

On 18 March, the European Parliament adopted the Energy Performance of Buildings Directive (EPBD) with a large majority. The upcoming law aims to address the significant energy consumption and CO2 emissions from the buildings in the European Union. The revised Directive includes targets for reducing energy use in both residential and non-residential buildings, along with measures such as banning subsidies for carbon-fuelled heaters and promoting the use of solar panels. The law places responsibility on Member States to implement the policies effectively. The revised Directive now awaits approval from the Council of the EU to become European law.

Wind energy back on track but problems persist

Europe’s wind power industry is showing renewed optimism and confidence in meeting the EU’s 2030 renewables goal, despite historically low build-out rates. Increased permits in key markets like Germany and investments in offshore facilities signal growth. The EU’s response to the energy crisis, including simplification of permitting rules and procedures, has stimulated European industry morale. However, the industry still faces challenges related to grid infrastructure investments.

European Parliament approves new Euro 7 Standards

On 13 March, the European Parliament adopted its previous agreement on the Euro 7 regulation, which sets stricter non-CO₂ emission standards for motor vehicles and aims for better market surveillance. The new law includes stricter exhaust emission limits for buses and trucks in laboratory and real-world driving conditions, while maintaining the current Euro 6 standards for passenger cars and vans. For the first time, EU standards will also include tyre and brake particulate matter (PM10) emissions for cars and vans, as well as minimum battery life requirements for electric and hybrid vehicles. Before the regulation can come into force, formal approval from the Council of the EU is required.

Empowering Europe’s energy transition and the importance of prioritising grid development

Insufficient electricity grid capacity poses a threat to Europe’s energy transition, leading to delays, cutbacks, and increased costs, according to an analysis by thinktank Ember. Grid development plans often lag clean energy targets, risking inadequate preparation for integrating wind and solar power. Grid investment needs urgent development, with inconsistencies across Europe potentially leading to a gridlock by 2030. Despite some progress, bold action is needed to align grid planning with clean energy goals. The current focus on grids presents a vital opportunity for governments and businesses to address these challenges and shape Europe’s future power grid effectively. The European Commission presented an action plan on electricity grids in November, but more action could thus be needed.

Business impact

Boosting biotechnology and biomanufacturing in the EU

On 20 March, the European Commission published a Communication on boosting biotechnology and biomanufacturing in the EU. The Commission seeks to streamline regulations in one of the fastest-growing and most innovative industries to enhance efficiency while supporting the sector in its growth in the internal single market. What can businesses expect? Read more to find out!

Why the focus on biotech?

Thanks to groundbreaking advancements in life sciences, digitalisation, and artificial intelligence (AI), the biotech sector within the EU has grown rapidly, with figures surpassing the overall economy’s growth rate between 2008 and 2018.

At the heart of the new Communication is a review into current biotech regulations, which is expected to wrap up by mid-2025. This review could lead to a groundbreaking EU Biotech Act, designed to simplify and unify the biotech rulebook across Europe.

For which sectors is the initiative relevant?

Biotechnology and biomanufacturing solutions employ biological materials and methods that are transforming numerous industries. A few of them:

Biotech solutions lead the way in developing new life-saving drugs, vaccines, and therapies in the healthcare sector.
Biotech offers more sustainable solutions, such as bio-fertilisers and biopesticides in the agricultural sector.
Bioplastics offers an alternative for single-use, non-recyclable packaging in the packaging and waste management sector.
With the potential for renewable alternatives to fossil fuels through biofuels, it has the potential to transform the energy sector.
Food production may be made more efficient by establishing lab-grown meat options.

A series of proposed actions

To navigate complex regulatory frameworks, the Commission will initiate a study to streamline biotech legislation across EU policies, aiming for faster approval processes and market access by mid-2025, potentially leading to an EU Biotech Act.
To bridge the gap between research and commercialisation:
- An EU Biotech Hub by the end of 2024 to assist biotech companies in navigating regulations and accessing support for scaling up.
- The Commission proposes the inclusion of biotech and biomanufacturing in the European Innovation Council (EIC) accelerator Work Programme 2025 to foster innovation development and scalability.
To anticipate on a digitalised world with new upcoming technologies, the Commission seeks to support the adoption of AI, particularly Generative AI in biotech and biomanufacturing.
The Commission will conduct a study to identify barriers for investments and propose solutions, including venture capital, stock exchanges, and post-trading infrastructure, by mid-2025. While also encouraging both public and private investments.
Ensuring fair comparisons between fossil-based and bio-based products by 2025, including by reviewing the Product Environmental Footprint (PEF) to better assess environmental impacts.
Strengthening cooperation with international partners.
Reviewing the EU Bioeconomy Strategy by the end of 2025.

What does this mean for your business?

Since the European Commission is now reviewing the regulatory landscape for biotech, potentially leading to a new Biotech Act, now is the perfect time for companies using biotech solutions to provide input on what they need from the EU. Want to know more about how to get in touch with policymakers? Reach out to us!

Blog

Carbon capture, utilisation and storage (CCUS): what is the EU’s plan?

On 6 February, the European Commission presented an Industrial Carbon Management Strategy, which outlines upcoming EU actions relating to carbon capture, utilisation and storage (CCUS). This blog post looks at carbon capture in a European context: what is the current legislative landscape? What is in the new strategy? And what does it mean for businesses?

Podcast

'Beyond the Ballot' podcast

Competitiveness and sustainability: how can these two terms make peace in the next EU mandate? And how can we make sure organisations retain their competitiveness within the EU? How can we ensure the EU plays a solid role in revitilising the economy in the face of competition from China and US? All these questions set the stage for Episode 2 of our podcast.

Listen on Spotify | Listen on YouTube

Watch the episode

What’s next?

From 2 to 5 April, the Connecting Europe Days – the EU’s flagship mobility event – are taking place in Brussels.
On 10 April, the European Parliament will vote on proposals regarding methane emissions reduction, CO2 emission standards for new heavy-duty vehicles, and a Union certification framework for carbon removals.
On 17 and 18 April, a special European Council will take place, where former Italian Prime Minister Enrico Letta is expected to present his report on the future of the EU Single Market.
On 22-25 April the European Parliament’s plenary session will convene for the final time in the current mandate, with several key votes taking place. These include the Net-Zero Industry Act, as well as regulations concerning the classification, labelling, and packaging of substances and mixtures.

Martijn Meijer

Hi, my name is Martijn and I am curating the Energy & Climate Policy Update, aiming to bring you insightful updates straight from Brussels. At Publyon, I work mainly on transport and energy files. Do you have any questions on EU energy and climate policies or how these might impact your organisation? Feel free to reach out!

Contact

EU Energy & Climate Policy Update | No. 47