Written by Marc Lütz
Dear reader,
The current heatwaves are timely reminders that climate and environmental policy are not abstract long-term debates, but issues with immediate implications for energy systems, infrastructure, supply chains and economic resilience.
June also brought a nice surprise: we met one of our readers, Wout, in person. Always good to know that the newsletter is not just disappearing into inboxes across Brussels.
As Brussels has been warming up, and not only politically, Europe’s sustainability agenda is entering a more practical and increasingly sensitive phase. This edition looks at how competitiveness, security and implementation are shaping the EU agenda, from critical minerals and EUDR scope clarifications to the dropped EPR files under the Environmental Omnibus and the Irish Presidency’s focus on the Circular Economy Act. The direction of travel is clear: Europe is now asking how to reduce dependencies, simplify compliance and support industrial transformation, without losing sight of environmental ambition.
The spotlight
The G7 places critical minerals at the centre of the sustainability and security agenda
The 2026 G7 Leaders’ Summit in Evian took place against a backdrop of geopolitical uncertainty, trade tensions and growing concerns over supply chain concentration. While environmental topics were not at the centre of the summit, sustainability concerns were still reflected in discussions on economic security, energy resilience and critical mineral supply chains. G7 leaders positioned critical minerals as a strategic priority for the digital, energy and industrial transitions. For the EU, this closely mirrors its own efforts to strengthen strategic autonomy while securing access to the materials needed for clean technologies, defence, aerospace and digital infrastructure.
The most concrete outcome was the G7 Leaders’ Declaration on securing supply chains for critical minerals. The declaration recognises the high level of market concentration in critical mineral value chains and the risks linked to arbitrary export restrictions, economic coercion and dependence on a limited number of suppliers. To address these vulnerabilities, G7 leaders committed to closer cooperation with partner countries, stronger transparency and traceability frameworks, increased stockpiling capacity, and greater coordination on financing and industrial production through a new Critical Minerals Resilience and Production Alliance. While primarily framed around economic security, the declaration also places greater emphasis on circularity through commitments on recycling, secondary raw materials, recycled content, and improved traceability. This reflects the ever-increasing link between sustainability, industrial resilience and strategic autonomy.
The declaration comes at a time when the EU is advancing its own Critical Raw Materials agenda. On 24 June, the European Parliament’s ITRE Committee adopted Mohammed Chahim’s report on amendments to the Critical Raw Materials Act, backing measures to support strategic projects across the value chain, from extraction and processing to refining and recycling. Members of the European Parliament also called for price-stabilisation mechanisms, coordinated stockpiling and a conditional export-control clause for permanent-magnet scraps and waste, aimed at keeping recyclable material within the Union.
As discussions move forward, attention is expected to shift from political commitments towards practical implementation. A key question will be how the EU and its international partners combine industrial policy, sustainability and economic security within a coherent critical raw materials strategy. Whether this renewed political momentum can be translated into coordinated action across international partnerships and future EU legislation will become clearer in the months to come.
Impact analysis for your business
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Policy updates
EUDR moves closer to implementation with key scope and system updates
Recent policy developments have introduced a pivotal wave of technical fixes and scope adjustments designed to balance environmental goals with practical implementation. Following the public consultation process, concluded on 1 June, the European Commission has refined the list of products subject to the regulation. Notably, it expanded the scope to include palm-derived chemicals (oleochemicals) used in cosmetics, detergents, and food emulsifiers. Conversely, it confirmed the exclusion of leather, bamboo and rattan products, while also clarifying that packaging, waste, and second-hand goods fall entirely outside the scope.
Meanwhile, the EU Information System has cleared a major hurdle as the European Parliament’s Environment Committee recently rejected objections to its final execution rules, which will reduce the administrative burden on businesses. These developments also introduced key updates to the implementation timeline. While core obligations remain firmly set for late 2026, the newly added product categories will have a deferred application date of 30 December 2027, giving supply chain leaders greater certainty as they prepare for compliance.
Environmental omnibus undergoes co-legislators’ scrutiny
On 24 June, EU Member States reached a partial agreement on the Environmental Omnibus, agreeing on three of the six files under review. Proposed in December 2025, the Commission text seeks to facilitate and streamline environmental legislation. Member states were able to agree on a simplification of the Batteries Regulation, the Industrial Emissions Directive, and the INSPIRE Directive (relating to the sharing of geospatial data). By contrast, work on the two files related to Extended Producer Responsibility (EPR) was discontinued, following a negative assessment from delegations. Member States chose instead to await the Commission’s forthcoming proposal for a Circular Economy Act (CEA), expected in September.
Meanwhile in the European Parliament, work on the proposals under the Environmental Omnibus have been characterised by political divisions. In her May draft report on the permitting file, rapporteur Emma Wiesner (Renew, SE) deleted the Commission provision on fast-tracked “strategic” projects. During the 15 June ENVI debate, Wiesner outlined her concern that such fast-tracking would create a two-tier system and stressed the need for unified, faster environmental assessments with adaptive timelines and stronger digitalisation.
- EPP MEPs argued in favour of keeping fast-track possibilities and an “overriding public interest” regime for strategic projects;
- S&D, Greens/EFA, and The Left warned of risks to species protection, public participation, and access to justice;
- The Commission, for its part, urged MEPs to limit amendments and keep the Omnibus focused on streamlining environmental assessments rather than reopening wider EU environmental legislation.
Irish Presidency puts sustainability and circular economy high on the EU agenda
As of 1 July, the Republic of Ireland assumes the Presidency of the Council of the European Union. The Irish Presidency programme indicates that Ireland will seek to balance the EU’s competitiveness agenda with continued progress on climate and environmental objectives.
As part of these efforts, the Council is expected to focus on preparations for both the COP31 climate summit in Türkiye and the UN Biodiversity Conference 2026, underlining that international climate diplomacy and biodiversity protection will remain a central priority under the Presidency. Ireland is reportedly also advocating for a more strategic and focused EU negotiation position ahead of COP31.
A key legislative file to watch will be the upcoming Circular Economy Act, with Environment Ministers set to hold a first policy debate on 11 December. The file is expected to become one of the EU’s main sustainability priorities moving into 2027. Overall, the Irish Presidency is expected to play an important role in shaping the EU’s sustainability agenda in the coming months, both through international climate negotiations and the advancement of key legislations.
AI and sustainability: compatible priorities?
AI development and sustainability are often viewed as competing priorities. However, when managed under the right conditions, they can go hand-in-hand to secure European competitiveness and close the innovation gap.
These insights were gathered by our colleague Justine Staelens at a Brussels Sustainability Club event last month, amid timely debates on the intersection of digital infrastructure, energy use, and climate change.
There, the consensus among experts was clear: achieving this compatibility requires meaningful regulations and institutional clarity. Creating a predictable environment for investors ensures that the tech and energy sectors operate with a shared roadmap. A prime example of this logic is the proposed Cloud and AI Development Act, which positions sustainability as a core pillar to stimulate investment in clean technology and water reuse.
To ensure an efficient transition, experts highlighted three strategic elements to prioritise: energy and grid management, water infrastructure, and strategic planning.
As power systems grow more complex, AI can actively orchestrate the grid. Data centres must evolve into grid assets that modulate peak demand and support local communities by exporting their waste heat.
Water and energy are inseparable when designing the future of European AI, and water scarcity is a major hurdle. Future-proof infrastructure means moving away from drinking water toward closed-loop cooling systems and repurposed municipal wastewater.
Governments must transition from speculative grid connection models to strategic capacity allocations. This includes mapping out data centre “acceleration zones” based on renewable energy availability and minimal water impact.
If AI and sustainability are to be compatible, it will not happen by accident. Aligning AI growth with sustainability requires moving past fatalism and committing to proactive planning, clear investment signals, and decisive political will.
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