EU Updates - February
The EU’s New Regulation to Halt Greenwashing
The European Commission kicked off the new year with the announcement of two crucial initiatives that will contribute to the EU’s economy becoming more circular and carbon neutral.
In line with the European Green Deal’s promise to ensure that all packaging in the EU market will be reusable or recyclable in an economically viable manner by 2030, the European Commission published a proposal on:
Packaging waste
Biobased, biodegradable and compostable plastics
Carbon removals
This proposal also aims to address the issue of greenwashing and preventing the use of misleading green claims in product advertising in the European Union.
Packaging and plastics
A few years ago, the EU made plastics fully circular, limiting and even banning some of the most polluting single-use plastics such as straws, cutlery, cups, plates and food containers. Today’s priority is to put the entire packaging industry on the path to circularity.
The European Commission’s proposal aims to:
Reduce the quantity of packaging waste (e.g. restrict unnecessary packaging, encourage the use of reusable packaging options).
Make all packaging on the EU market reusable.
Increase packaging made from recycled materials as much as possible
Additionally, the adoption of a unified, single label for all packaging will guide consumers on how and where it should be recycled. Furthermore, Member States will need to implement deposit return schemes for plastic bottles and metal cans.
Biobased and biodegradable plastics
The new framework clarifies for both producers and consumers the exact conditions that must be met for these plastics to be environmentally friendly.
Carbon removals
Deep emissions cuts will always be at the heart of efforts to achieve climate neutrality. As complete elimination is unattainable, carbon removals, whether through technology or natural carbon sinks, will soon be mandatory. The European Commission’s initiative will develop relevant regulations to monitor, report and verify the authenticity of the removals.
Suitable financial assistance will also be provided to farmers, foresters and land managers who choose practices significantly benefiting biodiversity.
For more information:
EU Project Manager
Due Diligence Update
The European Union (EU) has some of the most rigorous, innovative, and advanced corporate sustainability reporting requirements in the world. Europe is adopting expansive actions under the flag of a "European Green New Deal" to tackle climate change, promoting sustainable innovation, and make Europe the first climate-neutral continent by 2050.
On February 23, 2022, the European Commission adopted a proposal for a Directive on Corporate Sustainability Due Diligence. The proposal widely conforms to the European Parliament’s recommendations and is applicable to three groups:
All EU limited liability companies with over 500 employees and 150€ million+ in net annual turnover worldwide.
Other limited liability companies operating in defined high impact sectors (e.g. textile, agriculture, minerals) who do not meet the first group’ thresholds but have more than 250 employees and turnover of 40€ million worldwide and more. (Rules will start to apply 2 years later than for the first group).
Non-EU companies active in the EU who meet turnover thresholds aligned with first and second groups, generated within the EU
The Ongoing Legislative Process
In the latest Draft Report released by MEP Lara Wolters, the Parliament’s Committee on Legal Affairs took a more decisive and ambitious stance, strengthening obligations by proposing to:
Lower the thresholds for EU companies to 40 million euros (instead of 150 million euros) and to 250 (instead of 500) employees on average and for those active in a high-risk sector to 8 million euros (instead of 40 million euros) and 50 (instead of 250) employees on average, provided that 30% (rather than 50%) of this net turnover was generated in a high-risk sector.
Reinforce the concept of "value chain" to widen the relevant material scope upstream and downstream.
Pressure for avoiding disengagement where the impact of disengagement would be greater than the adverse impact.
Introduce the concept of good governance impact
On the other hand, the Council’s general position takes a different direction and introduces slight changes to the legal proposal, including:
The concept of "chain of activities" in place of the "value chain", that is defined as the activities of a “company's upstream business partners and downstream business partners”.
The revised concept of direct and indirect "business partners", to replace that of Established Business Partners.
The legislative process is said to reach a final agreement in the European Parliament by the end of Q1 2023, or in Q2 2023.
For more information:
EU Project Manager
Labour Migration: The Commission and Member States Strengthen their Collaboration to Address Labour Shortages in the EU.
The European Commission adopted the Skills and Talent Package on April 27, 2022, to address current demographic and migration challenges in the EU while getting ready for future needs. This is a critical cornerstone of the Pact on Migration and Asylum.
On the 28th of October, Commission President Ursula von der Leyen proposed that 2023 be designated as the European Year of Skills. This emphasises the cruciality of addressing labour shortages and getting a skilled workforce for the future of Europe's economies and societies.
One goal is to attract people from non-EU countries with the skills needed on the EU labour market, including by improving learning opportunities and mobility and facilitating qualification recognition.
In this context, the Labour Migration Platform, an initiative of the Skills and Talent Package that will support the objectives and actions of the proposed 2023 European Year of Skills, was created to promote labour migration from third countries to the EU while at the same time ensuring proper management and targeting of where labour and skills are needed.
On the 10th January 2023, Commissioner Ylva Johansson (DG HOME) and Commissioner Nicolas Schmidt (DG EMPL) held the platform’s first meeting with representatives from Member States specialising in migration and employment policy as well as European Social and Economic partners.
At the meeting, participants exchanged on:
Labour market challenges
Best practices concerning labour migration
The most effective tools to attract skilled workers to the EU
Further meetings will keep addressing the above-mentioned in addition to labour shortages in critical sectors, including the green and digital transition.
A skilled workforce is essential for ensuring future competitiveness and capitalising on the opportunity provided by the twin transitions. A well-managed labour migration is one measure that can help to overcome this challenge.
To advance collaborative efforts, the Commission and Member States are leveraging the platform to support the implementation of EU-level initiatives on legal migration and employment, such as the future EU Talent Pool and EU Talent Partnerships, both of which are outlined in the Commission's Skills and Talent Package.
The Labour Migration Platform will meet on a regular basis to improve cooperation and advancement in the field of EU labour migration. Based on the subjects discussed, relevant experts and organisations, in addition to Commission and Member State representatives, may be invited to participate. The goal will be to learn from one another and progress together.
For more information:
EU Project Manager
Davos: Von der Leyen Proposes the Net-Zero Industry Act in Response to the US Subsidy Binge
European Commission President von der Leyen addressed the World Economic Forum audience, revealing new details in the EU's Green Deal Industrial Plan to ensure that the EU remains at the forefront of the clean tech industry.
The actions are in response to the US Inflation Reduction Act, a $369 billion green subsidy package that the EU fears will drive industry abroad. Von der Leyen warned in her keynote speech that the United States' actions had caused concern in the EU capital.
Following several escalating economic crises caused by the Covid pandemic and the invasion of Ukraine, the Commission is currently consulting with EU nations on how to best revise the bloc's emergency state aid rules.
The Green Deal Industrial Plan will cover the following four key pillars to make Europe the home of clean tech and industrial innovation on the road to net zero:
The Creation of a Regulatory Environment based on a “Net-Zero Industry Act”, which will aid in the rapid scaling of sectors crucial to achieving net zero (e.g. solar, wind, green hydrogen, and carbon capture)
Financing seeking to increase investments and financing of clean-tech production
Counter skilled labour shortages ensuring the development of the needed skills in an attempt to facilitate the green transition, in other words increased investments in workers of the clean tech industry
Strong and Resilient Supply Chains: Trade (promote open and fair trade to stimulate international exchanges and making the most of trade agreements.)
Moreover, the European Commission is working on a European Sovereignty Fund as part of the mid-term review of the EU’s long-term budget. This will be in addition to tax breaks for the green industry and less stringent state aid rules for clean technology.
For more information:
EU Project Manager
The Sweden’s Presidency Has Started - What to Expect for the Next 6 months?
From the 1st January 2023 until the end of June 2023, Sweden will hold the presidency of the Council of the European Union. This will give the opportunity to the northern country to build the path to advance the Council’s work on legislation and liaise with the other EU institutions. Sweden is the last country of the 2022 trio presidency (French, Czech Republic, Sweden).
According to the published programme, Sweden will focus on the following four priorities:
Security – unity
In close collaboration with partners, a consensus must be built for a strong European security.
Competitiveness
The Swedish Presidency will work to keep a coordinated approach to European competitiveness at the forefront of the political agenda.
Green & energy transitions
The Sweden’s presidency will implement the Fit for 55 package and accelerate the energy transition.
Democratic values and the rule of law – our foundation
Upholding the principle of the rule of law and fundamental rights is thus an essential component of Sweden's Council Presidency.
In addition to the above-mentioned priorities, the Sweden’s presidency is also expected to work on EU regulatory frameworks that promote non-toxic material cycles, increased use of high-quality recycled materials in products and other business models that promote circular economy.
The Swedes also plan to move forward with the revision of the Packaging and Packaging Waste Directive.
In conclusion, the Sweden’s presidency could also have an influence on the regulation on the transport sector, more precisely on the regulation that are still under negotiation such as the Alternative Fuels Infrastructure Regulation (AFIR), ReFuelEU Aviation, and FuelEU Maritime.
From the 1st July 2023, the new Trio presidency will take the lead of the Council of the European Union (Spain, Belgium, Hungary).
For more information:
EU Project Manager
