Skip to main content

European Policy Update April 2018

Irene_igbc

European Commission to Produce a Long-Term Climate Strategy On 23 March, EU Ministers instructed the European Commission to...

Contents

European Commission to Produce a Long-Term Climate Strategy

On 23 March, EU Ministers instructed the European Commission to produce a long-term climate strategy “by the first quarter of 2019”. The recommendation was contained in the EU summit conclusions and calls on the Commission to ”present a proposal for a Strategy for long-term EU greenhouse gas emissions reduction by the Paris Agreement, taking into account the national plans”.

The revised roadmap will be an update to the 2050 low-carbon economy roadmap, drafted in 2011. Although the roadmap has been expected for months, there has been some confusion over when they are due.

The Paris Agreement calls on signatories to come up with long-term decarbonisation strategies “in the second half of this century”. However, legal experts disagreed over whether this meant the deadline was on 1 January 2020 or 31 December 2020. At the European Commission, officials had hoped to defer the decision to the next EU executive late next year.

The call has been welcomed by Climate commissioner Miguel Arias Canete who tweeted that there was “no time to lose” and that the EU will deliver.

EU Action Plan for Sustainable Finance Launched

On 08​ March , the European Commission proposed an EU action plan for sustainable finance. This was prepared in response to a report from the High-Level Expert Group on sustainable finance, published in January 2018.

The action plan builds on the High-Level Expert Group’s recommendations and sets out a roadmap to boost the role of finance in achieving a well-functioning economy that delivers on environmental and social goals.

The plan is part of the Capital Markets Union’s efforts to connect finance with the specific needs of the European economy. It is also one of the key steps towards implementing the historic Paris Agreement and the EU’s agenda for sustainable development.

Key Recommendations include:

  • Establishing a common language for sustainable finance, i.e. a unified EU classification system – or taxonomy – to define what is sustainable and identify areas where sustainable investment can make the biggest impact
  • Creating EU labels for green financial products on the basis of this EU classification system: this will allow investors to easily identify investments that comply with green or low-carbon criteria
  • Clarifying the duty of asset managers and institutional investors to take sustainability into account in the investment process and enhance disclosure requirements
  • Incorporating sustainability in prudential requirements
  • Enhancing transparency in corporate reporting

Further information can be found here.

MEPs Establish Position on Europe’s Future Budge

On 14 March, the European Parliament voted in favour of a resolution which sets out their position on the next multi-annual financial framework (MFF).The MFF is the EU’s long-term budget, usually covering a seven-year-period. The next MFF will apply from 2021.
Members of European Parliament (MEPs) have stated that the next EU budget must address the main challenges facing member states, especially migration, security, climate change and defence. To meet these challenges, MEPs voted to increase the next MFF to 1.3% of Gross National Income from the current 1%.

This vote demonstrated MEPs commitment to a budget that is based on the EU’s international commitments including the Sustainable Development Goals (SDGs) and the Paris Agreement. Specifically, MEPs called for climate-related spending to be significantly increased compared to the current MFF, and reach 30% as soon as possible and at the latest by 2027.

This resolution, adopted by a large majority of 485 to 177, provides Parliament’s input to the EU Commission’s legislative proposals on the MFF. These are due in May 2018.

BPIE Paper on Finance and Renovation

BPIE has published a new discussion paper suggesting five principles to improve how the EU finances building renovation and deliver a nearly zero energy building stock within the next Multiannual Financial Framework (MFF).

In this discussion paper, BPIE says that the crucial role of buildings in reducing energy efficiency is not sufficiently recognised and funds for renovation activities are not earmarked accordingly.

BPIE presents five principles to deliver the EU climate priorities (including building renovation):

 

  • Eligibility and conditionality consistent with the Paris agreement for all funds
  • Investments for demand-side infrastructure recognised as a strategic priority
  • Accessibility and availability
  • Flexibility, aggregation and blending
  • Coherence

In the case of building renovation, the paper asserts that funds should be easily attainable to local communities’ cities and municipalities, who have a greater awareness of local markets and the needs of citizens.

Carbon Emissions Hit Record High in 2017

A new report from the International Energy Agency (IEA) – the Global Energy and CO2 Status Report, 2017 states that carbon emissions have hit a record high of 32.5 Gigatonnes in 2017 due to rising energy demand.

The report found that Global energy demand rose by 2.1% in 2017, more than twice the previous year’s rate. Over 70% of this growth was met by oil, natural gas and coal, while renewables accounted for almost all of the rest.

In contrast, energy efficiency improvements slowed significantly, with global energy intensity improving by only 1.7% in 2017, compared with 2.3% on average over the last three years. This was caused by an apparent slowdown in efficiency policy coverage and lower energy prices.

The effect of these trends led to global energy-related carbon dioxide emissions increasing by 1.4% in 2017, after three years of remaining flat. The increase stands in stark contrast to the demands of the Paris climate agreement. The IEA have cautioned that these figures are evidence not enough is being done to combat climate change on a global scale.

European Public Procurement Strategy Package

On 03 October 2017, the European Commission published a Communication which sets out the priority areas for improvement in the area of public procurement both at Member State and Commission level.

In the paper, the Commission indicates its commitment to deliver on some specific actions by the end of 2018. The communication specifically mentions building information modelling and Level(s) as mechanisms to support the procurement of sustainable public buildings.

In response to the above communication, Parliament’s Committee on the Internal Market and Consumer Protection (IMCO) is preparing their own-initiative report on the Public Procurement Strategy. A draft of this report calls on the Commission to assist in the development of methodologies to implement the concept of ‘life-cycle costing’. IMCO is expected to finalise their report in July 2018.

European Commission Publish Review of REACH Regulation

On 05 March, the European Commission published their delayed review of the REACH chemicals regulation. The report proposes 16 measures to improve the implementation of the regulation but does not recommend legislative changes.

However, stakeholders have expressed disappointment that the review lacks specific commitments to:

  • Truly stimulate the substitution of toxic substances
  • Improve the identification of new substances of very high concern
  • Effectively shift the burden of proof to companies
  • Improve the information on hazards and risks of chemicals in consumer products
  • Bring low-volume production substances and polymers into the REACH regulation

 

National News

UK – Consultation on National Planning Framework

The UK Prime Minister has launched a major set of reforms to the National Planning Policy in a bid to meet the Government’s ambition for the delivery of 300,000 new homes a year. The proposals include new standards for quality and environmental protection, a new housing delivery test for Local Authorities and measures to maximise density on brownfield sites.

A consultation on the draft revised text of the NPPF is now open until 10 May.

Norway Approves Adoption of Energy Union Rules

On 22 March, Norway’s parliament approved the adoption of European Union energy rules, despite the objections of some parties. This allows Norway to remain a full member of EU markets and will ensure that Norwegian energy companies have market access on equal terms with companies in the EU via the European Economic Area treaty.

Spain Launches Circular Economy Strategy

Last month, the Spanish government launched a consultation on the Circular Economy Strategy. The strategy aims to implement the EU circular economy action plan and to “achieve a more innovative, competitive and sustainable model of development and economic growth, which reduces as much as possible the generation of waste.”

Alongside the consultation, an action plan for 2018-2020  outlines 70 action areas including the development of green public procurement criteria. Further information can be found here.