EU’s Marshall Plan set to EUR 1 trillion investment initiative

The European Commission has announced its intention to launch a unique Recovery Plan in the history of the EU. This plan is already part of an unprecedented effort by the EU and Member States to support the economy. With the activation of the general safeguard clause of the Stability and Growth Pact in March and with the €500 billion coronavirus relief plan decided on April 9, more than EUR 3 trillion have already been invested to support the European economy. However, with this Recovery Plan, the Commission wishes to move to another level.

On 16 April, the President of the Commission Ursula von der Leyen, presented the basis of this “Marshall Plan” to the European Parliament. She called for innovative instruments to be introduced in the MFF in order to unlock massive investments of up to EUR 1 trillion. This new “Marshall Plan” will double the ambition of the sustainable investments foreseen by the Green Deal and the European Digital Agenda. Investments will be concentrated in particular in the technology and digital sector, in energy and in R&D. In addition, the Commission promises to invest massively in transport and in the agri-food sector.

In conclusion, the new “Marshall Plan” is set to at least double the EU’s ambition in terms of investment compared to the initial ambitions of the Green Deal and the Digital Agenda. Massive financing opportunities will start in the coming months. In view of these huge opportunities, it is crucial for all European economic actors to strengthen their presence in Brussels in order to make the most of this unprecedented EUR 1 trillion investment “Marshal Plan”.

EU’s New Circular Economy Action Plan

On 11 March 2020, the Commission published its New Circular Economy Action Plan. This document provides the basis for multi-sectoral regulatory work aimed at creating a circular economy by 2050. The plan foresees the introduction of new consumer rights, new ecodesign regulations and the mobilisation of several European research funds. Most impacted sectors are ICT and electronics, batteries and vehicles, packaging, building and construction, food, textiles, water and nutrients. The rules and regulations planned will have an impact on a global level, even for companies which are not present in the Single Market. Indeed, an important part of this plan focuses on the EU’s efforts to impose European standards at the international level.

In details, the Commission will propose a Sustainable Product Policy Initiative that will extend eco-design directives to the broadest possible range of products. The Sustainable principles will introduce new specific obligations to increase durability, reusability, the right for the consumer to upgradability of the products. In addition to these obligations, new consumer regulations will guarantee consumers a “right to reparation”. These regulations will also reinforce the obligations to inform the consumer about the lifespan of the product and the repair procedures. From 2020 to 2023, the Commission will adopt a number of regulations strengthening eco-design and waste reduction requirements. In addition, strategies on textiles and chemicals will soon be published.

In conclusion, this plan will have very important consequences on all sectors related to vehicles, food, electronics, plastics and textiles. Activities in the sectors concerned will be greatly influenced by these new regulations, from conception to sale. Consultations for several regulations have already begun. All companies concerned must therefore think about intervening in the decision-making process of the European institutions very quickly.

EU presents its new Industrial Strategy

On March 10, the Commission presented its Industrial Policy Strategy. This plan sets out a broad work programme: from the implementation of a digital industrial strategy to the revision of competition rules. This strategy plans for a strengthening of the fight against barriers to trade within the internal market, development plans for key sectors and a strengthened partnership with industry in policy making. In addition, the Commission plans to internationalise its standards, in particular through WTO negotiations. Therefore, all companies, even those that do not trade directly with the EU, are concerned by this action plan.

More concretely, the plan provides for the modernisation of the Internal Market. The Commission plans to set up a Single Market Enforcement Task Force, a review of intellectual property rules and a recasting of the competition and anti-trust rules. In addition, the Commission will, in the coming months, present its strategies sector by sector. This concerns in particular the chemical sector and the mobility sector. The Commission will build its strategies and priorities through co-decision via the Industrial Forum and by fostering public-private partnerships.

In conclusion, the internal market will be strengthened, and structuring rules will be reviewed in the coming months. In addition, sector-by-sector industrial strategies will have an impact on product design and on research and innovation through funding programmes and industrial alliances supported by public actors. As the Commission has announced that these regulations will be co-designed in consultation with industry representatives, it is crucial for industry to strengthen its presence in the European decision-making process.

EU opens public consultation for its upcoming Climate Law

In March, the Commission opened the public consultation for the European Climate Law which is the first major realization of the New Green Deal. As part of this process, the European Commission is seeking the views of stakeholders to design climate action and share information to develop these new policies. The consultation period will run from 4 March to 27 May 2020 with the aim of adopting the law before November 2020.

This law will translate the European Union’s Green Deal commitments into law. The European climate law will enshrine the objective of climate neutrality by 2050 in European law and will set up the various financing funds. This Act sets out a greenhouse gas emissions reduction trajectory by September 2020. Thereafter the Commission will initiate a review of several EU regulations to ensure their compatibility with the climate trajectory. By June 2021 the Commission wants to re-evaluate the Emission Trading System (ETS) Directive, the Effort Sharing Regulation, the Energy Efficiency Directive, the Renewable Energy Directive and the CO2 Performance standards for Cars and vans. Public consultations for several of these regulations are already underway.

With the opening of public consultations, the Commission is seeking input from all stakeholders in order to guide its climate law. The Commission stressed the importance of scientific data and industry solutions in defining its action plan. Therefore, all companies related to the energy, environment, transport and other industrial sectors impacted by the revision of these regulations under the European Climate Law should be involved in the public consultation process in order to safeguard their interests.

EU paves the way to a closer association with Africa

The European Commission and the High Representative for Foreign Affairs presented the basis for a new strategy with Africa on March 11. Several objectives are outlined in the Action Plan: establishing a partnership on green and digital transition, supporting the development of a legislative framework for trade and investment, defining partnerships in education and research, increasing investment and cooperation in the humanitarian and security field. In this sense, what the Commission is planning will affect all companies that trade or plan to trade with Africa, but also all African States themselves, which will be able to benefit from this strengthened partnership.

More specifically, the energy sector is particularly concerned, as the EU wishes to step up investment in decarbonised energy. Regulatory convergence will be promoted, in particular on e-commerce and the digitisation of financial services and data regulation. African states will benefit from a renewed flow of investment of public and private funds. Through the NDICI tool, the EU foresees more than EUR 60 billion of investment in guarantees from 2021 to 2027. In addition, the EU will provide financial and technical assistance in the implementation of the African continent’s free trade agreement. This partnership will also be an opportunity for companies with activities in Africa to strengthen their presence. The programme provides for the establishment of a regulatory framework to ensure a level playing field and investment protection in all African States.

To sum up, this new strategy marks the EU’s willingness to strengthen its relationship with Africa in various fields, from ecology to the digital economy. The aim is to reach a new Joint EU-Africa Strategy replacing the 2007 Joint Strategy after the new African-EU Summit planned for October 2020. This document sets out a renewed ambition for Africa-EU relations. It is necessary for African States as well as for companies trading with Africa to strengthen their presence in Brussels in order to make the most of these renewed ambitions.

EU to present its “Farm to Fork” Strategy

The Commission will publish at the end of April an action strategy on the agri-food sector called “Farm to Fork”. This strategy covers the entire sector, from animal farming and agricultural practices to the point of sales. The plan should set out five pillars for action: reducing the use of pesticides and chemicals in agriculture, promoting organic farming, reducing food wastage, a new regulatory framework for livestock farming, and new food marketing rules. The entire agri-food sector is therefore facing a comprehensive reform of the regulatory framework.

In more detail, the strategy will provide for a reduction in pesticide use through legally binding, quantified targets. The Commission is also considering introducing a legislative proposal to harmonise the information given on the packaging of food products. This would concern in particular the nutrient profile as well as the origin of the products. In addition, a survey to assess food waste will be launched soon, which could have an impact on food marketing regulations. Finally, animal farming is to be radically reformed. The Commission advocates a shift from a meat-based to a vegetable protein-based diet for livestock. Furthermore, rules will be put in place to encourage carbon capture.

The measures to be announced in the plan will be open for public consultation in the near future. It is therefore essential for companies and associations in the agri-food sector to make their voices heard in Brussels, but also in Berlin and Paris in order to promote their interests.

EU’s Green Deal

In December 2019, the new European Commission presented the European Green Deal. The ultimate goal of the European Green Deal is to make the European Union the first climate neutral continent by 2050. To meet this objective, the European Commission will embark on a comprehensive review of existing and ongoing legislative measures and consider rolling out new detailed rules. Aside from the obvious focus on climate neutrality, bold action will be taken in other areas, including energy transition, agriculture, circular economy and sustainable transport. The European Green Deal is not only a political commitment, but a concrete new agenda that will shape European policy for the years to come. In that sense, the European Green Deal will affect all businesses and investors.

More concretely, the European Green Deal will affect all businesses that are working in the coal market. There will be a rapid shift towards renewable resources and a quick phase out on coal. When it comes to agriculture, there will be a large focus on land use as well as nutrients, chemicals and water. In relation to transport, there will be interruptions and opportunities for cars, ships and planes industries and service providers. Plastic producers will also face revamped rules that would demand higher standards on re-use and recyclability.

In sum, the European Green Deal will mark a shift in European policy. All businesses, whether leaders in the above-mentioned sectors or simply challenged by the new policies, must develop a government affairs strategy to avoid disruptions.

EU to Regulate Artificial Intelligence

In February 2020, the European Commission issued the White Paper on Artificial Intelligence. This document will be the basis for a number of new EU rules and legislations on the technology sector, in particular what the European Union considers high risk Artificial Intelligence applications. Most impacted sectors will be healthcare, financial institutions, transport and energy. The new rules and regulations will have global effects, not only for those companies that serve European consumers. As with the GDPR, the Artificial Intelligence regulation will shape future policy in other jurisdictions across the world.

In more concrete terms, the new EU rules are expected to introduce specific obligations for high risk Artificial Intelligence applications such as robustness and accuracy, training data and record-keeping and human oversight. Another important component is the fine line on what is high risk and low risk for certain applications. All businesses are currently invited to share their views on the White Paper by May 19, 2020. By June 2020, the European Commission will issue an assessment of the requirement identified above. A concrete legislative proposal might follow in the last quarter of 2020.

In conclusion, the process to regulate Artificial Intelligence in Europe has already started. Technology companies, but also companies that rely on Artificial Intelligence enabled products will be heavily affected. Therefore, all businesses most likely to be affected, should start now thinking of engaging with the EU institutions, starting with the ongoing consultation process.

EU’s Data Regulation

At the start of the year, the European Commission published a European strategy on data. The strategy covers data economy, data protection and standardized data sharing. It envisages also the creation of an EU Data Law in 2021. There will be strict rules that other countries might replicate in the future.

In more detail, the strategy foresees measures for data access and use including a legislative framework for the governance of common European data spaces that will be presented in the fourth quarter of 2020. In addition, the European Commission will invest in strengthening the EU’s capabilities and infrastructures for data processing and interoperability. In fact, the European Commission intends to set-up a cloud service marketplace in the fourth quarter of 2022. Moreover, the European Commission intends to empower individuals with respect to their data and build capacity for small and medium enterprises. Last, the European Commission will promote common European data spaces in strategic sectors such as energy, finance, health and agriculture.

The European Commission has initiated a consultation process on the European strategy on data, which will last until May 19, 2020. European and non-European industries, especially those that are heavily data driven, need to raise their voice in Brussels and in key capitals like Paris and Berlin now that the debate has started.

EU Rules on Food Safety

On 2 March 2020, the European Commission commenced a consultation process with all stakeholders aimed at reviewing the existing legal framework on food irradiation. The goal of the European Commission is two-fold. On one hand, the European Commission wants to assess whether the free movement of irradiated foodstuff within the internal market still works. On the other hand, the European Commission wants to assess whether the current rules ensure a high degree of protection of human health and the environment.

Currently, EU rules on food irradiation date back to 1991. The legislation focuses above all on defining the process of irradiation. They also specify the limits to the irradiation process while providing the grounds when irradiation may be authorized. In fact, there is an EU list of food and food ingredients for irradiation that includes a wide variety of products. In addition, EU law imposes labeling requirements when food and food ingredients have undergone irradiation. Last, it stipulates that EU countries must have uniform standards to detect irradiated food. The latter created by the European Committee for Standardization.

The start of the consultation signals the beginning of the process to assess whether EU legislation on food irradiation is fit for purpose. All views must be received by May 25, 2020. The process is especially important for food business operators in general and suppliers of services to irradiation facilities and manufacturers of irradiation equipment and materials in particular.