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.
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.
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.
The public consultations on the robustness of the EU air quality legislations, comprised of the two Ambient Air Quality Directives as well as of the Implementing Decision and the Commission Directive have recently been finalized.
The Directives had established European standards for a series of pollutants and aimed on ensuring their comprehensive and harmonized implementation in all member states. The review of the Directives is building upon the implementation experience in the EU Member States aiming to consolidate the EU legislative and regulatory framework. In addition to the entry into force of the new National Emission Ceiling Directive the EU is making decisive steps to achieve its 2030 emission reduction commitments.
The new legislation is expected to enshrine the stringency of the policy’s health objectives to reduce the impacts of atmospheric pollution to public health and reflect the cost of pollution to public budgets. While a debate on the rationalization of national public health budgets is expected to be triggered thereof, the effects of the stringent regulations are expected to be felt mainly on the EU agriculture, transport, shipping and energy production, especially in units that are beyond the urban limits. The above sectors are expected to bear the burden of timely and accurate compliance to the reviewed legislation.
The European Commission has recently launched the debate on the fitness check of the backbone of its legislation on water protection and management. Therefore, the Water Framework Directive as well as the closely related Groundwater Directive, the Environmental Quality Standards Directive as well as the Flood Directive are currently under review.
The main purpose of the review is to ensure the protection and sustainable management of the water in the EU via an integrated approach. Notwithstanding that the consultations are still ongoing, from the
analysis so far of stakeholders’ input, it clearly emerges that under the agricultural, chemical and pharmaceutical sectors are already under the Commission’s cross-chair. Certain incidents and practices of the above sectors in the EU have triggered controversy and had initiated the relevant
debate in 2016.
With the debate ongoing until March 2019 and the EU trying to strike an acceptable balance between the need for sustainable water management and the viability of its industry, all parties are expected to try to secure a favorable outcome in the consultations.
The Council of the European Union adopted conclusions on the development of a sustainable EU chemicals policy strategy in June 2019. These conclusions fall within the current 7th Environment Action Plan (EAP), adopted in 2013, which mandated the European Commission to develop a Union strategy for a non-toxic environment that is conducive to innovation.
The recent conclusions address particular topics of REACH, endocrine disruptors, nanomaterials and pharmaceuticals. The conclusions are expected to guide a new Union strategy for coordinating the protection of vulnerable groups by introducing risk management requirements into relevant EU legislation on chemicals of concern. The Council of the European Union has urged the European Commission to include in its proposal an 8th Environment Action Programme to implement the measures to the strategy.
The European Commission is set to finalize a Union strategy for a non-toxic environment by the end of the year. The proposed strategy is expected to deliver a regulation for water use, as well as the creation and implementation of an early warning system for chemical risks. Given the relevance of the upcoming EAP and chemicals Union strategy for the environmental and medical sector, it will be necessary to monitor the negotiations, which are set to start in the following months.
The European Commission launched a consultation on the review of State aid framework concerning fishery and aquaculture, which is set to expire in September 2019. The European Commission’s subsequent proposal is expected to be adopted in the fourth quarter of 2020.
The review aims to secure consistency of the regulations and guidelines concerning the European Maritime and Fisheries Fund (EMFF), by questioning whether the current framework serves its objectives efficiently. This consultation comes at a crucial point as the two governing regulations expire at the end of 2020. The replacement of such instruments with a new regulation will be necessary for the upcoming period of 2021-2027.
The inception impact assessment mentions the possibility of fully aligning State aid framework to the post-2020 EMFF rules, which would result in a loose definition of aid measures eligible for block exemption. This would facilitate public investment, fomenting the industry’s growth while preserving competition by giving Member States more flexibility to implement State aid measures without prior European Commission approval.
The European Commission has recently launched a public consultation to gather views on the current performance of the Food Contact Materials (FCM) legislation. This review will affect, among others, packaging and professional food manufacturing, preparation, storage and distribution. The results will feed then into the evaluation of the current legislative framework of FCM rules.
Currently, common EU rules on Food Contact Materials cover the safety of FCMs as well as labelling and traceability. More concretely, they limit their transfer into food in quantities that could endanger human health or change the composition of the food. Existing common rules help ensure not only a high level of protection of human health, but also a common level playing field.
Considering that this will be the first evaluation of the rules, all companies in the food contact material supply chain as well as firms that have articles that might come into contact with food in the future, should submit their views before 6 May 2019.
Starting from January 2018, China notified the WTO that it will ban the importing of 24 categories of waste, including plastics and mixed papers, on grounds of environmental and public health protection.
The domino effect of the world’s biggest waste processor has already affected China’s biggest client, the European Union, which used to ship approximately 60% of plastics and 13% of paper collected for recycling.
Following the Chinese ban, the EU is now considering several options that include unpopular new taxes, limits on plastic bags and a set of other standards and rules. The new measures will try to encourage the re-use of plastics, ensure that plastics packaging is fully recyclable and make the disposal of plastics economically burdensome. In addition, the European Commission is considering imposing new quality standards via new consumer labeling. Finally, the proposal is set to target water polluting plastics that are increasingly becoming a serious health concern.
The European Commission has put large supermarket and food retail business under its regulatory radar, in an attempt to rationalize the European food supply chain. The initiative, likely to make its debut as early as in 2018, will place producers and farmers under its aegis, in an attempt to bridle at the hypermarkets power by remedying unfair trading practices and arbitrary contractual clauses.
The current situation has allowed for the accumulation of disproportionate market powers to a few retailers, raising controversy over the misuse of dominant position, price controls as well as abusive and retaliatory business practices. Moreover, the present environment has driven many small-scale producers out of the market, threatening to compromise the entire EU agricultural sector.
Following closely the 2016 recommendations of the Agricultural Market Task Force, the new bill will focus on issues of price fairness and transparency by allowing collective price negotiations and imposing a mandatory price reporting system. Furthermore, the possibilities of easier access to finance for producers as well as the establishing of an independent adjudication system are on the table.
Currently, no concrete proposal has been presented yet. The nascent bill is expected to take form during the following months. This initiative will target primarily supermarkets and food retail business. NGOs and consumers organizations are already voicing their concerns to try and shape the proposal.