Category: agriculture

I. EU to target pesticides and artificial fertilizers

Within its agenda for the plenary session from 18 to 21 October 2021, the European Parliament is set to debate the Commission’s Farm to Fork strategy and vote on its own-initiative report. The draft report was adopted in September 2021 after heavy amending following the opinions of sceptical MEPs within other committees. Although the Parliament’s decisions will not be legally binding on this occasion, they will signal how much momentum lies behind the Commission’s plan among lawmakers, and what compromises can be expected.

The file touches upon fiercely debated provisions such as potentially mandatory nutrition labels on the front of food packaging, a statement that industrial-scale farming increases the risk of zoonotic viruses jumping to humans, or a mention to Europeans’ excessive meat consumption. Critics have raised the alarm over potential negative spill overs from the EU’s new farm policy such as a drop in food production leading to a loss of competitiveness for European farmers along with a mere exporting of the environmental damage of food production. A report by the Commission’s own research service allegedly identified such risks as real possibilities, which prompted fierce criticism from MEPs leading to the plenary vote.

The Commission itself has stressed in its responses to parliamentary questions that targets within the Farm to Fork strategy – i.e., to halve pesticide usage by 2030, dramatically curb fertilizers, and ensure that a quarter of EU farmland is organic – are aspirational guidelines that will depend on the adoption and transposition of over 27 individual measures. These will include the ordinary review and impact assessment procedures of the sustainable use of pesticides directive or the Common Agricultural Policy, which means the political battle is far from over and will be long and arduous.

Alber & Geiger can use its extensive experience representation of agribusiness to strengthen your position in the legislative process.

II. EU to target connected devices in push for enhanced cybersecurity

The 2021 State of the Union Address also saw the European Commission announce an initiative to raise the cybersecurity requirements for digital services employed in critical sectors of the economy and society. The initiative will build on the existing proposal for a Directive on Security of Network and Information Systems (NIS2) that is currently processing through stages at the European Parliament. Boldened security standards for smart devices commonly used by European consumers is welcome by many, with a significant number of voices having raised the alarm over the lack of provisions to this effect.

The revision of the NSI2 is expected to update the regulatory framework and ensure that key manufacturers of connected devices, believed to often disregard cybersecurity as a selling point of their products, implement high standards in the protection of the users’ data across different devices. The creation of a European network of Security Operation Centres is also expected to regularly scan the network using artificial intelligence technologies to detect cyber threats. Lastly, the commitment to create a Joint Cyber Unit presented last June was reiterated with the objective of coordinating and setting up a European crisis management capability in the cybersecurity space.

There are a significant number of voices among Europe’s digital industry who had already underlined the lack of baseline cybersecurity requirements, pointing out insufficient existing rules and calling for a horizontal regulation. However, a call for caution about proliferation of EU proposals to regulate the cyber environment has also been made. Many believe that Europe needs more harmonized targets and easily implementable rules to achieve the right protection for Europeans while helping the domestic industry build cyber security capabilities at scale while retaining competitiveness and profitability.

Our expert team can help influence opinions and agendas on EU digital policy matters at the highest political level.

III.EU to review waste management rules

As the EU’s Circular Economy Action Plan materialises into concrete measures, the remainder of 2021 has some important developments in line concerning the regulatory framework of waste management. Before the end of year, the European Commission is expected to come up with a proposal for a regulation set to replace the Packaging and Packaging Waste Directive as the previous impact assessments and public consultations have led the European Commission to believe the current regulatory framework falls short of delivering on environmental targets. The European Commission has equally announced that a review of the Waste Framework Directive is underway with the start of a public consultation scheduled for the second quarter of 2022.

In a high level of ambitions scenario, the new rules could require all packaging to be reusable or recyclable under a new and enforceable definition of re-usable packaging. In certain applications where alternative reusable productions or systems are possible or consumer goods and be handled safely without packaging, forbidding the use of certain packaging materials and polymers is being considered. Producer Responsibility Schemes whereby businesses placing any kind of packaging on the single market ought to be directly involved in the collection and recycling of packaging waste are already meant to be fully operational by 2024.

Many welcome the revamp of the packaging and waste rules as key area to deliver tangible results on the Green Deal’s environmental goals. The European Parliament has reiterated its objective to make all packaging reusable or recyclable in an economically viable way by 2030 in. a resolution from February 2021. However, some voices have called for emphasis on the cost effectiveness and the preservation of competitiveness aspects in an already heavily regulated sector as the different proposals will process through stages at the EU’s co-legislating institutions.

Our team can guide you through the legislative changes being considered to maximise the impact of your positions in the European decision-making process, and to put you in a position to benefit from them.

IV. EU to boost local semiconductor industry

A European Chips Act was pitched by the European Commission during the annual State of the Union address aiming to increase Europe’s self-reliance and competitiveness in an increasingly critical industry. Its implications can be vast and range across many industries including the automotive, computer or home appliances sectors.

The idea is still at a very infant stage without a concrete date for a proposal from the Commission nor any mention in the 2021 work program. However, further steps can be expected in 2022 if the ambitious objective of boosting Europe’s share of semiconductor production to 20% by 2030. The momentum for introducing provisions to that effect has been building up in the face of persistent shortages and supply chain disruptions during the Covid-19 pandemic. As a result, there are now a significant proportion of voices who believe the issue goes beyond business considerations and touches the core of Europe’s geopolitical and technological sovereignty, making it a priority at a time of European growing “strategic autonomy”.

The European Commission has laid down three core areas where to expect EU action. First, a European semiconductor research strategy would aim to build up on already existing first-rate research capacity and aim to align it with European strategic interests and ambitions. Secondly, a collective plan to enhance European production capacity by directly supporting the creation of large-scale fabrication plants capable of producing the most advanced and energy-efficient semiconductors. Last, a framework for international cooperation and partnership with the aim to secure European supply chains through both diversification and creation of domestic capacity. A plethora of financing sources can be expected at both European, national, regional, and private level, as well as a potential dedicated European Semiconductor Fund.

Alber & Geiger can use its extensive experience in EU affairs to strengthen your position to capitalize from projects such as these.

 

V. EU to update emissions standards for vehicles

The European Commission is expected to come up with a proposal for a regulation on emissions standards for all petrol and diesel cars, vans lorries and buses. The so-called Euro 7 regulation concluded its public consultation period in late 2020 and will be proposed to Parliament and Council before the end of 2021. Although Euro 7 is widely perceived as a key tool to deliver on the EU’s Green Deal emissions reduction targets coming from the transport sector, concerns have been voiced over an excessive level ambition potentially trumping the competitiveness of Europe’s automotive industry.

A key area where the regulation is meant to improve on its predecessors Euro 6 and VI is the monitoring of real-world emissions from vehicles for their lifetime on the road. Measurement of on-road pollutant emissions data currently goes through post-processing, which averages emissions during accelerations and excludes some relatively high emissions of heavy-duty vehicles, particularly in urban traffic. Many thus believe that measurement should target actual tailpipe emissions during a vehicle’s daily use for a comprehensive depiction of emissions according to driving circumstances. Provisions to this effect are envisaged should the Commission opt for the highest-level of ambitions course of action.

The two more moderately ambitious alternatives currently on the table consider stricter limits on CO2 and NOx as well as the inclusion of harmful ultra-fine particles (PN10), ammonia (NH3) and nitrous oxides (N20) that were previously excluded from measurements of vehicle emissions. Furthermore, hybrid cars could also be forced to drive in electric-only mode in certain locations. The proposed regulation is expected to be adopted by 2025 after the proposal has gone through the usual back and forth between the EU institutions.

Our experienced team can assist you in shaping concrete provisions of EU regulations to tailor them to your business interests to the highest possible extent.

VI. EU-US Trade and Technology Council

There was a great deal of enthusiasm over the EU-US Trade and Technology Council (TTC) inaugurated on 29 September 2021 for a much-needed revival of transatlantic cooperation in a host of issues from the fight against climate change to the challenges of the technological revolution. Although the meeting in Pittsburgh was just the first of many encounters, it set the tone for how Brussels and Washington want to cooperate and pursue mutual interests. The event sent a strong signal of the two sides’ renewed wishes for an enhanced partnership and the need to overcome differences in the face of mounting global challenges.

The sheer size of the EU-US economic relationship only is enough cause to pursue the benefits of a closer partnership. Together, they account for a quarter of global trade and almost half of global GDP. It is no surprise that the business community welcomed the TTC with open arms as the first step towards building a reliable institutional framework for business opportunities to take full advantage of the transatlantic relationship’s tremendous potential to that effect. The ten working groups are now expected to advance their work and align shared trade and technology priorities on areas such as common technology standards, supply chain security, or data governance.

For the TTC to turn into a complete success, much of the work ahead will need to iron out the two bloc’s differences in some thorny issues. Chief among the contentious points is data protection regulation, where the EU’s notoriously strict standards have already prevented both sides to reach an agreement in the past whereby full disclosure of personal data between companies and organisations could take place with safety guarantees. Yet, officials insisted differences in some areas will not trump progress in others. All eyes are now on the TTC as a potential enabler of the Transatlantic Trade and Investment Partnership (TTIP)’s revival.

Alber & Geiger can put its distinguished internal relations team at your disposal to help you further understand and influence the current state of EU-US relations.

I.EU to target pre-installed phone applications

The Digital Marketing Act (DMA) is currently processing through the stages at the EU Parliament level. Much like the GDPR, the DMA will have direct effect throughout all Member States and is intended to be a revolutionary piece of legislation for the modern technological age that seeks to protect consumers from some of the unsavoury practises of the multi-national tech giants. Amongst the proposals for reform being looked at currently are measures, which would prevent these corporations from pre-installing their own applications such as Google Chrome or Microsoft Outlook onto every one of the individual devices manufactured by them.

There are a significant proportion of voices who believe that the capacity to do this affords these huge corporations with a disproportionate competitive advantage, which leads towards them behaving like oligopolies, given in practise how so few phone users reconfigure these basic applications once they have begun using each device. The momentum for introducing provisions to this effect in the DMA has been accelerated by pronouncements on the part of both the Body of European Regulators for Electronic Communications and the UK Competition Authority, where both voiced concerns about the impact on effective choice for consumers by allowing these corporations to continue pre-install their own applications.

Many believe a decision to introduce provisions to this effect would be a positive step in tandem with other efforts by the EU to cut down on oligopolistic tendencies on the part of these corporations. In this respect many would point to the decision by the EU Commission to fine Google more than €4 billion in July 2018 for their practise of allowing the biggest manufacturers to exclusively pre-install Google products on their devices. Many also believe legal provisions to this effect would enable consumers and broader society to effectively tackle the data harvesting business models of corporations such as Google, which largely rely on the consumer’s use of their pre-installed applications.

Alber & Geiger can use its extensive experience in EU affairs to strengthen your position in the legislative process.

II.EU to targets anti-competitive foreign subsidies

In May 2021, the EU Commission announced plans through which legal instruments would be introduced to prevent the practise of third countries affording subsidies to many of its successful companies within the EU Single Market, which had the effect of negatively distorting competition.

In the White Paper released by the EU Commission, it suggested that three different tools would be implemented which would empower authorities to identify, investigate and penalise subsidies of this nature. These tools would be specified to distinguish between differing sorts of subsidies such as those in the sphere of mergers and acquisitions, those which generally facilitate the gaining of competitive advantages for companies as a result of subsidies, and those which distort public tenders.

This latest White Paper follows a similar trend from summer 2020, when EU Competition Commissioner also presented a white paper detailing the EU Commission’s plans to level the playing field with regards anti-competitive subsidies. The overarching goals of both these plans is to solidify a means of redress for honest EU companies being put a financial disadvantage as a result of these practises by third country governments. There is some concern, however, in the wake of the publication of the White Paper that the three differing instruments will have the effect of creating loopholes, confusing overlaps and could ultimately create more legal uncertainty. There are also concerns regarding the ultimate effectiveness of these tools given the likelihood that much of the relevant evidence in these investigations will be located beyond the EU’s jurisdiction. The consultation period on the proposal closed in mid-June 2021, and could ultimately take up to two years to be fully ratified by the Council of the EU and the EU Parliament.

Our expert team can help influence opinions and agendas on EU competition matters.

III.EU to support geothermal technology

The Renewable Energy Directive first drafted in 2009, has long been the showcase legislative instrument through which the EU has demonstrated its commitment to creating ambitious reforms throughout the EU with respect to climate action. The Directive in its original form contained policy initiatives and guidance that sought to ensure that the EU would reach its goal of 32% of energy coming from renewable sources by 2030. The Directive was recast in 2018 shortly in the wake of the agreement of the Paris Climate Accord. Whilst in many respects the Directive has been successful, many in the geothermal energy sphere has been left disappointed by the Directive’s effectiveness in terms of encouraging use of this form of renewable energy.

However, in the wake of proposals under the European Green Deal, consideration is once again being given to revisiting the Directive with the aim of removing the many structural barriers that exist with regards to harvesting geothermal energy. These barriers are significantly acute in terms of the costs that exist for producers regarding exploration and drilling. Two key features of a yet again recast Directive that could help to reduce structural prices include provisions for de-risking measures and power purchase agreements (PPA).

PPAs, in fact, seek to reduce the burden that is placed on businesses alone in engaging in the sophisticated and risky work associated with harvesting and creating the necessary infrastructures associated with geothermal energy. A PPA would have the potential to create a balanced funding environment, whereby businesses would at first pay for the installation and maintenance of the necessary harvesting infrastructure. That said, there would also be a firm contractual commitment on the part of consumers to pay for this energy normally over the course of a contract lasting decades.

Our team can guide you through the legislative changes being considered in order to maximise the impact of your positions in the European decision-making process, and to put you in a position to benefit from them.

IV. EU approval of the Covid recovery fund

May 2021 saw the final approval given to the historic €672 billion EU Covid recovery fund (composed of grants and loans) that was agreed on by EU leaders in July 2020. The simultaneous ratification of the “Own Resources Decision” will enable the EU Commission to finance the fund by the EU Commission borrowing directly from the money markets on behalf of the EU as a whole, and later distributing its borrowing to Member States. It is envisaged the borrowing will be repaid by 2058.

Since the point of agreement at an EU Council summit last summer the specifics of the agreement has been debated and scrutinised by the parliaments of the respective Member States in the intervening time. In Poland in particular, approval of the project was significantly delayed by disagreements within the ruling coalition as to how exactly to distribute the fund internally within Poland. Disappointment may well exist within some quarters of the EU given the almost year long delay that has followed between agreement and final approval, particularly in the face of the urgent circumstances caused by the pandemic. Disappointment may well also exist that the fund has already been somewhat diluted from the original figure of €750 billion to €672 billion.

However, now finally with the ratification of the Polish and Austrian parliament all pieces seem to be in place to ensure that the fund will begin being distributed from this July. Large proportions of the fund will be earmarked for larger EU economies that took significant heavy hits during the pandemic such as Italy, France and Spain. The fund (like its US equivalent) also provides significant business opportunities to implement modern reforms to economies such as the ring fencing of 37% of the fund for projects related to climate action, and a further 20% will be targeted at smoothening the transition to a new digital economy.

Alber & Geiger can use its extensive experience in EU affairs to strengthen your position so as to capitalize from projects such as these.

V. EU-China investment agreement

In May 2021, the EU Parliament voted overwhelmingly to halt any legislative progression of the Comprehensive Agreement on Investment (CAI) that had been agreed between China and the EU until such point that Chinese officials agreed to lift sanctions they had imposed on five MEPs. These sanctions are regarded as a reaction to sanctions imposed by the EU Parliament on Chinese officials believed to be connected with the internment of the Chinese Uyghur population in conditions that fall far below human rights standards.

The halting of the CAI ratification process is indeed a considerable blow given that the deal was only agreed in principle as recently as December 2020. It had been hoped that the CAI would prove a significant milestone step in the amelioration of trading relationships between the EU and the traditionally protectionist Chinese markets. Under the terms of the CAI, China had agreed to allow much more external access to their markets and had also agreed to provisions which would seek to create a more levelled trading relationship between the EU and China, in addition to provisions which would commit China to improving their sustainable development mechanisms and improve their labour rights laws.

This stalling of ratification of the CAI looks unfortunately like it could well be a pro-longed delay, given how intrinsically such a deal is connected to the broader geo-political facts relating to EU-China relations. Neither side in their comments so far seem prepared to compromise first over the lifting of the sanctions, and hence the future of the CAI currently is very much uncertain.

Alber & Geiger can put its distinguished international relations team at your disposal to help you further understand the current state of EU-China trading relations.

VI. EU Commission to reduce carbon heavy imports into EU

In June 2021, media outlets received leaks indicating the EU Commission’s plans to reduce carbon imports into the EU by placing tariffs on goods, which traditionally carried large carbon footprints. Many of these goods are related to the construction and infrastructure sectors of the global economy such as steel, cement and electricity. The obtained information suggested that these tariffs will be manifested through a tool known as the carbon border adjustment mechanism, which will be formally presented to the public by the EU Commission in mid-July.

It is hoped that the introduction of these tariffs will help facilitate the EU as a whole in matching the carbon reduction ambitions of many of its competitors. It is expected that the EU Commission will emphasise that exemptions from the tariffs will be made for both EFTA Member States within the Customs Union such as– Iceland, Liechtenstein, Norway and Switzerland, and for economically developing countries. The tariffs, therefore, will predominantly be designed to penalise imports from developed countries who have chosen not to take similar wide ranging steps to reduce their carbon prints, so hence there is no guarantee that such goods coming from close EU partners like the United States or the United Kingdom will be exempt from these tariffs.

EU based companies importing these kinds of targeted products are expected to be required to obtain digital certificates, which contain a record of the carbon emissions on the products they are importing, thereafter tariffs will be placed on imports with a suitably high carbon foot print. This obligation to obtain this license will be an additional obligation in this area, given that EU based power companies are already required to obtain permits for work that generates large amounts of carbon emissions. The cost of these certificates are expected to be closely linked to the pre-existing permits. These plans are expected to be phased in on a gradual basis from 2023, and will be fully operational from 2026.

Our experienced team can help influence opinions and agendas.

I. Council to go ahead with the country-by- country reporting directive

On February 25, the Portuguese Presidency of the Council of the European Union earned widespread support from member states to advance with the European public country-to-country reporting directive. The directive aims to require multinational corporations to publish their profits and taxes paid in each EU member state in which they operate.

Overall, the directive aims to construct a new oversight regime that identifies instances of corporate tax avoidance in Europe. While businesses do favor transparency, they are also concerned that making profits public would harm their competitiveness. In fact, many businesses feel that the EU decision to move ahead will not necessarily help assess tax liabilities properly. They argue that it would be a duplication of the work carried out by the tax authorities, which will harm the level playing field on top.

The directive is expected to enter the legislative process later this summer, with trilogue negotiations between the Commission, Council, and Parliament planned for June. While a portion of the directive has been agreed to, the Council and Parliament are still grappling over the intensity of the directive’s transparency rules and have considerable disagreements to reconcile.

Alber & Geiger can defend your interests during the legislative process.

II. Commission to present digital tax proposal

The Commission is expected to present its proposal establishing an EU-wide digital tax this coming June – a long anticipated centerpiece of the Commission’s digital and economic strategies. Following the recent change in US administrations, with the Biden administration signaling a favorable stance toward the issue, momentum for creating international standards on a digital levy has built steadily. The development is of particular significance for larger technology firms, as these entities would be most affected by an EU-wide digital tax.

While the Commission has expressed it preference for an agreement within the OECD to establish an international digital tax framework, this preference has not halted the Commission from coming forward with its own proposal. Executive Vice President of the Commission Margrethe Vestager recently noted that while the proposal aims to be tabled in June, a digital tax will not become operational until 2023.

However, a select grouping of Member States, as well as several multinational corporations and business associations, are poised to oppose the Commission’s effort, instead preferring such a framework be crafted within the OECD.

We can assist technology and telecommunications firms achieve their legislative and regulatory goals in the EU.

III. Commission to bolster promotion of EU agricultural products

Promoting EU agricultural products is a clear priority of the Commission’s annual work program. In 2021 alone, the Commission will spend €182.9 million to promote European agri-food products within the Single Market and abroad. Having launched a public consultation on the review of such policies, the Commission has created the opportunity for stakeholders to shape the way in which certain key goals take form. The consultation period is currently open and will remain so until June 23.

First and foremost, nearly half of the Commission’s budget in this policy area (€86 million) will be tethered to the objectives of the European Green Deal, supporting schemes for organic products, best practices in sustainable agriculture, and other aspects of reforming the agri-food industry to better fight climate change. Additionally, an important part of the consultation will concern defining safety standards of EU agri-food products, as well as a range of quality schemes.

With regard to external markets, the Commission has placed a clear priority on high-growth markets. In particular, Canada, Mexico, Japan, and South Korea have been viewed as targets for specific EU exports, namely those from Europe’s dairy, olive oil, and wine sectors.

Our experienced team can help influence opinions and agendas.

IV. Commission reviews key aspects of Banking Union

In launching its consultation on the review of bank crisis management and deposit insurance framework, the Commission aims to present a proposal for a regulation that establishes a set of policies for handling bank failures and better protects depositors. The consultation, open now until May 20, allows stakeholders to influence a critical institutional development in the landscape of the EU’s financial sector, as well as to shape the broader contours of debate on the Banking Union. Specifically, the consultation concerns three legislative texts: the Bank Recovery and Resolution Directive (BRRD), the Single Resolution Mechanism Regulation (SRMR), and the Deposit Guarantee Schemes Directive (DGSD).

At its core, the forthcoming regulation is expected to shield public monies from bank failures, instead diverting the burden of institutional insolvencies to the shoulders of the broader banking industry. Thus, the consultation is of particular importance to credit institutions, investment first, electronic payment platforms, as well as relevant national financial bodies and agencies.

Alber & Geiger can get your message to the appropriate audience.

V. Suspension of Boeing-Airbus tariffs positions transatlantic trade talks to reopen

After years of punishing each other for subsidies granted to Airbus and Boeing, the EU and US agreed on March 5 to suspend their retaliatory tariffs for four months. The removal of these tariffs will affect billions of dollars in goods, ranging from tractors to wine to cheese.

Trade Commissioner Valdis Dombrovskis labeled the move as a “reset” for transatlantic relations meant to provide an opportunity to create a “comprehensive and long-lasting negotiated situation.” With transatlantic trade talks expected within this four-month timeframe, the EU agricultural sector will benefit heavily during the suspension period. To ensure retaliatory tariffs don’t reemerge after the suspension period, the agricultural industry should take serious interest in engaging in the negotiation process to ensure EU-US trade disputes on aircraft subsidies are settled.

Moreover, Europe’s aim for enhanced transatlantic cooperation can be seen in its proposal to establish a Trade and Technology Council comprised of US and EU officials.

Our trade team enjoys long-lasting relationships and understands the complexities to help shape decisions.

VI. Commission advocates for tougher, greener approach to trade

On February 18, the EU’s trade Commissioner Valdis Dombrovskis announced that Europe’s trade policy will regard the commitments delineated in the Paris Climate Accord’s as “essential elements” in all future trade deals. Additionally, the EU’s new trade approach will look to liberalize trade in green products and services while also brokering agreements to reduce third country subsidies of fossil fuels. Recent evidence of this trade approach can be observed in the Commission’s promise to delay ratifying the EU-Mercosur deal unless Brazil steps up its environmental commitments.

Furthermore, the Commission will look to develop a new mechanism to defend the EU from prospective coercive and distortive maneuvers from third countries. Potential mechanisms could include the establishment of an EU export credit facility, an office of a chief trade enforcement officer, and upgraded enforcement regulations.

Alber & Geiger can help third countries navigate the trade environment and advance their goals in Brussels.