A&G Newsletter Q1 2023

I. EU Busy as a Bee to Save Pollinators

In an attempt to reverse the decline of pollinators by 2030, the European Commission (EC) presented ‘A New Deal on pollinators’. The initiative launched by late January consists of a newly proposed strategy that revises the 2018 EU Pollinators Initiative.

The EC acknowledged the growing concern of citizens on the alarming situation of wild pollinators such as bees, butterflies, hoverflies, and other insects. “Citizens have been increasingly calling for decisive action against pollinator loss, also through the recent successful European Citizens’ Initiative ‘Save Bees and Farmers’,” the EC noted when introducing the initiative.
Based on the official communication from the EC, the contribution of pollinators to the EU’s agricultural output is estimated to be at least EUR 5 billion per year. However, most of the benefits provided by pollinators remain unquantified. Further on, one in ten bees and butterfly species, and one in three hoverfly species are threatened with extinction.

“The major threats to wild pollinators include land-use change (including urbanization), intensive agricultural management practices (including pesticide use), environmental pollution (including light pollution), invasive alien species, and climate change,” the EC noted in the communication.

The revised initiative will set objectives and actions under three priorities that are going to address the above-mentioned concerns and much more.

  1. Firstly, by improving knowledge of pollinator decline, its causes, and consequences
  2. Secondly, by improving pollinator conservation and tackling the causes of their decline
  3. Third, by mobilizing society and promoting strategic planning and cooperation at all levels

What’s next?
The EC invites the European Parliament and the Council to endorse the new actions and to be actively engaged in its implementation, in close collaboration with all relevant stakeholders. The new actions will complement future National Restoration Plans where Member States will identify the measures to achieve the legally binding target of reversing the decline of pollinator populations by 2030.

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.

II. New Tax Transparency Rules for Crypto Providers Serving European Residents Proposed

The European Union is hurrying up to keep pace with the fast-changing crypto asset sectors and fight crypto-related tax fraud with new rules.

It’s a fact that Bitcoin’s market capitalization reached up to EUR 370 billion in January 2023, almost close to Austria’s GDP. Yet Bitcoin is one among over 9,000 crypto-assets available on the market. Hence, the EC sees the need to address the growing crypto-related challenges faced by tax authorities.

A new proposal from the European Commission would require service providers that facilitate crypto transactions for residents in the European Union to share information with tax authorities. The new reporting framework, which would complement the Markets in crypto-assets (MiCA) Regulation, would help tax authorities in member states to detect and counter tax fraud, tax evasion, and tax avoidance. They would do it by tracking the crypto assets and the proceeds gained.
Moreover, the EC estimates that the new reporting framework could raise additional tax revenue between EUR 1 and EUR 2.4 billion per year.

The set-up of this reporting framework would require the amending of the Directive on Administrative Cooperation (DAC). EU’s DAC dates back to 2011 and it deals with the collection and exchange of tax-related information between Member States. The latest proposal would be the eighth revision of the DAC or simply DAC8. None of the previous seven revisions of the DAC covers crypto markets.

What entities will have to share information?
Based on the proposal, two types of entities will be obliged to report to tax authorities.

Crypto-asset providers: any legal person or undertaking whose professional activity is the provision of one or more crypto-asset services to third parties. The definition used in DAC8 is the same as that of MiCA.
Crypto-asset operators: a provider of crypto-asset services other than a crypto-asset service provider. These operators do not fall within the scope of MiCA

What’s next?
The proposed directive is subject to a special legislative procedure, requiring unanimous support in the Council, following consultation of the European Parliament and the European Economic and Social Committee.
If enacted, the new reporting framework with regard to crypto-assets, e-money, and digital currencies would enter into force on January 1st, 2026.

Alber & Geiger can advise in matters of consumer and privacy protection in crypto in the onset of the new regulatory package and help you maintain your rights and anonymity.

III. EC Takes Action to Unlock Algae’s Full Potential

For those asking how green the bioeconomy is, the European Union is introducing the greenest player in the game. Without assuming that all algae are green, the sure thing is that seaweed is the new gold of the green economy.

The European Commission adopted a communication that proposes 23 new actions that would unlock the potential of algae as a renewable resource in Europe. Those actions aim at improving business environments, increasing social awareness and acceptance of algae and algae-based products by consumers, and closing the knowledge, research, and technology gaps.

“The farming of algae can contribute to achieving the EU’s objectives in terms of decarbonization, zero pollution, circularity, the preservation and restoration of biodiversity, the protection of ecosystems, and the development of environmental services,” the communication noted.

While algae sectors remain untapped in Europe, the European demand for seaweed could increase from around 270 000 tons in 2019 to 8 million tons in 2030 and reach EUR 9 billion in value in 2030 across all sectors, with feed, food, and plant biostimulants (fertilizing products) being the largest. The EC recognizes the potential of the European algae sector for becoming a significant part of the EU blue bioeconomy.

Some of the above-mentioned key actions include:
• Developing a new algae farmers’ toolkit;
• Facilitating access to marine space, identifying optimal sites for seaweed farming, and including seaweed farming and sea multi-use in maritime spatial plans;
• Together with the European Committee for Standardisation (CEN), developing standards for algae ingredients and contaminants, as well as for algae biofuel;
• Assessing the market potential, efficiency, and safety of algae-based materials when used in fertilizing products;
• Examining the algae market and proposing market-stimulating mechanisms to support the transfer of technology from research to market;
• Funding pilot projects for career reorientation and supporting innovative SMEs and projects in the algae sector;
• Conducting studies and discussions to gain better knowledge, amongst others, on
• seaweed climate change mitigation opportunities and the role of seaweed as blue carbon sinks, define maximum levels of contaminants and iodine in algae;
• Supporting, through Horizon Europe and other EU research programs, the development of new and improved algae processing systems, novel production methods, and algae cultivation systems;
Promoting awareness-raising actions and analyzing the availability of algae-related data.

What’s next?
The Commission will discuss the communication with the European Parliament and the Council. The Commission will coordinate putting the 23 actions into practice with the Member States, industry (e.g. via the EU4Algae Forum), and other relevant stakeholders. The Commission will prepare a report assessing progress in implementing the Communication by the end of 2027.

IV. EC Registered a Citizens’ Initiative on Vegan Food Availability

What would you think about having vegan meal options available everywhere? The organizers of a European Citizens’ Initiative are asking for an EU law for vegan meal availability. The initiative registered by the European Commission back in October 2022 requires that all private and public food and beverage places in Europe have a vegan alternative available. The organizers highlight that such a law would bring great benefits to the planet concerning the mitigation of the climate crisis, deforestation, wildlife species extinction, use of land, protection of marine life, malnourishment, and food waste.

According to the initiative details, the presence of a vegan option would push a change toward a fairer world for people, animals, and the environment as well as a change in production and consumption needs.
Moreover, the law would allow easy access to vegan alternatives and to expect the vegan cruelty-free choice, the right to choose how to eat, to be kind to animals, etc.
Further on, another advantage of the vegan alternative would be the reduction of animal suffering and food costs.
“We urgently need action rather than empty words. We know what needs to be done. What is missing is the political will to take a new approach and a real commitment,” the Vegan Meals initiative organizers noted.

What’s next?
Following registration, the organizers have six months to open the signature collection. This means that the signature process must open by April. If a European Citizens’ Initiative receives one million statements of support within one year, from at least seven different Member States, the Commission will have to react. The Commission could decide whether to take the request forward or not and will be required to explain its reasoning.

V. EU Adopts Drone Strategy 2.0

The European Union is acting to speed up the use and further develop unmanned aircraft technology and its regulatory framework. The adoption of the European Drone Strategy 2.0 lays out how Europe can pursue large-scale commercial drone operations while offering new opportunities in the sector.
“With the right framework in place, the drone services market in Europe could by 2030 reach a value of €14.5 billion, with a compound annual growth rate of 12.3%, and create 145,000 jobs in the EU,” the Commission pointed out in its official communication.

However, before pushing ahead with these innovative technologies, the Commission wants to ensure that society supports drones. To address concerns over noise, safety, and privacy, the Strategy, therefore, calls for national, regional, and local municipalities to ensure that drone services are aligned with citizens’ needs.
According to the strategy, drones and their required ecosystem will have become an accepted part of the life of EU citizens by 2030.

They will be used to provide numerous services to the benefit of diversified civilian and defense end-users, including EU citizens, organizations, Member States, and industry. Drones’ aerial operations will include emergency services, inspections, and surveillance using drones to gather data, as well as for the delivery of goods.
Meanwhile, IAM services will start providing regular transport services to passengers, initially using aircraft with a pilot on board but with the ultimate aim to fully automate their operations.

“Unleashing the potential of the EU drone market and services requires the identification of critical technology building blocks, such as artificial intelligence, robotics, semiconductors and EU space services and mobile telecommunications. This will help the EU build an innovative and competitive drone sector, reducing strategic dependencies,” the Commission highlighted.

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

VI. EU to Increase Carbon Sequestration with Forests and Soil

The European Union is turning toward the apparent solution of reducing net greenhouse emissions, by expanding the sink capacity of forests and soil for carbon capture and storage. The EU agreed on a provisional deal the on the Land Use, Land Use Change and Forestry (LULUCF) to increase the EU’s target for net carbon removals by natural sinks to 310 million tons of CO2 equivalent by 2030.

The LULUCF sector covers the use of soils, trees, plants, biomass, and timber and is responsible for both emitting and absorbing CO2 from the atmosphere.

Among various LULUCF activities, reducing deforestation has the largest potential to reduce anthropogenic GHG emissions, followed by carbon sequestration in agriculture and ecosystem restoration including afforestation and reforestation.
According to the provisional agreement, the current rules under which emissions do not exceed removals (the “no debit rule”) will continue to apply until 2025. For the period from 2026-2030, where removals should exceed emissions, each member state will have a binding national target for 2030.

Member States have many measures at hand to improve their land management, including sustainable forest management or the rewetting of peatlands, and should update their strategic plans under the Common Agricultural Policy (CAP) to reflect the higher ambition for the land sector.

Moreover, the agreement maintains overall general flexibility to support those member states that have difficulties in meeting their targets owing to natural disturbances (such as wildfires, pests, and the effects of climate change and organic soils on emissions), provided that the Union as a whole meets its 2030 target.

This agreement is another step in the adoption of the Commission’s ‘Fit for 55′ legislative package to deliver the EU’s climate ambition under the European Green Deal.

What’s next?
The provisional agreement now requires formal adoption by the Parliament and the Council.
The Commission will submit a report within six months of the first global stocktake under the Paris Agreement (to be carried out in 2023), on including non-CO2 greenhouse gas emissions from agriculture in the scope of the regulation and the setting of post-2030 targets for the land-use sector.

Alber & Geiger can utilize its extensive European network to represent your business interests and propose legislative amendments on your behalf.

VII. EU and Chile Strengthen Political and Trade Partnership

European Union and Chile have concluded negotiations on the EU-Chile Advanced Framework Agreement.

“This landmark agreement is of key geopolitical importance: with the new Advanced Framework Agreement, the EU and Chile take their partnership to the next level to strengthen political dialogue, deepen cooperation and foster trade and investment opportunities,” the European Commission noted.

Further, the agreement puts shared values such as human rights, sustainable trade, and gender equality at the core of EU-Chile relations and it strengthens EU-Chile cooperation on shared global challenges, such as the fight against climate change and the environment.

Among others the agreement defines the following:
• 99,9% of EU exports will be tariff-free, which is expected to increase EU exports to Chile by up to 4,5 billion euros.
• Greater access to raw materials and clean fuels is crucial for the transition to the green economy, such as lithium, copper, and hydrogen.
• Easier for EU companies to provide their services in Chile, including delivery, telecommunications, maritime transport, and financial services.
• Same treatment for EU investors in Chile as for Chilean investors, including in the energy and raw material sector, and vice versa.
• New full-fledged articles on democratic principles, human rights, and rule of law enshrine core shared values at the heart of EU-Chile cooperation.
• Extending the political dialogue to include international peace, justice, and security.
• A renewed focus on science, technology, research, and innovation.

What’s next?

The EU-Chile agreement will consist of two legal instruments, the Advanced Framework Agreement and an Interim Free Trade Agreement (iFTA). Both the EU and Chile will proceed with the legal verification of the agreement. Following that, the EU will propose the Advanced Framework Agreement and the iFTA for conclusion and ratification.

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