EU Insight, 23 April 2021

Brussels, 23 April 2021

CO-LEGISLATORS REACH DEAL ON EU CLIMATE LAW TO FURTHER REDUCE EMISSIONS

The Council and the European Parliament reached a political agreement on the EU Climate Law. Negotiators agreed earlier this week to a target of at least 55 % net greenhouse gases (GHG) emission reduction as compared to 1990 for 2030. They also agreed to reach the 2050 target of climate neutrality at an EU level only, rather than at a national level. Moreover, if considered appropriate, the Commission will propose an intermediate climate target for 2040 in 2023. The deal also establishes that an independent advisory council will be set up to track the EU’s climate course and provide advice. The co-legislators will now have to formally endorse the agreement.

COMMISSION ADOPTS CLIMATE TAXONOMY CRITERIA

The European Commission adopted the final Delegated Act for climate change mitigation and adaptation under the Taxonomy Regulation. Overall, several criteria have been amended compared to earlier drafts, including for activities relating to forestry, bioenergy, hydropower, buildings, transport, and some manufacturing activities. These changes reflect the politically contentious nature of some criteria, most notably the energy criteria (e.g. gas, biofuel, nuclear, etc). In addition to the criteria outlined in this Delegated Act, further amendments are expected to be proposed later this year to address outstanding areas including nuclear, gas, agriculture, biofuels, and forestry. The member states and the Parliament has four months to scrutinise the proposal. They can vote against it but not propose amendments.

REVISED RULES FOR CORPORATE SUSTAINABILITY REPORTING PROPOSED

The European Commission presented its proposal for a Directive on Corporate Sustainability Reporting (CSRD), which amends the existing reporting requirements of the Non-Financial Reporting Directive (NFRD). Overall, the proposal builds on and revises the sustainability reporting requirements set out in the NFRD to enhance the consistency of sustainability reporting requirements with the broader legal framework on sustainable finance. The main changes include the extension of the scope to all large firms and all listed companies on EU regulated markets, as well as more detailed reporting requirements as part of the firm’s management report, among other requirements.

FIRST EVER ARTIFICIAL INTELLIGENCE LEGISLATIVE PROPOSAL PRESENTED THIS WEEK

The European Commission published a Communication on fostering a European approach to Artificial Intelligence (AI), which was accompanied by a proposal for a Regulation, updated rules on machinery products and a new coordinated plan with Member States to increase AI uptake, investment, and innovation across the EU.  The Regulation sets up a European approach on AI that meets a high level of protection of public interests, in particular the health, safety, fundamental rights, and freedoms of persons. It focuses on concrete AI use cases and will regulate only high-risk AI applications in certain sectors, including critical infrastructures, education, law enforcement and essential public and private services, among others. The file will now go to the member states and the Parliament.

CLIMATE SUMMIT ENDS WITH COMMITMENT TO TOUGHER STANCES ON CLIMATE CHANGE

The international Leaders’ Summit on Climate concludes today. The two-day virtual event saw the participation of more than 40 world leaders and aimed to underscore the urgency and economic benefits of stronger climate action. Notably, US President Biden committed to cut emissions by half by 2030, compared to 2005, and to increase funds to vulnerable countries to fight climate change. China’s leader Xi Jinping promised to “strictly limit coal consumption” and phase it down, while European Commission’s President Ursula von der Leyen highlighted that the EU already agreed to reduce greenhouse gas emissions by at least 55% by 2030, and that in June the Commission will table proposals to make Europe ‘Fit for 55′.

COMING UP NEXT WEEK

• 26 April: Informal videoconference of agriculture ministers.  
• 26-29 April: European Parliament Plenary session. On the agenda: EU-UK Trade and Cooperation Agreement, Digital Green Certificate, Digital Taxation, EU-Turkey summit. 
• 27 April: College of Commissioners meeting. On the agenda: new industrial strategy for Europe, communication on better regulation, voluntary return and reintegration strategy.
• 29 April: Informal videoconference of foreign affairs ministers. 

Karl Isaksson, Managing Partner Brussels, Kreab

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Kreab • Tel: +32 2 737 6900 • karl.isaksson@kreab.com • www.kreab.com/brussels • Twitter: @KreabEU.