EU Insight, 01 July 2022

Brussels, 1 July 2022

FIT FOR 55: COUNCIL AGREEMENTS ON ETS, CBAM, RED, EED, LULUCF, ESR, SCF, CO2 FOR CARS.

European governments reached Council positions on several climate measures to reduce emissions by 55% this decade. Lengthy negotiations among EU environment and energy ministers resulted in compromise agreements on emission trading, renewable energy, climate border adjustment, energy efficiency, and new CO2 standards for cars which effectively ban combustion engines by 2035. In addition, EU member states agreed on a €59 billion Social Climate Fund to support vulnerable households in case energy become more expensive. After summer, the European Parliament and the Council will start interinstitutional negotiations under the Czech presidency.

THE EU AND NEW ZEALAND SIGN A TRADE AGREEMENT

The EU and New Zealand finalised negotiations for a Trade Agreement that is expected to expand economic opportunities for both companies and consumers. Most notably, the deal includes commitments to implement the Paris Climate Agreement, core labour rights, as well as chapters dedicated to sustainable food systems, gender equality, and fossil fuel subsidies reform. With the deal, bilateral trade is forecasted to increase by up to 30% and EU investments into New Zealand might grow by up to 80%. Additionally, all tariffs on EU exports to New Zealand will be eliminated and compliance requirements significantly reduced.

DIGITAL FINANCE: AGREEMENT ON EUROPEAN CRYPTO-ASSETS REGULATION 

European co-legislators reached an agreement on the rules applying to crypto assets beyond the scope of financial services. The Markets in crypto-assets (MiCA) regulation aims at bringing crypto-assets, their issuers, and service providers under a harmonised framework. Several EU countries already regulate crypto-assets, but recent developments led European policymakers to create an EU-wide regulation focusing on investor protection, financial stability, and innovation. MiCA is part of a package that also contains a digital finance strategy, a Digital Operational Resilience, and a proposal on distributed ledger technology (DLT). The provisional agreement is now set to be approved by the Council and the European Parliament.

CO-LEGISLATORS AGREE ON RULES ON FOREIGN SUBSIDIES DISTORTING THE MARKET

The Council and the European Parliament reached a political agreement on the Regulation on foreign subsidies distorting the internal market, aiming to restore fair competition between European and non-European undertakings operating in the EU. The Regulation introduces three tools, prior authorisations for both mergers and bids in large-scale public procurement, and a general market investigation tool. The co-legislators agreed to maintain the notification thresholds proposed by the Commission. The new rules introduce a retroactive clause whereby the Commission is allowed to investigate and impose redress measures on subsidies that were granted up to five years before the entry into force of the Regulation.

STRONGER JOINT EUROPEAN CROSS-BORDER COOPERATION IN HEALTH

The European Parliament and Council reached an agreement on cross-border health cooperation. The agreement enables the Commission to formally recognise a public health emergency at EU level which would trigger enhanced intra-EU cooperation with regards to time, stockpiling, and joint procurement of medical countermeasures. The Regulation also seeks to improve the planning and coordination at EU and national levels by introducing a framework for joint procurement of medicines and medical devices, strengthening the role of the Health Security Committee, and increasing cooperation between European bodies. The text is now subject to final technical work and formal adoption procedures.

COMING UP NEXT WEEK

• 4 – 7 July: European Parliament’s Plenary. On the agenda: Vote on the DMA and DSA, Conclusions of the European Council, Debate with the Prime Minister of Greece
• 5 July: College of Commissioners meeting. On the agenda: A new European innovation agenda

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.