Chelgate Public Affairs Newsletter – December 2020
This month’s edition reveals what is behind the EU’s new Right to Repair, looks at the return of the US Environmental Protection Agency and Brussels’ and Westminster’s busy 2021 transport agenda, and tells you all you need to know about the EU’s carbon scheme
The return of the Americans
For those engaged in global sustainability regulations, one of the most profound effects of the US election will be the return of an ambitious and proactive US Environmental Protection Agency (EPA) to the negotiating table.
The US environmental regulators have been absent in recent years. However, with the confirmed appointment of John Kerry as the Special Presidential Envoy for Climate, the Biden Administration is making a clear statement that is intends to be actively involved in the global environmental debate.
Kerry’s appointment, in first instance, signals that the US will re-join the Paris Agreement. John Kerry signed the Paris Agreement on behalf of the US in 2016 and will have the pleasure of again committing the US to the agreement.
More importantly, John Kerry is a seasoned diplomat who knows Europe and the inner workings of the Brussels Institutions well. Indeed, he has already said that he looks forward to working alongside America’s allies and partners in tackling the climate crisis.
The EU Institutions are already eager to welcome the US back into the fold and leaked policy papers from the Council and Commission suggest that Member States are looking to the US to play a significant role in alongside the EU on the major issues of the day. This will be the EU’s chance to demonstrate that they are equal partners with the US and set the global regulatory direction.
2021 – the year of transport policy from EU and UK
Given the year we have just had, it seems a fool’s errand to try and make any predictions for the year ahead. However, steering clear of making any predictions on the substance of forthcoming policy proposals, we can say for certain that 2021 looks set to be one of the busiest years we have seen, both sides of the Channel, for transport policy.
The most intriguing element of 2021 will be the potential regulatory divergence between the EU and UK. Some fear that such divergence could potentially lead to a zero-sum game and race to the bottom – at very least that the UK will attempt to undercut the EU. However, with the new Biden Administration set to take office, both the EU and UK will be seeking to set the global agenda alongside the US on these global transport policies.
Where the EU and UK chose to focus their initial 2021 work will demonstrate where their ambitions lie. Looking ahead to the EU Commissions 2021 Work Programme, the EU Commission intended to regulate the internal combustion engine and set the future framework for the mass introduction of zero emission vehicles.
Looking at the UK Government’s recent announcements, the UK Government are more interested in going straight to zero electric transportation – primarily electric and hydrogen. The regulation of the current transport modes, and indeed those heard to reach modes such as HGV/trains and planes, do not appear to be of any great interest.
So, what does this all mean in practice. Well, the EU will set the global standard for the current transport modes – the test cycles, the emission monitoring methodologies and regulation of efficiency technologies. The new Euro 7 and VECTO regulations will likely be copied and pasted for the UK markets and UK companies should follow the EU developments closely. However, the UK will seek to play a role in setting the global framework for electric vehicles and the use of hydrogen. Clearly, the EU will see their role as setting these standards also – alongside the US – so it will be interesting to follow these developments next year and how the UK seek to optimise their COP presidency.
The European Parliament’s push for the sustainable single market: will Europeans be entitled to a Right to Repair for their ICT products?
The foundation of the Single Market in 1993 was a milestone for the EU. On 25 November 2020, the European Parliament laid the groundwork for another such landmark, the “sustainable single market”, by adopting a resolution on the EU Right to Repair. However, leading ICT manufacturers have already signalled their objection. Can Apple and Co. roadblock the Right to Repair?
The new Right to Repair, which will apply to ICT products such as phones and tables, sets out to deliver on the Circular Economy Action Plan’s priority to curb e-waste and increase resource efficiency. Indeed, the Commission hopes that the new right encourages businesses to offer, and to allow consumers to choose reusable, durable and repairable products.
While consumer groups have celebrated the European Parliament’s resolution as a “big win”, and applauded MEPs for sending a clear signal for more sustainable goods, the decision attracted fierce criticism from the ICT sector. Apple has been outspoken against the proposal for common chargers stipulated by the Right to Repair, arguing that it would freeze innovation. The ICT industry also voiced its objection to a legal right to repair in general, claiming that repair should be an option, rather than a mandate.
Over the next months, the Commission will work together with stakeholders, which will decide about the level of ambition of the new proposal. Together, the Commission seeks to devise a standardised method to calculate the lifespan of products, develop mandatory labelling frameworks to provide consumers with easy-to-understand information in durability and reparability, and explore additional measures to promote longevity, for instance through price guarantees.
Despite the political support for the Right to Repair, we can expect a “policy battle” over the details of the new measures between consumer groups on the one, and big ICT players on the other side. A public consultation in foreseen for Q1 2021, providing stakeholders with the opportunity to leave their mark on the new Right to Repair.
EU Emission Trading: 3 things you need to know about the flagship carbon pricing scheme
The European Union likes to pride itself with EU Emission Trading Scheme (ETS), the world’s first decarbonisation initiative that puts a price tag on pollution. Although the statistics are in ETS’s favour – showing a remarkable GHG decrease of 9% in ETS covered sectors in 2019 – the scheme is ripe for reform. Here’s everything you need to know about ETS and its forthcoming revision.
Fact 1: it is not as complicated as its name might suggest
ETS functions according to the logic of “cap and trade”: The ETS regulation sets a cap on the total amount of GHG emitted, and within this cap, companies in energy-intensive industries such as steel, construction and energy, can receive and buy emission allowances, which they can trade with one another as needed. The cap is reduced over time so that overall emissions from each sector fall. The underlying idea is that “the polluter pays”, while well-performing industries can generate extra revenue with the sale of allowances to worst-emitters.
Fact 2: aviation and shipping remain the EU’s problem children
In terms of aviation, the devil is in detail: while formally part of ETS, airlines have benefitted from over-allocation of permits, which allowed worst-emitters to purchase cheap ETC credits and continue to pollute at a small price. Let the numbers speak: while emissions in other ETS covered sectors such as power and steel fell sharply, aviation emissions grew by 1.5% in 2019. Although shipping emissions represent around 13% of the overall EU greenhouse gas, up until 2020, policy makers have turned a blind eye on the sector. However, the tide has now turned, and this September the European Parliament has voted in favour of the inclusion of shipping in the ETS.
Fact 3: ETS will be overhauled in 2021
The ETS framework was crafted in the early 2000s, when climate change was nowhere near the top of the EU’s agenda, and so it is understandable that the regulation requires steady revisions to deliver on the EU’s increasingly ambitious climate objectives. As announced in the EU Green Deal, ETS will be revised in June 2021 to align the scheme with the EU’s stricter GHG reduction target. It is also clear that ETS will be extended to new sectors, above all to shipping, but also other sectors like forestry and carbon capture industries are being considered.
If you would like to know more information about the Environmental Protection Agency or on any of the above content please contact our Chelgate Public Affairs team. Alternatively, you can contact our London Office here.