EU’s post-election environmental-related regulation review

As a sequel our previous comments on The EU’s pre-election push on environmental-related regulation this blog updates the status of a selected range of environmental-related regulationsⁱ following the European Parliamentary elections (6-9 June 2024). The non-exhaustive list of regulations ranges from nature restoration and anti-greenwashing requirements to waste, soil health, packaging and supply chain due diligence controls.

The present status is summarised below:

Finally, a green light for the future of nature

The EU Nature Restoration Law, legislation which aims to achieve the targets set by the Global Biodiversity Framework (GBF) agreed at the 2022 UN Biodiversity Conference (COP15),ⁱⁱ has just received the green light from the European Council at its 17^th June 2024 meeting, with a wafer-thin majority as a 65% was needed for approval and 66% (population-adjusted) was reached – see Figure 1.

Figure 1: voting results from the European Council Environment Ministers on 17^th June 2024 on the nature restoration law.ⁱⁱⁱ

This positive vote has been reached after a struggle. Despite a provisional agreement between the EU Parliament and EU Council on the Commission’s proposal, which had been approved by the EU Parliament (EP) in February 2024, the Council switched its position and no longer appeared supportive. However, the change in position of two countries (Austria and Slovakia) just saw it over the line. The regulation will now be published in the EU’s Official Journal (OJ) and enter into force. It will become directly applicable in all Member States. By 2033, the Commission will review the application of the regulation and its impacts on the agricultural, fisheries and forestry sectors, as well as its wider socio-economic effects.

This is the first EU regulation that adopts measures not only to preserve but also to restore nature and represents a fundamental step in the EU’s implementation of its international commitments, particularly those of the GBF. The regulation requires Member States to establish and implement measures to restore at least 20% of the EU’s degraded land and sea areas by 2030, with priority given to Natura 2000^iv sites by 2030, and all ecosystems in need of restoration by 2050.^v This law includes measures to reverse the decline of pollinator populations by 2030 at the latest, and further non-deterioration efforts for specific and restored ecosystems. Finally, in line with GBF commitments, Member States will have to provide national restoration plans to report on the progress made.^vi

Sustainability Due Diligence awaits publication in the Official Journal

The EU Directive on Corporate Sustainability Due Diligence (CSDDD), which aims to foster sustainable and responsible corporate behaviour throughout global value chains by identifying, preventing and mitigating adverse impact of their activities on human rights and on the environment, won legislative approval. While the Directive is applicable to companies, it also requires the EU Commission to submit a report to both the European Parliament and the Council, on “additional sustainability due diligence requirements tailored to regulated financial undertakings with respect to the provision of financial services and investment activities, and the options for such due diligence requirements as well as their impacts, in line with the objectives of this Directive, while taking into account other Union legislative acts that apply to regulated financial undertakings. That report should be accompanied, if appropriate, by a legislative proposal”.^vii Although the existing Directive excludes financial institutions, this may change in the future.

Now the Directive needs to be signed by the President of the European Parliament and the President of the Council and then be published in the Official Journal (OJ) of the European Union. It will enter into force on the twentieth day following its publication. Member States will have two years to implement the Directive and administrative procedures to comply with the legal text. Please see timeline below:

Figure 2: Timeline for CSDDD (Source: ERM, Planet Tracker)

Ecodesign Directive through; only the formalities are left

The new Ecodesign Directive will introduce requirements such as product durability, reusability, upgradability and reparability, rules on substances that inhibit circularity; energy and resource efficiency; recycled content, re-manufacturing and recycling; carbon and environmental footprints; and information requirements, including a Digital Product Passport.^viii Furthermore, the new regulation introduces a direct ban on the destruction of unsold textiles and footwear (with a temporary exclusion of small and medium-sized enterprises [SMEs]) and empowers the Commission to introduce similar bans for other products in the future.^ix

Following approval from the EU Parliament and Council, the legislation will be signed by the President of the European Parliament and the President of the Council and published in the Official Journal of the European Union entering into force on the 20th day following that of its publication. The regulations will apply 24 months later.

The EU’s Anti-Greenwashing Package: being transposed into national legislation

The Directive on Empowering Consumers for the Green Transition^x aims to prevent greenwashing and the avoidance of misleading product information in commercial consumer communication. Specifically, it:

1. forbids the use of generic environmental claims without backing these up with substance;
2. allows for the use of sustainability labels only if established by a public authority or if the label is based on certification schemes;
3. prohibits the claim, based on GHG emission offsetting, that a product has a neutral, reduced or positive climate impact on the environment.

In March 2024, the EU Council and Parliament gave the Directive the green light and now the EU Member States have 24 months to transpose it into national legislation.

Green Claims Directive; more negotiations needed

The Green Claims Directive complements the EU’s ban on greenwashing and introduces a verification system for companies that make environmental-related claims. It sets minimum requirements on the substantiation and communication of environmental claims and labelling, such as demanding lifecycle analysis or a Product Environmental Footprint (PEF). Furthermore, it would ask EU Member States to appoint independent verifiers and establish procedures for complaints.

While MEPs adopted their position on this proposal in March 2024, when the EU Council met on 17^th June, it required a clear distinction to be made between explicit environmental claims and environmental labels, so the obligations under each can clarified. Scientific evidence will be required. In addition, a simplified procedure could be introduced, as could exemptions and a longer timeframe implementation for SMEs. Furthermore, the Council’s position indicated that there should a be a differentiation between contribution claims (carbon credits to contribute to climate action) and offset claims (carbon credits to balance out an emissions share). Finally, companies should provide a net-zero target and show progress towards decarbonisation, as well as the percentage of total greenhouse gas emissions that have been offset.^xi

The Council’s general approach will inform the subsequent negotiations with the European Parliament on the final shape of the directive.

Packaging still on the table, but closer to adoption

The Revision of Regulation on Packaging and Packaging Waste (PPWR) tackles over-packaging and requires the reduction of packaging waste. This regulation introduces new specific targets to be set for the reduction of plastic packaging waste generated on a per capita basis (as compared with 2018) by at least -5% by 2030, -10% by 2035 and -15% by 2040.  It also proposes rules on sector specific reuse targets, refill, deposit return schemes (DRS) as well as a direct ban of PFAS,^xii also known as forever chemicals. On 24^th April 2024, the EU Parliament adopted in its plenary session the proposed text, which now requires a final approval by the Council, expected in Q4 of 2024, before it is added to the statute books. The provisions of the PPWR are expected to come into effect 18 months after publication in the OJ (around mid-2026).

Other regulations under the radar

The Revised Option of the EU Waste Framework Directive, which was discussed by the EU Parliament in March 2024 and by the Council in June 2024, is updating its predecessor and currently looking at more stringent rules on reducing the environmental and climate impacts associated with textile and food waste generation and management. The recent general approach adopted by the EU Council proposes the following:

• Food waste:
  • The Council agrees with the reduction targets proposed by 2030 (−10% in processing and manufacturing and −30% per capita in retail, restaurants, food services and households) and proposes to add targets for edible food by 31 December 2027;
  • It further supports the use of a reference year prior to 2020 and adjustment factors in certain sectors, in order to take into account fluctuations in tourism and production levels in food processing and manufacturing in relation to the reference year.
• Textiles Waste:
  • While the current directive requires the separate collection of textiles for re-use, preparation for re-use and, recycling, to be achieved by 1 January 2025, the proposed Revised Option indicates that, by the end of 2028, the Commission will consider setting specific targets for waste prevention, collection, preparing for re-use and recycling of the waste textile sector.
  • The proposal also provides for harmonised extended producer responsibility (EPR) schemes that would require fashion brands and textile producers to pay fees to help fund the textile waste collection and treatment costs, based on eco-modulation.^xiii

Finally, the Council’s general approach allows the new Hungarian Presidency to start talks with the European Parliament on the final text of this revised Directive.

Soil monitoring and resilience directive

The Soil monitoring and resilience Directive aims to have all soils in a healthy condition by 2050, in line with the EU Zero Pollution ambition. The Council appears to support the assessment of soil health but added some additional flexibilities regarding soil measurement systems and sustainable soil management. Next steps include further negotiations between the EU Council and Parliament in the new legislative cycle.^xiv

Looking ahead

The new make-up of the EP may herald a slowdown in the more ambitious forms of the EU Green Deal goals; however, it is to be noted that a great number of the EU flagship environmental policies have already been translated into regulation. Nevertheless, there are some examples of policies which encountered resistance even under the previous political set up, such as a food system law. In the meantime, the Environment Ministers of Member States have reiterated their commitment to the implementation of the adopted environmental and climate plan, so it remains to be seen what is next for the Green Deal.