The European Commission is currently discussing a draft of a proposal for a Carbon Border Adjustment Mechanism (“CBAM”) Regulation that it is expected to present on July 14, 2021. A CBAM was already announced in the European Commission’s Communication for a Green Deal and is intended to protect the EU’s domestic industry that is at risk of carbon leakage—to create a level playing field—and to serve as a policy tool to encourage third countries to reduce their greenhouse gas (“GHG”) emissions.
Continue Reading Twelve Things to Know About the Upcoming EU Carbon Border Adjustment Mechanism
The EU’s Green Capitalism Takes Shape: Taxonomy Screening Criteria and Corporate Sustainability Reporting
The European Commission has presented a package of key enabling legislation on sustainable finance (the “Sustainable Finance Package”). This includes the much-awaited first technical screening criteria under the Taxonomy Regulation — outlined in the Taxonomy Climate Delegated Act (“TCDA”) — and a proposal for a Corporate Sustainability Reporting Directive (“CSRD”), which significantly revises and expands on the existing Non-Financial Reporting Directive’s remit and disclosure rules for corporates. While the former is directly aimed at financial institutions and investors, and the latter at large and listed entities, the package has broader implications for all corporates.
Sustainable Finance Package: Context and Comment
The Commission’s intention with its Sustainable Finance Package is twofold: (1) in the short term, to set a clear regulatory framework to encourage investments that will contribute to a sustainable and inclusive economic recovery from the COVID-19 pandemic; and (2) in the long term, to ensure the transition to a carbon neutral EU economy by 2050, in accordance with the 2020 European Climate Law. Following the adoption of the EU Taxonomy Regulation (explained further below), the Sustainable Finance Disclosure Regulation, and the Benchmark Regulation, which enhances the transparency of benchmark methodologies, the Commission has in this legislative package laid out the next building blocks for its envisioned sustainable finance ecosystem.
Upcoming EU Environmental and Human Rights Supply Chain Due Diligence Requirements for Rechargeable Industrial Batteries and E-Vehicle Batteries
In December 2020, the European Commission presented a proposal for a new Regulation on Batteries and Waste Batteries (see Covington’s webinar on the proposal). The proposed Regulation seeks to achieve the objectives set out in the European Green Deal and subsequent strategies, such as the transition to a carbon neutral and circular economy and the growth of renewable energies and clean mobility. The European Parliament and Council are currently considering the proposal for its adoption through the ordinary legislative procedure, which is not likely to be completed before mid-2022.
Continue Reading Upcoming EU Environmental and Human Rights Supply Chain Due Diligence Requirements for Rechargeable Industrial Batteries and E-Vehicle Batteries
UK: new “world-leading” deforestation and ecosystem supply chain law
The UK Government recently announced that it is developing legislation that would make it illegal for large businesses operating in the UK to use certain commodities that have not been produced in line with local laws, and require in-scope companies to conduct due diligence to ensure that their supply chains are free from illegal deforestation and ecosystem change. A failure to comply could result in significant fines (the precise levels of fines are yet to be determined).
Continue Reading UK: new “world-leading” deforestation and ecosystem supply chain law
The Green Deal at the Border: Public Consultation on the EU Carbon Border Adjustment Mechanism Launched
Last week, the European Commission launched a public consultation on the possible adoption of a new EU Carbon Border Adjustment Mechanism (“CBAM”). This consultation is yet another of the initiatives that the Commission is taking to roll out its ambitious European Green Deal (for a recent overview webinar see here). Manufacturers in virtually all industrial sectors and their trade associations would be wise to assess the potential impact of the CBAM on the products they market in Europe and to consider participating in the public consultation and comment process.
Continue Reading The Green Deal at the Border: Public Consultation on the EU Carbon Border Adjustment Mechanism Launched
Climate Change: The EU Moves Towards a Carbon Border Adjustment Mechanism
Last week, the European Commission took a major step to implement the climate aspects of its European Green Deal. It presented a proposal for a European Climate Law and two consultations on its announced Climate Pact and Carbon Border Adjustment Mechanism (“CBAM”).
Continue Reading Climate Change: The EU Moves Towards a Carbon Border Adjustment Mechanism