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Funding incentives under the U.S. Inflation Reduction Act of 2022 (IRA) to transition to a clean energy economy are unleashing opportunities for key U.S. allies and partners around the world. In particular, tax credits exceeding 10% of the price of average electric vehicle (EV) sold in the United States are leading to new investments in Mexico and Canada, and have triggered high-level political negotiations from U.S. partners such as the European Union and Japan.…

Continue Reading Global Spotlight: the IRA’s Implications for Key U.S. Allies

On March 22, 2023, the European Commission (“Commission”) presented its proposal for a Directive on substantiation and communication of explicit environmental claims (“Proposed Green Claims Directive”).  The Proposed Green Claims Directive is intended to work in tandem with the Commission’s 2022 Proposal for a Directive empowering consumers for the green transition through better protection against unfair practices and better information (“Proposed Greenwashing Directive”).  Both Proposed Directives are intended to contribute to the EU’s green transition towards a circular, climate-neutral and clean economy by enabling consumers to make informed purchasing decisions based on reliable information about the sustainability of products and traders.  In particular, the Proposed Green Claims Directive would create a common methodology for substantiating green claims about the environmental footprint of products, services and companies and require companies making environmental claims to secure a certification of compliance from an independent national “verifier.”…

Continue Reading Greenwashing: EU Unveils Ambitious Proposal on Green Claims

As part of “A Green Deal Industrial Plan for the Net Zero Age” to respond to the US Inflation Reduction Act (IRA) (see our alert), the European Commission (the “Commission”) adopted on 9 March 2023 its Temporary Crisis and Transition Framework for State Aid measures to support the economy following the aggression against Ukraine by Russia (the “TCTF”). The text amends the Temporary Crisis Framework last amended on 28 October 2022 (see our blog). 

These are the three most important things you need to know about the TCTF:

  • To avoid that an investment would be located outside the European Economic Area (EEA), EU countries may support investments in the manufacturing of relevant equipment for the transition towards a net-zero economy, such as batteries, solar panels, wind turbines, heat pumps, carbon capture usage and storage (CCUS), as well as their key components and critical raw materials necessary for their production. They may even grant aid matching foreign subsidies to support those investments, provided that they are located in the poorer areas of the EU.
  • EU countries’ possibilities to grant aid for accelerating the rollout of renewable energy are extended to any renewable technologies, including hydropower, and no longer require a bidding process to select the aided projects that are considered as less mature.
  • The TCTF is not a subsidy program, and it is up to EU Member States to provide public funding.

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Continue Reading The Commission adopts its Temporary Crisis and Transition Framework relaxing State aid rules as a response to the US Inflation Reduction Act

The EU’s Green Deal Industrial Plan for the Net-Zero Age

The US Inflation Reduction Act (the IRA) has raised concerns in the EU about the potential impact on international investment – particularly the possibility that such investment will be pulled into the US, rather than directed to the EU and may encourage ‘green industries’ to relocate production to the US. The EU has been working on an appropriate response that would increase the attractiveness of the EU as a green investment destination without breaching either WTO rules or its own State Aid rules.…

Continue Reading The EU’s Green Deal Industrial Plan for the Net-Zero Age

The European Parliament and Council are about to adopt an agreed text on a Regulation on Batteries and Waste Batteries (“Sustainable Batteries Regulation” or “SBR”) that will impose a broad range of requirements on the safety, sustainability and circularity of batteries, including batteries that are part of devices (e.g., laptop batteries), industrial batteries (e.g., large stationary storage applications) and means of transport batteries (e.g., car batteries), as well as extended producer responsibility obligations (including waste take back) on producers marketing them.  The SBR is likely to be published in the official journal of the EU within the next couple of months and will repeal and replace the existing EU Directive on Batteries and Waste Batteries.

This post outlines the specific removability and replaceability requirements that the SBR will impose on portable batteries and light means of transport (“LMT”) batteries (e.g., batteries for electric bicycles) marketed in the EU/EEA as of around September/October 2026.  The new requirements will oblige producers of appliances to introduce design changes to their appliances and the batteries they incorporate.  Moreover, clarifying the details of such requirements is likely to create much controversy and debate among the European Commission, Member States and other stakeholders within the next two years.  In effect, the SBR leaves it to the Commission to adopt guidelines interpreting the different removability and replaceability requirements. 

The post also briefly mentions the political compromise that the European Parliament and Council reached on the removability and replaceability of electrical vehicle batteries and “starting, lighting and ignition” (“SLI”) batteries, and its emphasis on ensuring that such batteries be removable and replaceable by “independent professionals” (and not just authorized dealers).…

Continue Reading New Removability and Replaceability Requirements for Batteries Marketed in the European Union

The European Union (“EU”) has passed the world’s most far-reaching mandatory environmental, social, and governance (“ESG”) reporting regime.

The Corporate Sustainability Reporting Directive (“CSRD”) will apply to an initial group of large EU companies from 2024 and gradually extend its reach to smaller companies over the course of the following four years. It is ultimately expected to apply to more than 50,000 companies incorporated, listed, or doing business in the EU. Notably, from 2028 the CSRD will apply to non-EU parent companies that generate more than EUR 150M of net turnover in the EU and have at least one EU subsidiary subject to the CSRD (or a local branch of a certain size). (See Appendix for a table with detailed information on the CSRD’s application thresholds and dates.)…

Continue Reading EU Mandatory ESG Reporting Takes Shape: CSRD is Passed and EFRAG Adopts Draft ESRS

Last week the European Commission published its long-awaited proposal for a Packaging and Packaging Waste Regulation (“Proposed Packaging Regulation” or “proposed Regulation”), and a Plastics Communication on an “EU Policy Framework on Biobased, Biodegradable and Compostable Plastics” (“Plastics Communication”).  The Proposed Packaging Regulation is intended to replace the Packaging and Packaging Waste Directive 94/62 (“Packaging Directive”) and to ensure that all packaging marketed in the EU/EEA is fully recyclable or reusable by 2030.  If adopted, the Proposed Packaging Regulation’s new requirements and restrictions will have a significant impact on industry, distributors, and consumers.  The European Parliament and Council must now consider the proposed Regulation for adoption through the so-called “ordinary legislative procedure,” which will allow for the introduction of amendments and is likely to take at least 18 months.  

This blog post highlights the main changes and new requirements that the Proposed Packaging Regulation would introduce, and outlines the principal recommendations of the Commission’s Plastics Communication.…

Continue Reading The Commission unveils its proposal for a Packaging and Packaging Waste Regulation, and provides recommendations on Biobased, Biodegradable and Compostable Plastics

On 6 October 2022, the Council of the European Union adopted a Regulation on an emergency intervention to address high energy prices (the “Regulation”).  The Regulation was published in the Official Journal of the European Union on 7 October. The Regulation has three main elements:

  1. A requirement to reduce electricity consumption by 5% in peak hours;
  2. A measure to return the excess revenues or profits of energy companies to the individual Member States; and
  3. The allocation of proceeds to customers to alleviate retail electricity prices and an extension to Small and Medium-sized Enterprises (SMEs) of the categories of beneficiaries of a possible Member State intervention in the retail price.

The Regulation’s market intervention is exceptional (albeit in response to an extraordinary geopolitical market disruption).  It will have widespread positive and negative impacts for energy market sellers and buyers.  These circumstances may provoke a range of disputes, transaction (re)structurings or additional compliance obligations that will require expert advice and understanding of the details of the Regulation.…

Continue Reading EU Emergency Action on Energy

The European Parliament and Council are in the last stages of the legislative procedure to adopt a Regulation on Batteries and Waste Batteries (“Sustainable Batteries Regulation”), which the European Commission proposed in December 2020.  Among other many requirements, the proposed Sustainable Batteries Regulation will require manufacturers to ensure that the portable batteries contained in their electronic devices are removable and replaceable.  These requirements will apply to a large variety of electronic devices, including household appliances, IT, telecommunications equipment, and medical devices.  They are part of a broader sustainable products package that includes other legislative proposals, such as the Commission proposal for a Regulation on Ecodesign Requirements for Sustainable Products and an upcoming legislative initiative on the right to repair, and will require manufacturers to redesign the electronic devices that they market in the European Union and European Economic Area (“EU/EEA”).…

Continue Reading Upcoming EU Removability and Replaceability Requirements on Portable Batteries

On 30 May 2022, the European Union (“EU”) adopted the revised Regulation on guidelines for trans-European energy infrastructure (No. 2022/869) (the “TEN-E Regulation 2022”), which replaces the previous rules laid down in Regulation No. 347/2013 (the “TEN-E Regulation 2013”) that aimed to improve security of supply, market integration, competition and sustainability in the energy sector. The TEN-E Regulation 2022 seeks to better support the modernisation of Europe’s cross-border energy infrastructures and the EU Green Deal objectives.

The three most important things you need to know about the TEN-E Regulation 2022:

  • Projects may qualify as Projects of Common Interest (“PCI”) and be selected on an EU list if (i) they fall within the identified priority corridors and (ii) help achieve EU’s overall energy and climate policy objectives in terms of security of supply and decarbonisation. The TEN-E Regulation 2022 updates its priority corridors to address the EU Green Deal objectives, while extending their scope to include projects connecting the EU with third countries, namely Projects of Mutual Interest (“PMI”).
  • PCIs and PMIs on the EU list must be given priority status to ensure rapid administrative and judicial treatment.
  • PCIs and PMIs will be eligible for EU financial assistance. Member States will also be able to grant financial support subject to State aid rules.

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Continue Reading The European Union Adopted New Rules for the Trans-European Networks for Energy