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Dr2 Consultants hosts third webinar on the EU Data Act with representatives of the EU Parliament and the Council

Following the publication of the EU Data Act in February 2022, Dr2 Consultants hosted a series of three Breakfast Webinars to discuss the impact of the proposal on European businesses. The last edition took place on June 16 and hosted institutional representatives to discuss the views of the European Parliament and the Council. The event was moderated by Cathy Kremer, Senior Consultant at Dr2 Consultants.

Ms. Angelica Petrov, Policy Advisor on cybersecurity and digital policy to MEP Alin Mituța, shadow rapporteur on the EU Data Act for Renew in the leading ITRE committee, and Ms. Anna-Liisa Pärnalaas, Counsellor for Digital and Cyber Affairs at the Permanent Representation of Estonia to the EU, were invited to shed light on the Data Act from an institutional perspective. Input gathered from the previous two webinars (first and second) on the EU Data Act and its impact on EU competition and sustainability and smart mobility goals fed into the discussion with institutional stakeholders.

Both speakers emphasized the importance of the proposal as one of the main cornerstones of the EU data economy. However, they also recognized that the proposal still requires a comprehensive assessment of the proposal’s real-life impact given the technical nature of some of its provisions. In addition, some clarifications are necessary to avoid putting an additional burden on EU SMEs and companies, thus guaranteeing a competitive edge for the digital economy and society. Against that background, they encouraged all stakeholders to come up with their input to implement a practical framework that works for everyone.

Ms. Anna-Liisa Pärnalaas stated that the proposal has several provisions that support businesses entering the market and empower consumers, e.g. data portability, interoperability safeguards, and unfair contractual contracts. On privacy rights, Ms. Pärnalaas underlined that this regulation should avoid a situation where requirements lead to loss of control of personal data. To tackle this issue, she mentioned that additional safeguards and clarifications about how GDPR applies to the Data Act would be beneficial.

Ms. Angelica Petrov said the European Parliament supports this piece of legislation as it comes at a timely moment with the surge of connected devices and IoT products which generate a significant amount of data. In her view, data holders should have access to the data they produce, and this framework comes at the right moment to regulate how to process and collect data, unleashing the true power of industrial data for EU consumers and businesses. Against that background, Ms. Petrov stressed how this legislation would help B2B, B2G and cloud switching. In that regard, Ms. Petrov would like to see more clarity on definitions as well as data anonymization; data sharing with Member States governments in emergency situations; and cloud switching rights including reverse switching.

When asked about the imbalance on third parties’ requirements, who would be the big economic beneficiaries, in the direction of both consumers and manufacturers, Ms. Petrov and Ms. Pärnalaas answered that this issue would require additional safeguards and provisions.

From an institutional standpoint, Ms. Petrov noted that there has been a broad consensus on major issues in the European Parliament so far. She added that the timeline is on hold for now due to a conflict of competence between committees. Ms. Pärnalaas stipulated that the Council had finished the first reading of the French presidency’s report. She mentioned that the first written comments are with the Presidency before discussions kick off in July, adding that the most active part will begin in fall 2022.

To watch the full replay of the last breakfast webinar click here.

If you would like to stay up to date with the developments regarding EU digital policies and related events, please sign up to our monthly EU Data Policy Update here. Learn more about our EU Data Policy Services here.

Dr2 Consultants hosts second webinar on the EU Data Act and its impact on EU competition and smart mobility goals

Following the publication of the EU Data Act in February 2022, Dr2 Consultants hosted a second Breakfast Webinar on May 25 to discuss the impact of the EU Data Act on the European competition and smart mobility goals. The webinar is the second in a series of three, where the first was held on May 5 and discussed the impact on EU competition and sustainability goals.

The event was moderated by Cathy Kremer, Senior Consultant at Dr2 Consultants. Two speakers were invited to share their thoughts about the impact of the Data Act on the mobility sector. Mr. Mikael Isaksson, Public Affairs Officer at Volvo Cars and Dr. Nima Barraci, Senior Manager, Group Data Strategy and Transformation at Lufthansa Group gave insight into the road transport and aviation sectors’ perspectives.

Mr. Isaksson stated that the consumer focused approach in the Commission proposal is the right approach. He underlined that Volvo Cars values people’s freedom to move in a personal, sustainable and safe way. He argued that data and connectivity have a role to play in decarbonizing transport, in managing traffic flows and in optimizing energy efficiency. Data must be shared in a way that is safe, technically feasible and relevant for the consumer. The Data Act should not stifle innovation, growth and investment. It should lay down the basic principles to ensure data can be accessed on a level playing field.

Dr. Barraci said that Lufthansa Group had in principle a positive stance towards the Data Act. He noted that, currently, machine generated data is to a large extent unregulated and there are no rules to whom the data belongs and who has access to it. The Data Act would level the playing field by creating ground rules, foster competition and innovation. It would help reach the EU’s sustainability goals by improving the ecological performance of aircrafts and aircraft operations. The Data Act will foster innovation and energy efficiency, he underlined.

Asked about their one key message to policymakers, Dr. Barraci wished to see the Data Act become an enabler for innovation and competition in Europe. Mr. Isaksson concluded that the Data Act should be designed in a way that it encourages innovation and that it will benefit everyone in the connected mobility ecosystem.

To watch the full replay of the second breakfast webinar, click here.

Input gathered from the first and second webinar will feed into a discussion with institutional stakeholders in the final webinar on 16 June. Feel free to register on this page.

If you would like to stay up to date with the developments regarding EU digital policies and related events, please sign up to our monthly EU Data Policy Update here. Learn more about our EU Data Policy Services here.

REPowerEU: A boost for the European energy transition

This week marks a major development in the path towards an independent EU energy market. Through the REPowerEU plan, published on 18 May (an outline of which was published on 8 March), the European Commission highlights an urgent need to reduce the EU’s reliance on Russian fossil fuels, especially on natural gas imports. But how does this plan concretely foresee to reduce dependence, ensure strategic autonomy of the EU in the field of energy and how will it accelerate the clean energy transition? In this article, Dr2 Consultants presents the main takeaways of the REPowerEU plan.

The EU’s recipe for a green transition

In 2021, the European Commission proposed a package of measures to tackle the transition to more sustainable energy systems by means of the “Fit for 55” package. If all proposals as part of the package would be implemented, annual fossil gas consumption could be reduced by 30%, equivalent to 100 billion cubic meters (bcm), by 2030. However, in view of the invasion of Russia into Ukraine and the subsequent energy crisis, the REPowerEU Plan aims to accelerate this process.

The REPowerEU plan is based on three main elements:

  1. Saving more energy (and thus reducing energy dependency) through the promotion of energy efficiency;
  2. Diversifying energy supply (seeking new markets for imports), in order to reduce dependency on Russian energy;
  3. Substituting fossil fuels through the acceleration of Europe’s clean energy transition (combining investments and reforms).

Energy savings

Together with the REPowerEU plan, the Commission presents an EU Save Energy Communication. The new plan builds on the Fit for 55 proposals from July 2021 and calls for their speedy adoption. Among others, the European Commission proposes a legal amendment to raise the targets as put forward in the Energy Efficiency Directive – a revision that is part of the Fit for 55 package and currently under revision –  from 9% in the current proposal to 13%. On heat pumps, the EU wants to double the current deployment rate, resulting in a cumulative 10 million units over the next five years. Moreover, Member States are encouraged to come with measures such as reduced VAT rates for high efficiency heating systems and for insulation in buildings, as well as other energy pricing measures, which encourage switching to heat pumps and the purchase of more efficient appliances.

Accelerating clean energy transition

The REPowerEU plan recommends replacing fossil fuels, such as natural gas with renewable fuels from both biological as well as non-biological origin in the near future. By accelerating the transition towards and increasing the uptake of fuels such as hydrogen and biomethane, Europe can replace fossil imports by renewables at a faster pace than foreseen. The Commission will finalize the proposed regulatory framework for hydrogen and will soon publish two new draft legal acts to define and boost the production and market development of renewable hydrogen within Europe. On biomethane, the Commission is proposing an action plan to achieve 35 billion cubic meters (bcm) of annual biomethane production by 2030. The Commission wants to address the main barriers to increasing the production and use of biomethane. Taking away these barriers will make it easier to facilitate its integration into the EU gas market.

Fit for 55 services

Furthermore, REPowerEU urges for much more action on deploying renewable energy and related smart energy technologies, such as heat pumps and hydrogen electrolyzers. It puts forward an increase to the Renewable Energy Directive target – a revision that is part of the Fit for 55 package – from 40% to 45% by 2030, equivalent to 1236GW of installed renewables capacity, a significant step up from the 1067GW targeted in the original proposal for a revision.

Lastly, REPowerEU also includes a strategy for solar energy to make it an important part of the EU’s energy and heating systems. This proposes a target of over 320 GW of newly installed solar photovoltaic capacity by 2025, and almost 600 GW by 2030. The European Commission introduces a solar rooftop obligation for commercial and public buildings by 2026 and for new residential buildings by 2029. Moreover, an EU large-scale skills partnership to develop the necessary skilled workforce to produce, install and maintain these panels and an EU Solar Industry Alliance to support the EU industry in expanding the domestic production of photovoltaic panels.

In the new detailed plan, the Commission encourages Member States to identify the most suitable projects for renewables where permitting would be shortened and simplified. Normal renewable energy licensing procedures usually take years, meaning a significant acceleration of the rollout of renewable energy projects in the years to come.

Diversifying energy supply

Similar to the vaccine purchase schemes during the COVID-19 pandemic, the Commission would like to negotiate (gas) purchasing agreements on behalf of the whole EU through a ‘joint purchasing mechanism’, as part of the EU External Energy Strategy. The vehicle currently used for purchasing agreements is the EU Energy Platform, a voluntary mechanism used to pool demand, and to coordinate the use of the import, storage and transmission infrastructure. By negotiating in this way, the Commission wants to secure more reliable suppliers of gas and hydrogen, build long term partnerships, and thanks to the collective purchasing power of all Member States strike better deals (including cooperation on hydrogen and other green technologies).

As part of the REPowerEU communication on 23 March 2022, the Commission adopted a legislative proposal for obligatory gas storage rules. The proposed rules include the obligation for Member States to fill all gas storage sites to at least 80% by November 2022 (and 90% in subsequent years), new mandatory certification for storage system operators and a 100% transmission tariff discount for gas storage facilities. The file is currently being negotiated by the co-legislators under an urgent procedure, so that it can take effect from Summer 2022.

With regards to the European embargo on Russian oil products, as announced by the Commission as part of its sixth sanction package, an agreement among the Member States has not yet been reached. The introduction of REPowerEU should help the Member states to transition away from Russian oil products, but the negotiations are reported to be at a standstill. The decision on a potential embargo is likely to be taken at the highest political level during a Special meeting of the European Council on 30 and 31 May.

What to expect next?

The REPowerEU plan is a landmark publication with far-stretching impact on various industries, and is expected to guide reforms and investments in the years up to 2030. In order to replace Russian fossil fuels and diversify the EU’s energy mix, the Commission is increasing the targets for the production and import of energy carriers such as renewable hydrogen, biomethane and LNG significantly. Additionally, the plan proposes to significantly shake up the investment landscape, e.g. by repurposing the Recovery and Resilience Facility and easing permitting procedures. It is expected that this mix of measures will strengthen the business case of projects in the energy transition and will provide guarantees to investors.

Moreover, with its dedicated External Energy Strategy, the Commission rightfully acknowledges the need for strong partnerships with other continents across the globe to diversify its energy supplies. It is expected that new platforms such as EU Energy Platform and the Mediterranean Green Hydrogen Partnership will play a key role in setting a clear regulatory framework to accommodate global trade flows and harmonize standards between continents.

Furthermore, the revised targets within some of the (already controversial) Fit for 55 files, such as the Renewable Energy Directive, are expected to be subject to intense negotiations among the co-legislators. Whilst there is general consensus on the objectives of the REPowerEU plan – diversify energy sources and stimulate the transition towards renewable energy sources – policymakers disagree on the measures necessary to realize these objectives.

Want to know more about these latest developments and how they impact your organization? Please get in touch with us via our website. We also invite you to stay up to date via Dr2 Consultants’ weekly Fit for 55 policy updates (read the latest update here and subscribe here).

Dr2 Consultants hosts webinar on the EU Data Act and its impact on EU competition and sustainability goals

Following the publication of the EU Data Act in February 2022, Dr2 Consultants hosted a Breakfast Webinar on May 5 to discuss the impact of the Data Act on European competition and sustainability goals. The event was moderated by Cathy Kremer, Senior Consultant at Dr2 Consultants.

Mr. Paolo Falcioni, Director-General of APPLiA, representing the home appliance sector in Europe, and Mr. Radu Surdeanu, Senior Director Government Affairs at Siemens Energy, a large energy company offering products and services along the entire value chain, were invited to shed light on the Data Act from an association and business perspective.

Both speakers agreed with the key ambition of the Data Act, its potential to increase Europe’s competitiveness and contribute to the EU’s sustainability goals, but they underlined there is still a long way to go for this proposal. The rules for the industry need to be more clearly defined and the text should be strengthened in a participatory manner with all stakeholders.

Mr. Falcioni stated that the home appliance industry is committed to facilitate the transition to the circular economy by unlocking all valuable data, while supporting the principles of fair, reasonable and non-discriminatory terms for making data available. However, Mr. Falcioni wonders to what extent the protection framework to trade secrets would apply and prefers to respect the contractual freedom of the parties involved. Mr. Falcioni noted that some elements were missing in the Commission’s text. He wished to see clarification on conditions and obligations, e.g. which data should be made available and to whom. He wondered how the Data Act will help square the circle between the climate crisis and the EU’s competitiveness.

Mr. Surdeanu welcomed the Data Act and supported the standardization efforts for interoperability. He noted that in the energy sector data and AI are paramount to the development of the sector, offering solutions in terms of decarbonization. He had similar concerns about the Act as Mr. Falcioni regarding trade secrets, contractual freedom, and lack of distinction between B2C and B2B contracts and stated that the high level of ambition does not match the actual proposal. Mr. Surdeanu said a shift in mindset and skills is needed to reach ambitions of the EU’s twin transition. Finally, he said there is a disproportionate ratio between incentives and the regulatory burden. Companies should be more incentivized, especially smaller players for whom digitization might become an obstacle.

Input gathered from this webinar and the next one, which takes place on May 25 and will focus on the impact of the Data Act on the transport sector, will feed into the discussion with institutional stakeholders in the final webinar on June 16.

If you already have not registered for the upcoming two breakfast webinars, you can do so here.

To watch the full replay of the first breakfast webinar click here.

If you would like to stay up to date with the developments regarding EU digital policies and related events, please sign up to our monthly EU Data Policy Update here. Learn more about our EU Data Policy Services here.

Fit for 55 package: carbon pricing in the transport sector

The European Green Deal aspires to reduce the transport sector’s dependence on fossil fuels. In that context, the Commission presented the ‘Fit for 55 Package’ on 14 July 2021. This legislative package aligns the EU’s legislation with the 55% emission reduction target to be achieved by 2030. In order for the transport industry to play its part, the EU is increasing its efforts to put a price on COemissions. Dr2 Consultants will demystify the Commission’s greening efforts within the ‘Fit for 55 Package’ through three illustrative examples of increased carbon pricing across different transport modalities.

1. Eurovignette and CO2 emission standards to decarbonize road transport

The use of road infrastructure by heavy-duty vehicles is regulated through the Eurovignette Directive. The revision of this file, first tabled in 2017 by the Commission, was officially adopted on 24 February 2022, and is not part of the Fit for 55 Package. Member States now have two years to transpose the Directive in national legislation. The revision will phase out the time-based vignette-system for heavy goods vehicles across the core trans-European transport network (TEN-T) from 2030. This will be replaced by distance-based charges resulting in a user-pays and polluter-pays system across the core TEN-T network, where most international transit of commercial vehicles takes place. Road haulers using clean trucks would benefit from the revised legislation, which is expected to half their road tolls by May 2023.

With regards to passenger cars and light-duty vehicles, which are responsible for 75% of EU road transport CO2 emissions, the European Commission tabled, as part of the Fit for 55 Package, the revision of the Regulation setting CO2 emission performance standards for cars and vans. The CO2 reduction target for cars, currently set at 15% for 2025 and 37,5% for 2030 compared to 2021 levels, will be raised in order to ensure that all cars registered as of 2035 will be zero-emission. The new targets require average emissions of new cars to be reduced by 55% from 2030 and 100% from 2035, compared to 2021 levels. 

In his draft report, the Rapporteur in the Environment Committee, MEP Jan Huitema (the Netherlands, Renew), called for even stricter CO2 targets for cars (-75% by 2030) and vans (-70% by 2030) towards 2035. However, these higher targets have not been supported by all other political groups in the European Parliament. Jens Gieseke (Germany, EPP) and Kateřina Konečná (Czech Republic, The Left) considered the draft report too ambitious and believed that the targets could not be achieved by the car manufacturers and some of the Member States. Furthermore, it remains to be seen if MEP Huitema’s proposal will be supported by his own political group.

The Council of the EU has not yet adopted a position on the revised targets, as negotiations are ongoing on some key issues. For instance, a group of Member States supports the increased ambition of the new targets, while others express concerns about the price of electric vehicles and the availability of affordable cars in the future. The Environment Ministers are expected to discuss the file during their upcoming meeting on 28 June.

Dr2 Consultants expects that the various Fit for 55 carbon pricing measures in the road transport sector will stimulate the market demand for zero- and low emission vehicles, both for passenger and freight transport. Later this year, the European Commission is expected to table a legislative proposal with updated CO2 emission performance standards for heavy-duty vehicles and trucks.

2. Extending the EU ETS to the maritime sector and road transport

The EU Emissions Trading System (EU ETS), the EU’s instrument to measure and price carbon emissions per unit, is also being revised as part of the Fit for 55 Package. The revised proposal does not only increase its ambition to reduce the number of EU-wide annual allowances at a quicker pace (which will significantly drive up the price for CO2 per ton by cutting supply of emissions permits), but it also extends its scope towards other sectors, including emissions from maritime transport. As a reasoning behind the inclusion of maritime transport in the EU ETS, the European Commission states that maritime transport emissions are currently higher than in 1990 and these are expected to grow further in a business-as-usual scenario. The extension of the EU ETS to maritime transport applies in respect of emissions from incoming voyages (i.e. emissions from ships arriving at an EU port from a port outside the EU, as well as intra-EU voyages) and emissions occurring at berth in an EU port. 

Fit for 55 services

The revision’s plans for the obligation to surrender allowances is to be gradually phased-in over the period between 2023 to 2025. Investments to support the decarbonization of the maritime transport sector will be supported by the Innovation Fund.

Rapporteur MEP Peter Liese (Germany, EPP), in his draft report of the Committee on Environment, Public Health and Food Safety (ENVI) (the lead committee on the topic) welcomed the Commission’s proposal and said that the revenues can be used to support new technologies. He is of the view that the commercial operator of a ship should be responsible for the payments of the EU ETS price, which requires authorities to trace down these commercial operators. There is much support in ENVI for the inclusion of maritime sector to the EU ETS and the additions proposed in the draft report. In the draft opinion of the Committee on Transport and Tourism (TRAN), Rapporteur Andrey Novakov (Bulgaria, EPP) is also in favor of the inclusion of the maritime sector, but emphasizes that the EU needs to ensure the EU maritime sector will remain competitive throughout the implementation. Therefore, he states that equal treatment of intra-EU and extra-EU maritime routes is crucial.

The European Commission has proposed to apply emissions trading also to road transport. However, this system will be separate from the existing EU ETS, as road transport will influence a large sum of small users. Therefore, this revised EU ETS will regulate fuel suppliers rather than car drivers in order to prevent a system that is too complex. Fuel suppliers will be responsible to incorporate the carbon cost into the price for their consumers. This separate EU ETS is planned to be operational in 2025, with the cap on emissions set from 2026. Most of the Member States have not yet adopted a position on the introduction of this new EU ETS, but the Council of the EU is expected to be divided on the proposal. Rapporteur for the TRAN opinion, Andrey Novakov, expresses concerns about the negative effect the new EU ETS would have on end-consumers and notes that the European Social Climate Fund will not have enough financial resources to help the households that are most affected by the higher prices of transport.

3. Revising energy taxation: end fossil fuel subsidies and incentivize green alternatives

The third example of increased carbon pricing in the context of the Fit for 55 package is the Energy Taxation Directive (ETD) which sets the rules for the taxation of energy products such as motor fuels or electricity. The Commission also proposed a revision as part of the Fit for 55 Package. The aim is to align the taxation of energy products with EU energy and climate policies and end outdated tax exemptions and incentives for the use of fossil fuels. The revision of the ETD will tax fuels based on their energy content and environmental performance rather than their volume. Also, the exemption for fuels in the aviation and maritime transport sectors will end. The aim of the revision is to incentivize the transition towards a higher uptake of sustainable fuels and to level the playing field between the different modes of transport.

On 28 February, the Rapporteur John van Overtveldt (Belgium, ECR) in the Committee on Economic and Monetary Affairs published his draft report on ETD. He warns about the potential negative impact for businesses working on a global scale, which would cause carbon- and business leakage. In September 2022, the European Parliament is expected to adopt its formal position during its Plenary session, which serves as a non-binding opinion to the Council of the EU, as it relates to tax matters, which is a core competency of the Member States. The Council of the EU is currently discussing the technical aspects of the Directive. As Member States will have to agree unanimously, a common position is still out of sight.

Is your business Fit for 55?

The Fit for 55 Package will shape the legislative landscape for the upcoming decade, trigger the public debate and impact businesses across the different transport modalities. The revised and updated COemission standards might radically impact your day-to-day business operations. More than ever, making your voice heard is crucial.

Over the last years, Dr2 Consultants has built up a track record in advising a broad range of transport clients in navigating the EU ecosystem. Would you like to know more about what the ‘Fit for 55 Package’ means for your organization? Feel free to reach out to us or visit our Fit for 55 webpage.

You can also sign up for our Fit for 55 policy updates here.

You might also be interested in:

The future of the EU transport sector (2021-2024) – four trends

European Council March 2022 summit: conflict in Ukraine is a test of European unity and its transatlantic solidarity

Leading up to the European Council 24-25 March 2022 summit it was clear that coming up with a plan to tackle the rising energy prices would be tough. Particularly, Southern EU Member States have demanded concrete actions at European level for a longer time. The conflict in Ukraine and subsequent sanction regime put on Russia have put this topic even higher on the agenda. The situation intensified by Putin’s announcement to only accept rubles as a means to pay for Russian gas imports. The summit was also marked by the presence of US President Joe Biden, who also attended part of the European Council Meeting and made clear that Europe and the US can count on each other in difficult times.

EU’s starting position

Through the new REPowerEU initiative, The European Commission wants to ensure that Europe’s gas supplies are sufficiently filled for next winter. As with the purchase of vaccines during the corona crisis, the Commission wants to start negotiations on behalf of EU countries with more reliable suppliers of gas via pipelines and LNG ships such as the United States, hoping to enforce larger contracts and better prices thanks to the collective power of EU Member States. Northern EU Member States have voiced skepticism about this proposal. The Commission’s proposal also includes the option to replace gas with hydrogen in the future, which gives Europe the opportunity to accelerate the transition to the more sustainable renewables.

North-South division on price interference

Leading up to the European Council March 2022 summit, Southern EU Member States – primarily Spain and Portugal – advocated a price ceiling or an intervention in the functioning of the electricity market, an option that Northern Member States such as the Netherlands and Germany have voiced a dislike for. Member States can help companies with state aid. However, this costs governments a lot of money that goes into unproductive investments, they argue. France seems to have tried to stay in a position to seek consensus. The Commission announced that in this regard, it will release a new report in May with possible medium-term measures for the electricity price.

On the measures to cap gas and electricity prices, The French Secretary of State for European Affairs, Clément Beaune, stated on 22 March in preparation of the summit that the discussion was more difficult. Also, an embargo on Russian energy products was an option to be explored. The EU leaders put forward a request to the energy ministers to examine the measures which the Commission proposed to deal with rising prices. On the purchase of gas, LNG and hydrogen they already reached a commitment to work together.

Energy (in)dependence high on the agenda

One of the first major announcements following the European Council March 2022 summit was a commitment by President Biden to increase the American gas supply to Europe to support the EU in its effort towards energy independency from Russia. He vouched the US could replace 10% of the Russian gas export to Europe. It has to be noted, however, that environmentalists raise questions about the environmental impact of said American gas, most of which consists of shale gas. The Green group in the European Parliament already criticized the Commission’s proposals for mandatory filling of gas storage facilities, stating that this can only be a short-term and interim solution in the current crisis. They argue that the Commission must accelerate the approval procedures for subsidies for energy efficiency measures.

Fit for 55 services

On 25 March, the last day of the summit, an embargo on Russian oil and gas was discussed. However, there did not seem to be broad support for such an extensive measure. The morning of 25 March was devoted on how the EU could reduce the Union’s dependence on Russian fossil fuels and how it could deal with rising energy prices. The proposal to cap gas prices is very divisive, while the announcement by the European Commission on the joint gas purchases seems to be more consensual.

Special compromise on price caps

The discussion on price caps on gas was resolved by giving Spain and Portugal special concessions. Because of their specific energy situation, as the Iberian Peninsula is not fully integrated with the European power network, the two countries will be allowed to temporarily exercise a higher control on their domestic energy market. The Commission will, however, maintain the right to control the Spanish and Portuguese emergency measures in order to ensure they do not impede general European interests.

Towards unity on joint actions and strategy

Lastly, the EU Member States announced their intention to pool together the purchasing power of the member states in the international energy market and will therefore explore the possibility of joint energy purchases, specifically for LNG, hydrogen and gas. This will also be coupled with more investments in gas storage facilities. For the long term, it was clearly confirmed that an end of European dependency to Russian energy will be the common strategic objective. A direct embargo on Russian energy products was not made concrete.

Sanctions, data and more

The Council decided to not further increase the sanctions put in place on the Russian economy. This can be interpreted in relation to concerns raised by certain heads of state that the sanctions should not hurt the European economy more than they do the Russian. The Council did confirm that an extra sanction package in the form of a boycott of Russian oil is ready in case Russia crosses the red line of using chemical weapons during the conflict.

Additionally, the Council announced the conception of a Solidarity Trust Fund to support Ukraine. The fund will be open to all sorts of donations and the specifics have been discussed with Ukrainian president Zelensky. Lastly, the EU and the US have confirmed their commitment to negotiate an agreement on data flows and privacy between the two markets. This can be interpreted in relation to the recently published European Data Act that requires such multilateral agreements to facilitate data sharing.

What to expect following the European Council March 2022 summit?

An issue put on the table that remained unresolved is that of decoupling the gas price from the energy market. European Commission President Ursula von der Leyen announced this will be looked at more concretely in May. We can expect this, as well as the REPowerEU agenda to remain in focus for the next months. Furthermore, we can expect more precise information on the German plan to quickly decouple from Russian energy and the Spanish and Portuguese governments are expected to publish details on their emergency energy measures. Any initiatives regarding security and the energy crisis will be dealt with on top of the current legislative priorities. As of this moment, the Commission has not announced that any of the current revisions and or proposals, such as those part of the Fit for 55 package, will be delayed.

Want to know more about these latest developments and how they impact your organization? Please get in touch with us.

European Data Act: a harmonized framework for accessing and sharing data

On 23 February, the European Commission published the long-awaited “European Data Act”, which is a proposal for regulation to establish a harmonized framework for data sharing in the European Union.

The Data Act will make more data available for use and will set up rules on who can use and access what data for which purposes across all economic sectors in the EU. According to the Commission, the new rules are expected to create €270 billion of additional GDP by 2028.

Given how much is at stake for the green digital transition, we at Dr2 Consultants are excited to share our insights into the new proposal. In concrete terms, the Commission includes:

  1. Improved access to private sector data for the public sector (B2G);
  2. Fairness of data access and use in business relationships (B2B);
  3. New rules allowing customers to effectively switch between different cloud data-processing service providers.

What does the European Data Act mean for you?

This blogpost provides an overview of the main implications and opportunities for European businesses, focusing on:

  • Objectives for data sharing and access requirements;
  • Targets, ranging from service providers and gatekeepers to device manufacturers, companies and public authorities;
  • Implications of data sharing, interoperability standards and cloud switching.

Keep in mind, however, that the European Parliament and the Council of the EU will both provide amendments to the text.

What’s the objective of the European Data Act?

Complementing the Data Governance Act, which aimed to increase trust and facilitate data sharing across the EU and between sectors, the Data Act’s core objective is to put users and providers – large and small – on more equal footing in terms of access to data. Concretely, Dr2 Consultants expects every actor that contributes to the generation of data should be able to access said data. This means that users will get standard access to the generated data on any of their integrated tools. These could be virtual assistants, connected home appliances and so forth. The data should be easily and freely accessible and shareable with third parties.

The proposal is based on the results of an open public consultation carried out by the European Commission in 2021, which showed that an EU action is needed on business-to-government (B2G) data sharing for the public interest, especially for emergencies and crisis management, prevention and resilience. For the past three months, the Commission has been working to address certain concerns regarding the necessary legal clarity to B2G data sharing. In the proposal, the Commission appears to have tried to limit mandatory B2G data sharing to cases in which an ‘exceptional need’ exists.

What implications will the European Data Act have for your business?

A piece of horizontal legislation, the Data Act will apply to device manufacturers, providers of digital services and connected products (such as ‘the Internet of Things or IoT) as well as public authorities in the EU. Dr2 Consultants advises businesses to pay close attention to the developments in the coming months.

The proposed legislation mandates data sharing requirements to allow data sharing among businesses, public authorities and users. SMEs are exempted from these obligations, but overall the requirements imply that the European Commission has opted for a one-size-fits-all solution that compels all businesses to adapt.

EU Data Policy Services

Certain limits will be put in place to guarantee that third party access to shared data remains safe and harmless to the parties involved. This entails agreed upon measures to protect confidentiality, privacy and trade secrets as well as restrictions of the use of the data by market competitors of the data holder.

Neither data holders nor third parties will be allowed to influence or prevent the user’s data sharing behaviour in any coercive, manipulative or technical way. Only micro and small companies will be excluded from these strict guidelines if they’re independent from other companies.

In particular, providers with a significant position in the market will be labelled as gatekeepers within the market. Such actors will be subject to more specific restrictions, as third parties are not allowed to share data with these gatekeepers, nor are gatekeepers allowed to request access to these data.

Specific attention goes out to the risk of non-EU countries gaining access to data. The European Data Act goes beyond current restrictions regarding the transfer of personal data outside the EU by extending such restrictions to non-personal data. Only when an international agreement is in place will court orders from third countries be adhered to. This is relevant keeping in mind the ongoing efforts of the US and the EU to reach such an agreement.

Furthermore, the draft sets out provisions to ensure interoperability and cloud switching and safeguards for international data transfers. The previous SWIPO initiative for cloud-switching was deemed insufficient for this purpose as the Commission now opts for binding measures. The goal will be functional equivalence when moving software to another cloud platform. This means required compatibility of interfaces and platforms with all other services. Proper interoperability is essential for fair competition to function in the digital data market. To realistically strive for interoperability, a degree of harmonized standards among cloud services will be necessary. European standardisation organisations will be approached for this purpose, possibly accompanied with a mandatory implementing act if necessary.

Next steps

In the coming weeks, the co-legislators, the Council of the EU and the European Parliament will assess the proposal and kick off the discussions. Because this is a regulation, the legislative act will be immediately applicable in all Member States once the European Parliament and the Council of the EU have concluded their negotiations with the European Commission.

Within the European Parliament, MEP Pilar del Castillo (ES) is likely to lead the EPP in the Industry (ITRE) Committee, while for the Greens MEP Alexandra Geese (DE) announced she would take the lead on this file in the Internal Market and Consumer Protection (IMCO) Committee, sided by MEP Damian Boeselager (DE) in the ITRE Committee.

The Parliament now needs to determine which committee will take the lead. We can expect that the same committees that handle the Data Governance Act will be working on this file: ITRE in the lead, with the Civil Liberties (LIBE), Legal Affairs (JURI) and IMCO Committees giving their respective opinions.

Ahead of the start of the legislative debate among Parliament and Council, the European Commission published on 14 March a call for feedback on the proposed Data Act. Open for a period of 8 weeks, the open call will collect feedback from private and public stakeholders in order to feed the EU decision-making process. Dr2 Consultants stands ready to support organizations in the contribution of their views to the legislative debate.

Dr2 Consultants will follow the legislative developments very closely, and thanks to its expertise and wide range of clients in the digital sector, Dr2 Consultants is expertly placed to assist your company in identifying the impact of and leveraging the opportunities offered by the European Data Act.

Would you like to know more about how your organization can make the most out of the data regulation? Visit our EU Data Policy Services webpage and subscribe to Dr2 Consultants’ EU Data Policy Updates, or get in touch with our Managing Partner Jasper Nagtegaal.

European energy crisis: the security, affordability and sustainability dilemma

The EU is currently in the middle of a historical energy crisis, mostly driven by high gas prices. Already before the Russian invasion of Ukraine, the rise of energy prices and market turmoil drastically increased power bills on the continent and caused severed repercussion for people and companies. The Russian invasion of Ukraine has aggravated this situation, underlining the EU’s dependence on imports for 90% of its gas, 40% of which arrives from Russia. The transition towards a low-carbon economy, the post-COVID recovery curve combined with geopolitical conflicts created the perfect storm. With this blog post, Dr2 Consultants aims to shed light on how the EU is addressing the energy crisis.

In response to the energy crisis, on 8 March, the European Commission published REPowerEU: Joint European Action for more affordable, secure and sustainable energy. The Communication presents actions that would make the EU more resilient by accelerating the deployment of renewable energy as well as ensuring the security of energy supply. Following the Russian invasion of Ukraine, the Communication has a strong focus on decreasing Europe’s energy dependency on gas imported from Russia. The Commission thus proposes measures to diversify supplies away from Russian pipeline gas towards liquified natural gas (LNG) and other natural gas suppliers.

Moreover, to avoid low gas storage in the future, the Commission will propose by April an EU-level gas storage policy that would put forward legal requirements for Member States to ensure a minimum level of gas storage of at least 90% by 1 October each year. To reduce the EU dependency on fossil fuels, the Commission sets out measures to unlock the solar, wind energy and heat pumps potential. Notably, the Commission invites also the European Parliament and the Council of the EU to boost the Fit for 55 legislative proposals with higher or earlier targets for renewable energy and energy efficiency. One of the other goals of REPowerEU is to decarbonize the industry by accelerating the deployment of innovative hydrogen-based solutions and cost-competitive renewable electricity in industrial sectors. In addition, the Commission announces a recommendation on fast permitting for renewable energy projects. The Communication aims to promote the rollout of renewable and low carbon gas production with a focus on hydrogen and biomethane. In this regard, the draft suggests an ambition to produce 35 billion cubic meters of biogas by 2030 and to import 10 million tons of renewable hydrogen by 2030.  Other actions set out measures to support Member States in regulating energy prices in the electricity market and provide short-term relief to heavily exposed companies (e.g., in the form of state aid).

Sustainable goals will help address the European energy crisis

The EU’s ambitious climate agenda to phase out coal and the stricter rules of the EU ETS was one of the elements that led to an increase in carbon prices reaching a record peak of €88/ton on 8 December 2021. At the same time, the low gas storage in Europe and the increasing demand for gas worldwide drove both gas and coal prices further up and exert strong inflation pressures on the cost of electricity. In addition, the low wind power generation in the past year, the higher demand of energy due to weather conditions and the closure of nuclear plants in countries like Spain, France, Germany and Belgium exacerbated the tightness in the energy market in Europe.

Nevertheless, the European Commission underlines that the way out of the energy crisis is the acceleration of the implementation of the European Green Deal, including a faster deployment of renewable energy and the rollout of low-carbon gases. Indeed, during his speech at the European Parliament, European Commission Executive Vice-President Frans Timmermans pointed at the transition to renewable energy resources as a solution to the energy crisis. As part of the climate ambition, in the Taxonomy Complementary Climate Delegated Act, the European Commission indicated that gas and nuclear energy would play a pivotal role in accelerating the shift from coal towards a climate-neutral economy.

How does the EU respond to the crisis?

On 1 March, the European Parliament held an extraordinary Plenary session to discuss the EU’s response to Russian invasion of Ukraine. In the adopted resolution, MEPs call for a significant reduction of energy dependence on Russian gas, oil and coal. The resolution stresses the importance of diversifying energy sources, increasing energy efficiency and speeding up the clean energy transition.

Fit for 55 services

In parallel, MEPs responsible for the negotiations on Fit for 55 legislative package on energy, proposed solutions to address the current crisis. On the one hand, Rapporteur on EU ETS, MEP Peter Liese, suggested to lower the threshold to issue more permits at times of rapid price rises. The proposal entails the use of Article 29a of EU ETS according to which the European Commission should release 100 million CO2 allowances into the market from its market stability reserve over a period of six months if, for more than six months, the average permit price is more than two times the average price in the two preceding years. On the other hand, MEP Markus Pieper, who is the Rapporteur on the revised Renewable Energy Directive (RED III), aims to increase the renewable energy targets to 45% by 2030 to reduce the EU’s dependency on Russian gas. He said, “The Russian war against Ukraine is now forcing us to focus even more on our strategic autonomy, apart from climate change”.  Dr2 Consultants is constantly following the developments in the European Parliament and the Council of the EU on the proposed reform of EU ETS and RED III in light of the vote on the initial positions expected in June 2022.

Moreover, on 7 February, during the 9th EU-US Energy Council, the EU and US representatives addressed the issue of energy security within the EU and its neighborhood countries. In this light, the EU and the United States reaffirmed their cooperation to focus on avoiding energy and resources supply disruptions and improving diversification of energy suppliers (e.g., via global LNG markets).

The importance of diversification of energy sources

The EU measures to address the crisis and ensure the security of supply have one common denominator: the diversification of energy sources. Following the conflict on the Russia-Ukraine border, Russia, who is the largest supplier of gas in the EU (40%), decided to cut back on gas shipments across Ukraine, which counts for a third of gas flow. This had a significant impact on the import of gas to the EU. Notably, in 2021, the EU imported an average of over 380 million cubic metres (mcm) per day of gas by pipeline from Russia, or around 140 billion cubic metres (bcm) for the year as a whole. In addition, around 15 bcm was delivered in the form of liquefied natural gas (LNG). The total 155 bcm imported from Russia accounted for around 45% of the EU’s gas imports in 2021 and almost 40% of its total gas consumption. With reduced deliveries, the gas reserves in EU countries have been much lower than usual. Moreover, Europe suffered from the competition with Asia for supplies of LNG, where many countries boosted their consumption in the post-COVID-19 recovery, thus diverting LNG cargo away from European markets. Notably, China became the largest LNG importer at the beginning of 2021.

Dr2 Consultants continuously monitors the developments of the discussion on the new EU rules for the energy sector and supports its clients on these matters accordingly. If you would like to know more about this regulation or the overall legislation that the Commission will publish on the energy policies, please contact Dr2 Consultants to learn more about our services.

Sustainable Products Initiative: more than just Ecodesign

As announced in its Circular Economy Action Plan (CEAP) almost two years ago (in March 2020), the European Commission aims to make products fit for a climate-neutral, resource-efficient and circular economy through a Sustainable Products Initiative (SPI). The SPI will serve as the main instrument in a renewed European approach towards product policy. Due to its broad scope and huge impact on many sectors, Dr2 Consultants guides you through the main issues companies will have to contend with when the SPI is published, its relationship to other policies as well as further opportunities to engage with policymakers.

The European Parliament, in its Non-Legislative Own-Initiative Report on the Circular Economy Action Plan from February 2021, emphasizes the need to turn the linear “take-make-dispose” economy to a truly circular economy. It also underlines the frontrunner role it expects European companies to play in a global market. The SPI thus also presents plenty of opportunities for innovative players in the circular economy.

Sustainable Products Initiative: a broad review of the Ecodesign Directive

The Sustainable Products Initiative will revise the Ecodesign Directive (2009) and make products placed on the EU market more sustainable. The SPI is expected to move beyond the narrow scope of the Ecodesign Directive – exclusively aimed at products, such as household appliances, information and communication technologies or engineering – and to set sustainability criteria based on harmonized indicators and life-cycle assessments, such as environmental footprints, to the broadest range of products such as:

  • Electronics & ICT equipment;
  • Textiles;
  • Furniture;
  • Steel, cement & chemicals.

Taking into account the broadening of the scope, the European Parliament in its Non-Legislative Own-Initiative Report on the Circular Economy Action Plan similarly actively calls for the establishment of common life cycle assessment methodologies and improved data collection. Such methodologies need to take into account the full life cycle of a product, from-cradle-to grave, and the impact of sourcing semi-finished products, spare parts and by-products throughout the value chain. The close involvement of stakeholders in defining these methodologies in an open, transparent, and science-based process is crucial. Here the European Parliament explicitly opens the door for input by relevant stakeholders.

The broad review of the Ecodesign Directive also means that the Sustainable Products Initiative will be developed in close coordination with other initiatives announced in the CEAP, in particular the initiative on empowering consumers for the green transition and the initiative on the substantiation of environmental claims, both of which are expected to be announced in the second quarter of 2021.

Widened scope brings opportunities and threats

On a general level, the Sustainable Products Initiative is expected to set sustainability principles and specific requirements linked to environmental aspects of products. However, producers of priority product groups such as electronics, ICT and textiles as well as furniture and high impact intermediate products such as steel, cement and chemicals will be made responsible for providing more circular products and intervening before products can become waste (for example providing products as a service, providing repair service or ensuring spare parts availability). The impact of such far-reaching principles on producers cannot be underestimated and Dr2 Consultants can support your organization in identifying the specific aspects within the Sustainable Products Initiative which are expected to affect your business. You can learn more about our sustainability sector here.

On another note, the Commission is determined to set EU rules for mandatory sustainability labelling and/or disclosure of information to market actors along value chains in the form of a digital product passport. Such passports will foster the availability of data related to product’s content and carbon footprint and recyclability. The exact scope of such a digital passport will of course have to be determined in close cooperation with the industry, which is why Dr2 Consultants highly advises companies to actively engage with policymakers.

When it comes to a ‘right to repair’, the European Commission will most likely take heed of the encouraging language of the European Parliament in its Non-Legislative Own-Initiative Report on the Circular Economy Action Plan. Producers, not only of electronic products, will need to be able to provide free-of-charge access to necessary repair and maintenance information, including information on spare parts and software updates, to all market participants.

Finally, the Sustainable Products Initiative is most definitely expected to set more elaborate rules on the inclusion of recycled content in products, for example in packaging. In doing so, the Commission also wants to ensure that hazardous substances in production processes are tracked more thoroughly. The impact of more stringent rules can of course not be underestimated, with a potential impact on the whole packaging and recycling sector.

Legislative proposal to be published shortly

Having run a public consultation from 17 March to 9 June 2021, the Commission is expected to publish a proposal on the Sustainable Products Initiative on 30 March 2022.

Dr2 Consultants’ expertise in this area means that our international team can support you not only in engaging with policymakers during, but also after, this public consultation process. Companies should also already keep an eye out on the position of the European Parliament and Council of the EU on this topic, as evidenced by their own reports on the Circular Economy Action Plan.

Feel free to get in touch with us for more information.

Dr2 Consultants launches new EU Data Policy services

Is your organization ready for the new data economy?

Today, 17 February, one week before the publication of the European Commission’s proposal for a Data Act on 23 February, Dr2 Consultants launched its brand-new EU Data Policy services to keep track of EU legislation related to the data economy and support organizations in anticipating its impact as well as identify threats and opportunities.

Data is the cornerstone of every future development across our society and economy, ranging from technological innovations and transport to better energy consumption and privacy. Public and private organizations must prepare for the challenges to come and continuously integrate new policies in their daily business activities.

The European Union has developed a “European strategy for data”, which captures the benefits of better use of data, enhancing productivity and competition, and to become a world leader in the data economy. If you want to know more about what to expect from the Data Act, we have already published a blog post on the first leak.

Dr2 Consultants wants to support organizations in their efforts to anticipate future digital regulations in such a way that they can benefit from all potential opportunities for growth and innovation.

 

Over the last years, Dr2 Consultants has built up a track record in advising a broad range of clients in navigating the EU ecosystem. Whether your regulatory issues relate to infrastructure, data sharing, data privacy, regulation of service providers or digital policies in general, we, at Dr2 Consultants, have the expertise to support you in ensuring your organization can continue to operate and grow.

Jasper Nagtegaal, Managing Partner

Dr2 Consultants has built solid foundations in terms of expertise in digital policy and network by providing support to a wide range of stakeholders, from local start-ups and public institutions to European associations and large corporations.

Dr2 Consultants offers a full range of tailored public affairs services, from a data snapshot report and a comprehensive data impact scan, to data public affairs and communication campaigning, data policy monitoring, and wider EU public affairs trainings.

To stay updated on the latest policy developments, subscribe (tick the box “Digital/Tech” under Communication permissions) to receive our EU Data Policy updates directly to your inbox.

For more information on the data-related legislative initiatives and the way they will impact your organization click here or feel free to reach out to Mr. Jasper Nagtegaal.

Subscribe EU Data Policy Services webpage