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From Green Deal to Green Recovery

While the COVID-19 crisis has seen unprecedented challenges for the European transport sector, it also demonstrated the crucial role transport plays to ensure an uninterrupted supply of goods and services across Europe. Although the recovery of the sector is of vital importance of Europe’s economy, the recovery from the crisis also provides a momentum for the industry to act on the ambition of decarbonization and reaching climate neutrality by 2050. As put forward in the Commission’s EU Recovery Plan, the COVID-19 recovery phase should be used to pave the way towards not only a resilient and reliable transport sector, but also a sustainable one that is at the heart of the European Green Deal.

Following the publication of the Commission’s plan for recovery – dubbed as ‘Next Generation EU’ – as well as its updated Work Program for 2020, we have a clearer picture how the greening of the sector will unfold in the coming years. Dr2 Consultants’ transport team presents four take-aways for sustainable transport that will dominate the EU’s policy agenda in the years to come.

1. Alternative fuels, sustainable vehicles

Alternative fuels are a key priority for the Commission to cut emissions and create jobs. The EU’s executive arm aims to accelerate the production of low-emission fuels and the deployment of sustainable vehicles and vessels. In order to finance this, public investment should come with a commitment from the industry to invest in cleaner and more sustainable mobility.

The roadmaps for the further deployment of different fuel types are expected to be part of the highly-anticipated FuelEU proposals – to be published later this year – that will aim at increasing the use of alternative fuels in the maritime and aviation sector. Furthermore, in early 2021, the Commission will put forward the revision of the Alternative Fuels Infrastructure Directive, which will ensure the development of the necessary infrastructure across Member States to stimulate the uptake of sustainable fuels for all transport modes. 

2. The convergence of the energy and mobility systems

In order to decarbonize the transport sector, no stone is currently left unturned. Although electrification seems to be the most viable option on the short term, hydrogen is dubbed as the energy source for the future. The Commission’s flagship instrument for research and innovation, Horizon Europe, will be instrumental to kick-start the clean hydrogen revolution. The Commission has increased its budget in the new Multiannual Financial Framework (MFF) with €13.5 billion, bringing Horizon Europe’s new budget to a total of €94.4 billion.

Later this month, the Commission will launch the Clean Hydrogen Alliance to stimulate the upscaling of clean hydrogen production in Europe. Also, the work of the European Battery Alliance will be accelerated. On 24 June, the Hydrogen Strategy is expected to be published.

3. Cities at the heart of sustainable mobility

With over 70% of EU citizens currently living in urban areas, achieving sustainability in cities across Europe is one of the main challenges of the recovery period. As a direct result of the COVID-19 crisis, noise pollution and air quality figures have dropped to an unprecedented level. Moreover, cities reinvented the way citizens move around, e.g. by giving priorities to pedestrians, introducing speed limits for vehicles and implementing new cycling lanes. The shift towards smart and more livable cities, therefore, places a big responsibility on the transport sector.

The Commission aims to increase the support for zero and low-emission mobility in cities by investing significantly in clean urban mobility. Funding calls in the Connecting Europe Facility (CEF) and InvestEU programs will focus on clean fleet renewals by cities, the deployment of charging points and mobility-as-a-service solutions.

4. Taxation, anyone?

In the Next Generation EU, the Commission proposes to generate additional own resources by new taxes. Although the Commission still must draw up the specifics, it floated the option of extending the EU’s Emissions Trading System (ETS) to the maritime sector, thereby raising up to €10 billion annually that will feed into the EU’s budget. In addition, the so-called carbon border adjustment mechanism is likely to be introduced, putting a carbon levy on non-EU imports.

Raising these kinds of ‘European’ taxes is unprecedented. As Member States have diverging views on this matter, it remains to be seen whether we can expect a breakthrough on these new own resources any time soon.

Next steps

The Commission aims to have the new MFF and recovery fund operational by 1 January 2021. EU leaders are expected to start the negotiations on the budget proposal during the European Council Summit on 19 June and will have multiple rounds of very difficult talks until a compromise is made. This ultimately means that the budget as proposed now for transport-related funding instruments can still change. The budget negotiations are expected to accelerate when Germany takes over the rotating six-months Presidency of the Council of the EU on 1 July 2020.

Europe’s green recovery from the COVID-19 pandemic

On 27 May 2020, the European Commission’s published its historic proposal for the ‘Next Generation EU’ recovery fund worth €750 billion, topping the renewed proposal for a €1.1 trillion Multiannual Financial Framework (MFF) 2021-2027. After the approval by the Council of the EU and the European Parliament (16 and 17 December 2020 respectively) of the EU’s Multiannual Financial Framework 2021-2027, it is now clear how Green Deal initiatives are incorporated into the Commission’s recovery plans.

Main takeaways                

  • The European Green Deal will be central in Next Generation EU, public recovery investments should follow EU energy and climate priorities;
  • Funding of €10 billion for the Just Transition Fund;
  • The Commission will increase its own resources via an extension of the Emission Trading System (ETS)to the maritime and aviation sectors and a carbon border adjustment mechanism.

Accelerated investments in the green transition

To kick-start the green transition in times of crisis, the European Commission published a Renovation Wave Communication on 14 October 2020. This massive renovation wave of buildings will improve energy efficiency and promote the circular economy, whilst creating local jobs in the coming years.

On top of the renovation wave, the Commission will focus on rolling out renewable energy projects, especially wind and solar. To this end, the Commission published an Offshore Renewable Energy Strategy on 19 November 2020. Moreover, the EU will reinforce its efforts to develop a clean hydrogen economy in Europe, something that is currently mainly promoted by Germany and the Netherlands.

When it comes to clean transport and logistics, the Commission aims to accelerate the production and deployment of sustainable vehicles and vessels as well as alternative fuels. This ambition includes the installation of one million charging points for electric vehicles and a boost for rail travel and clean mobility in European cities and regions, as set out in its Strategy for Smart and Sustainable Mobility published on 9 December 2020.

EU ‘green’ levies to finance recovery

How will this sustainable recovery be financed? The Next Generation EU will raise money by temporarily lifting the own resources ceiling to 2.00% of EU Gross National Income, allowing the Commission to use its strong credit rating to borrow €750 billion on the financial markets. To repay these loans in a fair and shared way, the Commission proposes a number of new own resources. The Commission will for example increase its own resources via an extension of the Emission Trading System (ETS) to the maritime and aviation sectors and a carbon border adjustment mechanism.

Next steps

For the Commission to start borrowing under NextGenerationEU, thus making the instrument operational, the ratification of the new Own Resources Decision by all Member States in line with their constitutional requirements is still needed.

This blog post has been updated with new information on 5 February 2021.

Why now is the time to embed European affairs in your organization?

Author:

Margreet Lommerts

Managing Partner at Dr2 Consultants

More than ever, it is important to have a focused and effective European Affairs Strategy and structure in place to effectively contribute to the (re)shaping of the European economy for the next decades. Now is the time for organizations to see EU affairs no longer in isolation but as an integral part of their Corporate Affairs Strategy.

Soon after the start of the new European Commission at the end of 2019, we could already see the outline of the agenda of Commissioner President von der Leyen. The Commission’s Green Deal – published on 13 December – presents an overarching growth strategy to achieve a green transformation and climate neutrality of the economy.

Before the realization of tangible proposals for the green and digital transformations of the EU economy, COVID-19 turned the Commission into full crisis mode. Priorities shifted and the Commission and Council of the EU dedicated their work on drafting a comprehensive recovery plan from the health and economic crisis. It will not come as a surprise that a green recovery and the digital transformation will continue to be prioritized and play a central role in relaunching and modernizing the EU economy. According to the Commission, the trillions of euros for the recovery should be spent in a clean, competitive, resilient, and inclusive economy for the 21st century, into a new economy.

As the Commission is formulating its economic and green recovery plan, there is an enormous momentum for organizations to engage with EU institutions in Brussels and to play a role in the shaping of the new economy which will have a huge impact on all businesses.

Looking at the transport sector, it is clear that the demand for mobility and individual transport is changing due to the COVID-19 crisis. The European transport sector faces the great challenge of regaining consumer confidence while stimulating economic growth. According to the Commission, green and digital transitions are at the center of the recovery to create new jobs, remain internationally competitive and bring the sector in line with European climate goals. The Commission aims to better coordinate modes of transport and to encourage the use of sustainable fuels.

In addition, the European energy market will be heavily impacted by the EU’s climate ambitions. The European solar and wind energy market is expected to shrink by about 30% because of disruptions in the logistics chain, delays in projects and stricter financing conditions. As a result, the realization of the EU’s climate targets for 2030 are in jeopardy. This means that acceleration must take place to achieve the EU’s green ambition. The Commission is expected to make additional funding available for sustainable industrial projects and technologies (e.g. carbon capture and storage, relaxation of state aid rules, and alignment of energy taxation with climate ambitions with the aim of getting innovative projects off the ground and scaled up.

As an effect of the COVID-19 crisis, the digital transformation of more “traditional” businesses has definitely accelerated, like brick-and-mortar shops, some of which probably had no online presence whatsoever, maybe not even a Facebook or Google page, before the outbreak. In order to continue operating in a full lockdown situation, these businesses have had to quickly “go online”, either individually or in cooperation with other similar businesses or by relying on the services of online platforms such as e-commerce marketplaces.

As the Commission, Members of the European Parliament (MEPs), and Member States are actively reaching out for industry input, it is important for these businesses to get involved and make their voices heard at EU level, so that they can contribute to the shaping of EU policies that can actually benefit them.

Even though advocacy in these challenging times may not seem top priority and will take more time, the EU institutions are calling for input and involvement from industry which is a prerequisite for future-proof legislation.

Dr2 Consultants has a proven track record in supporting organizations to become more effective in their European Affairs by providing support in:

  • Identifying the role of European Affairs within the current structure and develop the ideal proposition for your organization;
  • Defining a targeted European Affairs strategy with key objectives;
  • Providing tools and know-how on how to execute the strategy successfully;
  • Creating effective internal structures.

For more information or to get in touch click here.

Reinstating the European transport sector

Following weeks, during which containment measures rapidly succeeded each other, the focus of the EU institutions is now on shifting towards re-establishing transport services and connectivity in the EU. The relief measures of 8 May (more information below) and the package of guidelines of 13 May and recommendations are considered to be important milestones in the recovery of the sector.

Nonetheless, the recovery phase is far from crystallized. Important discussions are still taking place in various European Parliamentary committees and Council configurations, focusing amongst others on maintaining a level-playing field between the different modes of transport, safeguarding passenger rights (e.g. reimbursement of tickets) and aligning the recovery measures with the EU’s climate objectives.

The Commission is expected to present a new proposal on the Multiannual Financial Framework (MFF) for the period 2021-2027 on 20 May, although this is not a definitive date. The amount of the overall budget and the allocation of funds will provide more clarity about the financing of the recovery of the transport sector.

Herewith you can find an overview of recent contingency and recovery measures in the transport sector. For a detailed analysis of the developments below, please get in touch with us via our website.

Transport relief measures

The European Commission is working together with Member States on transport relief measures, covering all modes of transport, which the European Parliament is expected to approve during its extraordinary plenary session of 13-15 May. Among the measures are (1) an aviation relief package, (2) an omnibus legislative proposal for the extension of certificates and (driving) licenses, (3) the postponement of the transposition deadline of the Fourth Railway Package and (4) an amendment to the Port Services Regulation, which allows reduced infrastructure charges in the maritime sector.

Communication on lifting travel restrictions

On 13 May, the European Commission presented a package of guidelines and recommendations to advise Member States on gradually lifting travel restrictions and allow tourism businesses to reopen, after months of lockdown, while respecting necessary health precautions. The Commission’s communication consists of several documents, including:

  • A common approach to restoring free movement and lifting restrictions at EU internal borders in a gradual and coordinated way;
  • A framework to support the gradual re-establishment of transport whilst ensuring the safety of passenger and personnel;
  • A recommendation which aims to make travel vouchers an attractive alternative to cash reimbursements for consumers;
  • Criteria for restoring tourism activities safely and for developing health protocols for hospitality establishments.

These Commission guidelines are non-binding, as Member States can decide unilaterally on border controls and restrictions. However, the Commission aims to coordinate their efforts to achieve the freedom of movement as much as possible by facilitating cross-border coordination.

Commissioner Timmermans in TRAN Committee

On 11 May, an exchange of views was held in the European Parliament’s Committee on Transport and Tourism (TRAN) with Executive Vice-President Frans Timmermans on the future of the transport sector in the framework of the European Green Deal and in the context of economic recovery from the COVID-19 pandemic. Mr. Timmermans stated during the discussions that:

  • Serious investments are needed to maintain a strong EU transport sector, including private investments, to save jobs and successfully achieve a zero-emission society by 2050;
  • Actors in the transport sector receiving financial or state aid from Member States, should be compelled to ‘give back to society’ in return for this aid, such as increasing efforts in the field of sustainability;
  • The European Commission will conduct an impact assessment in September 2020 to further analyze raising the emission reduction goal for 2030 from 50% to 55%.

Read summary

Commissioner Vălean in ENVI Committee

The European Commissioner for Transport Adina Vălean exchanged views on 11 May with the Environment, Public Health and Food Safety (ENVI) Committee of the European Parliament on sustainable transport after the COVID-19 pandemic. The main takeaways of the discussions were:

  • The recovery phase will focus on making transport smarter and cleaner;
  • The European Green Deal objectives must be sustained, Europe must stay ambitious;
  • In the context of the debate on conditionality to receiving state aid, the Commission will introduce transparency requirements for large companies, to report how the aid helps to meet European ambitions on green and digital transitions;
  • On passenger rights, right of reimbursement is still a primary right. A voucher system could be introduced, but the passenger will always have the right to be reimbursed.

Read summary

Brexit: Momentum? From a deal to elections

In the last two weeks, the Brexit debate has gained momentum. For starters, on 17 October the European Union and the United Kingdom reached an agreement on Brexit. The changes to the Withdrawal Agreement and the Political Declaration have been made in the context of significant developments in the Brexit debate: the removal of the backstop and the negotiation of a comprehensive Free Trade Agreement. Consequently, Northern Ireland will remain in UK customs territory, but the UK will be responsible for enforcing EU customs procedures. Furthermore, Northern Ireland representatives can vote on continuation of the special arrangement by simple majority 4 years after the end of the transition period.

After the European Council voted unanimously to accept the new deal, the UK Members of Parliament (MPs) gathered for the first time in 37 years on a Saturday to also vote on the new Brexit deal. However, the deal was pre-empted when MPs adopted the Letwin amendment, which requires the Prime Minister to ask for an extension, allowing MPs more time to pass the full Brexit legislation and properly scrutinize the deal. A few hours later European Council President Donald Tusk confirmed he had received three letters: a letter – that was, however, not signed by Boris Johnson – asking for an extension of the Brexit deadline until 31 January 2020; a second letter written by Sir Tim Barrow, the UK’s permanent representative to the EU, explaining that the first letter was required under the terms of the Benn Act; and finally a third letter from the Prime Minister, regretting the decision of the UK parliament to ask for a delay. The EU reacted that it will not decide on (the length of) a delay before the House of Commons discusses the new Brexit deal, but it is pretty sure that they will accept an extension.

House of Commons Speaker, John Bercow, ruled two days later, on 21 October, that he was not going to permit MPs to hold another vote on the Withdrawal Agreement and the Parliamentary Declaration that day. Instead, the House of Commons voted on 22 October on two other proposals. It first approved the Withdrawal Agreement Bill (WAB) in the second reading, a bill that passes the Withdrawal Agreement into UK law and  gives the government permission to ratify it. However, MPs then rejected the government’s proposed timetable, which would have required MPs to debate and sing off on the Bill in three days. The government’s defeat on the legislative timetable has important implications. First, it is now highly unlikely that the UK will exit the EU on 31 October, and second, MPs will now have more time to propose amendments to the Bill. Johnson decided, after the second vote, to pause the legislation “until the EU has made its intentions clear” regarding the extension that would be granted. At this stage, it is not yet clear if there will be a short delay or a long one, until the end of January.

In this turn of events, Boris Johnson indicated on 24 October that he wants to organize early elections on 12 December. In this way he wants to put extra pressure on the parliament to approve his Brexit agreement. However, the opposition only wants to accept new elections if the European Union agrees to a long delay for the Brexit. A vote on the elections will take place on Monday 28 October.

Time is running out because the new President of the European Commission, Ursula von der Leyen, said that the UK must name an EU commissioner to serve in Brussels if the EU grants a delay to the 31 October Brexit deadline.

Digital Ambitions in Flanders

The Flemish Government Agreement 2019-2024 was announced on Tuesday 1 October and was negotiated by N-VA, CD&V and Open Vld. Although the coalition agreement does not contain a separate chapter on digital topics, the new Flemish Government is committed to making innovation and digital transformation a priority in its policies. To achieve this, the agreement emphasizes that Flanders must raise to the top of the digital infrastructure. Moreover, the Flemish Government also wants to take the lead in experimenting with new digital applications and digital transformations in its services.

Lifelong learning

The agreement stresses the importance of digitalization to stimulate a culture of lifelong learning. Therefore, the new Flemish government wants to set up a Lifelong Learning Platform and aims to use smart data to proactively make people aware of career opportunities and threats on the labor market. In addition, embedded in the VDAB (Vlaamse Dienst voor Arbeidsbemiddeling en Beroepsopleiding, Flemish Office for Employment and Vocational Training) career platform, the Flemish government is developing a smart digital tool that will help Flemish people find their way in the private and public labor market. Citizens who do not have sufficient digital skills will be proactively tracked and supported to increase their self-reliance. However, already during the formative years in high school, the government wants to have an eye for digital innovations in the “classroom of the future” and for the corresponding IT applications. In addition, courses should be substantively up-to-date and respond to the reality of tomorrow, certainly also with regard to the necessary digital and transversal competences.

 

Artificial intelligence

Artificial intelligence will play an important role in the digitalization of Flanders. Therefore, the new Flemish Government is preparing an integrated plan for further digitalization of Flanders and the valorization of artificial intelligence. With this plan, the Flemish government wants to increase support for the policy programs and projects for Artificial Intelligence, Cyber Security, I-Learn and Mobilidata and ensure that these remain optimally tailored to the needs of Flemish companies and society as a whole. In addition, the government agreement states that the quality of life will also increase thanks to the efforts of AI. The Flemish AI policy plan fulfills the ambition to put Flanders on the world map in this strategic domain through research, training and practical applications in companies.

Digital security

The new Flemish government is also concerned about its digital security. Through the cyber-security policy plan, aimed at research, practical applications in companies and training, the coalition of N-VA, CD&V and Open Vld wants to develop in particular a resilient digital economy in Flanders. In this regard, also privacy is very important according to the government agreement. The government will, in accordance with international evolutions, develop standards for pooling, opening and exchanging data, with the utmost respect for user privacy. In addition, in the rapidly evolving media society where the impact of (social) media on society is enormous, the importance of media literacy and digital literacy should be increased to guard against fake news. Therefore, the Flemish government will continue to implement the media literacy policy together with the Knowledge Center Media Literacy so that they are able to pursue a coordinated policy throughout the media sector with other policy areas.

The ambition of Flanders is clear. The new government wants Flanders to be the world reference for a number of innovative technologies and sectors and to be a pioneer in digital entrepreneurship. Flanders must be the testing ground for companies and citizens who want to taste the digital applications of the future. The question remains, however, how these ambitions will be financed and how these priorities will be implemented concretely in order to give Flanders a leading (digital) position in the world.

Bold sustainability ambitions in the European Union

Already in July, Ursula von der Leyen made clear that the new European Commission has bold ambitions to tackle climate change: The European Union must become an example of how to live sustainably. In this regard, energy efficiency and circular economy are central to the European way of life.

Frans Timmermans and the European Green Deal

The European Green Deal will be the guide for this ambitious transition, targeting among other things, an emission reduction of 50% to 55% by 2030. This target is about 10-15% higher than the current 2030 climate and energy framework. The Commissioner in charge of the Green Deal will be the Dutchman, Frans Timmermans, who also holds the position of first Executive Vice-President of the next European Commission. In his hearing in the European Parliament on 8 October, he urged the European Parliament to be ambitious and lead by example in the world. To make a real difference with regards to global warming, the EU needs to focus on talks with its global partners, according to Timmermans. He feels like he has got a strong mandate, since according to statistics, 9 out of 10 European citizens want the EU to act decisively on climate change.

Concretely, Timmermans will propose a draft Climate Law within the first 100 days of his mandate. This law will put into legislation the EU’s climate ambitions, but most importantly determine the in between steps to be taken to reach these goals. Timmermans is strongly considering using infringement procedures against Member States not complying with the EU’s upcoming climate laws and its ambitions. Furthermore, the Climate Pact will engage citizens with the EU’s climate policy which would make legislation seem less ‘top-down’.

Virginijus Sinkevičius and the European Circular Economy

Three years after its adoption, the Circular Economy Action Plan can be considered fully completed. Its 54 actions have now been delivered or are being implemented. Together with Timmermans, Lithuanian Virginijus Sinkevičius will however increase the ambitions in the field of the circular economy. Sinkevičius stated during his hearing in the European Parliament on 3 October that if the EU ensured the complete circular use of just four materials (steel, aluminum, cement and plastic) – which goes further than the existing Circular Economy Action Plan – EU’s industrial emissions would be cut in half.

Sinkevičius believes that a new action plan can involve three major areas:

  • First, by examining the ways in which the EU produces and consumes. He mentioned particular further action on eco-design and more focus on reuse and repair. This strand could also integrate circularity in other sectors such as textiles, construction, food and ICT.
  • Second, by helping consumers make informed choices.
  • Third, by moving beyond recycling. Waste should not only be minimized, but prevented completely in areas such as textiles and construction.

Environment Council

Not only the European Commission wants to increase the European ambitions regarding climate change and sustainability, but also the Council realizes their importance. On 4 October, Environment Ministers held a debate on the EU’s strategic long-term vision for a climate neutral economy and adopted conclusions on climate change, which set out the EU’s position for the UN climate change meetings (COP25) in Chile in December 2019. The Council called for action to promote circularity systemically across the value chain, including from the consumer perspective, in key sectors including textiles, transport, food as well as construction and demolition. The Council also stressed the need for more measures on batteries and plastics.

 

 

 

 

What will be the digital agenda of the next European Commission?

Between early leaks from DG CONNECT to the individual grilling of Commissioners-designate, the digital agenda of the next European Commission is slowly taking shape – even if key questions remain.

 Digital policies: who does what?

The cross-checking of somewhat blurry portfolio titles, mission letters, the Commission’s new organizational chart, the attribution of DGs and finally the Commissioners-designate hearings shed some light on who will do what to set the digital agenda in motion.

Margrethe Vestager’s hearing set the tone, with a number of questions and declarations on expected digital files (a chance Sylvie Goulard, Commissioner-designate for the Internal Market, did not get). The Vice-President for Digital and Commissioner for Competition also used this occasion to clarify (though without going into details) that the execution of the digital portfolio will be in the hands of her colleagues – allowing her to keep separate her two jobs – and avoid any clash between possible conflicting objectives.

So, who are the Commissioners in charge of digital policies?

Goulard’s rejection today by the European Parliament might lead to some reshuffling, but as it stands, the following Commissioners will contribute to the EU’s digital agenda:

  • Didier Reynders, Commissioner-designate for Justice, on topics such as GDPR and Artificial Intelligence;
  • Věra Jourová, Vice President-designate for Values and Transparency, on issues like illegal content and disinformation – possibly contributing as well to the Digital Services Act;
  • Mariya Gabriel, Commissioner-designate for Innovation and Youth, who also mentioned AI in her hearing, in addition to the importance of investing in education, research and innovation, and ensuring synergies between the three;
  • Paolo Gentiloni, Commissioner-designate for the Economy, that will inherit the work on the Digital Tax;
  • Valdis Dombrovskis, Executive Vice-President for “An Economy that works for people”, that will continue the work on Fintech, cryptoassets, cybersecurity…;
  • And of course, now, there’s a big question mark on who will take on the files assigned to Goulard, including the groundwork on the Digital Services Act, Artificial Intelligence, cybersecurity, digital education and so on.

On what topics?

The new Digital Services Act – which will include a revision of the 2000 Ecommerce Directive, has been high on the agenda of the tech sector, and is clearly high on the Commission’s agenda as well. For anyone that has been closely following these developments, the hearings did not reveal anything. The new act will “upgrade” the existing liability rules for platforms and try to find the right balance to avoid hindering a growing European platform economy. Jourová added to the discussion by focusing on the fight against illegal content and disinformation and the responsibility of platforms.

Artificial Intelligence has been mentioned many times, but not in great details. Vestager highlighted again what should be the EU’s approach to AI, and Reynders argued in favor of a very horizontal, “ethics-by-design” approach. Vestager also confirmed that something will come in the first 100 days, without concretely saying what will come and under which form – since a legislative proposal seems relatively improbable under such deadline.

Access to data was briefly mentioned, with Vestager highlighting that the EU might need to regulate the way that companies collect, use and share data, so it can benefit the entire society.

Digital Tax remains on the agenda, with Gentiloni supporting an international solution, but not excluding a European one if an agreement cannot be reached.

On competition, Vestager highlighted that competition rules needed to adapt to digitalization, especially with the development of the platform economy and technologies such as AI, where access to data is crucial. Vestager also declared, after her hearing, that “she will move beyond fines in her second term […] to look at other measures to ensure a fair playing field”.

Remaining on the topic of Big Tech, Valdis Dombrovskis also announced that the Commission was looking into Facebook’s Libra, and that a legislative proposal on such cryptoassets was to be expected.

Beyond policy, the hearings confirmed that the European Commission will have to deal with a fragmented and vocal European Parliament, especially on digital matters.

Download our infographic on Margrethe Vestager’s hearing here.

The push for decarbonization of transport

Now that the President-elect of the new European Commission, Ursula von der Leyen unveiled her team of candidate-Commissioners and the subsequent portfolio distribution, it is time to determine its priorities in the field of transport. The most notable feature in the plans of the Commission is the push for decarbonization in the transport sector in order to comply with the climate objectives as set out in the EU’s 2050 Climate Strategy. So, what is exactly expected in the coming five years?

New structure, new responsibilities

Within the new structure of the European Commission, Frans Timmermans has been proposed as one of the top candidates of the Commission, responsible for realizing the European Green Deal, according to which Europe should be climate-neutral by 2050.

In his new role as Executive Vice-President, Timmermans will coordinate the work of multiple Commissioners, such as Transport, Energy and Agriculture, and their respective contributions towards the Green Deal. Moreover, Timmermans will have direct access to the Directorate-General of Climate Action, which will give him more influence in initiating and implementing legislations. Timmermans is expected to present his first outline of the European Green Deal in early December, in which more details are expected on how transport should contribute to the climate objectives. Frans Timmermans will be heard by the Parliamentary Committees on 8 October.

Decarbonization and the legislative framework

Following the publication of the new Commission’s policy priorities, von der Leyen has set out the priorities for each Commissioner-designate in a dedicated mission letter. According to von der Leyen, transport is at the intersection of the climate and digital transition. The priorities for the next Transport Commissioner should be to ensure sustainable, safe and affordable transport, in which emissions are further reduced. The following policy measures can be expected from the next Transport Commissioner:

  • Strong focus on completing the missing infrastructure links in the Trans-European Transport Network (TEN-T). This should help to smoothen connections in logistic chains and stimulate cross-border transport, i.e. by high-speed train connections;
  • Comprehensive review of existing legislation to align it with the EU’s climate ambitions. In concrete terms, this means breaking up the Energy Taxation Directive and subsequent voting procedures (currently by unanimity), as well as extending the EU’s Emission Trading System (ETS) to the maritime sector and reducing free allowances for airlines;
  • The new Transport Commissioner is asked to also stimulate global solutions besides the European routers, within the International Civil Aviation Authority (ICAO) and the International Maritime Organization (IMO), to avoid hampering the competitiveness of the European transport sector;
  • For road transport policy proposals are expected on the alternative fuels- and EV-infrastructure, as well as new policy regarding road safety and autonomous vehicles.

Perspective of the Member States

The European Commission has ambitious objectives to decarbonize transport, but what about the commitment of the Member States? The EU’s 2050 climate strategy was the centerpiece of the Transport Council of 20 September. Despite an ambitious agenda of the new Commission, Member States seem to have diverging views on the proposed actions for the different transport sectors.

For the road, maritime and aviation sectors, decarbonization is a central theme for the European Commission as well as for the Ministers of Transport. However, there was no explicit majority support during the Transport Council meeting for an extension of the Emission Trading System to the maritime sector, even though the new Commission states this as one of their key ambitions. Secondly, although the new Commission aims to reduce ETS allowances for the aviation sector, the Transport Council meeting also highlighted the lack of support from the Member States for an extension of the current ETS regime for the aviation sector (ending the so-called “stop the clock” measure). Multiple Member States agreed that, for now, the International Civil Aviation Authority (ICAO) and the International Maritime Organization (IMO) are the first-choice platforms to reach decarbonization goals. Moreover, changing the voting rules within the Energy Taxation Directive to be able to pass taxation legislation without unanimity from the Member States, is not expected to get support in the Council since Member States prefer taxation measures to remain a national competence.

On rail transport, there is an overall consensus among Member States on the ‘switch to rail’ as a desirable modality shift. As of this moment, fragmentation of national systems and lack of cooperation on cross-border railway connections impede the rise of the train as a more convenient transport mode. The Member States expect investments needed for the development of rail infrastructure through the Connecting Europe Facility (CEF).

Balancing ambitions

When it comes down to politicized dossiers such as the Energy Taxation Directive and extending the EU’s Emissions Trading System, Member States are currently not on the same page as the European Commission. It remains to be seen how the Commission will pursue its agenda and get the necessary support in the Council. More details are expected during the hearings of the Commissioners-designate in the European Parliament.

 

Brexit: What after the prorogation?

On 16 September, Boris Johnson and Jean-Claude Juncker met for the first time in person since Johnson became Prime Minister. Both parties saw the meeting as an opportunity to take stock of the negotiations, but the Commission’s statement afterwards concluded that no concrete proposals emerged from the discussion. On the same day, the Prime Minister of Luxembourg, Xavier Bettel, called Boris Johnson’s approach to Brexit a nightmare at a press conference (which Johnson left early due to anti-Brexit protestors ruining it). Bettel also said the British government had not made any serious proposals for a new deal. Therefore Jean-Claude Juncker also repeated on 18 September, during the European parliament plenary session in Strasbourg, that a no-deal scenario is still very plausible.

However, a deal (or an extension of Article 50) seems necessary as the British government has been accused of minimalizing the possible disruption at ports in a no-deal scenario. Documents published last week about Operation Yellowhammer, the official plan to handle a no-deal scenario, suggested that there would be a low risk for ports outside Kent, a port that has a lot of EU traffic. But new documents show that this is only because tens of thousands of vehicles would be rejected because they would be non-compliant, meaning that the drivers would not have the correct permits or the correct papers filled in, and would be turned away. Also, the facilitation of trade between Northern Ireland and the Irish Republic still needs some time. Johnson is setting out plans for an all-Ireland economic relationship which must replace the Irish backstop. With this plan, Northern Ireland would effectively become a special economic zone inside both the UK and the EU. There would still be a border and everything that is not covered by the all-island regime would be subject to checks.

But, as Juncker stated, there is also a very big chance that the UK will leave the European Union without a deal. Two weeks ago, UK MPs passed a law which requires Boris Johnson to seek an extension of Article 50 if Johnson fails to secure a Brexit deal with the EU by 19 October (dubbed the Benn Act). There is no guarantee that Johnson will do that. However, another concern now is that even if Johnson agrees with the Withdrawal Agreement (WA) with the EU and the deal successfully passes through Parliament, there could not be sufficient time to pass through Parliament a separate act implementing the WA (a complex piece of legislation) – or it could be blocked by MPs – before 31 October. Now, once the WA is agreed, the Benn Act does not come into force because it does not take into account the separate act to implement the WA, so the result is a no-deal Brexit. Therefore, it is in the interest of Labour and Tory rebel MPs not to agree to the WA before the extension has been secured. An extension should be obligatory, whether there is a deal or not.

In the meantime, the Supreme Court, the UK’s highest court, is currently hearing the case over Johnson’s decision to temporarily shut down the UK Parliament. Scotland’s highest court ruled last week that the suspension was indeed unlawful, but the High Court in England had ruled earlier the opposite way. Therefore, the UK Supreme Court is now discussing if this case is justiciable and, if so, whether the prorogation was lawful. After two days of hearing arguments on both sides, also former Tory prime minister John Major spoke on the final day in court to doubt Johnson’s decision to suspend parliament. It is not yet known when the judges will deliver their verdict, but it is expected for next week.

In addition, on 18 September, a clear majority of the Members of the European Parliament voted for a resolution supporting the UK being given a Brexit deadline extension should it request one. The vote itself is largely symbolic because the European Parliament wants to show that it cannot be ignored. However, the EP will reject a deal that does not include a backstop. This is significant because the EP will need to vote through the final Brexit deal.