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Next Generation EU and National Recovery Plans

On 27 May 2020, the European Commission proposed a temporary recovery instrument called Next Generation EU (NGEU), meant to address the unprecedented crisis caused by COVID-19. Currently, Member States are rapidly formulating National Recovery and Resilience Plans on the basis of the European Commission’s recommendations before the deadline of 30 April 2021.

Next Generation EU: The basics

The Next Generation EU is an envelope of €750 billion representing the largest stimulus package ever financed by the EU and is designed to boost the recovery of EU economy on the basis of two clear targets:

  • 37% for green investments and reforms. Each Member State will have to include a minimum of 37% of expenditure related to climate and other environmental objectives.
  • 20% for digital investments and reforms. Each Member State will have to include a minimum of 20% of expenditure to foster the digital transition.

To achieve the targets outlined above, the Member States have until 30 April 2021 to advance a National Recovery and Resilience Plan. All Member States are now at work to set up their national recovery and resilience plans, with a constant activity following the guidance provided by the European Commission (I and II). The Member States will also integrate their recovery and resilience plans with the annual national reform programmes in line with the European Semester objectives.

The following weeks and months are a crucial period, and Dr2 Consultants strongly advises businesses to engage with their national governments and make sure that the draft national plans effectively address their specific digital and sustainability needs. Two concrete case examples in Belgium and Italy which are in the process of formulating their plans provide a vivid example of current and future opportunities for businesses to intervene in the sustainability sector.

Dr2 Consultants is expertly placed to assist your company in identifying the opportunities in the National Recovery and Resilience Plans. Our expertise in sustainability and digital topics neatly overlaps with proposed activities at national and European level.

National Recovery and Resilience Plans

Belgium

Regarding Next Generation EU in Belgium, the different governments have only recently (11 January 2021) found an agreement on the distribution of the allocated €5.9 billion from the Recovery and Resilience Facility between the federal and federated entities.

National Recovery Plan: Distribution of the allocated €5.9 billion from the Recovery and Resilience Facility between the federal and federated entities in Belgium

Distribution of the allocated €5.9 billion from the Recovery and Resilience Facility between the federal and federated entities in Belgium

Owing to its complex state structure, Belgium has not yet officially presented its National Recovery and Resilience Plan at the time of writing, which has to be agreed between the six different governments. However, it is clear that the plan will centre around five key themes:

  1. Sustainability;
  2. Digital transformation;
  3. Mobility;
  4. Social issues;
  5. Productivity.

Within the sustainability pillar, the plan will have a major focus on energy renovation of buildings, renewable energy sources, biodiversity and circular economy activities. The Belgian government(s) are expected to present their shortlist of projects shortly which will provide (industrial) stakeholders with the opportunity to elaborate on their potential involvement in concrete projects. Belgian companies which are active in the above mentioned sectors are thus highly encouraged to seek close contact with the cabinet of Minister for Recovery, Thomas Dermine.

Italy

On 12 January 2021, the Italian Government has approved the Piano Nazionale di Ripresa e Resilienza (PNRR) which has a budget of €224 billion and outlines the trajectory that the country will follow to achieve the goals of Next Generation EU.

Based on 6 missions spanning from digitalization to green transition and mobility, the PNRR covers various projects to make Italy a more modern, more digital, more sustainable and more inclusive country. The mission 2 called “Green Revolution and Ecological Transition” is at the core of the plan, envisaging to earmark €68.9 billion to four components:

  1. Green enterprise and circular economy;
  2. Energy transition and sustainable local mobility;
  3. Energy efficiency and building requalification;
  4. Protection and enhancement of land and water resources.

Mission 2 is predominantly oriented towards the pursuit of environmental sustainability, but it also has considerable digitization content. The investment actions will be accompanied by specific reforms aimed at promoting the energy transition and the use of renewable sources, providing the necessary infrastructure for their integration into the national electricity system.

The interventions will be consistent with the European Circular Economy Action Plan, with the aim of reducing the net production of waste and the landfill of all processed waste, and will ultimately contribute to the achievement of the EU objectives, made even more challenging by the review of existing legislation at European level (“Fit for 55 package”, which aims to reduce emissions by at least 55% by 2030).

The PNRR is currently under revision of the Italian Parliament and will undergo a final check with the local institutions and the social partners. The Government will also publish a governance model that identifies responsibilities for its implementation, ensures coordination with relevant ministers and monitors progress on spending.

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New Belgian federal government’s sustainability policy priorities

After 493 days of negotiations between the political parties in Belgium since the elections in May 2019, the new federal government of the Kingdom of Belgium was sworn in on 1 October 2020 with Alexander De Croo (Open Vld) appointed as new Prime Minister. With a clear difference in engagement compared to Charles Michel’s so-called ‘Swedish coalition”, sustainability – together with employment and solidarity – is one of the key themes in the new coalition agreement, which confirms full commitment to the climate ambitions of the Paris Agreement and the European Green Deal. The ambition is to reduce greenhouse gas emissions by 55% by 2030 and make Belgium climate neutral by 2050.

Another urgent focus of the new government will be addressing the corona crisis and the path to economic recovery by transitioning into a more sustainable economic model. The “Government De Croo” sets out investments and new policies in line with the goals of the European Green Deal, however, it often remains unclear how the goals will be achieved in practice.

Renewable energy sources 

The new Belgian federal government proposes to invest more in the development of renewable energy sources, in particular in wind and solar energy, i.e. by exploring potential additional capacity for offshore wind in the Belgian North Sea. However, environmental organizations already raised their concerns about the lack of measures that would protect nature reserves in the North Sea in case economic activities would be exploited in the area. Additionally, in their pursuit of climate neutrality, public companies are encouraged to develop their own sustainable energy supplies and to gradually replace polluting sources, including nuclear energy.

Sustainable transport 

Railway is within the competency of the federal government, where additional investments are expected with the ambition to create more efficient and faster international (night) train connections to major European cities and consequently make Brussels a truly international train hub. The government is also aiming to double the freight traffic by 2030. In consultation with the regions, the government will put forward proposals on the uptake of zero-emission vehicles (subject to the availability of such affordable vehicles on the Belgian market) including an obligation on zero-emission company vehicles by 2026. Also, together with the regions, this government will strive for an ambitious modal shift and the promotion of Mobility-as-a-Service with a view to a significantly increase the share of sustainable mobility modes.

Circular economy 

The new government – in consultation with the regions – will develop a federal circular economy action plan to significantly reduce the use of raw materials and the material footprint in production and consumption. The federal government will also set best practices and include the principle of a circular economy in its public tenders. In line with the ambitions of the European Green Deal, the Belgian government will also promote reduction of waste, reuse and recycling.

Biodiversity 

To improve the negative impact on the biodiversity, the new federal government will investigate the impact of the ban of certain plastics and push to harmonize these standards at the European level. Furthermore, the government will realize an ambitious reduction plan for pesticides with special attention for Belgian (agricultural) companies in order to avoid any competitive disadvantage. In general, the new government seems to align the national biodiversity strategy much more with the European biodiversity strategy.

Recovery 

The new government is investing €3.2 billion in new policies, out of which  €2.3 billion will be earmarked for social policy. €1 billion is reserved for relaunching the economy following the corona crisis, including investment in a new economy (e.g. more energy-efficient government buildings, the development of the use of sustainable accumulators and batteries, improvement and intensification of freight transport by rail and inland waterways). Furthermore, spin-offs that have a positive effect on sustainable development, more specifically on renewable energy, insulation of buildings, climate-friendly technologies, but also in the field of digitization and mobility will be set as priorities. Further details are set to be announced in the coming weeks and months.

Conclusion 

The new Belgian federal government has without doubt set out ambitious goals to achieve a more sustainable and circular economy for the coming years. Together with the recovery plan following the COVID-19 crisis, this provides new opportunities but also poses challenges for companies to adopt their operational and business environments. It is therefore crucial to stay up-to-date with the latest developments and understand when is the right momentum to proactive influence the political agenda.

Dr2 Consultants offers comprehensive Public Affairs support for companies and organizations that are impacted by Belgian policies – either at federal or at regional level.

Dr2 Consultants hosts successful transport networking event with focus on sustainability

On 22 January, Dr2 Consultants hosted a transport networking event welcoming over 60 representatives of the transport sector both from EU institutions and private companies.

The event at Holland House provided an opportunity to exchange views about the policy priorities of the EU. The networking event featured two keynote speakers, Mr. Kristijan Ležaić, Counsellor at the Croatian Presidency of the Council of the EU, and Mr. Daniel Mes, member of Executive Vice-President Frans Timmermans’ cabinet giving interesting insights about the impact of the European Green Deal on transport.

The Presidency will focus on the improvement and finalization of the Trans-European Transport Network (TEN-T) and the achievement of a competitive and sustainable shipping sector. The Croatian Presidency will also try to finalize trilogues on the Connecting Europe Facility (CEF) as soon as the negotiations for the next Multiannual Financial Framework (MFF) 2021-2027 are completed.

Mr. Daniel Mes explained that the Commission is committed to work towards a sustainable transport sector that is beneficial for all. The Climate Law that will be presented in February will propose binding targets that will allow the EU to become climate neutral by 2050. Mr. Mes invited stakeholders to take an active role in shaping the EU’s climate agenda.

“At Dr2 Consultants, we promote constant interaction between policymakers and stakeholders in order to ensure future-proof legislation, especially now, at the beginning of the new policy mandate and in view of the challenges the EU is facing. We look back at a successful event and we look forward to gathering colleagues from the transport, digital and sustainability sector in the coming months.”- added Margreet Lommerts, Managing Partner at Dr2 Consultants.

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.