Policy and Regulation

How Europe is interpreting Macron’s call for regulatory pause

Emmanuel Macron: Some fear his suggestion will create a domino effect, with the European parliament pushing back against environmental regulation one proposal at a time (Photo: Valeria Mongelli/Bloomberg)

While some back relieving Europe of the current ‘avalanche’ of regulation, others believe it is not the time to oppose a proposed nature restoration law and other emissions-cutting initiatives.

The furore created by French president Emmanuel Macron’s call for “a European regulatory pause” on environmental legislation is symptomatic of growing divisions in Brussels – and other regional capitals – over the speed at which Europe is moving on legislation to cut emissions and restore nature. And as the 2024 European parliament elections move closer, environmental law-making is becoming increasingly politicised.

Macron’s words, uttered as he launched plans for a green industrialisation of France in May, created a storm. The Elysée immediately insisted he was not calling for a “moratorium or a repeal of rules that already exist or are under negotiation” – yet a day later in Dunkirk, an industrial city in northern France, Macron said he preferred “factories that respect our European norms, which are the best, rather than those that want to add more norms” with the risk of “no more factories”.

“Everyone who wants to do nothing could use an extensive interpretation of the president’s words to say, look I am doing like Macron,” French MEP Pascal Canfin, a staunch defender of environmental legislation and a member of Macron’s Renaissance party, tells Sustainable Views. “But we need to remember that Macron’s words in no way have anything to do with laws that are being negotiated or have been agreed.”

Nonetheless, many of the MEPs who voted a week ago against European Commission plans for a nature restoration law belong to Renaissance, with the rest largely from the EPP, the parliament’s centre-right bloc.

Furthermore, Belgian prime minister Alexander de Croo, whose party sits with Macron’s in the parliament’s liberal Renew group, was emboldened by the French president’s words to say last week that he supported a regulatory “pause” related to EU environmental law-making. 

“What we need to avoid now is to overburden the boat by adding to CO₂ emission objectives, for example, new norms for nitrogen dioxide, new norms linked to restoring nature, new norms for biodiversity,” said de Croo.

Regulation fatigue

Politicians pushing back against environmental regulation often claim they are defending business. The private sector has been largely supportive of the EU Green Deal, but it is “undeniable [that] the rhythm of these measures is very rapid”, Estelle Cantillon, economist at Solvay Business School, part of the Free University of Brussels, tells Sustainable Views.

An “avalanche” is how Christian Egenhofer of the Centre for European Policy Studies, a Brussels-based think-tank, describes the current amount of regulation pushed out by the commission.

“The Green Deal was quite successful,” Egenhofer says, but suggests there is a growing sense in Brussels that “we may have gone a bit too fast”, coupled with fatigue in the EU institutions that have had to manage a vast amount of new environmental – and other – regulations in recent years. 

Susi Dennison, a senior policy fellow at Paris-based think-tank the European Council on Foreign Relations, suggests Macron, aware of such tensions, is setting out his stall ahead of the European elections and making it clear that centrist parties like his own are “business-friendly”. 

Following the trend of recent national elections in Europe, a swing to the right – or even to the far-right – is generally expected next year. Such a result would give more power to the ECR group, which includes parties not known for their green credentials, such as Giorgia Meloni’s Brothers of Italy.

Nicolas Berghmans of the Institute for Sustainable Development and International Relations, a French research institute, also believes Macron is playing the longer game and looking to influence the next EU administration, where “the focus should be less on regulation and more on implementation [of the Green Deal] and making sure industries have the right support and the appropriate skills”.

“Regulation already adopted gives the right direction,” Berghmans says, citing the EU carbon price in particular as giving businesses a certainty that companies in other countries outside the EU don’t have. The US Inflation Reduction Act offers a less secure framework for businesses because what happens next in the US “depends on the policy choices” of the president, he says. 

He believes, however, that regulation must be backed up by sufficient funding to implement it. Like Canfin, he supports the idea of an EU sovereignty fund, as suggested by commission president Ursula von der Leyen last year, to boost EU investment in green technologies and help ensure all countries benefit from the energy transition. 

But there is opposition from Scandinavian countries, and the fund increasingly risks not becoming reality under this administration. 

Level playing-field

Marc-Antoine Eyl-Mazzega of the French Institute for International Relations, a Paris-headquartered think-tank, believes Macron was expressing genuine concerns about the EU becoming an “island” in terms of the speed at which it is trying to decarbonise compared to other regions and the potential impacts on competitiveness. 

Polices such as the recently agreed Carbon Border Adjustment Mechanism don’t go far enough to protect industry and create a “green European fortress”, says Eyl-Mazzega. There are too many differences in how regulations are being implemented in different EU countries to offer a level-playing field for business, he says, and the EU green taxonomy and non-financial disclosure demands put companies at a competitive disadvantage compared to the rest of the world. Rather than a fortress, green Europe is a “very fragile sandcastle”, says Eyl-Mazzega. 

He doesn’t believe a regulatory pause is the answer, but advises focusing efforts on “where we can get the quickest results without weakening us” and on getting countries in the G7 and the G20 to step up their action. Developing and scaling up new technologies, including artificial intelligence, are key to help harder sectors, such as agriculture, to decarbonise, he believes.

Fraught environment

As the EU elections approach, politicians want to pre-empt any potential opposition. In France, there are fears of triggering another gilets jaunes uprising (the movement whose protestors wore yellow high-vis jackets) if environmental regulations are seen as socially or economically unfair.

Opposition from farming communities is another concern after the win by the pro-farmer party in the recent Dutch elections following protests over emissions regulations. 

It is against this backdrop that the various nature and farming related parts of the Green Deal – the nature restoration law, proposals on reducing pesticide use, improving soil health and making food systems more sustainable – are coming to the fore, much to the concern of environmental campaigners. 

“We are really worried,” says Anaïs Berthier, head of legal non-governmental organisation ClientEarth’s Brussels office. She tells Sustainable Views she fears a “domino effect”, which could see the parliament pushing back against environmental regulation one proposal at a time. 

Berthier is especially concerned about an apparent lack of understanding among many right-wing MEPs that climate targets cannot be reached by changes to the energy system alone, and that restoring soils and habitats to ensure they absorb rather than release carbon, and cutting emissions from agriculture are equally important. 

Calls from some MEPs to protect food security, while opposing legislation to protect nature just as scientific studies show alarming falls across the EU in birds and insects, are also worrying Berthier. “You can’t feed 9 billion people without insects,” she concludes. 

 

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