In Brief: EU parliament passes final Green Deal dossiers ahead of elections; US EPA targets ‘forever chemicals’
The latest ESG policy and regulatory news
The EU has launched an inquiry into Chinese suppliers of wind turbines, centred on the construction of wind parks in Spain, Greece, France, Romania and Bulgaria. In a speech, EU commissioner for competition Margrethe Vestager said Europe needs a systematic approach to counter unfair competition from China. “And we need it before it is too late. We can’t afford to see what happened on solar panels, happening again on electric vehicles, wind or essential chips,” she said. Last week, the European Commission said it had opened two in-depth investigations under its foreign subsidies regulation involving two companies with links to China, which are bidders in the public procurement procedure of a photovoltaic park in Romania.
The European Council and parliament have reached a provisional deal on continuing to suspend import duties and quotas on Ukrainian agricultural exports to the EU, until June 5 2025. Under the deal, the commission is allowed to take action if significant disruption occurs to the markets of one or more EU countries because of Ukrainian imports. To protect EU farmers, an emergency brake can be triggered for particularly sensitive products such as poultry, eggs, sugar, oats, groats, maize and honey. Grain imports from Ukraine have become especially controversial following the import of Ukrainian goods through Poland since the Black Sea became inaccessible for trade. In response, Polish farmers have staged large-scale protests and blocked Ukrainian goods from entering the EU.
The parliament also voted on other legislative packages, including approving rules to stimulate the uptake of renewable gases such as hydrogen, and reforms to the bloc’s electricity market. It also gave the go-ahead for new requirements on the collection, treatment and discharge of urban wastewater, including new extended producer responsibility schemes for the pharmaceutical and cosmetic sectors.
The parliament also voted in favour of the first EU-wide methane emissions reduction law — at the same time as a report by the International Energy Agency revealed that methane emissions from the energy sector remained near a record high in 2023 — as well as on a carbon removals framework and stricter carbon emissions reduction targets for trucks and buses.
Separately, the parliament also agreed its negotiating position on a soil-monitoring law and on a revision to the construction products regulation, and agreed to postpone by two years the deadline for adopting sector-specific European Sustainability Reporting Standards. These dossiers will need to be finalised after the European parliament elections in June.
The commission has said it will publish a set of indicators to “monitor and measure progress of the green transition, competitiveness of the EU economy and the social transition”. The announcement comes as part of an assessment of the “clean transition dialogues”, which were established as a new way for the commission to engage with industry and social partners to support the implementation of the European Green Deal.
A “minerals security partnership forum” was launched, co-led by the EU and the US, to foster stronger ties between resource-rich countries and countries with high demand for critical minerals. Members of the partnership, in addition to the EU and the US, include Australia, Canada, Estonia, Finland, France, Germany, India, Italy, Japan, Norway, South Korea, Sweden and the UK. New members will need to commit to diversifying global supply chains, high environmental standards, good governance and fair working conditions. Separately, the EU and Uzbekistan signed a memorandum of understanding to start a strategic partnership on critical raw materials.
The European Court of Human Rights has set an important precedent for citizens to challenge their governments’ climate policies and regulations. You can find a full overview of the ruling here.
In a ruling involving endangered bird species, the Supreme Court of India has recognised the right to be free from the adverse impact of climate change as a fundamental right under the country’s constitution.
The UK’s Transition Plan Taskforce has released separate guidance reports for financial services — asset owners, asset managers and banks — as well as for specific industrial sectors, such as electric utilities and power generators, food and beverage, metals and mining, and oil and gas. Set up by the UK Treasury during COP26 in Glasgow, the task force published its disclosure framework in October 2023 in anticipation of mandatory legislation. While the UK government has delayed regulation on transition plans, the task force’s initial two-year mandate has been extended to further assess how the British financial sector can raise transition capital at scale. In addition to sector-specific guidance, the task force also published guidance on how companies should engage in a transition planning cycle, on the use of private sector transition plans in emerging markets and developing economies, as well as advisory notes on adaptation, nature, the just transition and small and medium-sized enterprises.
The Church of England Pensions Board has announced it will vote in favour of clean energy shareholder proposals, filed by the Comptroller of the City of New York, at the upcoming annual meetings of the Bank of America, Goldman Sachs and Morgan Stanley. The resolutions urge banks to disclose their “annual clean energy financing ratio”, a metric comparing a bank’s total financing — of equity, debt and project finance — in low-carbon energy supply with that of fossil fuel energy supply.
The US Environmental Protection Agency has issued a first-ever drinking water standard, which will establish legally binding levels for several so-called “forever chemicals”. All US public water systems will have three years to complete their initial monitoring, after which they will be obliged to inform the public of the level of forever chemicals measured in their drinking water. Companies will have five years to implement solutions if exceeding levels have been detected. The agency estimates that between 6 per cent and 10 per cent of companies will have to take additional measures.
The EPA has published a rule aimed to combat toxic air pollution from chemical plants, as well as interim guidance on the destruction and disposal of forever chemicals and products containing those chemicals.
The US agency has also published requirements for government contractors to purchase cleaning products for federal buildings that do not contain forever chemicals.
The US state of Oregon has passed fossil fuel divestment legislation, the Clean Oregon Asset Legislation Act, which will force the Oregon Public Employees Retirement Fund to divest up to $1bn in thermal coal assets. The US states of California and Maine have previously passed similar legislation.
California Senate Bill 1036, aimed at regulating the selling and marketing of carbon offsets, passed a Senate judiciary vote, despite a similar bill being vetoed by governor Gavin Newsom last year.
A “community benefits agreement” between an environmental organisation and an energy company has been announced regarding the contentious construction of a carbon dioxide pipeline in the US state of Nebraska. The agreement has been labelled as a first for overcoming community concerns regarding the construction of pipelines across land that will carry CO2 to be stored underground. In addition to financial commitments of more than $1mn, the agreement also carries a requirement that at the time of decommissioning, landowners may decide to have the pipeline abandoned, in place or removed from their property.
Brazil has held meetings with representatives from Colombia, Ghana, Indonesia, Malaysia and the Democratic Republic of Congo to showcase its proposal for a global fund to finance the conservation of tropical forests. The “tropical forests forever initiative”, announced at COP28, is based on a payment-for-performance mechanism, which would see a fixed annual amount be paid for each hectare of intact forest. Brazil intends to officially launch the mechanism at COP30, which it will host in 2025.
The Science Based Targets initiative is experiencing an employee-led backlash after it announced updates to its guidance on carbon credits to include their use for the abatement of Scope 3 emissions. Employees distanced themselves from the guidance in two separate letters, with one letter asking for the removal of chief executive Luiz Amaral. Prior to the backlash, the SBTi had said it intended to publish draft rules for using environmental attribute certificates for abating Scope 3 emissions by July 2024.
The Australian government has announced its “national energy performance strategy”, which will include $1bn in funding for low-cost loans to households.