What is the EU Green Deal?

A series of regulations known as the EU Green Deal will assist Europe in becoming the first continent to be climate neutral by the year 2050. The EU Green Deal will make Europe's economy modern and dynamic while simultaneously guaranteeing:

• no net emissions of greenhouse gases by 2050
• economic growth decoupled from resource use
• no person and no place left behind.

Regulations under the EU Green Deal

The EU Green Deal has a set of regulations that have already been implemented, which focus is on different areas. Already implemented regulations are:

The Corporate Sustainability Reporting Directive (CSRD)

Companies must record their social and environmental data under the CSRD, and investors and stakeholders must have access to this data. It became operative on January 5th, 2023, and about 50.000 enterprises are now subject to it.

Circular economy action plan

Reduced demand on natural resources will result from the transition to a circular economy. The new circular economy action plan not only tackles trash prevention and sustainable consumption, but also the full life cycle of products, including how they are created. It became effective in March 2020.

Biodiversity strategy for 2030

With a focus on species that can store carbon, the Biodiversity strategy for 2030 aims to preserve nature and stop ecosystems from degrading. In accordance with this goal, the EU proposed an ecosystems Restoration Law that will assist in restoring land and marine ecosystems, particularly for particular species. The implementation of this plan began September 2020.

Zero pollution action plan

By 2050, the Zero Pollution Action Plan seeks to reduce pollution in the air, water, and soil. The proposal was put into action on May 12th, 2021. The European Green Deal announced the following key initiatives to achieve zero pollution:

• Chemical strategy for sustainability - to better safeguard the public and the environment from dangerous substances.
• Zero pollution action plan for water, air and soil - improve pollution prevention, treatment, monitoring, and reporting.
• Revising measures to address pollution from large industrial installations to make sure they are compliant with policies relating to the circular economy, energy, and environment.

Farm to Fork

Focusing on the entire food value chain is vital if Europe wants to achieve net-zero energy use. The EU will benefit from the new Farm to Fork plan in this regard. By 2030, 25% of all farmland should be used for organic farming, 50% of chemicals and some pesticides should be eliminated from agricultural usage, and 50% of EU sales of antimicrobials for farm animals and agriculture should be eliminated.

Deforestation-free products

With the consumption of "deforestation-free" items, plans for deforestation-free products aim to lessen greenhouse gas emissions, biodiversity loss, and forest degradation. Many suppliers' supply chains will need to adjust, but primarily those for cocoa, coffee, soy, timber, palm oil, and rubber.

Additionally, there are laws or proposals that have not yet been put into effect but will do so in the coming months or years. These include:

Packaging and Packaging Waste

The EU will eliminate pointless packaging, restrict overpackaging, provide clear labels to support proper recycling, reduce the need for raw materials, increase Europe's recycling capacity, and reduce its reliance on primary resources and outside suppliers with the help of the Packaging and Packaging Waste Regulation.

Ecodesign for sustainable products

The goal of this plan is to create goods that are easier to recycle and remanufacture as well as more dependable, reusable, upgradeable, reparable, maintainable, and resource and energy efficient.

Part of the EU Green Deal is the 'Fit for 55 package'

It is a package of significant carbon reforms. In order to ensure that EU policies are in accordance with the climate targets, the Fit for 55 package is a collection of suggestions for new activities. As was already mentioned, the EU's target for decreasing net greenhouse gas emissions is to do so by at least 55% by 2030, which is why this package's name, Fit for 55, was chosen. There are currently 15 proposals included in this package:

1. EU emissions trading system refrom
2. Carbon border adjustment mechanism
3. Reducing methane emissions in the energy sector
4. Effort Sharing: Member states’ emissions reduction targets
5. LULUCF: Emissions and removals from land use, land use change and forestry
6. ReFuelEU Maritime initiative
7. ReFuelEU Aviation proposal
8. Social climate fund
9. Renewable energy
10. Energy efficiency
11. Energy performance of buildings
12. Hydrogen and decarbonised gas market package
13. Energy taxation
14. CO2 emission standards for cars and vans
15. Alternative fuels infrastructure

The Carbon Border Adjustment Mechanism, or CBAM, is the most recent rule included in the Fit for 55 package. The CBAM will ensure that the carbon price of imports is equal to the carbon price of domestic production and that the EU's climate objectives are not compromised by ensuring that a price has been paid for the embedded carbon emissions generated in the production of specific goods imported into the EU. This mechanism will go through a Transitional period from October 2023 to December 2025, and then it will enter the Fully Operated phase in January 2026. Imports of cement, iron and steel, steel, aluminum, fertilizers, electricity, and hydrogen will be subject to the CBAM initially.

The Industry plan also forms a part of the Green Deal

The goal of the Green Deal Industrial Plan is to improve the environment for increasing EU manufacturing capacity for net-zero technologies and goods, which are necessary to meet Europe's aggressive climate commitments and have access to more clean technology. Three initiatives make up the plan:

Net-Zero Industry Act

In order to achieve the Union's overarching strategic goal of having at least 40% of the EU's deployment needs met by net-zero technologies by 2030, it will improve the environment for setting up net-zero projects and increase Europe's competitiveness in this area.

Critical Raw Materials Act

With the European Raw Materials Act, the EU hopes to dramatically reduce its reliance on imports from just one country by ensuring a sustainable supply of vital raw materials (Gallium, Lithium, Boron, Titanium, and Tungsten) for Europe's industry.

Electricity market design

The architecture of the electricity market intends to increase the resilience of the EU energy market and increase the independence of consumers' and businesses' energy costs from the short-term market price of power.

Conclusion:

• The EU Green Deal is a set of regulations that will help Europe fight climate change.
• The regulations cover different areas, from reporting regulation to food regulation, etc.
• As part of the Green Deal, the Industry plan and Fit for 55 will help in achieving EU's goals.

Author:
Anna-Maria Begić
Business Analyst @ Swiss IPG Partners Group