Capital Markets Union package: strong measures on sustainable finance and financial innovation

The EU Commission presented its package of measures to deepen the Capital Market Union. This includes proposals on FinTech and crowd- funding, covered bonds and the cross-border distribution of investment funds. The package also includes an action plan on sustainable finance. Priorities of this action plan are a classification (?taxonomy?) and a label for sustainable financial products as well as prudential regulations for banks and insurance companies. The Commission plans to publish a legislative package on sustainable finance in May.

MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented: “Our demand to systematically promote green financial markets is finally bearing fruit. The Commission’s action plan contains key projects, which are increasingly called for by large parts of the financial sector. Sustainable financial products also contribute to the climate targets agreed in Paris. Europe must now set the right standards to become the lead market for green finance. We must not let conservative sceptics obstruct this forward-looking initiative. In implementing the proposals, the Commission must ensure that its definitions and rules do not only promote good, but also actively exclude harmful investments. Nuclear and coal-fired power plants or fossil infrastructure cannot be part of any sustainable financial product; rather, they risk to ruin the reputation of this young market. A sustainable financial system can provide the right incentives as a framework, but it is not an alternative to green investments in the future and decisive environmental legislation. Financial markets can only finance what pays off. Capital adequacy rules for green investments by banks and insurance companies may only be alleviated if their lower risk can actually be demonstrated. Higher climate risks should accordingly also be backed by more equity capital. The disclosure of environmental and social factors must finally become compulsory for companies. Linking a unique label for green financial products to the EU Ecolabel is a landmark proposal and would allow small investors to make easier and more transparent investment decisions. It is right that the EU Commission takes, in principle, a positive view of financial innovations. More competition in the financial sector is also in the interests of consumers and the real economy. Where problems to consumers become visible, however, Europe must act swiftly in the FinTech sector. In the area of cryptocurrencies we must not tolerate any legal vacuum. Tough measures against money laundering and white- collar crime must become the norm here. To this end, the Commission has today failed to present proposals.”

EU low-carbon society becoming new reality

 

The Third Report on the State of the Energy Union shows that Europe’s transition to a low-carbon society is becoming the new reality on EU’s ground.

“The Energy Union will only succeed if we all pull in the same direction. The aim is to deliver on our commitment to complete the Energy Union by the end of the Commission’s current mandate. By 2019, the Energy Union must no longer be a policy but a daily reality benefitting every European citizen. This will require increased ownership by all parts of society. Therefore, I see the next year as the year of engagement”. Said Commenting on the report Maroš Šefčovič, the Vice-President responsible for the Energy Union.

@MarosSefcovic: 2018 needs to be the year of engagement on the #energyunion to ensure that what is agreed is really implemented. I hope the State of the Energy Union report released this Friday can be an impulse in this direction.

— Andreas Graf (@andreasgraf) November 21, 2017

The Third State of the Energy Union Report published today tracks the progress made over the past year after the publication of the Second State of the Energy Union in February 2017 and looks forward to the year ahead. The Third Report on State of the Energy Union also confirms that energy transition is not possible without adapting the infrastructure to the needs of the future energy system. To address this, the Commission today adopted a Communication on the 2030 electricity interconnection target of 15%. It also adopted the third list of Projects of Common Interest (PCI).

Miguel Arias Cañete, Commissioner for Climate Action and Energy, said: “Europe’s energy transition is well underway, with record levels of renewable energy and rapidly falling costs. But Europe’s energy infrastructure must develop in the same direction and with the same speed to fully support this energy transition. That’s why we are proposing to focus the new list of projects on key electricity interconnections and smart grids. Today’s steps to boost clean energy infrastructure are another important move towards making our energy system more sustainable, more competitive and more secure – providing genuine European added value”.

No Green without Blue: EIB to support the blue economy

“The European Investment Bank, which is the long-term lender of the European Union, can be a strong partner in protecting the environment, especially our oceans. With your help, we can reduce pollutants in the water, manage ocean resources sustainably and mitigate climate change.”  Said Jonathan Taylor Vice-President in charge of Climate Action and Environment at the European Investment Bank (EIB).

Speaking at Oceans Action Day, at the COP23 UN Climate Conference in Bonn the Vice-President in charge of Climate Action and Environment at the European Investment Bank (EIB) has urged the global community to do more protect oceans and support the blue economy.

Mr Taylor: “It is important to underline that there simply will be no green without blue. In other words, in order to meet the Paris targets and Sustainable Development Goals, we need to establish an economy that is blue in the same sense that the economy on land should be green.”

Speaking at one of a series of events organised around Oceans Action Day, Vice-President Taylor added, “But the global community needs to work together. It is clear that current climate strategies – on national, regional or local levels – are not leading to concrete policies and mechanisms to ensure that ocean acidification is reduced.”

As a key supporter of the Paris Climate Agreement, the EIB has committed to deliver global climate financing of 100 billion dollars before 2020. The EU bank’s efforts actively contribute to the reduction of carbon dioxide emissions and tackle important water issues such as ocean acidification and warming, which are growing problems around the world.

The EIB is involved in a wide range of ocean and coastal projects – supporting adaptation, biodiversity and ecosystems projects aiming to increase the resilience of the ocean and coastal environments to the effects of climate change. Over the last five years the EIB has supported the blue economy activities such as offshore wind, seaport installations and water transport with around 8 billion euros.

The EIB’s support for small island states has involved mitigation and adaptation projects in the Caribbean (supported by a recent 110 million dollar loan to the Caribbean Development Bank for climate change mitigation, adaptation and resilience projects), the Pacific, Atlantic Ocean, Indian Ocean and the Mediterranean. Projects include an airport in the Cook Islands, roads in La Reunion, a wind farm in Cape Verde, solar micro grids in the Maldives, upgraded water systems in the Seychelles and a hydro project in the Solomon Islands.

Small islands are among the most vulnerable to the effects of climate change. Discover in this interactive map how the European Investment Bank is helping them adapt to climate change and mitigate its effects.

On November 10 at COP23, the EIB signed its biggest ever loan in the Pacific: a water project in Fiji’s capital Suva to help increase climate change resilience of the water supply system. Earlier this year, the EIB also approved a 20 million dollar investment in the Sustainable Ocean Fund.

This will provide money for marine and coastal enterprises that are helping with conservation, improved livelihoods and better economic returns.

EU-Switzerland: one step closer the Emissions Trading Systems

 “After much hard work on both sides, I am proud of the progress we have made with our Swiss colleagues. As the world’s largest cap and trade system, we have always aimed to promote the growth of the international carbon market.” Said climate Action and Energy Commissioner Miguel Arias Cañete.

#climatechange does not stop at the border: #EU and Switzerland to link their Emissions Trading Systems #euets https://t.co/toGfogPZ71 pic.twitter.com/YtTmKCP4wr

— Vattenfall EU (@VattenfallBXL) August 16, 2017

The EU has  moved one step closer to linking its Emissions Trading System (EU ETS) for the first time. The Commission adopted two proposals to finalise an agreement with Switzerland on linking the EU ETS with the Swiss emissions trading system. Linking the European system with other systems expands opportunities for emissions reductions and reduces costs. Once the agreement with Switzerland takes effect, participants in the EU ETS will be able to use units from the Swiss system for compliance, and vice versa.  Negotiations between the Commission and Switzerland opened in 2010. A linking agreement was initialled in January 2016 but the signature and conclusion of the agreement were put on hold following the Swiss referendum. Following high-level contacts and a change in Swiss legislation, a meeting between Commission President Jean-Claude Juncker and Swiss President Doris Leuthard in April (see press conference and SPEECH/17/897) opened the path for today’s decisions.

The Commission’s proposal for the signature of the agreement and a proposal for its conclusion (ratification) will now be discussed by the Council of Ministers of the European Union. The Council will require the consent of the European Parliament in order to conclude the agreement. Subject to final conclusion, the agreement could be signed before the end of the year. The entry into force would take place at the start of the year that follows ratification by both sides. The EU ETS is a key tool to tackle climate change with a view to reducing greenhouse gas emissions. It is the world’s first major carbon market and its biggest one. In October 2014, the European Council agreed on the 2030 climate and energy policy framework for the EU setting an ambitious economy-wide domestic target of at least 40% greenhouse gas emission reduction for 2030.

EU: action to tackle pollution from large combustion plants

The Commission takes action to tackle pollution from large combustion plants, such as power stations and district heating plants, which are responsible for about one-third of all air pollutants from industry. Large combustion plants – with a total thermal input of more than 50 megawatt, irrespective of the type of fuel used – are the biggest sectoral emitters in the EU. Therefore more cost-effective and technically feasible reductions of emissions are required. The adoption today of an implementing act by the Commission brings into effect “Best Available Technique” (BAT) conclusions for large combustion plants. These are techniques that are environmentally performing, economically viable and technically proven and developed through a transparent and thorough process over several years with EU Member States, industry and environmental NGOs. For all affected installations (around 3 500 in the EU) the Commission proposes that a review of their permits must happen within four years, so that by mid-2021 stricter EU-wide standards for all large combustion plants will be met. To tackle pollution from large combustion plants is in line with this Commission’s Energy Union priorities to steer the on-going energy transition towards a low emission economy. Clean energy transition is a priority for the Commission and the ”Clean Energy for all Europeans” package presented last November aims at providing a stable regulatory framework to deliver on the transformation of the energy system, which will be crucial for the implementation of the Paris Agreement.

Biodiesel Board calls to end unfair Polish competition

“The European legislation is not only poorly implemented by Poland, but also misused for an unfair competition around Euroope. We believe Brussels should not accept anymore that European renewable legislation is infringed so blatantly and wide scale by an EU Member State and, worse, that the EU Renewable Energy Directive serves as a basis for abusive traffics in the EU,” – said Mr. Raffaello Garofalo, European Biodiesel Board (EBB) Secretary General.

It has been one year the unfair low price biodiesel exports from Poland are causing serious damages to the EU internal market of renewable fuels and to fuels operators in many EU countries. In spite of the industry’s alerts to national and EU authorities concerning the Polish export trend affecting the European markets it has not only been stopped, but is at raise.

Polish fuel market players, deliberately exploiting a loophole in the Polish biofuels legislation causing significant financial damage to the biodiesel production chains in various EU countries – in Romania, first, and also in the Netherlands, Belgium, Italy, and France in first ranks.

In Poland the accounting of a given biodiesel volume towards the national blending mandate is based on a simple invoice of purchase by the fuel distributor. As Polish law does not explicitly require the biodiesel accounted towards the blending mandate to be consumed within its boundaries, some Polish operators have been capitalising on the export of underpriced biodiesel, that has already been declared as blended. As a consequence, a large part of biodiesel volumes are counted towards EU national blending mandates twice, a first time – falsely- in Poland and then – at an unfair dumped price – in any other EU country.

As a result an increasing number of EU stakeholders – from farmers through oilseed producers and crushers, to biodiesel producers– are experiencing economic loss and very negative impacts on their businesses. The  Polish legislative loophole creates significant distortions by decreasing the overall profitability of local biodiesel producers, prompting job loss along the chain,curbing the progress in local energy and protein independence, and impacting the revenues of farmers and PMEs.

“We ask the European Commission to stop this unfair competition because there are evidences, even provided to Polish authority, of market prices below the price on export from Poland” Mr. Garofalo concluded.

The Industrial Association has confirmed a clear cut position against such unfair traffics proceeding to the expulsion of an EBB member company being directly involved with the traffic and refusing to co-operate to fight against such unfair practice. In this context EBB also urges Polish national authorities to resolve the described problem, which casts a severe shadow on the concrete fulfilling of EU renewable mandates by Poland.

The EBB has been collaborating on regarding this issue with a number of industry players, including sustainability certification systems, and is definitively determined to re-establish legality and fair trade on the EU biodiesel market.

Electric vehicles have another record year, reaching 2 million cars in 2016

The number of electric cars on the roads around the world rose to 2 million in 2016, following a year of strong growth in 2015, according to the latest edition of the International Energy Agency’s Global EV Outlook.

China remained the largest market in 2016, accounting for more than 40% of the electric cars sold in the world. With more than 200 million electric two-wheelers and more than 300,000 electric buses, China is by far the global leader in the electrification of transport. China, the US and Europe made up the three main markets, totalling over 90% of all EVs sold around the world.

Electric car deployment in some markets is swift. In Norway, electric cars had a 29% market share last year, the highest globally, followed by the Netherlands with 6.4%, and Sweden with 3.4%.

The electric car market is set to transition from early deployment to mass market adoption over the next decade or so. Between 9 and 20 million electric car could be deployed by 2020, and between 40 and 70 million by 2025, according to estimates based on recent statement from carmakers.

Still, electric vehicles only made up 0.2% of total passenger light-duty vehicles in circulation in 2016. They have a long way to go before reaching numbers capable of making a significant contribution to greenhouse gas emission reduction targets. In order to limit temperature increases to below 2°C by the end of the century, the number of electric cars will need to reach 600 million by 2040, according to IEA’s Energy Technology Perspectives. Strong policy support will be necessary to keep EVs on track.

Cities are taking leadership roles in encouraging EV adoption, often because of concerns about air quality. Major urban centres often achieve higher EV market shares compared to national averages. A third of global EV sales took place in 14 cities in 2015.

Paris, for instance, has mandated that any electric car is allowed to re-charge at the re-charge stations of its car-sharing program, called Autolib. Amsterdam has a unique strategy of offering the installation of charging points on public parking spaces to people who make a request, ensuring that charging infrastructure is installed where it’s actually needed. London for its part encourages EV adoption by waiving its congestion charge.

The analysis shows that fleet procurement is an important means of encouraging early EV uptake. Fleet operators, both public and private, can contribute significantly to the deployment of EVs, first from demand signals that they send to the market, and second thanks to their broader role as amplifiers in promoting and facilitating the uptake of EVs by their staff and customers.

In that respect, four major US cities – Los Angeles, Seattle, San Francisco and Portland – are leading a partnership of over 30 cities to mass-purchase EVs for their public fleets including police cruisers, street sweepers and trash haulers. The group is currently seeking to purchase over 110,000 EVs, a significant number when compared to the 160,000 total EVs sold in the United States in 2016.

The report offers a comprehensive collection of national-level data on EV deployment based on primary data collected from member governments of the Electric Vehicle Initiative (EVI). The EVI is a multi-government policy forum established in 2009 under the Clean Energy Ministerial (CEM), dedicated to accelerating the deployment of EVs worldwide.

EVI members will also launch the EV30@30 campaign during the Eighth CEM Meeting on June 8 in Beijing. The campaign will set a collective aspirational goal for all EVI members of a 30% market share for electric vehicles in the total of all passenger cars, light commercial vehicles, buses and trucks by 2030. The campaign will also raise support for accelerated deployment of charging infrastructure, commitments on fleet procurement, and exchange and replication of best practices for the promotion of EVs in cities.

Clear and ambitious policy support is vital to keeping the growth of EVs on track with IEA low-carbon scenarios, to improve urban air quality, and diversify transport energy sources. Despite impressive improvements in costs and energy density over the past decade, battery packs are still expensive, driving up retail prices. Financial incentives for EV adoption and taxes on fossil fuels will continue to be important in the current phase of EV technology deployment to initiate and reinforce a positive feedback loop that, through increasing sales, production scale-ups and technology learning, will further support cost reductions for batteries and other components.

Source: IEA