Brussels update: November

European Commission sets out its legislative agenda for 2022 

The European Commission has published its 2022 work programm outlining its legislative direction and priorities for the next year. At the core of the programme is the acceleration and implementation of the twin green and digital transformation, as well as developing a fairer and more resilient economy. 

The Commission sets out 42 new policy initiatives (as well as a number of revisions and evaluations of existing legislation) to be adopted in the next year. The programme does not include much detail or further information on the scope and nature of these new initiatives, but does set out the direction EU legislation will take, providing a general timeline. Overall, the proposals are broadly in line with packages previously presented, such as 'Fit for 55' and the broader European Green Deal. 

It includes proposals to lead the global race to carbon neutrality and ensure a clean and just energy transition such as: 

• The review of the CO2 emission standards for heavy-duty vehicles (Q4 2022) 
• The introduction of carbon removal certification (Q4 2022) 
• A new strategy on international energy engagement (Q1 2022). 

To drive the economic and social digital transformation, the Commission will introduce the following initiatives: 

• A European Cyber Resilience Act establishing common cybersecurity standards for products with which third countries such as the UK will need to comply (Q3 2022) 
• A European Chips Act to ensure semi-conductor supply (Q2 2022). 

Other proposals include: an initiative on instant payments in the EU, and the implementation of the OECD global agreement on re-allocation of taxing rights to ensure fair taxation. 

Together with the European Parliament and the Council, the Commission will publish a Joint Declaration towards the end of the year outlining the legislative files to be prioritised. The CBI will identify priority areas for engagement to ensure that the interests of members are represented, working with BusinessEurope to ensure a sustainable and inclusive recovery across Europe and the UK. 

EU publishes toolbox for Member States to address rising energy prices 

The European Commission recently published its Communication on “Tackling rising energy prices: a toolbox for action and support”. The document outlines a 'toolbox' of existing policy options that EU Member States can use to respond to the current surge in energy prices. It also sets out the Commission's future plans to address the issue. The ‘toolbox’ sets out short and medium-term measures which include:

• Using revenue generated from the auction of EU ETS allowances to launch social payments for the most-affected households 
• Applying reduced tax rates on energy used by consumers.  

Furthermore, to alleviate the crisis, the Commission encourages Member States to speed up renewable auctions by reducing complex permit procedures.  

The Commission will propose a regulatory framework for the gas and hydrogen markets and present an international energy engagement strategy in the coming months. It will also explore the design of a voluntary joint procurement of reserve gas stocks in the long term.  

The Commission is also expected to adopt a proposal for a revision of the third energy package for gas in December, which is due to outline further reforms such as the enhanced rollout of smart meters to better manage users' energy consumption and free-of-charge switching between providers. 

Following up on the Communication during an EU Energy Council, EU energy ministers also discussed rising energy prices but no unified position has emerged. A number of EU Member States have defended the current electricity market system, whilst Spain and France have called for a revision of the ETS allowance scheme and greater independence in setting the individual maximum gas price. Most noticeably, EU ministers were open to discussion on a proposal from Spain for joint procurement of gas. 

The ’toolbox’ will be important in shaping Europe’s reaction to rising energy prices and will see an eventual reform of its energy market. The CBI is monitoring the impact of energy costs across the UK and EU, with a focus on energy intensive industries.

Countdown to COP26: EU calls for stronger commitments from international partners 

The European Parliament adopted its position on COP26, calling for more ambitious climate action and a move towards actionable, deliverable legislation on the international level, with the EU leading by example. Green MEP Bas Eickhout, Vice-Chair of the Parliament’s environment committee, reiterated the need for stronger commitments from certain partner countries in delivering both a 45% global reduction of CO2 emissions by 2030 and climate finance promises to developing countries. 

EU leaders at the European Council summit also emphasised the need for many major economies to communicate and/or update enhanced and ambitious nationally-determined contributions in time for COP26. And to present long-term strategies towards reaching net zero emissions by 2050. Leaders also recalled the EU commitment to continue scaling up climate financing. 

Ahead of COP26, the CBI is working with partners around the world to coordinate action to tackle climate change and support progress in Glasgow, pushing for greater EU-UK collaboration in achieving climate goals. The CBI is planning a busy programme of events and opportunities for the COP26 summit in order to: 

• Highlight business’ role in combatting global climate change 
• Showcase the investment and innovation of our members 
• Outline how companies can work with international governments to make a difference.  

Working with BusinessEurope and our European sister federations, the CBI is calling for all international partners to commit to climate-neutrality by 2050, enable Article 6 of the Paris Agreement to set up cooperative mechanisms, and support proportionate funding commitments to meet climate finance promises.

European Parliament announces members of EU-UK Parliamentary Assembly  

The European Parliament has established its delegation to the EU-UK Parliamentary Assembly, a body set up under the EU-UK Trade and Cooperation Agreement (TCA). The Assembly will be made up of both Members of the European Parliament and Members of the UK Parliament, serving as a forum to exchange views on the partnership and make recommendations to the Partnership Council.  

Whilst the UK is still to confirm the members from its side, the European Parliament has announced its 35-person delegation spanning all political groups. This includes prominent centre-right Irish MEP Seán Kelly, as well as Irish liberal MEP Barry Andrews. Other key figures include German centre-right MEP and Chair of the Parliament's UK Coordination Group David McAllister, and French liberal MEP and member of the EU-UK friendship group, Nathalie Loiseau. The Assembly will meet in early 2022 to agree the rules of procedure, with two meetings a year taking place: one in Brussels and one in London. 

At the CBI, we will now be reaching out to key members of the delegation to present our business priorities for EU-UK trade after Brexit and to highlight key practical actions both sides can take to stabilise relations and strengthen cooperation.