Europe’s Green Deal Finalized

The EU Parliament concluded its last session of the current session prior to its June elections, following a marathon of green votes. Numerous new rules, such as the Corporate Sustainability Due Diligence Directive (CSDDD), which we discussed last week, were produced by the massive voting sessions. A number of other agreements were made, as well as a modification to the Corporate Sustainability Reporting Directive (CSRD) and an EU version of the Inflation Reduction Act. 

Here’s a brief summary of what took place:

The Net Zero Investment Act (NZIA):This is the US Inflation Reduction Act translated by the EU. Its goal is to make 19 net zero technologies—from carbon capture to battery storage—more competitively manufactured in the EU. 

Ban on products made with forced labor:If there is concrete evidence that a company has imported, exported, or sold goods manufactured with forced labor, that company will be inspected. The company’s products will have to be taken off the EU market if it is found guilty.

Withdrawal from the Energy Treaty Charter:Established in the 1990s, the Energy Treaty Charter is an international agreement that permits investors in fossil fuels to bring private court lawsuits against nations for “unfair” climate action. As a result, there is no longer any risk of legal action hindering the EU and its member states from passing climate rules. 

Common agricultural policy: A revision to the common agricultural policy exempts small farm owners from fines in response to the protests by winter farmers, and more exemptions will be provided in the event of catastrophic weather.

CSRD update: As anticipated, the European Council decided to postpone sector-specific and non-EU reporting under the Corporate Sustainability Reporting Directive (CSRD) by two years. 

The Green Deal will be the long-lasting legacy of this five-year EU Parliament. The European Union has implemented several worldwide pioneering environmental initiatives since the 2020 announcement of the Green Deal. These rules are set in stone and can only be changed, even in the event that the June elections lean to the right.