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Lobby groups call for business-friendly turn of the EU Green Deal

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European business groups have presented their wish lists for the next legislative cycle, calling on the EU to streamline policy, tackle double reporting and pair the bloc’s Green Deal with a solid industrial policy plan.

The EU’s main business lobby, BusinessEurope, and the German Chamber for Industry and Commerce (DIHK) put forward their key demands for the next legislative cycle at two different events in Berlin on Tuesday and Wednesday respectively. They called on the EU to “concentrate on the essentials” in the next five-year term – after what the DIHK called a “tsunami” of new regulations coming from Brussels during the current legislative term.

Moreover, both associations underlined that they don’t want the EU to turn away from its climate objectives, but argued that in order to reach them, it should be better explained to companies what is required from them – and called for reducing double reporting.

Many rules would follow very similar objectives, but would each add different reporting obligations for companies, Freya Lemcke, the DIHK’s chief lobbyist in Brussels, said, referring for instance to the EU’s due diligence directive, the sustainable finance taxonomy, and corporate sustainability reporting.

There was a “feeling of confusion” among companies, Sibylle Thierer, DIHK member and vice president of Eurochambres, the European association of business chambers, told reporters in Berlin on Wednesday (20 March), “simply because there is something new every day”.

“Sometimes it’s more like 100 reports in 100 different way,” Lemcke added. “It’s really about such issues, not about deregulation as such, but about reducing the burden accordingly.”

The EU should “ensure the Green Deal becomes a growth strategy by flanking it with a real Industrial Deal,” BusinessEurope wrote in their flagship report ahead of the EU elections, also published on Wednesday.

“Only through strengthening its economy and improving its attractiveness as an investment location will the EU be able to achieve its environmental and social goals in the coming years,” the report added.

The report echoed what Markus Beyrer, BusinessEurope’s Director General, told another conference in Berlin on Tuesday (19 March): “We know that this transformation is important, that it is right, but that it will of course bring about massive changes in society and massive changes in the economy.” 

“It’s about creating framework conditions that are compatible,” he added.

According to the group’s report, proposals under the Green Deal would have led to almost EUR 2 billion of additional administrative burden on EU businesses in 2022 alone.

As one of the challenges, Beyrer singled out rising carbon prices in the Emissions Trading System (ETS) – the cornerstone of the EU’s climate policy – a trend that is adding to the already comparably high energy prices in Europe.

While Beyrer believed the ETS is “the right system because it is market-based,”  but said its impact on prices was “sometimes trivialised a little” – and warned that it would make European steel production 30% more expensive, and aluminium production 40% more expensive than in other parts of the world.

While prices for emission allowances have dropped in recent months and only slowly started to gain ground again, in the long run, prices are expected to increase substantially as the EU nears its emissions reduction targets for 2030, 2040 – and climate neutrality by 2050.

According to financial analysts, an emissions’ reduction target of 90% by 2040, as it has been recently proposed by the European Commission, could see ETS prices rise to up to €400.

Meanwhile, many companies who currently get their emission certificates for free – to help them stand in international competition – will see their free allowances being phased out, as the EU introduces its new carbon border adjustment mechanism (CBAM), a new tariff for carbon-intensive imports.

CBAM also came with new bureaucratic burdens for companies, Thierer pointed out, adding that her company Häfele, which produces metal fittings, was “suddenly affected” by reporting obligations for screws and aluminium.

Additionally, while currently around 10,000 power plants and industrial production sites are covered by the EU’s carbon market, as of 2027, all 31.5 million businesses in Europe will be indirectly affected by it because heating and road fuels as well as smaller industrial sites will be covered by a new market, known as the second Emissions Trading System (ETS2).

Nevertheless, the DIHK expressed its support for the ETS, saying that it allows companies to find ways to reduce emissions in an “imaginative and innovative” way.

[Edited by Anna Brunetti]

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