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Urban Waste Water: Commission decides to refer SLOVENIA to the European Court of Justice over waste water treatment

EU Reporter Correspondent

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The European Commission has decided today to refer Slovenia to the European Court of Justice for failure to comply with the requirements of the Urban Waste Water Treatment Directive (Directive 91/271/EEC). The Directive requires Member States to ensure that urban agglomerations (towns, cities, settlements) properly collect and treat their waste waters, thus eliminating or reducing all their undesirable effects.

The European Green Deal steers the EU towards a Zero Pollution ambition. Full implementation of the standards enshrined in EU legislation is important to effectively protect human health and safeguard the natural environment.

Slovenia should have been fully compliant with the Urban Waste Water Treatment Directive requirements since 2016, according to its agreements under the Accession Treaty. However, four agglomerations with a population of over 10 000 (Ljubljana, Trbovlje, Kočevje, and Loka) do not comply with such requirements because urban waste water entering collecting systems is not subject to the appropriate level of treatment before being discharged.

In addition, the agglomerations Kočevje, Trbovlje, and Loka fail to meet additional requirements of the Directive related to sensitive areas, as urban waste water entering collecting systems is not subject to more stringent treatment before being discharged into those areas.

The Commission sent a letter of formal notice to the Slovenian authorities in February 2017, followed by a reasoned opinion in 2019. Although the Slovenian authorities have shared monitoring data aimed to show compliance with the requirements of the Directive, the deficiencies and gaps therein identified lead the Commission to conclude that the authorities have failed to prove compliance for the above-mentioned agglomerations.

Therefore, the Commission is referring Slovenia to the Court of Justice of the European Union.

Background

The Urban Waste Water Treatment Directive requires member states to ensure that their towns, cities and settlements properly collect and treat waste water. Untreated waste water can be contaminated with harmful chemicals, bacteria and viruses and thus presents a risk to human health. It also contains nutrients such as nitrogen and phosphorous which can damage freshwaters and the marine environment, by promoting excessive growth of algae that chokes other life, a process known as eutrophication.

The Commission published in September 2020 the 10th report on the implementation of the Directive that showed an overall improvement in collection and treatment of waste water in Europe's cities and towns, but pointed to different success levels between the member states.

More information

Urban Waste Water Treatment Directive - Overview

EU Infringement procedure

Environment

Climate and Environment: Commission welcomes the final approval of the new LIFE Programme with €5.4 billion budget

EU Reporter Correspondent

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The European Parliament has officially approved the deal with member states on the LIFE Programme, which will allow it to invest €5.4 billion in climate and environmental projects over the next seven years. The LIFE programme is among the EU funding programmes for which the Commission proposed the largest proportional increase for the period 2021-2027. Environment, Oceans and Fisheries Commissioner Virginijus Sinkevičius, said: “I would like to thank the European Parliament for its great support for LIFE throughout the 3-year negotiation. For more than 30 years, our LIFE programme has supported thousands of iconic projects. With its new and significantly boosted €5.4bn budget, it will help us deliver major EU Green Deal initiatives, for a toxic-free, circular and climate-neutral Europe.” The total budget allocated for LIFE - the only programme at EU-level solely dedicated to the environment and climate – will be split between €3.5bn for environmental activities and €1.9bn for climate action. The EU programme will contribute to making the necessary shift towards a clean, circular, energy-efficient, low-carbon and climate-resilient economy, to protect and improve the quality of the environment, and to halt and reverse biodiversity loss. With its contribution of 64% of its budget to the target for climate financing, it is one of the largest contributors to climate objectives across all EU programmes. The Commission will ensure that LIFE projects especially support member states with so far low participation. Improving the national contact points will hence contribute to a geographical balance across the EU. More information on LIFE projects.

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European Green Deal

Greenwashing of EU finance law sparks walk-out by experts

Catherine Feore

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Five environmental and consumer organizations are pulling out of an EU expert group in protest at the European Commission’s decision on 21 April to classify certain forestry practices and highly emitting types of biomass as sustainable investments. 

The Platform on Sustainable Finance advises the European Commission on the development of science-based technical screening criteria for sustainable investments. The Commission has selected 50 members and nine special observers based on their environmental, sustainable finance, or social/human rights expertise. The members include key EU institutions such as EIOPA, ESMA, EBA, EIB, in addition to NGOs, trade and business associations, academia and research institutes there are also a number of observers including: OECD, ESM and ECB.

The organizations claim that the new rules are not based on climate and environmental science and ignore the recommendations of the EU expert group on sustainable finance. 

Luca Bonaccorsi, director of sustainable finance at Transport & Environment, said: “The taxonomy law was supposed to be the gold standard of sustainable finance. But the result has been the greenwashing of dirty cargo ships, gas buses, and logging and burning trees. Environmentalists will not come back to the process until the Commission comes back to science.”

NGOs Transport & Environment, WWF European Policy Office, BirdLife Europe and Central Asia, consumer group BEUC, and eco-standards advocates ECOS are demanding discussions with the Commission to establish rules that stop the scientific basis of the EU taxonomy law being, to their minds, compromised further. 

director general - BEUC, eu consumer organisation

The groups say decisions to endorse harmful forestry and biomass projects completely discredits the green taxonomy.

The Commission also decided to classify as ‘sustainable’ cargo ships burning highly polluting ‘bunker’ fuel and buses running on fossil gas. It delayed a decision on fossil gas as an energy source until a later stage of the process.

The five organizations have suspended their participation in the expert group to avoid a “cover-up” of further greenwashing. They called on the expert group’s members and leading MEPs to join their protest. 

The Taxonomy Regulation determines which financial investments can be labelled environmentally sustainable. The actual list of environmentally sustainable activities is being drawn up by the Commission and is supposed to be based on recommendations by the expert group of NGOs, financial market companies and EU agencies.

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Sustainable Finance and EU Taxonomy: Commission takes further steps to channel money towards sustainable activities

EU Reporter Correspondent

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The European Commission has adopted an ambitious and comprehensive package of measures to help improve the flow of money towards sustainable activities across the European Union. By enabling investors to re-orient investments towards more sustainable technologies and businesses, today's measures will be instrumental in making Europe climate neutral by 2050. They will make the EU a global leader in setting standards for sustainable finance.

The package is comprised of:

  • The EU Taxonomy Climate Delegated Act aims to support sustainable investment by making it clearer which economic activities most contribute to meeting the EU's environmental objectives. The College of Commissioners today reached a political agreement on the text. The Delegated Act will be formally adopted at the end of May once translations are available in all EU languages. A Communication, also adopted by the College today, sets out the Commission's approach in more detail.
  • A proposal for a Corporate Sustainability Reporting Directive (CSRD). This proposal aims to improve the flow of sustainability information in the corporate world. It will make sustainability reporting by companies more consistent, so that financial firms, investors and the broader public can use comparable and reliable sustainability information.
  • Finally, six amending Delegated Acts on fiduciary duties, investment and insurance advice will ensure that financial firms, e.g. advisers, asset managers or insurers, include sustainability in their procedures and their investment advice to clients.

The European Green Deal is Europe's growth strategy that aims to improve the well-being and health of citizens, make Europe climate-neutral by 2050 and protect, conserve and enhance the EU's natural capital and biodiversity.

As part of that effort, companies need a comprehensive sustainability framework to change their business models accordingly. To ensure the transition in finance and prevent greenwashing, all elements of today's package will enhance the reliability and comparability of sustainability information. It will put the European financial sector at the heart of a sustainable and inclusive economic recovery from the COVID-19 pandemic and the longer-term sustainable economic development of Europe.

EU Taxonomy Climate Delegated Act

The EU Taxonomy is a robust, science-based transparency tool for companies and investors. It creates a common language that investors can use when investing in projects and economic activities that have a substantial positive impact on the climate and the environment. It will also introduce disclosure obligations on companies and financial market participants.

Today's Delegated Act, politically agreed today by the College of Commissioners, introduces the first set of technical screening criteria to define which activities contribute substantially to two of the environmental objectives under the Taxonomy Regulation: climate change adaptation[1] and climate change mitigation[2]. These criteria are based on scientific advice from the Technical Expert Group (TEG) on sustainable finance. It follows extensive feedback from stakeholders, as well as discussions with the European Parliament and Council. This Delegated Act would cover the economic activities of roughly 40% of listed companies, in sectors which are responsible for almost 80% of direct greenhouse gas emissions in Europe. It includes sectors such as energy, forestry, manufacturing, transport and buildings.

The EU Taxonomy Delegated Act is a living document, and will continue to evolve over time, in light of developments and technological progress. The criteria will be subject to regular review. This will ensure that new sectors and activities, including transitional and other enabling activities, can be added to the scope over time.

A new Corporate Sustainability Reporting Directive

Today's proposal revises and strengthens the existing rules introduced by the Non-Financial Reporting Directive (NFRD). It aims to create a set of rules that will – over time – bring sustainability reporting on a par with financial reporting. It will extend the EU's sustainability reporting requirements to all large companies and all listed companies. This means that nearly 50,000 companies in the EU will now need to follow detailed EU sustainability reporting standards, an increase from the 11,000 companies that are subject to the existing requirements. The Commission proposes the development of standards for large companies and separate, proportionate standards for SMEs, which non-listed SMEs can use voluntarily.

Overall, the proposal aims to ensure that companies report reliable and comparable sustainability information needed by investors and other stakeholders. It will ensure a consistent flow of sustainability information through the financial system. Companies will have to report on how sustainability issues, such as climate change, affects their business and the impact of their activities on people and the environment.

The proposal will also simplify the reporting process for companies. Many companies are currently under pressure to use an array of different sustainability reporting standards and frameworks. The proposed EU sustainability reporting standards should be a “one-stop-shop”, providing companies with a single solution that meets the information needs of investors and other stakeholders.  

Amendments to Delegated Acts on investment and insurance advice, fiduciary duties, and product oversight and governance

Today's six amendments encourage the financial system to support businesses on the path towards sustainability, as well as supporting existing sustainable businesses. They will also strengthen the EU's fight against greenwashing.

  • On investment and insurance advice: when an adviser assesses a client's suitability for an investment, they now need to discuss the client's sustainability preferences.
  • On fiduciary duties: today's amendments clarify the obligations of a financial firm when assessing its sustainability risks, such as the impact of floods on the value of investments.
  • On investment and insurance product oversight and governance: manufacturers of financial products and financial advisers will need to consider sustainability factors when designing their financial products.

An Economy that Works for People Executive Vice President Valdis Dombrovskis said: “Europe was an early leader in reforming the financial system to support investments for climate change. Today, we are taking a leap forward with the first-ever climate taxonomy which will help companies and investors to know whether their investments and activities are really green. This will be essential if we are to mobilize private investment in sustainable activities and make Europe climate-neutral by 2050. This is a ground-breaking step for which we have consulted far and wide. We left no stone unturned in seeking a balanced, science-based outcome. We are also proposing improved rules on sustainability reporting by companies. By developing European standards, we will build on and contribute to international initiatives.”

Mairead McGuinness, commissioner responsible for financial services, financial stability and the Capital Markets Union, said: ““The financial system plays a crucial role in the delivery of the EU Green Deal, and significant investments are required to green our economy. We need all companies to play their part, both those already advanced in greening their activities and those who need to do more to achieve sustainability. Today's new rules are a game changer in finance. We are stepping up our sustainable finance ambition to help make Europe the first climate-neutral continent by 2050. Now is the time to put words into action and invest in a sustainable way.”

Background and next steps

The EU has taken major steps over the past number of years to build a sustainable financial system that contributes to the transition towards a climate-neutral Europe. The EU Taxonomy Regulation, the Sustainable Finance Disclosure Regulation and the Benchmark Regulation form the foundation of the EU's work to increase transparency and provide tools for investors to identify sustainable investment opportunities.

Once formally adopted, the EU Taxonomy Climate Delegated Act will be scrutinised by the European Parliament and the Council (four months and extendable once by two additional months).

Regarding the CSRD Proposal, the Commission will engage in discussions with the European Parliament and Council.

The six amendments to Delegated Acts on investment and insurance advice, fiduciary duties, and product oversight and governance will be scrutinised by the European Parliament and the Council (three month periods and extendable once by three additional months) and are expected to apply as of October 2022.

More information

Commission Communication: EU Taxonomy – Corporate Sustainability Reporting, Sustainability Preferences and Fiduciary Duties    

EU Taxonomy delegated act 

Q&A - Taxonomy Climate Delegated Act and Amendments to Delegated Acts on fiduciary duties, investment and insurance advice

Q&A - Corporate Sustainability Reporting Directive proposal

Factsheet – the April 2021 sustainable finance package  

DG FISMA's website on sustainable finance

[1] An economic activity pursuing this objective should contribute substantially to reducing or preventing the adverse impact of the current or expected future climate, or the risks of such adverse impact, whether on that activity itself or on people, nature or assets.

[2] An economic activity pursuing this objective should contribute substantially to the stabilization of greenhouse gas emissions by avoiding or reducing them or by enhancing greenhouse gas removals. The economic activity should be consistent with the long-term temperature goal of the Paris Agreement.

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