EU News

EU proposed a hydrogen revolution

The European Commission presented a Hydrogen Strategy on 8th July 2020. It sets, among other things, that from 2025 to 2030 hydrogen needs to become an intrinsic part of our integrated energy system with the production of up to ten million tonnes of renewable hydrogen in the EU. The strategy highlights that it is not only about the energy system, but that “the whole industry can benefit from hydrogen”. At the same time, it is important to synchronise the demand and supply and ensure that there is an appropriate infrastructure. If nobody wants to use it, those who invested in its production will have no customers. The reasons for hydrogen deployment and its costs were the subject of an online debate co-organised by CEBRE together with other partners on 13th October 2020.

In line with the EU strategy, the Czech Republic is preparing its own national Hydrogen strategy. “The Czech Hydrogen strategy should grasp hydrogen as the fuel of the future, because it is ecological, highly efficient and is able to be stored”, said Petr Mervart from the Ministry of Industry and Trade of the Czech Republic, who is responsible for drafting the text. However, he stressed that the input costs for its production will be very high at the beginning.

Czechia has an industrial tradition and the upgrading of gas infrastructures offers a great opportunity. “If we are able to supply these components, we will be able to supply them everywhere. Industry has a tradition in mechanical engineering and should take this opportunity”, highlighted MEP Mikuláš Peksa (CZ, Greens/EFA). “We should export valves and import hydrogen”, explained Peksa.

Aleš Doucek from the Czech Hydrogen Technology Platform (HYTEP) agreed with starting the shift of energy and mobility from fossil fuels to green fuels. However, he considers the idea to import hydrogen to the Czech Republic from abroad as awkward. He explained that the cost of hydrogen transportation would increase its final price. In the debate with participants, it has been stressed that it would make more sense to start to deploy hydrogen in small areas that would serve as pilots. Pilot projects in regions could reveal how to make the most of this opportunity.

EU recovery plan should help to set new economic growth period

After the spread of the pandemic, the European Commission presented a plan to facilitate the recovery of the European economy after the coronavirus crisis. The plan includes an increase in cohesion funds, a new instrument to support recovery and resilience, which will finance assistance to the Member States most affected by the crisis, and a strengthening of instruments to mobilise private investment and investment in strategic sectors. The funding comes from the EU’s multiannual financial framework for 2021-2027. In a debate organised by the Representation of the European Commission in the Czech Republic together with CEBRE and Confederation of Employers ́ and Entrepreneurs ́ Associations of the CR, representatives of the Commission, The Office of the Government of the Czech Republic, Czech entrepreneurs and trade unions discussed how the European recovery plan could help the Czech Republic.

The speakers agreed that investments in infrastructure, especially in digitisation and transport, but also in green technologies, will be important for the recovery of the domestic economy. The May recommendations of the Commission for the Czech Republic and the National Investment Plan should be a good guide for the use of the EU Recovery Fund. Investment priorities should also be reflected in the operational programs for the forthcoming Cohesion Fund programming period. Above all, it is necessary to identify priority projects at an advanced stage of readiness so that the investment impetus in the economy can come as soon as possible. At the same time, administrative burdens, which are one of the key obstacles to development, need to be removed. According to the Czech Chamber of Commerce, it would help entrepreneurs if some ambitious goals were postponed, as entrepreneurs will have to deal with the consequences of the crisis in the short term, even though they have expected to release investments in green technologies this year.

According to Lukáš Kovanda from the Government’s National Economic Council, the Czech Republic should focus on strengthening the Czech-Moravian Guarantee and Development Bank so that it can provide repayable assistance to companies in sufficient volume. European funds could also be used to kick-start financial instruments.

The Czech Republic is concerned that a change in the allocation criteria for drawing cohesion funds, e.g. in terms of taking into account the decline in GDP or employment after the COVID crisis, will be disadvantageous for the Czech Republic. On the other hand, the Czech government has an appetite to use the SURE tool to support short-time work scheme, thus protect jobs and self-employed against the risk of unemployment and loss of income.

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New Cybersecurity Strategy presented

On the 16th of December 2020, the European Commission presented a new EU Cybersecurity Strategy, which should strengthen collective protection against cyber threats and provide credible and reliable digital services and tools. The strategy focuses on several key areas, including increasing resilience, technological sovereignty and leadership, building operational capacity for prevention, deterrence and response, and developing a global and open cyberspace to help intensify cooperation. To support these goals, the EU will earmark substantial funding from various programmes, whether from Digital Europe, Horizon Europe or the EU Recovery Plan, which should total up to € 4.5 billion. One of the main tasks of the strategy is also to ensure the secure implementation of 5G networks.

Digital Services Act focuses on online platforms

In mid-December 2020, the European Commission issued the Digital Services Act and the Digital Markets Act, which should significantly change the rules for all digital services, including social media, online marketplaces and other online platforms. The Digital Services Act amends the e-commerce directive, which was adopted 20 years ago and does not reflect the current market situation. Digital service providers will have to respect new obligations and measures, in particular regarding the elimination of illegal goods, services and content, user protection, transparency, advertising and algorithms for recommending content, or traceability of users in marketplaces. The Digital Markets Act will focus on the negative consequences of certain behaviour of platforms, which have the role of gatekeepers and can set their own rules due to their size and strength.

Commission introduced new legal framework for batteries

The European Commission proposed modernizing European legislation on batteries to meet the current objectives of the EU’s circular economy strategy and the Green Deal for Europe. The aim is for batteries on the European market to be high-performance, safe throughout their life cycle and sustainable in production. The Commission therefore proposes a set of mandatory requirements concerning, for example, restrictions on the use of hazardous substances, the minimum content of recycled material, the carbon footprint of production, their performance or resilience. The measures cover the entire life cycle of batteries, from production to collection and recycling. In addition, the proposal contains a framework for easier use of used batteries from electric vehicles.

The Transparency Register will basically become mandatory

The representatives of the Council, the European Parliament and the European Commission agreed on a compromise on the revision of the rules of the Transparency Register that contains information about EU lobbyists. The new rules introduce the principle of conditionality, which makes registration for interest representatives in the register basically mandatory, if they want to carry out certain activities.

New action plan to support the audio-visual and media sector

The European Commission issued an action plan to support the recovery and transformation of the media and audio-visual sector, focusing on 3 main areas and proposing 10 concrete actions. Key areas include recovery, support for ecological and digital transformation, and overall strengthening of the sector. The Commission will support the recovery by improving access to EU funding, investing in the audio-visual sector under the new MEDIA INVEST initiative, which is expected to provide up to € 400 million over the next 7 years, and NEWS initiative, which will provide further financial support through grants and guarantees with a special focus on local media. In the field of digitization, the Commission wants to support the creation of European media data spaces and a European coalition for virtual and augmented reality. In terms of empowerment, the Commission wants to promote dialogue with the audio-visual sector, develop young talents and strengthen cooperation between regulators.

Let ́s talk numbers!

New financial instrument to support artificial intelligence

At the beginning of December 2020, the European Investment Bank and the European Investment Fund launched a new financial instrument designed to support European artificial intelligence companies. The tool will have a budget of € 150 million and will focus on the development of companies in the initial phase or in the growth phase. It will target companies involved in the development of artificial intelligence or its breakthrough application, as well as technologies such as blockchain, the Internet of Things or robotics. It is estimated that the instrument should help 20-30 small and mediumsized enterprises.

EU leaders agreed on Multiannual Financial Framework 2021–2027

At the European Council Summit that took place in December 2020, EU leaders managed to find an agreement on the Multiannual Financial Framework for the period 2021-2027 and the Next Generation EU recovery instrument. The total budget will be € 1,800 billion, with € 750 billion earmarked for the recovery instrument. For some time, the agreement was blocked by Poland and Hungary due to the condition of respect for the rule of law. If one of the states violated this condition, it would not be able to draw funds from the budget. Finally, it was agreed that the mechanism would apply retroactively from 1st January 2021, but the Commission would have to wait for a ruling from the EU Court of Justice before initiating proceedings with a Member State.

EU industrial production grew by almost 2% in October

The European statistical office Eurostat informed that industrial production increased by 2.1% in the euro area and 1.9% in the EU as a whole in October of this year compared to the previous month. The best results were reported from Belgium (+6.9%), Germany (+3.4%) and Slovenia (+3.1%), while the largest declines were seen in Denmark (-5.8%), Greece (-3.0%) and Lithuania (-1.7%). Industrial production in the Czech Republic grew by 3.0% in the given period. Year-on-year comparison with October 2019 shows that industrial production fell by 3.8% in the euro area and 3.1% in the EU as a whole.

European Council agrees to increase climate targets by 2030

The European Council reaffirmed its agreement on a plan to reduce greenhouse gas emissions by at least 55% from 1990 levels by 2030. EU leaders also called on the Commission to reflect this goal in a draft European climate law and to adopt it swiftly. According to the Commission, this agreement is an important step towards meeting the 2050 goal of climate neutrality. In addition, the Council called for strengthening of the EU carbon trading system, for a proposal on how energy-intensive industries can apply climate-neutral technologies while maintaining their competitiveness, and for a draft of a Carbon Border Adjustment mechanism.

Agreement on Invest EU programme

The representatives of the Council and the European Parliament agreed on the form of a regulation concerning the InvestEU programme. It will focus on 4 main areas, including sustainable infrastructure (€ 9.9 billion), research, innovation and digitisation (€ 6.6 billion), small and medium-sized enterprises (€ 6.9 billion) and social investment and skills (€ 2.8 billion). At least 30% of the InvestEU budget will be dedicated to EU climate goals and the program will also include a dedicated Just Transition Scheme.

In the world!

EU wants a close partnership with the US

The European Commission presented a proposal for a new transatlantic agenda to promote EU-US cooperation. According to the Commission, Joe Biden’s victory in the presidential election offers a unique opportunity to strengthen the partnership between the two entities based on common goals and values. The EU should work with the US in four main areas, namely a common response to the coronavirus pandemic; environmental protection; technology, trade and standards; and, last but not least, the promotion of democracy and international law. The cooperation should be formally launched at the EU-US summit scheduled for the first half of 2021.

Council endorsed agreement with China on geographical indications

The Council gave a final green light on an agreement on the protection of geographical indications with China. The agreement signed between the EU and China in September 2020 ensures that 100 traditional European products will be protected on the Chinese market against counterfeiting and 100 Chinese products will be protected on the European market. This is the first bilateral agreement between the two of this type. Four years after the entry into force of the agreement, the scope of the agreement will be extended by a further 175 geographical indications, with the possibility of adding more in the following years.

New system to complain about violations of free trade agreements

The European Commission launched a new system that allows Member States, businesses, business associations, civil society organizations and EU citizens to report barriers to entry to countries with which the EU has free trade agreements. Two forms will be available, one for breaches of market access and the other for breaches of sustainable development commitments. The complaint will need to include an estimate of the economic impact and, after examination by the Commission, the entity will be informed whether the Commission would take corrective actions in this regard. If so, the answer will contain the individual steps that should lead to the correction of the situation and the time schedule.

Trade with Canada grew by almost a quarter in 2019

The European Commission recently issued its fourth annual report on the implementation of free trade agreements covering the year 2019, which shows that despite tensions on the global stage, the EU continued trading with third countries thanks to its bilateral agreements. Trade with the 65 partners with which the EU has agreements increased by 3.4% last year, while overall EU exports grew by 2.5%. The most significant increase in mutual trade was recorded in the agreement with Canada (by almost 25%) and Japan (by 6%). Trade agreements cover a third of the EU’s total trade with third countries.

EU introduced tariffs on US exports related to Boeing case

The European Commission imposed $ 4 billion worth of tariffs on US exports to Europe in connection with the Boeing case of unlawful state aid. The United States is already applying similar measures to European exports to the US in connection with the unlawful support of Airbus, and although the European Commission has sought to find a solution with the US to mutually eliminate tariffs, this option did not happen due to insufficient progress on the US side. Tariffs apply to aircrafts (15%), agricultural and industrial products (25%).