Decarbonisation timeline: The road to 2050

Summary: Italy hastransposed three key EU directives into its national law. They relate to the energy performance of buildings, energy efficiency and Phase IV of the EuropeanEmissions Trading System (EU-ETS) which runs from 2021 to 2030.

Specifically:

·       Legislative Decree no. 48 of 10 June 2020,pursuant to the delegation contained in article 23 of the EuropeanDelegation Act 2018, Law no. 117/2019, has transposedinto Italian law (EU) Directive 2018/844 regarding the Energyperformance of buildings (EPBD - Energy Performance of Buildings Directive).

·       Legislative Decree no. 73 of 14 July 2020,pursuant to the delegation contained in the aforementioned Law no. 117/2019,gave effect to EU Directive 2018/2002 on energy efficiency (EED Directive).Following the EED Directive the principle of 'energy efficiencyfirst' has now officially been established in Italy. According to this,before making energy policy planning and investment decisions, the authority must assesswhether there are alternative solutions with a better energyefficiency that are technically, economically,environmentally, and cost-efficiently valid  that can stillachieve the political objectives. 

·      Legislative Decree no. 47 of 9 June 2020transposes (EU) Directive 2018/410, which establishes the operation of theEuropean Emissions Trading System (EU-ETS) in Phase IV (2021-2030).

Most relevant to: All

More information:  Clean energy for all Europeans package

‍

Summary: COP26, the UN's Climate Change Conference 2021 hosted by the United Kingdom in partnership with Italy will be taking place in Glasgow on 1 – 11 November 2021.

Most relevant to: All

More info: UNFCCC website

UK Government website

Summary: The UK government will be introducing a new Green Gas Support Scheme (GGCS) to increase the proportion of green gas in the grid, through support for biomethane injection. This will replace the Renewable Heat Incentive Scheme and be funded by a new Green Gas Levy on all licensed gas suppliers with levy costs split across suppliers according to the number of meter points they service with each meter point incurring the same charge regardless of gas consumption or meter type. The GGSS is expected to launch on 30 November 2021 with levy payments from gas suppliers commencing on 1 April 2022.

Most relevant to: Biomethane sector, Gas suppliers

More info: Draft Green Gas Support Scheme Regulations 2021

‍

Summary: The UK government has stated that occupational pensions schemes will be mandated to make disclosures in line with the recommendations published by the Task Force on Climate-related Financial Disclosure. The new requirements will be introduced from 2021 for occupational schemes >£5bn, and from 2022 for occupational pension schemes with assets of between £1bn - £5bn.

Most relevant to: UK pension schemes

More info: Government response and consultation: Taking action on climate risk: improving governance and reporting by occupational pension schemes

Taking action on climate risk: improving governance and reporting by occupational pension schemes

‍

Summary: The UK government's Ecodesign for Energy-Related Products and Energy Information Regulations 2021 came into force in the most part on 1 July 2021.

The regulations mirror EU proposals, which means that, in the short term, the UK has maintained a consistent regulatory regime with the EU. However, the EU is progressing a working plan to revamp the EU Ecodesign Directive and Energy Labelling Regulations between 2020 and 2024, which will likely incorporate the EU's circular economy action plan, and so rules may still diverge.

The new rules which apply to white goods (refrigeration, dishwashers, washing machines etc) and some other industrial goods introduce:

- A legal right to repair: for the first time, manufacturers will be under a legal obligation to make spare parts and maintenance information available to consumers in order to facilitate repairs. This is hoped to significantly expand the lifespan of products and promote a culture of reuse.

- Higher energy efficiency standards: certain electric products will have to meet higher minimum energy-efficiency requirements.

- New energy labels: Energy efficiency labels will be displayed on a new scale from A to G. This scale has been simplified from the old regime in which appliances were classified as A+, A++ or A+++. The new scale is intended to be more consumer friendly and encourage purchases of energy-efficient goods.

‍Most relevant to: All

More information: UK Department for Business, Energy and Industrial Strategy response to consultation

The Ecodesign for Energy-Related Products and Energy Information Regulations 2021

Insights: UK poised to require "right to repair" information for consumers (15 April 2021)

Summary: All suppliers bidding for UK government contracts with a value above £5 million per annum (andto which the Public Contracts Regulations 2015 apply) must have a carbon reduction plan confirming their commitment to achieving net zero by 2050.

Most relevant to: Public sector contractors

More information: Procurement policy note

Summary: In December 2020, the CMA launched a market study into the electric vehicle charging sector in the UK. Considering 2 broad themes:

• how to develop a competitive sector while also attracting private investment to help the sector grow

• how to ensure people using electric vehicle chargepoints have confidence that they can get the best out of the service

The CMA will publish a market study report in the summer of 2021 (ahead of the statutory deadline of 1 December 2021).

Most relevant to: EV sector

More info: CMA electric vehicle charging market study case page

Insight: Driving towards a greener future? CMA takes stock of electric vehicle charging in the UK (17 December 2020)

‍

Summary: The UK government is proposing to amend the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 to improve the energy performance of private rented sector (PRS) homes. The government's proposals, which include raising minimum EPC standards to Band C, were the subject of a consultation which closed on 8 January 2020. The government's response to the consultation is targeted for Spring 2021 and amending regulations are expected to be laid in Autumn 2021, though this timeline may be subject to delays as a result of the Covid-19 pandemic.    

Most relevant to: PRS landlords, energy efficiency sector

More info: Government consultation: Improving the energy performance of privately rented homes

‍

Summary: The EU's Circular Economy Action Plan was adopted in March 2020 and many of its 35 actions are due to be implemented in 2021/22

The Commission's flagship policy is to create a right to repair for consumers as part of its efforts to reduce tech-related waste and prevent consumers simply throwing away broken devices. In practice this is likely to mean that manufacturers are required to give consumers access to spare parts and repair manuals.

Other measures aimed at minimising waste include:

Information requirements

• Additional information will need to be provided to consumers about product lifespans.

• Companies will be legally required to substantiate any environmental claims.

Right to software updates

• Consumers will be given a right to update obsolete software, a position which has been traditionally avoided by businesses due to compatibility and security concerns. This could have an impact on the support and software design obligations on businesses.

Ecodesign

• The Commission also plans to require mobile phone, tablet and laptop manufacturers to meet "ecodesign" standards, which will ensure that devices are "designed for energy efficiency and durability, reparability, upgradability, maintenance, reuse and recycling".

• Packaging rules will be reinforced across industries to reduce overpacking and packaging waste and pollution.

Harmonised Chargers

• The Circular Electronics Initiative intends to introduce regulatory measures to harmonise charging connectors that are used for mobile phones and similar devices by introducing a "common charger". The EU has already consulted on this, with mixed responses from industry.

WEEE and REACH Directives

• The EU is exploring options for a "take-back scheme" to return or sell back old electronics and batteries in order to improve the collection and treatment of waste electrical and electronic equipment.

• Rules on hazardous substances in electrical and electronic equipment will be also be reviewed.

Plastics Policies

• Alongside the implementation of the Single Use Plastic Products Directive, the Commission will be producing a policy framework on the sourcing of bio-based plastics and the use of biodegradable and compostable plastics.

Other similar strategies are being developed by the EU to cover textiles, sustainable building and construction, and nutrient management in farming and food services.

Most relevant: All

More information: European Commission Circular economy action plan https://ec.europa.eu/environment/strategy/circular-economy-action-plan_en

Insights: EU proposes to give consumers a "right to repair" (16 April 2020)

‍

Summary: SFDR imposes sustainability-related transparency and disclosure requirements on financial market participants and financial advisers. In scope businesses will need to consider how sustainability risks are incorporated into their investment decision-making process and how the remuneration of individuals is consistent with sustainability issues. They will have to report information to the public at large on their websites and also to their investors (both prior to the investment and then on an ongoing periodic basis). The majority of the obligations apply from March 2021 and periodic reporting requirements apply from January 2022.

Most relevant to: Financial market participants and financial advisers

More info: Disclosure Regulation

‍

Thisdraft law contains 27 articles and is divided into five headings:

-      Makeusers aware of the environmental impact of digital technology

-      Limitthe renewal of terminals

-      Promotethe emergence and development of environmentally friendly uses of digitaltechnology

-      Promoteenergy-efficient data center and network

-      Promotea responsible digital strategy in the territories

Thus,the purpose of this new law is to inform and educate the users but also changethe use of consumers and professionals then regulate the structures andstakeholders of this key sector.

Atthe moment, the key measures are:

-      Theaddition of awareness to the environmental impact of digital tools as well as adigital sobriety component to the training obligations

-      Theobligations of information to the consumers on various issues: key features ofsoftware update, the existence of reconditioned offers, alerts and advice foruse or for maintenance, servicing or cleaning operations

-      Theprohibition of software obsolescence: prohibition of any technique, includingsoftware, to restrict the consumer's freedom to install software or operatingsystems of his choice on his terminal

-      Theconsideration of the reparability index in the public procurement of digitalproducts

-      Theintroduction of a specific rate of private copy levies on reconditioned objects

-      Thecreation of a general reference framework for the eco-design of digitalservices

-      Theelectronic communications operators shall publish key indicators on theirpolicies to reduce their environmental footprint

-      Themunicipalities with more than 50,000 residents shall define a responsibledigital strategy

Pleasenote that it could evolve after the new reading of the French Senate as thebinding aspect has been broadly reduced by the French National Assembly but canbe reinforced again.

Indeed,for the time being, the draft law is still in the process of being adopted bythe Parliament (a first version has been adopted by the Senate then theNational Assembly, but it will be in the next weeks in second reading).

Mostrelevant to:"Energy sector", "Retail and Consumer”, “Technology, Mediaand Communications”, “Real Estate and Infrastructure”

Moreinformation:

Assemblée nationale: Proposition de loi visant à réduire l'empreinte environnementale du numérique en France
/ PDF

‍

Summary: Any plastic packaging produced in or imported into the UK with less than 30% recycled content will be subject to a tax at an initial rate of £200 per tonne. There is a de minimis threshold before the tax will apply – if an operator produces/imports less than ten tonnes of plastic packaging within a 12-month period, they will not be liable to pay the tax.

Most relevant to: Manufacturers

More info: UK government policy paper

Summary: Inspired by the work of the citizens' convention, this draft law (Projet de loi portant lutte contre le dérèglement climatique etrenforcement de la résilience face à seseffets) contains 69 articles and is divided into six headings (consuming, producing and working, traveling, housing, eating, strengthening judicial protection of the environment).

With this new law, the Government wishes to accelerate France's ecological transition to a carbon-neutral society and to convince French people to consume, produce, work and travel in a more ecological way.

The key measures are:

-       the creation of a "CO2 score" labelling to show the impact on the climate of the goods and services (article 1);

-       the prohibition of fossil fuel advertising and the regulation of advertising (articles 4 and 5);

-       the strengthening of mayors’ power to control advertisements inside shop windows (articles 6 and 7);

-       the creation of low-emission zones in France's large cities (article27);

-       the prohibition of the sale of the most polluting vehicles in 2030(article 25);

-       the prohibition of flights when an alternative by train exists for a journey of less than 2h30 (article 36);

-       the obligation for 100% of domestic flights to be subject to compensation (article 38);

-       the division by two of the rate of soil artificialisation (articles 48and 49);

-       the prohibition of the rental of poorly insulated house i.e. “passoiresthermiques” (article 42);

-       the introduction of vegetarian choices every day in voluntary localcommunities (article 59);

-       the introduction of meals made up of 50% sustainable products (including20% organic products) in all collective catering services (article 60);

-       the creation of the criminal offence of “ecocide” (article 68).

The final vote of the draft law is planned for September 2021.

‍

Most relevant to: All

More info: Climate Change News

French National Assembly Legislation Tracker (in French)

French National Assembly Text of Law (in French)

Summary: The UK government has stated that large companies and LLPs (those with more than 500 employees and either £500m in annual turnover or which have securities traded in the UK) will have to disclose climate risks in their annual reports in line with Taskforce on Climate-related Financial Disclosures recommendations

This is step is part of the roadmap published by the UK's Joint Government-Regulator TCFD Taskforce with similar requirements being introduced for other companies by 2025.

Most relevant to: UK companies and LLPs

More info:

Government consultation: Mandatory climate-related financial disclosures by publicly quoted companies, large private companies and LLPs

UK's Joint Government-Regulator TFCD Taskforce

‍TFCD

Insights: Mandatory climate reporting among new green finance measures (11 November 2020)

Summary: The UK governmen has committed to deploy two carbon capture clusters by mid-2020s. The government hopes to make final investment decisions for these clusters in the first half of 2022.

Most relevant to: Energy sector participants

More info: Government response to CCUS consultation

Summary: The UK government is targeting 1GW of low carbon production by 2025. The UK is taking a "twin track" approach to hydrogen production and sees both electrolytic "green" hydrogen and carbon capture, utilisation and storage (CCUS) enabled "blue" hydrogen playing an important part in reaching hydrogen and net-zero targets.

Most relevant to: Energy, transport and industrial sectors

More info: UK Hydrogen Strategy(August 2021)

Insights: The UK's Hydrogen Strategy signals next steps on the road to decarbonisation

Summary: This legislative proposal by the European Commission establishes a carbon border adjustment mechanism ('CBAM') for addressing greenhouse gas emissions embedded in the goods referred to in Annex I, upon their importation into the customs territory of the EU, in order to prevent the risk of carbon leakage. The CBAM complements the EU emission allowance trading system by applying an equivalent set of rules to imports.

Most relevant to: all

‍More info: Proposal for a Regulation establishing a carbon border adjustment mechanism

‍

Summary: Every decade the EU Member States need to establish and submit to the European Commission an integrated national energy and climate plan (NECP) for the next decade. The NECPs need to cover the following areas:

• energy efficiency

• renewables

• greenhouse gas emissions reductions

• interconnections

• research and innovation

Most relevant to: all

More info: NECPs

‍

Summary: The UK government is targeting 5GW of low carbon hydrogen production by 2030. It expects that the first movers in the early 2020s are likely to be relatively small electrolytic hydrogen projects (up to 20MW) with production and end use closely linked, for example at a transport depot or industrial site. By the mid-2020s the government expects to see larger (100MW) electrolytic projects and the first CCUS-enabled hydrogen production facilities based in industrial clusters. By the end of the decade, the government expects multiple large CCUS-enabled (500MW plus) production facilities across the UK.

Most relevant to: Energy, transport and industrial sectors

More info: UK Hydrogen Strategy(August 2021)

Insights: The UK's Hydrogen Strategy signals next steps on the road to decarbonisation

Summary: The Ocean Risk and Resilience Action Alliance (ORRAA) has set a target to funnel $500 million of investment into coastal natural capital by 2030. The finance is to be used to support nature-based solutions to the climate crisis by enhancing and restoring marine and coastal ecosystems - including reefs,mangroves, seagrass beds and saltmarshes.

The UK signed up asa full member of ORRAA in 2021. Italy, France, Germany, the USA and the EU each support the initiative as observers.

Most relevant to: All

More information: Ocean Risk Alliance

Summary: Countries who have signed the Global MethanePledge have committed to reduce global methane emissions by at least 30% from 2020levels by 2030.

Most relevant to: All

More info: European Commission press release

Summary: The G7 Countrieshave committed to the global "30x30" initiative to conserve orprotect at least 30% of the world's land and at least 30% of the world's oceanby 2030, as well as committing to 30x30 targets nationally.

Most relevant to: All

More information: UK government press release

Summary: UK government target of a 78% reduction in GHG emissions from 1990levels. This emissions reduction target includes emissions from the UK's share of international shipping and aviation.

Most relevant to: All

More information: UK government press release

Summary: The UK government has committed to phase out the installation of new gas boilers from 2035, with the government looking to alternative, greener forms of heating (including heat pumps, heat networks and potentially hydrogen). There are no plans to mandate the removal of existing gas boilers.

The government intends to boost the heat pump market using a £450 million boiler upgrade scheme in the hope that, by 2030, heat pumps will be no more expensive to buy and run than gas boilers.

Most relevant to: Commercial landlords, property developers

More information: Heat and Buildings Strategy

‍

Summary: In its 2021 Net Zero Strategy, the government pledged to fully decarbonise the UK's power system by 2035 (subject to security of supply).

The government intends to achieve this through reliance on renewable and nuclear energy generation, which is underpinned by flexibility including storage, gas with CCS and hydrogen.

‍

Most relevant to: Energy sector participants

More: Net Zero Strategy

‍

Summary: This legislative proposal by the European Commission sets out a binding objective of climate neutrality in the EU land use, forestry and agriculture sector at the latest by 2050. The EU shall aim to achieve negative emissions thereafter.

Most relevant to: all

More info: Proposal for the amendment of the LULUCF Regulation

‍

Summary: Every decade the EU Member States need to establish and submit to the European Commission an integrated national energy and climate plan (NECP) for the next decade. The NECPs need to cover the following areas:

• energy efficiency

• renewables

• greenhouse gas emissions reductions

• interconnections

• research and innovation

Most relevant to: all

More info: NECPs

Summary: This Regulation sets out a binding objective of climate neutrality in the European Union at the latest by 2050. The EU shall aim to achieve negative emissions thereafter.

Most relevant to: all

More info: European Climate Law