To boost the shift towards eco-friendly investment the EU is introducing rules to define what qualifies as green or sustainable activities.
During the June plenary session, MEPs will vote on a framework that determines which activities can be considered sustainable. This would establish a common classification system across the EU, provide business and investors with clarity, and encourage an increase in private sector funding for the transition towards climate neutrality.
Parliament and Council negotiators reached a provisional agreement in December 2019. Parliament’s economic affairs and environment committees backed the agreement on 28 May.
Need for a common definition
Sustainable development requires the preservation of natural resources and respect for human and social rights. Climate action is an important aspect, as the need to limit and mitigate the effects of climate change becomes more and more urgent.
To achieve the goal, the EU must invest in new technologies. The European Commission estimates that Europe needs about €260 billion in extra investment every year over the next decade.
Public investment will not suffice and private investors will have to step in to finance climate-friendly projects. This requires clear criteria on what exactly is sustainable and eco-friendly; otherwise, some funding might be directed to “greenwashing” projects that claim to be green, but in reality are not.
Some EU countries have already started developing classification systems. Both companies seeking funding and investors interested in supporting sustainable projects would benefit from common EU standards.
Which economic activities qualify as sustainable
The taxonomy regulation sets six environmental objectives and states that an activity can be considered environmentally sustainable if it contributes to any of them without significantly harming any of the others.
The “do no harm” principle – which will be further defined by the European Commission – ensures that an economic activity causing more damage to the environment than creating benefits cannot be classified as sustainable. Environmentally sustainable activities should also respect human and labour rights.
The environmental objectives are:
- Climate change mitigation (avoiding/reducing greenhouse gas emissions or increasing greenhouse gas removal)
- Climate change adaptation (reducing or preventing adverse impact on current or expected future climate, or the risks of such adverse impact)
- Sustainable use and protection of water and marine resources
- Transition to a circular economy (focusing on the reuse and recycling of resources)
- Pollution prevention and control
- Protection and restoration of biodiversity and ecosystems
Financial market participants selling financial products and large companies with more than 500 employees will have to disclose how and to what extent their activities contribute to the environmental objectives. If they don’t claim to be sustainable, this should be clearly stated.
Once the rules have been adopted, the European Commission will develop technical criteria for each objective.
These should be ready by the end of 2020 for climate change mitigation and adaptation. The deadline is the end of 2021 for the other objectives. The rules will apply for each environmental objective one year after the technical criteria have been established.
Innovation and market reform needed to drive Japan’s clean energy transition
Japan will need to move quickly to make headway on the steep emissions reductions that are required to achieve its recently announced ambition of reaching carbon-neutrality by 2050, the International Energy Agency said today in its latest in-depth review of the country’s energy policies.
Nearly a decade after the 2011 earthquake and the resulting Fukushima nuclear accident, Japan has made real progress towards developing a more efficient, resilient and sustainable energy system. It has embarked on major reforms of its energy market and diversified its energy mix. Energy-related CO2 emissions have fallen continuously since their peak in 2013, thanks to the expansion of renewable energy, the restart of some nuclear power plants and energy efficiency gains. By 2018, Japan’s emissions had declined to a level last seen in 2009. Reliance on fossil fuels has also declined but remains high at nearly 90% of energy supply, making Japan among the most carbon-intensive economies of IEA members.
“Japan needs to accelerate the deployment of low-carbon technologies, remove regulatory barriers and increase competition in its energy markets if it is to reach carbon-neutrality by 2050. I welcome Japan’s new Green Growth Strategy that puts emphasis on these priorities. The IEA is committed to supporting the government in these vital efforts,” said Dr Fatih Birol, the IEA’s Executive Director, who launched the report today at an online event with Shin Hosaka, Commissioner of the Agency for Natural Resources and Energy at Japan’s Ministry for Economy, Trade and Industry.
The new IEA report on Japan’s policies analyses its energy challenges and recommends possible solutions to help it achieve a secure, affordable and sustainable energy future. It finds that Japan has made important strides in reforming its domestic electricity and natural gas markets. The increasing competition in these sectors is encouraging, but further reform is needed to achieve a true level playing field for all market participants. Additional regulatory reforms will be important to encourage investments in zero-emissions electricity and to improve power system flexibility. The IEA also calls for policy makers to ensure that the market regulator has sufficient powers and independence.
The report highlights that Japan has seen continuous growth in renewables in the power sector, but that grid constraints have hampered investment in new projects and posed challenges to security of supply. Creating a well-integrated national grid and taking steps to improve the operational efficiency of the electricity system will facilitate the integration of more renewables while enhancing system resilience. The recent cold snap in January led to very low reserve margins in Japan’s electricity systems. This event provided a reminder of the importance of regional interconnections and the need to have sufficient generation capacity.
The IEA welcomes the government’s recent announcement to phase out inefficient coal plants by 2030. This will further improve the already high efficiency of Japan’s thermal power fleet. Yet even efficient coal plants emit more CO2 than any other power generation source, and Japan ranks among the few IEA members that plan to add new coal capacity. Japan should tackle emissions from those new coal power plants by retrofitting, repurposing them as flexibility sources or able to use other fuels, or through other measures to help them avoid becoming stranded assets.
The IEA report highlights that Japan’s strong innovation and technology base can play a vital role in developing the technologies needed to achieve its 2050 energy and climate ambitions. “I applaud Japan for its leadership in advancing low-carbon hydrogen and carbon-recycling technologies, which will be crucial for decarbonising sectors where emissions are hardest to reduce, such as long-distance transport and heavy industry,” Dr Birol said.
Reducing the costs of these technologies will be essential to promote their deployment at scale. Stronger reliance on market-based instruments is an additional option for Japan to reduce emissions cost-effectively, foster innovation for low-carbon technologies and further increase Japan’s already high level of energy efficiency.
New EU energy labels applicable from 1 March 2021
To help EU consumers cut their energy bills and carbon footprint, a brand new version of the widely-recognised EU energy label will be applicable in all shops and online retailers from Monday, 1 March 2021. The new labels will initially apply to four product categories – fridges and freezers, dishwashers, washing machines, and television sets (and other external monitors). New labels for light bulbs and lamps with fixed light sources will follow on 1 September, and other products will follow in the coming years.
With more and more products achieving ratings as A+, A++ or A+++ according to the current scale, the most important change is to return to a simpler A-G scale. This scale is stricter and designed so that very few products are initially able to achieve the “A” rating, leaving space for more efficient products to be included in the future. The most energy efficient products currently on the market will typically now be labelled as “B”, “C” or “D”. A number of new elements will be included on the labels, including a QR link to an EU-wide database, which will allow consumers to find more details about the product. A number of ecodesign rules will also come into force from 1 March – notably on reparability and the need for manufacturers to keep spare parts available for a number of years after products are no longer on the market.
Commissioner for Energy, Kadri Simson, said: “The original energy label has been very successful, saving an average household in Europe several hundred euros per year and motivating companies to invest into research and development. Until the end of February, over 90% of products were labelled either A+, A++ or A+++. The new system will be clearer for consumers and ensure that businesses continue to innovate and offer even more efficient products. This also helps us to reduce our greenhouse gas emissions.”
As well as rescaling the energy efficiency class of the product concerned, the layout of the new label is different, with clearer and more modern icons. Like the previous labels, the rescaled labels show more than just the energy efficiency class. For a washing machine, for example, they show at a glance the number of water liters per cycle, the duration of a cycle, and the energy consumption, as measured for a standardised programme.
A further significant change is the introduction of a QR code on the top right of the new labels. By scanning the QR-code, consumers can find additional information about the product model, such as data relating to the dimensions, specific features or test results depending on the appliance. All appliances on the EU market have to be registered in a new EU-wide database – European Product Registry for Energy Labels (EPREL). This will further facilitate the comparison of similar products in the future.
In addition to the new energy labelling rules, there are corresponding new regulations on ecodesign that take effect on 1 March 2021. These relate notably to the updated minimum efficiency requirements and reinforce consumer rights to repair products and support the circular economy. Manufacturers or importers will now be obliged to make a range of essential parts (motors and motor brushes, pumps, shock absorbers and springs, washing drums, etc.) available to professional repairers for at least 7-10 years after the last unit of a model has been placed on the EU market. For end-users, too (i.e. consumers who are not professional repairers, but like to repair things themselves), manufacturers must make certain spare parts available for several years after a product is taken off the market – products such as doors or hinges and seals, which are suitable for DIY action. The maximum delivery time for all these pieces is 15 working days after ordering.
The EU energy label is a widely recognised feature on household products, like lightbulbs, television sets or washing machines, and has helped consumers make informed choices for more than 25 years. In an EU-wide (Eurobarometer) survey in 2019, 93% of consumers confirmed that they recognised the label and 79% confirmed that it had influenced their decision on what product to buy. Together with harmonised minimum performance requirements (known as ecodesign), EU energy labelling rules are estimated to cut consumer expenditure by tens of billions of euros every year, whilst generating multiple other benefits for the environment and for manufacturers and retailers.
The new categories for the rescaled label were agreed after a rigorous and fully transparent consultation process, with the close involvement of stakeholders and Member States at all stages, scrutiny by the Council and the European Parliament and with sufficient involvement of and notice provided to manufacturers. As required by the framework regulation, other product groups will be “rescaled” in the coming years – including tumble dryers, local space heaters, air conditioners, cooking appliances, ventilation units, professional refrigeration cabinets, space and water heaters, and solid fuel boilers.
The switch to the rescaled labels coincides with the entry into force of two horizontal (“omnibus”) regulations recently adopted to correct or clarify a range of issues identified in the concerned energy labelling and ecodesign regulations as originally adopted in 2019.
E-Boda-Bodas: a promising day for electric transportation in East Africa
Forty-nine motorcycles made little noise but raised much interest in Nairobi’s Karura Forest this morning, as the UN Environment Programme (UNEP) launched a pilot electric bikes project in the presence of Kenyan government officials and business leaders. Following the pilot phase in four locations in Kenya, the project is expected to expand in an effort to reduce air pollution, improve national energy security and create green jobs.
“Kenya is importing more motorcycles than cars, doubling its fleet every 7-8 years. These are generally inefficient and poorly maintained polluting motorcycles,” said Joyce Msuya, UNEP Deputy Executive Director. “Kenya’s electricity is very green in 2019 with more than 80% was generated by hydro, solar, geothermal, and wind. Shifting to electric bikes in Kenya, Rwanda, Uganda and elsewhere will reduce costs, air pollution and Greenhouse Gas Emissions, as well as create jobs.”
“The average motorcycle is estimated to be 10 times more polluting per mile than a passenger car, light truck or SUV. Hydrocarbons are dangerous to human health,” said Peter Anyang’ Nyong’o, Governor of Kisumu County. “Electric motorcycles not only mitigate against this health hazard but also help reduce noise pollution that the rampant increase of petroleum powered motorbikes currently causes in our cities.”
The pilot aims to help policy makers assess the barriers in uptake of the much-needed technological shift towards electric bikes, and to demonstrate that the shift is feasible and within reach. In Kenya, the number of newly registered motorcycles, commonly used as taxis (boda-boda), was estimated in 2018 at 1.5 million and will likely grow over five million by 2030. Though developing countries have the fastest growing fleets of bikes, most lack vehicle emissions standards or programmes and incentives to promote zero emission vehicles.
The pilot test launched today in Kenya is based on a study implemented by the Energy and Petroleum Regulatory Authority, the University of Nairobi, and Sustainable Transport Africa. The pilot includes a host of local partners, including ministries, and national and sub-national authorities, and uses bikes donated by Shenzhen Shenling Car Company Limited (TAILG). It will last 6-12 months and is replicated in Uganda, Ethiopia, the Philippines, Thailand and Viet Nam. The overarching project, “Integrating Electric 2&3 Wheelers into Existing Urban Transport Modes in Developing and Transitional Countries” is supported by UNEP with funding from the International Climate Initiative (IKI) of the German Ministry for the Environment.
John Chege, infrastructure coordinator from Friends of Karura Forest said, “In my restoration work, the bike will help me move swiftly through the vast forest of over 1000 hectares in a very short period. At first, I was nervous about having to charge it, but now I got used to it. Since it is fast and emits no noise and air pollution like the diesel motor, they allow us to provide better security in the forest and tackle one of Nairobi’s worst environmental problems.”
Two- and three-wheelers are a central transport mode in many low and middle-income countries, including African ones, quickly rising in numbers to a 50 percent increase by 2050. Highly polluting two- and three-wheelers can account for the same amount of emissions as a passenger car. A rapid global shift to electric motorcycles can result in saving 11 billion tons of co2 and about USD 350 billion by 2050 (more than double the annual energy-related emissions in the USA and about 14 times the 2019/2020 budget of Kenya).
A global leapfrog to electric vehicles, already underway in countries like Norway and China, is essential to curb carbon dioxide emissions. Transportation contributes approximately one-quarter of all energy related CO2 emissions. By 2050 it is likely to reach one-third, when the global number of passenger cars is projected to more than double. This growth is expected mostly in low-income countries, where there are rarely any vehicle emissions standards.
Scaling up the transition to electric mobility will require investments in battery charging infrastructure. Kenya’s electric power generation capacity is sufficient to support the charging infrastructure. However, while demand for motorcycles is high, particularly in rural areas, distribution networks are inadequate. However, this challenge may be tackled by using solar energy, setting up charging stations, consulting boda-boda operators and using lithium ion batteries.
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