Assessing 2023 in EU politics – a half-year recap
Racing to finalise climate and environment files before next year’s elections
By Pascal Koenig – Senior Account Manager
Two years after the European Commission published its sprawling Fit for 55 package, the first have of this year saw many of the Commission’s legislative proposals being concluded by the European Parliament and the Swedish Council Presidency.
Work on climate and environment issues has been both intensive and progressive, as the EU’s co-legislators finalised their negotiations on key files such as the end of the internal in combustion engine in passenger cars by 2035, while also creating the necessary infrastructure for enabling the shift to zero- and low-emissions mobility through the Alternative Fuels Infrastructure Regulation (AFIR). Work was also initiated on decarbonising heavy-goods vehicles, and finalised in the aviation and maritime sectors through an extension of the EU’s Emission’s Trading Scheme.
Meanwhile, following controversy on its scope and potential impact on relationships with global trading partners such as the United States and China, the EU’s so-called Carbon Boarder Adjustment Mechanism – i.e., the EU’s new carbon tariff – was signed into law in May. The Mechanism, due to be fully implemented by 1 January 2026, will require EU importers to pay the difference in the price of carbon emissions between domestically produced products and equivalents imported from non-EU countries for a broad range of products (cement, electricity, fertilisers, iron and steel, aluminium, and hydrogen).
At the same time, with 12 months left until the European Parliament elections in June 2024 and the subsequent election of a new European Commission, MEPs and the Swedish Presidency of the Council kicked off work on a range of other files important to reducing the energy needs of European businesses and households. Chiefly among these, on a macro-level, are the plans to revise the functioning of the EU’s Energy Market, aimed at further increasing the share of renewable energy in the EU’s energy system. On a micro-level, this work extends to ensuring that private houses and commercial buildings reduce their energy consumption and are, thus, cheaper to heat in the winter, and easier to cool in ever-increasing summer heats.
Additionally, while the fight within the European Parliament on the Nature Restoration Law made headlines in past weeks and months, MEPs have been eager to get started on issues related to air quality, wastewater and industrial emissions, in order to finalise these before the election campaigns kick off in earnest in early 2024.
The EU continues to be the global tech regulator
By Emma Buchholt – Account Manager
In the EU’s bubble of digital affairs, quite a few noteworthy developments have occurred in the past six months.
AI ACT
Within the realm of tech policy, European policymakers have been actively working on regulations concerning artificial intelligence (AI). The EU AI Act, proposed by the European Commission in 2021, has been under debate for two years, addressing complex issues in digital and tech policy and is now finally being negotiated in trilogues. The EU’s active participation in international AI cooperation offers the potential for the Act to become a baseline for other countries’ AI regulatory efforts. However, there is a risk that the AI Act may diverge from approaches taken by the U.S. and other nations, potentially leading to barriers in international AI cooperation and imposing costs on AI development within Europe. Interestingly, the dynamic and evolving nature of many elements in the AI Act allows room for international partners to contribute and help shape its development. The upcoming trilogue debates will play a pivotal role in determining the AI Act’s direction and its implications for the international AI regulatory landscape. Finding a balance between effective regulation, international cooperation, and alignment with other approaches will be crucial for the AI Act’s success.
DSA & DMA
In 2023 and 2024, compliance efforts are expected to be challenging, particularly for large platforms, as the two major and significant pieces of tech regulation, the Digital Services Act (DSA) and the Digital Markets Act (DMA), will take effect. The DMA is a significant legislation that, along with the DSA, will shape the operations of large online platforms, ensuring fair competition and greater user choice in the future.
On 14 April 2023, the Commission implemented detailed guidelines for conducting specific proceedings under the DMA and while the direct impact of the DMA on big platforms’ business models remains uncertain, it will run concurrently with the DSA, which will be fully applicable by early 2024. The DSA focuses on combating illegal online content and has a broad scope, encompassing various online intermediaries. Major social media platforms like Facebook, Twitter (now X), and TikTok will be required to take strong actions against illegal and harmful content. Failure to do so could result in substantial fines, which could be imposed as early as 25 August, which is the deadline for companies to comply with the full set of obligations under the DSA and carry out their first risk assessment. The Commission made its initial designation decisions under the DSA on the 25 April 2023, designating 17 Very Large Online Platforms (VLOPs) and two Very Large Online Search Engines (VLOSEs) with at least 45 million monthly active users in the EU.
Both acts have truly brought about a revolutionary transformation, establishing a benchmark for tech regulation worldwide, particularly concerning user-generated content. They have set a gold standard on a global scale, emphasising the importance of effectively managing user-generated content while ensuring privacy and protection for users. So, prepare yourselves – the internet is on the verge of becoming significantly safer (hopefully!).