Regulatory Outlook

Environment | UK Regulatory Outlook April 2024

Published on 23rd Apr 2024

European Parliament adopts new certification framework for carbon removals | European Parliament adopts position on soil monitoring directive | EU Environmental Crime Directive receives formal approval

European Parliament adopts new certification framework for carbon removals

On 10 April, the European Parliament formally adopted its position on a regulation to introduce a voluntary certification framework for carbon removals, which aims to boost the bloc's ability to monitor and verify such activities to counter greenwashing.

The regulation covers different types of carbon removals: permanent carbon storage through industrial technologies and carbon storage in long-lasting products and carbon farming, which includes practices that reduce emissions from soils. In addition, to ensure transparency, a public EU registry for carbon removals and soil emission reductions will be set up by the European Commission.

The regulation now has to be adopted by the Council, which it is expected to adopt it at first reading. After this it will be published in the EU Official Journal and enter into force 20 days later.

European Parliament adopts position on soil monitoring directive

The European Parliament adopted its position on the proposal for a Soil Monitoring Law, which is the first piece of EU legislation dedicated to soils.

The new legislation will require EU Member States to monitor and assess soil health and will require polluters to pay for soil contamination in line with the "polluter pays" principle. The file will be followed up by the new European Parliament after the 6-9 June 2024 elections.

The legislation will have a direct impact on the agricultural sector, but is also likely to have a significant impact on other sectors where the supply chain relies on natural products, for example the food and fashion sectors.

EU Environmental Crime Directive receives formal approval

The European Parliament and the Council of the EU have both now formally adopted the Environmental Crime Directive.

This substantially broadens the scope of offences covered by environmental criminal law, increasing the list from nine to twenty. New offences include timber trafficking, the illegal recycling of polluting components of ships and serious breaches of legislation on chemicals.

The legislation also increases the penalties for those who commit offences. For companies, fines will be at least 5% of the total worldwide turnover for the most serious offences or an amount corresponding to €40 million. It also introduces imprisonment against those companies' senior individuals who commit environmental offences.

The directive will now be published in the Official Journal and will enter into force on the twentieth day following its publication. Member States will have two years to transpose the rules into national law. See our Insight for more.

What is natural capital and what does it mean for investors and lenders in the UK and Europe?

While some natural capital-related regulatory requirements may currently only be voluntary, or not yet catch financial institutions, there may be merit in complying early. Our recent Insight gives a brief overview of how natural capital might affect investors and lenders and provide an opportunity for the financial sector to play a leading role in driving this important agenda.

Council of EU formally adopts directive on energy performance of buildings

On 12 April 2024, the Council of the EU formally adopted its position on a revised directive on the energy performance of buildings, which outlines a vision to have zero emission buildings by 2050.

The directive sets out that by 2030 all new buildings should be zero-emission buildings, and by 2050 the EU’s building stock should be transformed into zero-emission building stock.

In addition, the directive also introduces minimum energy performance standards which will aim to lead to a gradual phase-out of the worst performing non-residential buildings.

Further, to help decarbonise the building sector, Member States will need to outline in national building renovation plans a roadmap to phase out fossil fuel boilers by 2040. Financial incentives for the installation of stand-alone fossil fuel boilers will be prohibited as of 1 January 2025.

The European Parliament formally adopted its position last month. The directive will now be signed and published in the Official Journal of the EU. Member States will have two years to incorporate the provisions into their national legislation.

TPT publish sector-specific guidance

Please see ESG

HSE launches call for evidence on PFAS in firefighting foams

Please see Products


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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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