Overview of the key measures announced relevant to the lubricants industry

Mobilising industry for a clean and circular economy

The full mobilisation of industry is required to reach set climate and energy efficiency targets. The EC will propose an EU industrial strategy and a Circular Economy Action Plan. A key aim of the new policy framework will be to stimulate the development of lead markets for climate neutral and circular products, in the EU and beyond.

What does it mean for UEIL? The decarbonisation and the modernisation of the energy sector is crucial aspect of the EGD. Also, the circular economy action plan will include a ‘sustainable products’ policy to support the circular design of all products based on a common methodology and principles. This is an opportunity to demonstrate that our industry has innovative potential and sustainable solutions available. The framework will foster new business models and set minimum requirements to prevent environmentally harmful products from being placed on the EU market. Extended producer responsibility will also be strengthened.

Timeline of dossiers to monitor: • EU Industrial strategy (published 10th March 2020) • Circular Economy Action Plan, including a sustainable products initiative and particular focus on resource intense sectors such as textiles, construction, electronics and plastics (published 11th March 2020)

• Initiatives to stimulate lead markets for climate neutral and circular products in energy intensive industrial sectors (expected as from 2020)

Climate ambition The EGD features a proposal for a European Climate Law which was subsequently published on 4th March 2020, and a plan to increase EU 2030 climate targets. Currently, the Climate Law Roadmap is underway. This will enshrine the 2050 climate neutrality objective in the European legislation. The debate is now ongoing at the EU level on the greenhouse gas emissions reductions target (50% or 55%) for 2030. The recent European Parliament’s resolution on the European Green Deal calls for the 55% target.

What does it mean for UEIL? The Climate Law will also ensure that all EU policies contribute to the climate neutrality objective and that all sectors play their part, therefore including the lubricants’ sector. Timeline of dossiers to monitor: • Proposal on a European ‘Climate Law’ enshrining the 2050 climate neutrality objective (published 4th March 2020) - Input received for the Climate Law Roadmap (which is available via the official EU website)

• New EU Strategy on Adaptation to Climate Change (Expected in 2020/2021)

Energy Taxation Directive The Energy Taxation Directive was withdrawn by the previous European Commission as Member States in 2015 could not find an agreement on the minimum level of tax rates, tax treatment of biofuels, the transitional periods and the linkage with the ETS. However, under this new European Commission, the Energy Taxation Directive is a clear new objective under its New Green Deal and the European Commission is hoping that EU Member States are now ready to agree on an Energy Taxation Directive (unanimity at Member States is still required).

How will the UEIL respond? For UEIL an adoption of an Energy Taxation Directive is positive as currently many EU Member States, such as Italy and Poland, are raising national taxation on lubricants, in spite of the fact that this can lead to fraud. UEIL always stated that through the Energy Taxation Directive a level playing field can be achieved as under the previous European Commission proposal on the Energy Taxation Directive lubes were in the scope of the Directive as excise product but with a specific exemption for products not used as heating or motor fuels. This means that EU Member States are no longer able to raise national taxation on lubes.

Timeline of dossiers to monitor: • Proposal for a revision of the Energy Taxation Directive

On the basis of our latest political intelligence the European Commission will publish its new Energy Taxation Directive after the summer, so probably in Q3/Q4 2020.

• Proposal for a carbon border adjustment mechanism for selected sectors – (Expected in 2021)

Continued on page 42 LUBE MAGAZINE NO.156 APRIL 2020 41

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