In the coming weeks and months, the EU will propose several environmental protection regulations that will impose new obligations on companies, directly impacting their business operations. Penalties for environmental crimes will be increased and pollution emission standards will be tightened. Regulations on packaging and the right to have goods repaired are also in the pipeline. On top of that, on 6 February 2024 the European Commission plans to publish a communication on the industrial management of CO2 emissions, the first step towards detailed regulations on the development of the carbon dioxide capture sector, which is crucial for the EU to achieve climate neutrality.

Penalties for environmental crimes

On 16 November 2023 the European Parliament and the Council of the EU reached a provisional agreement on a new directive to replace the existing 2008 regulations, aimed at improving environmental protection through criminal law. The new directive doubles the number of environmental crimes from the current nine to 18 and harmonizes sanctions for legal persons. For the most serious crimes, countries will have to impose a maximum fine of at least 5 percent of the offender’s annual global turnover or €40 million, and for the remaining offences a fine of 3 percent of turnover or €24 million. Companies will also have to pay compensation for the damage caused. EU member states are expected to implement the directive within two years.

Due diligence requirements for large companies

The Corporate Sustainability Due Diligence Directive was agreed upon by the European Parliament and the Council of the EU on 14 December 2023. It will apply to companies with more than 500 employees and a global net turnover of more than €150 million. Non-EU companies will also be subject to the directive if they generate that much turnover within the EU. Companies will have to identify those of their activities that violate human rights and harm the environment, cease such activities, and address the damage caused by themselves, their subsidiaries or business partners. It is important to note that the financial sector is not currently covered by this directive. Failure to comply with the directive may result in financial penalties and civil liability.

Reducing packaging waste

Negotiations on a new regulation on packaging and packaging waste will start in January 2024 with a wide range of stakeholders. The European Commission will propose that all packaging on the market be recyclable by 2030, with additional requirements for things like compostable tea bags and self-adhesive labels on fruit. The regulation may also ban certain items, such as miniature hotel cosmetics and single-use catering packaging, with the details to be worked out in the negotiation process. There will also be a mandatory deposit return system for plastic bottles and aluminum cans from 1 January 2029.

Ensuring the right to repair

On 7 December 2023 the European Parliament and the Council of the EU started negotiations on a directive that would give consumers the right to have faulty goods repaired. Sellers would be obliged to offer free repairs during a two-year warranty period, whenever feasible and when the cost of repairs is equal to or less than the cost of replacing the faulty product. In addition, the European Parliament suggests extending the warranty for a further year after repair. For certain products such as washing machines, vacuum cleaners, smartphones or bicycles, the right to repair will extend beyond the warranty period. Members of the European Parliament have also proposed that, in such cases, consumers should receive a replacement product for the duration of the repair.

New industrial emissions standards

On 29 November 2023 the European Parliament and the Council of the EU concluded negotiations on amending the Industrial Emissions Directive, which will now impose stricter emission standards and also apply to the mining industry and large-scale battery production. The most serious violations of the regulations will result in administrative fines of at least 3 percent of the annual turnover of the installation operator in the EU. Member states will be required to put in place mechanisms to allow people whose health has been affected by such violations to seek compensation. Countries have 22 months to implement these regulations.

Tighter standards for car exhaust emissions

On 18 December 2023 the European Parliament and the Council of the EU agreed on the new Euro 7 standard which will replace the existing emission regulations for cars and vans (Euro 6) and heavy goods vehicles and buses (Euro VI). The new regulation maintains the current exhaust emission standards for light vehicles but changes the measurement method to cover particles 10 nm in diameter instead of 23 nm. It also tightens the standards for heavy vehicles, addressing previously unregulated nitrogen dioxide emissions. The regulation also sets standards for other types of pollution, such as brake dust emissions. Euro 7 will be implemented gradually, with the first standards for passenger cars and light commercial vehicles coming into force after 30 months, but not before June 2026.

How the EU plans to capture and use CO2

To achieve climate neutrality, the EU aims not only to capture CO2 but also to make it a tradeable commodity that can be used to produce synthetic fuels. The creation of the CO2 market is intended to speed up the decarbonization of the European economy and help the EU to meet its climate targets for 2040 and 2050. Brussels wants carbon dioxide to become an ordinary commodity that can be bought and sold. For this to happen, CO2 capture technologies need to be implemented on an industrial scale and an infrastructure developed to enable CO2 trading. The CO2 regulatory package is expected to be announced in 2025, the year of the Polish EU presidency. At that time, calls for the promotion of CO2 capture and storage (CCS) and CO2 capture and utilization (CCU) technologies are likely to be a key focus for the new Polish government.