Sustainability runs high in decisions, policymaking across EU in 2022

Here is a glimpse into some of the major developments in the bloc.

Policy

November saw business activity fall across the euro zone for the fifth consecutive month, according to flash purchasing manager’s index data released by S&P Global.

Although the rate of decline remained the second strongest since 2013—excluding COVID-19 lockdown months—the intensity of the downturn moderated in response to a reduced rate of loss of new business, fewer supply constraints and a pick-up in business confidence about the year ahead. Business sentiment remained gloomy by historical standards, and demand continued to fall at a steep rate.

In April, European Commission (EC) President Ursula von der Leyen and Indian Prime Minister Narendra Modi agreed to launch the EU-India Trade and Technology Council at their meeting in New Delhi. The strategic coordination mechanism will allow both sides to tackle challenges at the nexus of trade, trusted technology and security, and deepen cooperation.

The European Parliament and the EU member states reached a political agreement in June on the directive on adequate minimum wages proposed by the EC in October 2020. The new legislation will apply to all EU workers who have an employment contract or employment relationship. The EU countries in which the minimum wage is protected exclusively via collective agreements will not be obliged to introduce it nor to make these agreements universally applicable.

In July, New Zealand and the EU concluded negotiations for a free trade agreement (FTA) that offers duty-free access on 97 per cent of the New Zealand’s existing goods trade to the EU within seven years, and 91 per cent from day one. The FTA is expected to raise the value of New Zealand’s exports to the EU by up to $1.8 billion per year from 2035.

The EC in October proposed an emergency regulation to address high gas prices in the EU and ensure security of supply this winter. In combination with already agreed measures on gas and electricity demand reduction, gas storage and redistribution of surplus energy sector profits, these new steps will improve stability in European gas markets this winter and beyond.

The regulation will aggregate EU demand and joint gas purchasing to negotiate better prices and reduce the risk of member states outbidding each other on the global market, while ensuring security of supply across the EU.

The EC and the European Bank for Reconstruction and Development (EBRD) signed an InvestEU guarantee agreement in December that will unlock EBRD finance of up to €2.1 billion for investments in green economy, sustainable infrastructure and digitalisation, as well as research and innovation in the EU. The agreement was worth up to €450 million.

The EBRD will use this guarantee to mobilise investments across a wide range of sectors, including energy, digital connectivity, circular economy, and low carbon technologies. It will also support investments in bioeconomy, research and digitalisation, critical raw materials value chain solutions, life science, and sustainable blue economy.

Early finalisation of India-EU FTA is among the priorities of Sweden when it takes over the rotating presidency of the European Council for a six-month period from January 1 to June 30 next year. The Scandinavian country will also work on the 18-month programme jointly drafted with its predecessors France and the Czech Republic.

EU member states in December reached an agreement to implement at the bloc level the minimum taxation component, known as Pillar 2, of the Organisation for Economic Cooperation and Development’s reform of international taxation.

The profit of large multinational and domestic groups or companies with a combined annual turnover of at least €750 million will be taxed at a minimum rate of 15 per cent. The new rules will reduce the risk of tax base erosion and profit shifting and ensure that the largest multinational groups pay the agreed global minimum rate of corporate tax, the European Council noted.

Textile & Garments

The Technological Centre for the Textile and Clothing Industry of Portugal (CITEVE) in October launched a large collaborative project on bio-economy called Be@t, or Bioeconomy at Textiles, which will invest €138 million, including €71 million from the Portugal’s Recovery and Resilience Plan approved by the European Commission. Be@t will boost the development of value-added products from biological resources instead of using fossil raw materials.

France’s L'Union des Industries Textiles (UIT) and several other trade unions concluded an agreement, raising the minimum wages in the textile industry from May 1. The agreement provides for a 2.7 per cent increase in conventional minimum wages for all professional categories in the industry—workers, supervisors and executives. UIT represents 2,150 textile companies in France.

The Nordic Swan Ecolabel, the official ecolabel of the Nordic countries, launched in May, revised and sharpened requirements for clothing and other textile products certified with the label. More requirements for product design, increased emphasis on quality, longevity and a ban on dumping surplus clothing are some of the innovations.

The European Textile and Apparel Confederation’s (EURATEX) ReHubs initiative in May announced its plans to pursue fibre-to-fibre recycling for 2.5 million tonnes of textile waste by 2030. The initiative brings together key European and world players to solve the European textile waste problem by transforming waste into a resource, and to boost the textile circular business model at large scale. Based on the ambitious European Waste law, all EU member states must separately collect textile waste in two years and half.

Zero Waste Scotland and the Scottish government launched a £2-million fund in June to help reduce the environmental burden of textiles. The Circular Textiles Fund goes directly to businesses across the textile industry in Scotland, from fashion to upholstery. It will support innovative projects in which resources are valued and made to last.

Potential business models include those that reduce demand for new textiles, such as clothing and textile rental, reuse and repair services; employ sustainable manufacturing processes; reduce in-life environmental impacts; and maximise the amount of textile waste that is captured and recycled.

The Fashion Council of Germany (FCG) and 24 other fashion institutions founded the European Fashion Alliance in June to unite to foster a sustainable and inclusive European fashion ecosystem. Just before that, FCG brought together leading European fashion organisations in Frankfurt to form a coalition of change with the support of Messe Frankfurt and its global Texpertise network.

Sustainability

The EC in April finalised its scoping assessment to identify the priority list of waste streams for the development of further EU-wide end-of-waste criteria, as announced in the Circular Economy Action plan. Plastics and textiles—separately collected clothes and other textiles prepared for re-use and cellulosic or mixed fibres recovered or recycled from textile waste—are the top two candidate streams.

EU transport ministers agreed in June on a range of legally-binding measures, including new binding targets in shipping, to reduce greenhouse gas emissions in the transport sector in the coming decade. The agreement includes new technical standards and mandatory targets for EU airlines’ use of sustainable aviation fuels, and new binding targets for GHG reductions in shipping.

The measures were agreed under the EU’s ‘Fit for 55’ package—the flagship suite of legislation announced in July 2021 to ensure the bloc meets its 2030 climate targets.

In November, the EC launched the 2023 European Semester cycle of economic policy coordination. The four priorities are promoting environmental sustainability, productivity, fairness and macroeconomic stability, to foster competitive sustainability.

The European Parliament and Council have agreed on a new law that fights global deforestation and forest degradation driven by EU production and consumption. The law, once adopted and applied, will ensure that a set of goods sold in the EU market do not contribute to deforestation and forest degradation in the EU or anywhere else in the world.

The EC has also proposed late this year new EU-wide rules on packaging to tackle this constantly growing source of waste. The new rules aim to stop the trend of rise in packaging waste, ensure reusable packaging options, get rid of unnecessary packaging, limit over-packaging and provide clear labels to support correct recycling.

In December, the EC adopted a proposal for a first EU-wide voluntary framework to reliably certify high-quality carbon removals. The proposal will boost innovative carbon removal technologies as well as sustainable carbon farming solutions, and contribute to the EU’s climate, environmental and zero-pollution goals.

Fibre2Fashion News Desk (WE)