Billions for green industry: EU weakens supply chain law - and initiates Clean Deal

The supply chain law has caused a lot of discontent. Now the EU Commission is accommodating the economy, postponing the law by a year and clearing it out. At the same time, it is investing a lot of money to boost Europe's struggling economy.

The EU Commission wants to promote climate-friendly industry with a 100 billion package and the reduction of bureaucracy. To this end, the application of the EU supply chain law is to be postponed by a year and the requirements for companies are to be significantly weakened. Postponing the deadline for the rules to June 2028 will "give companies more time to prepare for the new requirements," the Commission said. Brussels is thus reacting to massive pressure from the business community, which is complaining about bureaucratic requirements.

The EU actually wants to use the law to hold companies with more than 1,000 employees accountable for human rights violations and environmental pollution in their supply chains from the middle of next year. The Commission is now proposing to postpone the first deadline for implementation by one year to June 26, 2028. The law will then come into full effect one year later.

The companies concerned will no longer have to ensure compliance with human rights and environmental standards throughout their entire supply chain, but only with their direct suppliers. According to the proposals, proof of this would no longer be required annually, but only every five years. The Commission also wants to limit EU-wide civil liability for violations of the requirements.

Commission President Ursula von der Leyen had promised an "unprecedented effort" to reduce rules. In addition to the supply chain law, the Commission also wants to postpone and renegotiate sustainability reporting requirements by two years. According to the Commission, 80 percent of the companies affected so far are to be exempted.

In addition, Brussels wants to exempt numerous companies from a tax on CO2 emissions from imports because, according to the Commission, they have only low CO2 emissions. According to the plans, this should apply to all companies that import less than 50 tonnes of steel, aluminium, cement or fertilizers into the EU.

EU should emerge from the crisis in a climate-friendly manner

In order to get Europe's economy back on track for growth, the EU Commission wants to approve state aid for climate-friendly industries more quickly in the future. The focus of the so-called Clean Industrial Deal (CID) is on energy-intensive industries and clean, green technologies ("clean-tech") such as wind turbines. In the package, the Commission announces several laws or changes to laws for the coming months and years.

For example, EU guidelines for public procurement are to be revised. European companies could benefit from this. The Commission is also counting on 40 percent of climate-friendly technologies to be manufactured in the EU in the future. With these proposals, the Commission hopes to mobilize more than 100 billion euros in the short term.

While the EU Commission presented an unprecedented package of measures in the "Green Deal" in the last legislative period, primarily aimed at drastically reducing greenhouse gas emissions, the focus is now clearly on industry. However, the EU's climate targets are being maintained.

Electricity should become cheaper

One of the adjustments that the Commission wants to make, especially with regard to energy-intensive industries, is the comparatively high energy prices in Europe. As can be seen from an action plan presented by the authority, it is relying on more long-term contracts - to counteract price fluctuations - as well as faster approvals for green electricity, more interconnectors and more cross-border trade in order to reduce prices.

The plan aims to achieve savings for industry and households of €45 billion this year, which will then gradually increase to €130 billion annually by 2030, with a view to achieving savings of €260 billion per year by 2040.

A special unit for the gas market is intended to ensure fair competition. To lower electricity costs, the Commission is calling on Member States, among other things, to reduce electricity taxes and make it easier for consumers to switch to suppliers with cheaper offers.

Companies in the EU are increasingly facing competition, especially from the USA and China. This is reflected in the situation in the automotive industry, among other things - Chinese companies have in some cases significantly overtaken European ones in terms of technology. But other sectors are also under pressure, and the threat of US tariffs is further clouding the outlook. On average, productivity in the USA has increased significantly in recent years compared to the EU.