Welcome to Better Europe’s weekly update on EU Affairs.
PARLIAMENT CONSIDERS DELAY OF DEFORESTATION RULES
Facing pressure from EU Member States, international trade partners, and industry stakeholders, the European Commission has proposed a one-year delay to the deforestation-free products regulation (EUDR). Originally set to apply as of December 2024, large companies would now have until December 2025 to comply, with small businesses still getting an additional six months. The extension reflects concerns over the readiness of economic stakeholders, many of whom have struggled due to a lack of support and guidance from the Commission. In a heated parliamentary debate on 14 October, conservative and far-right MEPs welcomed the delay as they see the regulation is overly burdensome and called for stronger legal clarity. Conversely, liberal and progressive voices sharply criticized the Commission’s handling of the process, blaming long delays in the publication of the essential guidelines for the lack of preparedness. Some MEPs suggested that the delays were politically motivated, with the guidelines deliberately left unpublished for months. Despite the controversy, the EU institutions are aligning around the extension. Member States have already backed the Commission proposal, and the Parliament is expected to follow suit, allowing the amending regulation to enter into force before the end of the year.
COMMISSION STARTS EVALUATION OF CLIMATE BENCHMARKS
Ever heard of EU Paris-aligned and EU Climate Transition benchmarks? Professional investors have, and seem to appreciate the EU’s frontrunner role in defining stock indices of companies that are managing to make their business “Paris-proof”, or that make a significant effort to transition their operations. In a stakeholder workshop organised by the Commission this week, the Commission formally ticked the box with a thorough hearing of industry and consumer experts on their experience with the relatively new rules, in force since 2020, without committing to legislative change. One recurring question in the technical discussions was how much “tracking error” should be allowed in sustainable indices compared to the performance of “normal” stocks, indirectly confirming that many investors and policy-makers continue to see non-sustainable investment as the norm. After all, in a Paris-aligned world, it makes sense to make sure that your investments are Paris-aligned and sustainable – anything else is not financially smart, unless you believe we won’t get to Paris. Or, as one panellist put it: everyone is making their bets, just not on the same side.
EU LEADERS DISCUSS MIGRATION AND UKRAINE AMID RISING TENSIONS
As the EU summit concluded on Thursday in Brussels, migration and Ukraine remained dominant topics shaping the bloc’s future. Polish Prime Minister Donald Tusk’s recent move to suspend asylum rights for migrants arriving from Belarus sparked heated debate. France’s new Prime Minister Michel Barnier called for an overhaul of EU deportation rules to accelerate expulsions, reflecting rising national discontent with migration policies. The Middle East crisis added urgency, with EU foreign policy chief Josep Borrell warning of a potential wave of migration from the region. Meanwhile, Ukrainian President Zelensky addressed the Council, urging additional military aid as Kyiv braces for another winter of Russian attacks on its energy infrastructure. However, Hungary’s veto of a critical EU financial package for Ukraine complicated efforts to extend support. Alongside these challenges, discussions on economic competitiveness were framed by Mario Draghi’s latest report, which stressed the need to boost the EU’s industrial and technological sovereignty. With migration tensions growing and Ukraine still requiring assistance, EU leaders closed the summit facing the complex task of maintaining internal unity while addressing mounting external pressures.