Blog

Food security is one of the most acute and severe global challenges

The Global Food Security Summit 2022 concluded at #UNGA77 with strong statements from world leaders to combat global hunger and to keep food security high on the agenda.

Right before the Summit, President Biden announced over $2.9 billion in new assistance from the U.S. Government to address global #food insecurity.

Moreover, more than 100 United Nations member states have endorsed the Roadmap for Global Food Security – Call to Action. Actions agreed upon include:

🔒 Making new, additive financial donations to key humanitarian organizations to allow for an increased provision of immediate life-saving #humanitarianassistance wherever possible.

🔒 Provide, where possible and as needed, in-kind donations and necessary associated costs to key humanitarian organizations for transportation and delivery of food commodities based on assessed needs by governments of affected countries or humanitarian organizations.

🔒 Keep food, #fertilizer and #agricultural markets open and avoid unjustified restrictive measures, such as #export bans on food and fertilizer, which increase market volatility and threaten food security and #nutrition at a global scale;

🔒 Support an increase of fertilizer production, where possible and as needed, in order to compensate for shortages, accelerate and scale-up fertilizer #innovations, support their marketing, and promote methods to maximize fertilizer efficiency;

🔒 Accelerate efforts to support #sustainable agriculture and food systems, through strengthening agricultural productivity, particularly in the most affected countries to build their resilience and support domestic production, including as appropriate through efforts to support an #energy transition that is just and equitable, to make them more resilient and available to producers of all scale, including small holder #farmers.

🔒 Increase investments in research and technology to develop and implement science-based and climate-resilient agricultural innovations, including #seeds, that contribute to building sustainable and resilient agricultural sectors and food systems.

🔒 Monitor markets affecting food #systems, including futures markets, to ensure full transparency, and to share reliable and timely data and information on global food market developments, especially through the relevant international organizations.

President of the European Council Charles Michel co-chaired the event together with the United States Secretary of State, Antony Blinken, the Chairperson of the African Union and President of Senegal, Macky Sall, and the Prime Minister of Spain, Pedro Sanchez.

If you would like to know more about the implications of these commitments for your company or industry, send us a message!

The #TransformingEducation Summit closes today

The Summit elevated education to the top of the political agenda – bringing together leaders and youth activists to combat the global education crisis brought about by the pandemic.

Key outcomes include:

🎓The launch of the International Finance Facility for Education (IFFEd) – a multi-billion dollar finance facility for cheap loans to developing countries;

🎓Social impact bonds for education, launched by The Education Outcomes Fund;

🎓Member State Commitments to Action on Foundational Learning, advocated for by UNICEF and The World Bank;

🎓Further commitment to the UNICEF and International Telecommunication Union Giga Initiative to increase digital connectivity in schools;

🎓 A call to expand the international right to education, backed by more than 60 Nobel Peace Prize winners, current and former UN Special Rapporteurs, the former Office of the United Nations High Commissioner for Human Rights, and others.

Contact us to obtain an in-depth analysis of the meeting, commitments made, and follow-up trajectory towards the Future Summit in 2024.

#righttoeducation #letmelearn #sdg4 #unitednations #unga77

UNGA 77: 10 Moments to watch out for

For many reasons, UNGA is especially important this year. It is the first fully in-person gathering since the outbreak of COVID-19, the world is facing multiple crises, but also, civil society is invited to participate like never before.

With so much going on – 178 items on the agenda of the General Assembly, as well as hundreds of official and unofficial side events being organized – we’ve compiled a list of essential moments to watch out for during this 2022 edition.

1. 16 – 19 September: Transforming Education Summit
In the midst of the global education crisis, leaders discuss how to move forward on SDG4.

2. 19 September: UN Private Sector Forum
Co-hosted with United Nations Global Compact, business- and government leaders gather for an urgent rescue effort for the SDGs.

3. 19 September: SDG Moment
Kicking off the High-Level Week, this event stresses the importance of the SDGs as ‘the world’s to-do list’.

4. 21 September: seventh replenishment of the Global Fund to Fight AIDS, Tuberculosis and Malaria
The fund hopes to raise at least $18 billion for its work in the next three years.

5. 21 September: Leaders’ Round Table on Climate Action
Ahead of COP27, a small group of world leaders aims to reboot cooperation on climate action.

6. 21 September: 30th Anniversary of the Declaration on the Rights of Minorities
This High-Level meeting takes stock of and evaluates the implementation of the Declaration.

7. 22 September: Security Council meeting on Ukraine
World leaders will address the Security Council on maintenance of peace and security in Ukraine.

8. 22 September: High-level General Assembly meeting on challenges in the Sahel
Solutions to poverty, insecurity, terrorism, displacement, and climate change in the region will be discussed.

9. 23 September: Ending COVID-19 Pandemic
This event addresses priority areas for equitable access to vaccines, diagnostics and treatments.

10. 26 September: High-level meeting to commemorate International Day for the Total Elimination of Nuclear Weapons
Heads of State will discuss global nuclear risks against the backdrop of the war in Ukraine.

For an in-depth summary and analysis of these (or other) #UNGA77 meetings, reach out to our team to define topics of interest.

The busiest diplomatic season of the year has started! Follow our Linkedin page for daily updates and reports from #UNGA77

Today, the 77th session of the United Nations General Assembly opens under the theme ‘ A watershed moment: transformative solutions to interlocking challenges’ .

In the coming 2 weeks, political- , business- and civil society leaders from all over the world gather in New York City to find joint solutions to the world’s current interconnected crises:

🌎 the COVID-19 pandemic,
🌎 the war in Ukraine,
🌎 humanitarian challenges of unprecedented nature,
🌎 a tipping point in climate change,
🌎 as well as growing concerns about threats to the global economy.

The agenda consists of general assembly meetings, high level ministerial meetings, as well as numerous side events bringing together key stakeholders.

Want to keep updated on the outcomes of these historic talks? Three simple steps will provide you with all the information you need:

1.) Keep following this page for daily updates;
2.) Sign up for our free Dr2 Global Policy newsletter, which this month features exclusive in-depth UNGA reports and analyses;
3.) Contact us with your main topics / SDGs of interest. We’ll send you a list of UNGA events to follow, many of which are virtually accessible.

Talk soon!

#sustainabledevelopmentgoals #2030 #globalaffairs

Happening now: The most important SDG event of the year

The United Nations High Level Political Forum (HLPF) is happening in New York this week, yearly organized by the United Nations Economic and Social Council.

The aim of the meeting is to take stock of the progress on the Sustainable Development Goals in Member States, and to determine a course of action towards next year.

This years’ theme is “Building back better from COVID-19 while advancing the full implementation of the #2030 Agenda for Sustainable Development”.

Despite its name, the HLPF offers many opportunities for input from civil society through the preparatory #consultation process and the many side events currently happening.
See the slides below for an initial overview of the #HLPF2022.

Our consultants will be following many of the political discussions in the coming 2 weeks. For in-depth monitoring and analysis reports, or if you would like to know how to get involved towards the #SDGsummit2030, send an e-mail to: s.ros@dr2consultants.eu

HLPF agenda 2022

A global plan to cut agriculture emissions

In a letter to the UN FAO, coordinated by the FAIRR Initiative, major companies ask for a central roadmap with key milestones that #investors can use to align portfolios to address #climate and nature risks. To compare, the International Energy Agency (IEA) recently made a major impact on the worldwide #energy sector in a similar Net Zero Roadmap.

Even if fossil fuels were eliminated immediately, #food systems alone would make it impossible to keep global warming to 1.5˚C. All modelled pathways assessed by the IPCC that limit warming to 1.5ºC or well below 2°C require land-based mitigation and land-use change.

Currently, food systems account for around a third of global #ghgemissions. #Agriculture is the main threat to 86% of species at risk of extinction, whilst around three-quarters of the deforestation in the Amazon between 1978-2020 was caused by cattle ranching.

Therefore, the investors ” (…) urge the #FAO to produce a global roadmap to #2050 that mitigates these risks and sets a standard for the industry. It is crucial that this roadmap aligns with the #Paris Agreement’s goal of limiting global warming to 1.5˚C while ensuring the protection and restoration of nature, and achieving food and nutrition security goals.”

The FAO has yet to respond, but the letter is expected to form an important base for discussion on agriculture reform and #methane emissions rules during #COP27 in Egypt later this year.

Fit for 55 package: carbon pricing in the transport sector

The European Green Deal aspires to reduce the transport sector’s dependence on fossil fuels. In that context, the Commission presented the ‘Fit for 55 Package’ on 14 July 2021. This legislative package aligns the EU’s legislation with the 55% emission reduction target to be achieved by 2030. In order for the transport industry to play its part, the EU is increasing its efforts to put a price on CO2 emissions. Dr2 Consultants will demystify the Commission’s greening efforts within the ‘Fit for 55 Package’ through three illustrative examples of increased carbon pricing across different transport modalities.

1. Eurovignette and CO2 emission standards to decarbonize road transport

The use of road infrastructure by heavy-duty vehicles is regulated through the Eurovignette Directive. The revision of this file, first tabled in 2017 by the Commission, has entered the final stages of the decision-making procedure, and is not part of the Fit for 55 Package. The co-legislators reached in June an agreement on the revision. According to the agreement, time-based road charges will be phased out for heavy-duty vehicles on the core TEN-T network (main routes where most international transit of commercial vehicles takes place). Additionally, the revision grants Member States the possibility to set up combined charging system for heavy-duty vehicles, based on both time-based and distanced-based elements, in order to allow full implementation of the user-pays and polluter-pays principles.

The decarbonization of heavy-duty road transport will also be further incentivized by the introduction of a new system of varying road charges based on CO2 emissions.

With regards to passenger cars and light-duty vehicles, which are responsible for 75% of EU road transport CO2 emissions, the EU tabled as part of the Fit for 55 package the revision of the Regulation setting CO2 emission performance standards for cars and vans. The CO2 reduction target for cars, currently set at 15% for 2025 and 37,5% for 2030 compared to 2021 levels, have been raised in order to ensure that all cars registered as of 2035 will be zero-emission. The new targets require average emissions of new cars to come down by 55% from 2030 and 100% from 2035, compared to 2021 levels. This implies that the European Commission sees no future for the internal combustion engine in the future of the European transport sector.

Considering both aforementioned proposals, Dr2 Consultants expects that the various Fit for 55 carbon pricing measures in the road transport sector will stimulate the market demand for zero- and low emission vehicles, both for passenger as well as freight transport.

2. Extending the EU ETS to the maritime sector

The EU Emissions Trading System (EU ETS), the EU’s instrument to measure and price carbon emissions per unit, is also being revised as part of the Fit for 55 Package. The revised proposal does not only increase its ambition to reduce the number of EU-wide annual allowances at a quicker pace (which will significantly drive up the price for CO2 per ton by cutting supply of emissions permits), but it also extends its scope towards other sectors, including emissions from maritime transport. As a reasoning behind the inclusion of maritime transport in the EU ETS, the European Commission states that maritime transport emissions are currently higher than in 1990 and these are expected to grow further in a business-as-usual scenario. 

Fit for 55 services

The extension of the EU ETS to maritime transport applies in respect of emissions from incoming voyages (i.e. emissions from ships arriving at an EU port from a port outside the EU, as well as intra-EU voyages) and emissions occurring at berth in an EU port. The revision plans for the obligation to surrender allowances is to be gradually phased-in over the period between 2023 to 2025.

Investments to support the decarbonization of the maritime transport sector will be supported by the Innovation Fund.

The inclusion of maritime emissions in the scope of the EU ETS, and especially the determination of which emissions are covered (intra-EU voyages, emissions at berth in EU ports, as well as ships arriving at an EU port with their last port of call being outside the EU) risk impacting the competitiveness of the EU maritime transport at global level.

3. Revising energy taxation: end fossil fuel subsidies and incentivize green alternatives

The Energy Taxation Directive (ETD) sets the rules for the taxation of energy products such as motor fuels or electricity. The Commission also proposed a revision as part of the Fit for 55 Package in order to align the taxation of energy products with EU energy and climate policies and end outdated tax exemptions and incentives for the use of fossil fuels, for example the exemption for fuels in the aviation and maritime transport sectors.

Ending tax exemptions for aviation kerosene would result in higher tax burdens, thereby incentivizing the transition towards a higher uptake of sustainable aviation fuels. The revision of the ETD is welcomed by the railway sector, as ending tax exemptions for polluting fuels would accelerate the modal shift, level the playing field between the different modes of transport, and encourage consumers to choose clean alternatives such as rail transport.

Is your business Fit for 55?

The Fit for 55 Package will shape the legislative landscape for the upcoming decade, trigger the public debate and impact businesses across the different transport modalities. The revised and updated CO2 emission standards might radically impact your day-to-day business operations. More than ever, making your voice heard is crucial.

Over the last years, Dr2 Consultants has built up a track record in advising a broad range of transport clients in navigating the EU ecosystem. Would you like to know more about what the ‘Fit for 55 Package’ means for your organization? Feel free to reach out to us or visit our Fit for 55 webpage.

You can also sign up for our weekly Fit for 55 policy updates here.

You might also be interested in:

The future of the EU transport sector (2021-2024) – four trends

Slovenian Presidency of the EU 2021 logo

Slovenian Presidency’s transport priorities

Starting on 1 July, Slovenia will take over the rotating Presidency of the Council of the EU for the next six months. The slogan of the Slovenian Presidency, “Together. Resilient. Europe.”, refers to the recovery of the European economy following the COVID-19 pandemic. With the transport industry being one of the hardest hit sectors by the COVID-19 pandemic, the Slovenian Presidency will play an important role in shaping a resilient and future-proof transport sector. In this blog post, Dr2 Consultants has identified three key transport priorities of the Slovenian Presidency for the coming semester.

Moreover, in the coming months, the Slovenian Presidency will lead crucial files through the institutional negotiations and will be closely involved in the discussions of the Commission’s legislative proposals that are part of theFit for 55’ package.

In the run up to Slovenia’s six-month Presidency, Dr2 Consultants’ transport practice organized a webinar together with Ms. Petra Zaletel, Transport Counsellor at the Permanent Representation of the Republic of Slovenia to the EU, to hear more about the Presidency’s transport priorities in the coming semester. You can watch the recording of the event here.

Coordinating legislative files stemming from the ‘Fit for 55’ package

On 14 July, the European Commission will publish the Fit for 55’ legislative package, which  will aim at aligning the EU’s climate and energy legislative framework with the European Green Deal’s target of at least 55% emissions reduction by 2030. This landmark package, covering 11 legislative proposals, is expected to set the prerequisites for the transition towards a 55% emissions reduction by 2030.

The ‘Fit for 55’ package will have both direct and indirect impact on the transport industry, for example:

  • The revision of the Energy Taxation Directive will put a higher tax rate on fossil fuels to accelerate the production and use of low-carbon and clean alternatives.
  • The revision of the Alternative Fuels Infrastructure Directive will set binding targets for the deployment of re-charging and re-fueling infrastructure across the EU.
  • The upgrade of the Renewable Energy Directive will increase the sub-target for the renewable energy share in the transport sector.

As part of its transport priorities, the Slovenian Presidency will be tasked to lead the discussions on these legislative files through the different Council configurations. A milestone event will be a joint informal ministerial meeting of transport and energy ministers on 21-23 September dedicated to common challenges of e-mobility. In a separate meeting, the transport ministers will look into issues related to alternative fuels infrastructure.

The Slovenian Presidency will have to find a balance between diverging interests among EU Member States. During the last European Council meeting on 24-25 May, Eastern EU Member States already voiced their concerns about Europe’s poorest inhabitants having to carry the burden of the EU’s climate ambitions. We expect these discussions to continue in the various Council configurations. The results of these discussions and any adopted conclusions under the leadership of the Slovenian Presidency will also be relevant in the run up to the UN Climate Change Conference (COP26) in November.

Fit for 55 services

Dr2 Consultants supportS organizations in the transition towards climate neutrality by offering tailor-made solutions to navigate the evolving policy environment at EU level and anticipate the impact of the ‘Fit for 55’ package on your organization. Make sure to check out our ‘Fit for 55’ services.

Putting rail transport in the limelight

The European Commission declared 2021 the European Year of Rail. Although the Portuguese Presidency has officially launched the Year of Rail during the informal Transport Council meeting in late March, the promotional activities have seen a slow start due to the extended travel restrictions. But now that the COVID-19 situation is rapidly improving and travelling across Europe will be possible again in the coming months, the Slovenians will have more opportunities to promote rail as a sustainable mode of transport and further build upon the recently adopted Council conclusions on “Putting rail at the forefront of smart and sustainable mobility”.

As of September, the Connecting Europe Express will visit almost all Member States across Europe, with festivities and stakeholder events on several locations, including Brussels, Ljubljana and Berlin. In addition, in November this year, the European Commission is expected to table a package of legislative and non-legislative initiatives (e.g. revision of the TEN-T Regulation, revision of the Intelligent Transport Systems Directive, Action Plan to boost rail passenger transport) that will impact several components of the railway industry, including infrastructure, ticketing tools, and cross-border passenger services.

These legislative files are expected to dominate the policy discussions in the coming years. Would you like to better understand how these files will impact your business operations? Do not hesitate to get in touch with our Transport Team.

Concluding negotiations on inherited files

In addition to dealing with new legislative proposals, the Slovenian Presidency will also inherent files from the Portuguese Presidency. Although the Portuguese Presidency has been successful in concluding various pieces of legislation relevant for the transport sector, including the controversial new EU-wide road charging rules for light and heavy-duty vehicles (Eurovignette) and the Brexit Adjustment Reserve, several issues still require further discussions.

Regarding transport priorities of the Slovenian Presidency, we expect the Slovenians to start Trilogue negotiations on the Hired Vehicles Directive as well as the Single European Sky (SES2+) initiative with the aim to achieve a breakthrough on both files by December 2021 at the latest.

How can Dr2 Consultants’ transport practice support you?

Do you need support in understanding and anticipating upcoming transport files? Do not hesitate to get in touch with us. Dr2 Consultants has built up a track record in advising a broad range of transport clients in navigating the EU ecosystem.

“Business Taxation for the 21st Century” communication and its impact on businesses

On 18 May, the European Commission published a new communication titled “Business Taxation for the 21st Century”. With this, the Commission presented its EU tax agenda for the short and long term, following the ambitious roadmap set out in the Tax Action Plan of the Fair and Simple Taxation Package, presented last summer.

This agenda builds on the current discussions on tax policy at the Organization for Economic Cooperation and Development (OECD) level, but also goes a lot further. The Commission announced no less than seven new legislative proposals that will have a big impact on companies that are active in the EU, especially with regards to compliance requirements. Most of these proposals are expected to be published in the second half of 2021. In this blog post, Dr2 Consultants will provide you with an overview of the most relevant initiatives of the communication and will highlight how they will impact your business.

EU Digital Levy

On 14 July 2021, the Commission will publish its proposal for a European Digital Levy. There are indications that the Commission will propose a 0.3 to 0.5% tax on turnover from digital services that are provided by companies with a turnover of €250 million. The EU Digital Levy could therefore impact a lot more businesses than only the U.S. big tech companies. It is therefore likely that the proposal will affect tax compliance costs, tax revenues and the competitiveness of EU digital companies, and ultimately consumers. Read more on this topic here.

Directives following the OECD discussions on business taxation

Since 2019, the OECD has been discussing how to address the tax challenges of the digitalization of the economy (Pillar 1) and how to combat tax avoidance through a global minimum tax (Pillar 2). The G7 finance ministers agreed on 5 June 2021 that market jurisdictions should get a bigger share of the corporate income tax revenue and that there should be a global minimum tax rate of 15%. This deal in the G7 brings the agreement in the G20/OECD discussions on tax reform much closer. It is expected that a high-level political agreement in the G20/OECD could already be achieved in the beginning of July 2021, thus clarifying the details of the agreement during the Indonesia Presidency of the G20 in 2022.

Directly following this agreement in June 2021, the Commission will publish (consultations on) proposals for two new directives to ensure uniform implementation of the OECD proposals in the EU. Even though there might be push back from some Member States with regards to a minimum tax rate of 15%, it is likely that these proposed directives will be adopted quickly. These proposals will lead to higher compliance costs as the impacted companies will have to calculate if and which portion of their profits should be taxable where their customers are located.

Fighting tax avoidance (ATAD 3)

To further support its work on business taxation, in Q4 of 2021 the Commission will present a proposal to prevent the misuse of companies with very little substance and without real economic activity (so-called shell companies). By means of this proposal, EU companies will be subject to new compliance requirements, as this will lead to more reporting to the tax administration on the presence of real economic activity in companies in the corporate structure. Particularly with regards to intermediary holdings this proposal could mean much higher reporting requirements to safeguard access to the benefits of tax treaties.

The Commission will also present a proposal in Q4 that will limit the deduction of royalty and interest payments to companies that are located outside of the EU. The aim is to prevent that these types of payments are used to avoid paying tax in the EU. The consequence of these proposals, however, is that much more information will have to be provided to the tax authorities with regards to these payments to safeguard deduction where there are valid business reasons.

Dr2 Academy Trainings - 22 September and 18 November 2021

Increasing transparency in business taxation

In the first half of 2022, the Commission will publish a proposal for a directive that requires big companies to publish the effective tax rate they pay over their profits. It is likely that these effective tax rates will need to be published on a country-by-country basis. In addition, it is still unclear if this requirement will only apply to companies with a worldwide turnover of more than €750 million (following from the G20/OECD discussions) or that the EU would put the revenue threshold on €250 million, as they plan to do with the Digital Levy.

Encouraging equity over debt financing

In Q1 of 2022, a proposal for a directive is expected that will make it more attractive to finance investments with equity in order to discourage that companies take on too much debt. The proposal most likely will involve an allowance for equity (ACE). However, the possibility to deduct a percentage of (the mutation of) a company’s equity also comes with new reporting requirements. For instance, it would make it necessary to perform all sorts of corrections to the fiscal equity as it shows on the balance sheet to ensure that the equity cannot be artificially inflated to increase the deduction.

A new framework for business taxation

Finally, the Commission announced a new framework for business taxation in the EU to be published in 2023. The “Business in Europe: Framework for Income Taxation” (BEFIT) will build on the existing proposal for Common Consolidated Corporate Tax Base (CCCTB) that has been pending since 2011. If adopted, BEFIT will make it possible for companies to file their tax assessment for all their EU activities in one Member State. This one-stop-shop approach should mean a reduction in the administrative burden that companies now have to deal with when filing separate tax assessments in all the Member States where they are active. The experience with the CCCTB so far, however, shows that it is not easy for all the Member States to quickly align on this proposal.

What can Dr2 Consultants do for you?

Dr2 Consultants continuously monitors the developments of the discussion on the new global, EU and national tax regimes, so we can help you keep well-apprised of the relevant developments in the coming months. Should you be interested in further information on any of the EU Commission’s business taxation proposals and how these could specifically impact your business, you can reach out to Dr2 Consultants at info@dr2consultants.eu or find more information on our website. Also, find out how our monitoring services can help your business here.

Transport sector and national recovery plans: investment priorities for a green recovery

On 30 April, most EU Member States handed in their national recovery and resilience plan in the framework of the Recovery and Resilience Facility (RRF), the EU recovery fund of €750 billion aimed to finance the (green) recovery from the COVID-19 pandemic. The European Commission has currently received 18 national plans. Whereas larger Member States like Germany, France, Spain and Italy already handed in their plans, it remains to be seen what Member States such as the Netherlands, Sweden and Finland will prioritize during the recovery phase. Dr2 Consultants’ Transport Team assessed the different national recovery plans focusing on the transport sector to identify Member States’ investment priorities for the coming years and identified three investment trends: charging infrastructure, railways and hydrogen solutions. These trends will provide ample opportunity for the transport industry to secure funding for their projects, and are therefore relevant to monitor closely.

Below, Dr2 consultants provides a more detailed explanation of the three identified trends.

Trend 1: Charging infrastructure to stimulate the greening of transport as part of national recovery plans

Multiple Member States aim to use RRF resources to invest in the roll-out of recharging and refueling infrastructure for alternative fuels such as electricity, hydrogen and bio-CNG/LNG. Where Austria, Belgium and Spain invest in the deployment of recharging infrastructure, Germany is leading the pack, as it will invest approximately €2.5 billion in the infrastructure for electric vehicles. This recharging infrastructure will take the form of an increase in the number of charging points for electric vehicles, both rolling out public charging points as well as stimulating public and private investments in infrastructure rollout by private companies. These investments in alternative fuels infrastructure will go hand in hand with stimulating fleet renewal throughout the EU, focusing on vehicle fleet for company cars and trucking businesses.

European Green Deal Impact Scan

Not only are these investments directly stimulating the greening of the transport sector, but they are also desirable in the context of the upcoming revisions of the Alternative Fuels Infrastructure Directive (AFID) and the TEN-T Regulation. In line with the anticipated objectives set out in these upcoming legislative files, Member States will be required to invest more in the deployment of recharging infrastructure to boost e-mobility across the EU.

Trend 2: Expanding railway connections finds resonance in the national recovery plans for transport

The European ‘Year of Rail’ appears to find resonance in the national recovery plans. A swift modal shift from road to rail could become reality as Member States are consistently aiming to invest significant amounts from the RRF into the expansion of the railway network in the EU. Italy aims to invest an approximate €25 billion in railway infrastructure, which is partly used for high-speed lines in its northern parts, focusing on cross-border connections with the rest of Europe. Belgium will also be ambitious in the coming years, focusing both on a more efficient rail network to further stimulate a modal shift, as well as embracing new mobility concepts such as Mobility as a Service (MaaS) and building accessible multimodal stations.

Trend 3: Hydrogen solutions for transport

With Member States embracing hydrogen as a key enabler of the energy transition, it is no surprise that Member States aim to invest massively in hydrogen solutions. First of all, Member States are scaling up the production, storage and transmission of (green) hydrogen. Several Member States state they want to start Important Projects of Common European Interest (IPCEI) in the field of hydrogen. This means that Member States are not individually scaling up in the field of hydrogen, but that the hydrogen transition is considered a collective effort between all Member States. This way of thinking is in line with the EU’s Hydrogen Strategy from July 2020, and is a trend that will further materialize after revisions of essential pieces of EU legislation in the Fit for 55 Package.

Dr2 Consultants observes that an important element in national hydrogen strategies are the transport applications of hydrogen. Portugal, for example, aims for a 1-5% share of green hydrogen in road transport and a share of 3-5% in inland waterway transport by 2030. Germany and France are both set to invest approximately €2 billion in the scale-up of their hydrogen economy.

What does this mean for European businesses?

The existing plans can serve as a good blueprint for lobbying activities towards Member States that are still in the process of writing and finalizing national recovery and resilience plans. The projects and investments as laid out in the existing plans can be an important driver for the Member States to invest in similar projects in order to boost their competitive position.

However, Dr2 Consultants sees that some plans are more detailed than others, and that some Member States have fewer concrete ideas yet on how to reach some of the goals they pose in their plans (e.g. sticking to general notions such as ‘stimulating the modal shift’). Since the recovery plans will be scrutinized by the European Commission, it will remain to be seen if the national plans will have to be further specified before they can be approved by the EU.

Dr2 Consultants advises businesses to consult closely with national authorities how they can contribute to the execution of projects. Although RRF resources will have to be allocated to projects that can stimulate the (green) recovery over the short-term, co-financing from the RRF can cover unprofitable margins and ensure investment clarity.

You might also be interested in:

Next Generation EU and National Recovery Plans

Belgian National Recovery Plan: an analysis