These are the priorities of the Swedish Presidency of the Council of the European Union for the first half of 2023.
New year, new EU Council presidency. As of January 1st, Sweden assumed the Presidency of the EU Council for the first six months of 2023, and it does so with clear priorities: “security, competitiveness, green and energy transitions, democratic values and the rule of law.”
This presidency finishes the joint programme that started in January 2022 with the French Presidency and continued in the second half of 2022 with Czechia’s Presidency. The end of the Swedish presidency will be followed by a new ‘trio’: Spain, Belgium, and Hungary.
But before the new trio starts, the Swedish agenda is packed with priorities promising to determine policy outcomes well into 2030. These priorities have been marked by Russia’s unprovoked aggression against Ukraine, which has highlighted the need for rapid industrial decarbonisation and the acceleration of the energy transition, as the energy system is directly linked to European security and the democratic values of the EU.
With European economies severely affected by the war, the green and energy transitions take centre stage, with the ‘Fit for 55’ package setting the framework for climate action. Swedish Prime Minister Ulf Kristersson recognises the EU’s climate leadership and declared Sweden’s intention to strengthen this position during the Presidency.
As the Swedish Presidency states in its programme, “joint European steps towards independence from fossil fuels are necessary not only for the green transition, but for our security.” And if the current geopolitical landscape proves something, it is the need to become independent from Russian fossil fuel imports and strengthen the EU’s energy system. A secure supply of fossil-free electricity is of paramount importance to achieve this while decreasing the energy system’s carbon intensity, which is why the reform of the electricity market is a top priority of this Presidency.
The Gas Market Package is listed as another primary concern, as it could serve to reduce natural gas use while increasing the proportion of renewable and low-carbon gases in the energy system. For it to do so, the definition of low-carbon gases must include their full climate impact, and the blending of hydrogen with natural gas must be minimised due to their limited availability. Read Bellona’s recommendations here.
As part of the ‘Fit for 55’ package, the Swedish presidency also plans to continue driving forward the trilogues on the Renewable Energy Directive (RED) and on the Energy Efficiency Directive (EED). The results should reflect the ambitions set out in the 2030 targets, by setting out the right framework for additional deployment of renewable energy generation. Bellona supports the initiative of the Commission to expedite permitting processes for renewable energy deployment. The RED should also include higher targets for the direct use of renewable electricity in industry, together with strict requirements for the deployment of additional renewable electricity generation for hydrogen production. The use of hydrogen should also be prioritised in sectors where the direct use of renewable electricity is not achievable.
Furthermore, there are plans for advancing the work on the reform of the Energy Performance for Buildings Directive (EPBD), with aim to increase energy efficiency in buildings and improve the availability of charging infrastructure for electric vehicles (EVs). This is a step in the right direction, but to account for the full climate impact of the buildings sector, the embodied carbon emissions of buildings (i.e., the emissions that come from the manufacturing of construction materials and associated construction processes) must be taken into account. The EPBD must be an instrument in accounting for whole-life carbon in buildings, from material manufacturing to end-of-life disposal, to construction and building renovation as well as operational energy efficiency. Sweden, as one of the front-running Member States in embodied carbon legislation for buildings, is in a favourable position to drive forward the negotiations for a comprehensive and harmonised approach to include embodied carbon considerations in the EPBD.
Regarding transport, the Swedish Presidency intends to advance the negotiations on the Trans-European Transport Network (TEN-T), recognising it as “an important aspect in terms of sustainably and efficiently strengthening and modernising Europe’s transport infrastructure”. Currently, the lack of recognition and support for different ways of transporting CO2, such as by road, rail, and ships, risks missing the opportunity to optimise cooperation with other networks, like CO2 pipelines, that are supported under the TEN-E regulation. We look forward to the Swedish Presidency taking the opportunity of the ongoing revision of the TEN-T Regulation to remedy this inconsistency and bring the Regulation in line with the Commission’s ambition to establish a European cross-border, open access, and multimodal CO2 transport infrastructure. As Energy Commissioner Kadri Simson maintained during the 2022 CCUS Forum: “putting the right infrastructure in place is a must”.
The programme also communicates an intention to initiate negotiations on proposals on the road, rail and intermodal transport that the Commission is expected to present later this year, including a package for green freight transport. Proposals on aviation are also expected to improve the internal aviation market. The ReFuelEU Aviation Initiative is undergoing Trilogue negotiations, and Bellona’s stance can be found here. On maritime transport, negotiations on the legislative acts in the Maritime Safety Package will also be initiated in the Council.
Hydrogen, as a current hot topic, is subject to appear in several proposals related to energy and transport. As is argued regarding the Renewable Energy Directive, Bellona stresses the importance that any hydrogen supplied must be required to come from renewable energy sources and that the additionality of renewable energy must be ensured to avoid diverting renewable electricity generation capacity from its current use in the power sector. Read more about the place of hydrogen in an energy-efficient EU here.
A preliminary agreement on the Emissions Trading Scheme (ETS), one of the major files of the ‘Fit for 55’ package, was found in December during the Czech Presidency, leaving room for the Swedish Presidency to engage in political discussions on some of the remaining files.
It will also advance the proposal for Carbon Removal Certification Mechanism to develop robust accounting methodologies for carbon removal processes. Bellona welcomes this effort but highlights that the definition of carbon dioxide removal (CDR) must be clear and conform to these principles. There must be a separation of sinks, the commodification of carbon in natural sinks must be prevented, and the role of CCU must be minimised due to its limited potential for permanent storage. Certification of CDR is good news, but it must be gotten right. Bellona’s reaction to the initial proposal can be found here.
Several circular economy initiatives are also on the list, such as establishing penalties for disposing of products that can otherwise be recycled or reused or rewards for products with significantly lower emissions than conventional/carbon-intensive products. Robust and accurate greenhouse gas accounting methodologies will be essential to avoid the greenwashing of circular products. A legally binding agreement on plastic pollution is also likely to take place during the Swedish Presidency of the Council.
Following up on the outcomes of the UN Climate Conference (COP27) and the UN Biodiversity Conference (COP15) is also mentioned in the programme. Sweden will need to start the preparations ahead of COP28 for alignment on clear pathways to achieve net zero with intermediate targets, as a key element of the Presidency’s work.
Internal market and industry
Bellona welcomes the Presidency’s intention to prioritise the work on the interconnected negotiations on the Ecodesign for Sustainable Products Regulation and the Construction Product Regulation (CPR), as well as the recognition that both regulations should be aligned to ensure that the effective decarbonisation of the construction sector. On the CPR, Sweden, as the leading Member State in green public procurement (GPP) also has the potential to drive the negotiations towards stronger GPP criteria in construction projects.
The programme does not dive into the Council’s plans to tackle some regulatory files, such as the Sustainable Product Initiative, which, according to Bellona, should be given a more prominent place in the priorities list. Assessments must take into consideration the full value chain of production – including embodied carbon – of a given product. Not doing so can result in misleadingly favourable market conditions and a very real negative climate impact.
With so many relevant issues to tackle, the Swedish Presidency is bound to be leading the Council through a bustling six months, in a period where climate action is more urgent than ever if we want to meet the 2030 targets. Fortunately, the previous Presidency managed to conclude the political discussions on several key files, including the ETS and CBAM. However, most of the political agreements on the rest of the ‘Fit for 55’ package will need to happen during the Swedish Presidency, ahead of the next European elections in May of 2024, which will take centre stage from autumn of this year.