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By Paul A. Davies, Michael D. Green, and James Bee

The CBAM would seek to mitigate carbon leakage through the imposition of a levy on carbon-intensive imports into the EU, while free allowances under EU ETS would be phased out.

On 13 December 2022, negotiators from the European Parliament and European Council reached a provisional and conditional agreement on the terms of the EU’s carbon border adjustment mechanism (CBAM).

The CBAM was initially proposed by the European Commission in July 2021 as part of its “Fit for 55” package of policies. The measure seeks to address and mitigate the risk of “carbon leakage” from the EU, which refers to the risk that the EU’s greenhouse gas reduction efforts will be offset by increasing emissions outside of its border through the relocation of production to non-EU countries with less ambitious emissions reduction policies.

The CBAM would impose a levy on in-scope goods that are imported into the EU. Importers of such goods would be required to pay an amount equal to the cost of the emissions allowances under the EU Emissions Trading System (ETS) that would have been necessary to pay to produce that good in the EU.

Member States will follow a single EU legislative framework merging industrial policies and environmental protection to encourage sustainable economic and social development.

By Paul A. Davies and Jörn Kassow

The European Parliament adopted the new Circular Economy Package, on 18 April 2018, setting ambitious, legally binding EU targets for waste recycling and reduction of landfilling. The package aims to further increase municipal waste recycling and lower the amount of landfilling. Currently, over a quarter of municipal waste is still landfilled and less than half is recycled or composted. This has a negative impact on the environment, climate, human health, as well as the economy.

Through the updated waste management legislation, the EU promotes a shift to a more sustainable model known as the circular economy. This is a model of production and consumption that extends the lifecycle of products, components, and materials, to reduce waste disposal to a minimum. This shall replace the former linear economic model, which is based on a “take-make-consume-throw away” pattern and therefore wastes a lot of resources and energy.

By Paul Davies and Michael Green

The Environmental Liability Directive (ELD) aims to prevent, remedy and/or compensate for environmental damage. ELD seeks to achieve this through the “polluter pays principle”, ensuring businesses are held legally and financially accountable for environmental degradation that results from their operations. However, Member States have varied considerably in implementing ELD, significantly reducing its effectiveness. The European Parliament is the latest of several European authorities to review ELD’s effectiveness.

A report published by the European Parliament sets out the primary areas of concern with ELD, namely: (i) the lack of certainty surrounding key definitions; and (ii) narrowness of scope. For example, the European Parliament considers there is “total uncertainty” regarding the “significance threshold”. As the significance threshold determines whether an incident triggers liability under ELD, the European Parliament considers the clarity of the threshold crucial. Furthermore, ELD only imposes strict liability on operators that cause environmental damage in the course of activities specified in an exhaustive list. Beyond this list, liability for environmental damage is fault-based.

By Cesare Milani

The Italian Government definitively approved Legislative Decree no. 50 in April this year, implementing Directives 2014/23/EU, 2014/24/EU and 2014/25/EU of the European Parliament and European Council. The revised legislation resulting from the Directives coming into force affect the Italian construction market. Notably, the new Italian Public Procurement Code impacts “public procurement and awarding concession contracts, procurement by entities operating in the water, energy, transport and postal services sectors and on the reorganization of the Public Procurement Regulation”. The new code has been introduced to deliver high quality standards for public works and to limit excessive cost increases due to variances in project execution.

According to data made available by the Italian National Association of Building Contractors (Associazione Nazionale dei Costruttori Edili), the regulatory change has already resulted in the retreat of the public works market. In addition to strengthening the role of Autorità Nazionale Anticorruzione (ANAC), the national anti-bribery and corruption authority in the public procurement sector, the new code has also established a qualification system of contracting authorities and introduced other provisions to consolidate public tenders. Such revisions have led to a decline in both the value of the calls to tender made public and the number of large public procurement procedures launched. In May this year, there was a 75% decrease in tender value compared to the calls for tender published in May 2015. With respect to the number of public procurement procedures commenced, only 10 procedures with an awarding value higher than €5 million were kicked-off in May 2016, while 45 procedures of the same size were recorded in 2015.

By Paul Davies and Alice Gunn

Unwrapping the New Circular Economy Package

The European Commission is driving the transition to a stronger and more circular economy by ensuring resources are used in a more sustainable way. On 2 December 2015, the Commission adopted a new Circular Economy Package which, according to the Commission, will help European businesses and consumers adopt more sustainable practices.

In December 2014, the Commission withdrew proposals for waste reductions targets on the grounds that the approach…