Under the motto "Unite. Act. Deliver", the 28th World Climate Change Conference (COP28) will begin on 30 November 2023 in Dubai, United Arab Emirates. The BDI will be there as the voice of the German industry and will organise its own events. One of the key tasks of the summit is to turn the results of the first Global Stocktake into binding political resolutions: All countries must take ambitious concrete measures. Furthermore, with the "Loss and Damage" fund, the focus also lies on financing.

Biodiversity and nature conservation are high on the political agenda in Brussels. They are a focus of the European Green Deal. With its proposal for a Nature Restoration Regulation, the European Commission seeks to commit EU member states to ambitious targets. On July 12, the plenary of the European Parliament adopted the proposal after previous highly controversial discussions in the Council of Ministers and the European Parliament.

Germany's and Europe's dependence on mineral raw materials such as rare earths from China is already greater than that for oil and natural gas from Russia. Increasing system competition with autocratic regimes is further increasing supply risks. With the EU Critical Raw Materials Act, the European Commission is sending an important signal to strengthen European sovereignty in the raw materials sector. However, central instruments for implementation are missing.

Europe is facing major challenges: The transformation of our economy towards climate neutrality will require immense investments in the coming years and will place extreme demands on companies. At the same time, the energy crisis and fierce global competition are making this transition more difficult. The EU Commission has responded to these challenges: As part of February's Green Deal Industrial Plan, in mid-March it presented the Net-Zero Industry Act, a legislative proposal to accelerate climate transformation.

Following the energy crisis year of 2022, the European Commission has in March 2023 launched its proposal for a structural reform of the European internal electricity market. Its cornerstones "more renewable energies, more consumer protection and more competitiveness" are set. However, will the proposals help reinforce Europe´s attractiveness as an industrial location, its strategic resilience while strengthening its energy sovereignty?

Energy was the dominant issue at EU level during the crisis year 2022: the Energy Council counted a record number of eight ministerial meetings and adopted three emergency energy packages. For 2023, fundamental structural reforms are on the European agenda, ranging from the finalisation of the Fit-for-55 legislative packages to the reform of the EU electricity market design and the Green Deal Industrial Act as the European answer to the US Inflation Reduction Act (IRA).

How can the increasing volume of packaging waste be managed? How can packaging waste be better recycled and recyclates better used? What role will packaging play in a modern circular economy in the future? The European Commission is trying to answer these questions with its latest proposal for a regulation on packaging and packaging waste.

Due to the Russian invasion of Ukraine, Europe is running in crisis mode. Despite unprecedented levels of uncertainty, the strategic direction of travel for generations to come is to be set right now. Emergency energy measures and measures to spur investments in climate protection need to be designed hand in hand. Whether REPowerEU, Save Energy for a Safe Winter or Fit-for-55: reliable framework conditions remain key.

The legislative process on the proposal for a directive on corporate due diligence is progressing rapidly. The Czech Council Presidency plans to vote on a General Approach among the member states at the Competitiveness Council in December 2022. In the European Parliament, the lead Legal Affairs Committee will publish its report at the end of October. Numerous committees have already published their own draft opinions.

Brussels' response to Russia's invasion of Ukraine is taking shape: alongside expanded EU sanctions, including on Russian coal and oil imports, the EU Commission is betting on an acceleration of the Green Deal. Mid-May 2022, it presented its REPowerEU plan to rapidly reduce Europe's import dependence on Russian fossil fuels and to accelerate the ecological transformation.

As part of its Fit-for-55-package, the EU Commission has presented a revision of the CO₂ fleet regulation. In particular, it provides for a 100 percent reduction target for CO₂ emissions from passenger cars and light commercial vehicles by 2035. The proposal had already been endorsed by the EU Parliament at the beginning of June. With its vote, the EU Council has reopened the discussion on a technology-open regulatory approach for electromobility and internal combustion vehicles with e-fuels. However, the implementation is completely open.

Companies depend on the swift and unbureaucratic permitting of their industrial plants in order to produce and remain competitive. At the same time, Germany is facing an enormous permitting marathon in order to achieve the European climate targets. With the proposals from April 2022 to extend the European Industrial Emissions Directive, the EU Commission is jeopardising these goals.

With the Russian invasion of Ukraine, EU energy issues turned into geopolitical strategy and security issue practically overnight. But what do the current developments mean for Europe's flagship initiative, the Green Deal, and the ongoing negotiations on the Fit-for-55 packages?

The capture, use and storage of CO2 has been tried and tested. What is missing, however, is scaling up to industrial scale as well as trust and acceptance among the population. Germany could play a pioneering role here with model regions and establish a CO2 market in the long term. Pilot projects can help to gain the acceptance of the population.

In the light of COP26, Commission President von der Leyen said: "The world's race to achieve climate neutrality by mid-century has begun." With a comprehensive catalogue of measures, Europe is set to embark on its climate-neutral future and to reduce its net greenhouse gas emissions by at least 55 per cent by 2030. But record energy prices and geopolitical complexities cast shadows ahead. Quo vadis "fit for 55"?

Early June 2021, BDI, Confindustria and Medef presented their joint call for European energy and climate innovation leadership in Brussels. "There is only one answer to the challenging energy and climate transformation: innovation," urged Holger Lösch, BDI Member of the Executive Board. "Every industrial sector has its own path to climate neutrality," EU Energy Commissioner Kadri Simson stated in her opening speech at the joint event.

The EU action plan "Towards a Zero Pollution Ambition for air, water and soil" aims for zero pollutants in air, water and soil. Further, the "Zero Pollution Target" aims to strengthen the European Union's green, digital and economic leadership. Yet, pollutants are naturally present in the environment and not every substance classified as a pollutant is hazardous to the environment and health by its mere presence.

In line with the European Green Deal, sustainability is going to be integrated deeper into the corporate governance framework according to the plans of the European Commission. A legislative proposal on sustainable corporate governance is expected in October 2021. The goal: Companies are to be legally obliged to long-term oriented corporate governance and measurable sustainability goals. In addition, EU-wide corporate due diligence for supply chains will become mandatory in the future.

“Moving from crisis mode to a new cruising speed of cooperation with European industries,“ have been the opening words of Commission President von der Leyen at this year's EU Industry Days. In view of the EU Commission's legislative proposals announced for 2021 to implement the EU´s increased climate ambition, BDI has outlined the key principles in March 2021 that according to German Industries should guide the “fit-for-55“ process.

At the 39th General Assembly of the United Nations International Civil Aviation Organization (ICAO) in the fall of 2016, the member states agreed on a global climate protection instrument for the aviation sector. The launch is planned for 2021. For the competitiveness of European airlines, the global approach is preferable to a national or European solo effort.

Air traffic is not only of outstanding economic importance, but also has a high level of responsibility in terms of climate policy. The BDI is in favour of effective climate protection instruments without placing an additional burden on air traffic and, therefore, rejects the introduction of additional financial burden such as a kerosene tax to achieve climate policy goals.

At the beginning of October 2020, the EU environment ministers held an informal meeting to discuss raising the European climate target for 2030. No final agreement could yet be reached. The new target is to be set out in the European climate law. What this means for individual Member States is still unclear. What is certain, however, is that the new target will be extremely demanding, and that success is by no means guaranteed.

With the Green Deal, the EU Commission aims for a climate-neutral Europe by 2050. The financing of private and public investments in climate and environmental protection requires massive investments in a wide range of sectors and trillions of euro are needed. How can the ambitious goals be financed? There are several approaches.