Green and Digital Transitions: EU Regulation Impact in Spain
Focus on Sustainability and Digitalization
February 22, 2022
The year 2022 will bring about a regulatory tsunami, especially on the green and digital transitions, for companies operating in the European Union. This is shown by the Work Program announced by the European Commission, which has been reactivated because of, among other threats, the United Kingdom departure, the energy crisis, or the Covid-19. To just put it in context: in the last 122 days of 2021, 144 legal rules have been published in Spain, out of which only 14.5% have been subject to parliamentary control.
Presently, the efforts of the European Commission and Parliament are focused on preparing companies to compete in an increasingly global and complex environment. In particular, the initiatives proposed for 2022 have been devised relying on the pillars set at the start of Ursula von der Leyen’s mandate and are aimed at promoting environmental sustainability and the adoption of digitalization all along the business value chain.
In 2022 alone, the Work Program announced by the European Commission sets out 42 new policy initiatives, 26 initiatives for regulatory simplification, and 76 proposals on pending priority legislative files, plus six intended withdrawals of proposals submitted in 2021.
One of the legislative packages with the greatest impact on companies operating in Europe will the ‘Fit For 55‘ set of proposals, which calls for a drastic reduction in CO2 emissions in the coming decades. The ‘Fit For 55‘ package aims to drive progress towards entirely renewable production methods, with a fundamental shift in transportation and mobility, and the reshaping of supply chains. We are talking about measures aimed at protecting air and water quality; and moving towards a circular economy, affecting countless industries, such as plastics, fertilizers, pesticides, labelling or urban wastewater management.
In addition to the various legislative and non-legislative proposals planned, from the second half of 2022 onwards, under the presidency of the Czech Republic, various legal rules will be reviewed, such as the Directive on end-of-life vehicles, the Directive on motor vehicle type-approval, or the Regulation on the placing on the market of detergents. It is difficult to ascertain the impact of these reviews currently, but it is important to follow the evolution of possible changes and their consequences in sectors that are material to our economy.
This is also the case with the EU digital agenda, which will be moving forward on issues that are crucial to businesses. Among other aspects, the EU wants to boost digital media and channels so that companies can adapt more quickly to change and reduce the impact of future economic and financial crises; or strengthen digital competencies to reduce the digital divide, promote ‘digital skills’ and ensure affordable, safe & secure, high-quality connectivity. In this sense, a European Chips Act and a European Ciber Resilience Act should indeed be highlighted. The ultimate objective of all these measures is to help promote the strategic autonomy of the Union.
Other important aspects of digital regulation will continue to be the threat of cybercrime and the protection of consumer rights, with particular emphasis on data protection. In this respect, we should be on the lookout about the possible impact, on companies and administrations, of legislative proposals for 2022 such as the ‘Roadmap on security and defense technologies’, or the ‘Recommendation on improving the supply of digital skills in education and training’.
How can Spanish companies prepare for this regulatory tsunami in the given context? On the one hand, as all these initiatives will present a regulatory challenge for the member countries, which in turn must rely on their regions (autonomous communities in the Spanish case) and municipalities for their implementation, models of co-governance and public-private collaboration should be encouraged to achieve proper application. Secondly, and related to the previous point, having a strategy of public outreach, both at Community level and when introducing new regulations to the State authorities, autonomous communities, and municipalities, will be key to enabling companies to properly adapt at their lowest cost to their regulatory environment.
February 22, 2022
Senior Managing Director, Head of Spain Public Affairs
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