On 23-24 June 2022, the European Council adopted conclusions on Wider Europe, Ukraine, the membership applications from Ukraine, the Republic of Moldova and Georgia, Western Balkans, economic issues, Conference on the Future of Europe and external relations.

European Council conclusions, 23-24 June 2022
Remarks by President Charles Michel following the second session of the European Council, 24 June 2022

Ahead of the European Council meeting, EU and Western Balkan leaders met in the morning of 23 June 2022 in Brussels.

EU-Western Balkans leaders’ meeting, 23 June 2022

Main results
Wider Europe
The European Council held a strategic discussion on ‘Wider Europe’, concerning the EU’s relations with its partners in Europe. In this context, EU leaders also discussed a proposal to launch a European political community.
The discussion was guided by the questions ‘what, who and how?’. The aim of ‘Wider Europe’ is to offer a platform for political coordination to countries in Europe with which the EU has close relations. This will help foster cooperation and address issues of common interest to strengthen security, stability and prosperity in Europe.
Such a framework would not replace existing EU policies and instruments, including EU enlargement, and will fully respect the EU’s decision-making autonomy.
EU leaders will return to this issue.
Russia’s aggression against Ukraine
The European Council reiterated that it stands firmly with Ukraine and that the EU will continue to provide strong support for Ukraine’s overall economic, military, social and financial resilience, including humanitarian aid.
Safety of civilians and war crimes
EU leaders resolutely condemned Russia’s indiscriminate attacks against civilians and civilian infrastructure, and reiterated that international humanitarian law must be respected.
Leaders stressed that Ukrainians, notably children, who have been forcibly removed to Russia, must immediately be allowed to return safely.
They underlined that Russia, Belarus and all those responsible for war crimes and the other most serious crimes will be held to account for their actions in accordance with international law.

EU response to Russia’s invasion of Ukraine (background information)

Sanctions against Russia
The European Council said that the work on sanctions will continue, including efforts to strengthen implementation and prevent circumvention.
EU heads of state or government called on all countries to align with EU sanctions, in particular countries that are candidates for EU membership. They also stressed that work on the Council decision adding the violation of restrictive measures to the list of EU crimes should be swiftly finalised.

EU restrictive measures against Russia over Ukraine (background information)

Solidarity with Ukraine
EU leaders highlighted that the EU remains strongly committed to providing further military support to help Ukraine exercise its inherent right of self-defence against Russian aggression and defend its territorial integrity and sovereignty.
To this end, they called on the Council to swiftly work on a further increase of military support.
The European Council noted that the European Commission would soon present a proposal to grant Ukraine new exceptional macro-financial assistance of up to €9 billion in 2022.
EU heads of state and government called on the Commission to swiftly present its proposals on EU support for the reconstruction of Ukraine, in consultation with international partners, organisations and experts.

EU solidarity with Ukraine (background information)

Food security
The European Council addressed the global food crisis. EU leaders urged Russia to immediately stop targeting agricultural facilities and to unblock the Black Sea ports to permit the export of Ukrainian grain and enable commercial shipping operations to resume. Leaders supported the efforts of the United Nations Secretary-General to this end.

Russia, by weaponising food in its war against Ukraine, is solely responsible for the global food security crisis it has provoked.
European Council conclusions, 23 June 2022

EU leaders underlined that EU sanctions against Russia allow the free flow of agricultural and food products and the delivery of humanitarian assistance.
Leaders expressed strong support for the ongoing work on the solidarity lanes, which are facilitating food exports from Ukraine via land routes and EU ports.
Building on the FARM initiative as well as UN and G7 initiatives, they called on the Commission and EU member states to step up efforts to:

help developing countries reorient their supply chains, where necessary
accelerate work on the Team Europe initiatives aiming to support Africa’s sustainable agri-food production capacities

support the development of input manufacturing capacity in developing countries, in particular sustainable fertilisers

Impact of Russia’s invasion of Ukraine on the markets: EU response (background information)
Food security and affordability (background information)

EU membership applications
The European Council recognised the European perspective of Ukraine, Moldova and Georgia and reiterated that the future of these countries and their citizens lies with the EU.
EU leaders granted candidate status to Ukraine and Moldova. In this context, the leaders invited the European Commission to report to the Council on the fulfilment of the conditions specified in the Commission’s opinions on the respective membership applications. The Council will decide on further steps once all of these conditions are fully met.

The European Council has just decided EU candidate status to Ukraine and Moldova. This is a historic moment. Today marks a crucial step on your path towards the EU. Our future is together.
European Council President Charles Michel, 23 June 2022.

EU enlargement: Ukraine (background information)
EU enlargement: Moldova (background information)

The European Council is ready to grant candidate status to Georgia once the priorities specified in the Commission’s opinion on Georgia’s membership application have been addressed.

EU enlargement: Georgia (background information)

Each country’s progress will depend on its own merits in meeting the Copenhagen criteria, and also on the EU’s capacity to accept new members.

EU enlargement (background information)

Western Balkans
Ahead of the European Council, EU leaders met Western Balkan leaders in the morning of 23 June 2022. During the meeting the leaders discussed:

progress on EU integration
how to advance the EU enlargement process
the consequences of Russia’s war of aggression against Ukraine in the region
geostrategic issues

The leaders also took stock of progress on key investments under the Economic and Investment Plan for the Western Balkans.

EU-Western Balkans leaders’ meeting, 23 June 2022
The EU: main trading partner and investor for the Western Balkans (infographic)

Accelerated enlargement process

The European Union expresses its full and unequivocal commitment to the EU membership perspective of the Western Balkans and calls for the acceleration of the accession process.
European Council conclusions, 23 June 2022

Building on the revised enlargement methodology, the European Council invited the European Commission, the High Representative and the Council to further advance the gradual integration between the EU and the Western Balkans during the enlargement process in a reversible and merit-based manner.
In this regard, the European Council recalled the importance of reform in the following areas:

rule of law
independence and functioning of judiciary
the fight against corruption

The European Council also called on the partners to guarantee the rights and equal treatment of minorities.

EU enlargement (background information)

Political dialogues and agreements
The European Council was informed of the latest developments on the discussions between Bulgaria and North Macedonia and called for a swift resolution of the last remaining issues so that accession negotiations can be opened without delay.

EU enlargement: The Republic of North Macedonia (background information)

The European Council reaffirmed the urgency of making tangible progress in resolving outstanding bilateral and regional disputes, particularly the Belgrade-Pristina Dialogue on the normalisation of relations between Serbia and Kosovo*.
The European Council welcomed the political agreement reached on 12 June 2022 by the leaders of Bosnia and Herzegovina, which is vital for the stability and full functioning of the country. It called on all political leaders of Bosnia and Herzegovina to swiftly implement the commitments set out in the agreement and finalise the constitutional and electoral reform in order to allow the country to advance on its EU path in line with the priorities outlined in the Commission’s opinion.
The European Council is ready to grant candidate status to Bosnia and Herzegovina. To that end, EU leaders invited the European Commission to report without delay to the Council on the implementation of 14 key priorities set out in its opinion in order for the European Council to revert to decide on the matter.

Political agreement on principles for ensuring a functional Bosnia and Herzegovina that advances on the European path (press release, 12 June 2022)
EU enlargement: Bosnia and Herzegovina (background information)

*This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo declaration of independence. 
Economic issues
European Semester 2022: country-specific recommendations endorsed
The European Council endorsed the country-specific recommendations, thus allowing the 2022 European Semester to be concluded.

European Semester 2022: country-specific recommendations agreed upon (press release, 17 June 2022)
Timeline: European Semester in 2022 (background information)
European Semester (background information)

Enlargement of the euro area: Croatia
The European Council welcomed the fulfilment by Croatia of all of the convergence criteria as set out in the Treaty. It endorsed the Commission’s proposal that Croatia adopt the euro on 1 January 2023 and invited the Council to adopt the relevant Commission proposals without delay.

The euro is the monetary expression of our shared destiny and has been part of our European dream. Now the dream comes true for Croatia.
European Council President, 24 June 2022

Energy prices
Referring to the Versailles Declaration and recent European Council conclusions, EU leaders reiterated the invitation to the Commission to explore with international partners ways in which to curb rising energy prices, including the feasibility of introducing temporary price caps where appropriate.

The Versailles Declaration, 10-11 March 2022
European Council conclusions, 21-22 October 2021
European Council conclusions, 24-25 March 2022
European Council conclusions, 30-31 May 2022

In the face of the weaponisation of gas by Russia, the European Council invited the Commission to urgently pursue efforts to secure energy supply at affordable prices.
The European Council also invited the Council, together with the Commission, to take any appropriate measures to ensure closer energy coordination between EU member states.

Energy prices and security of supply (background information)
Impact of Russia’s invasion of Ukraine on the markets: EU response (background information)

Conference on the Future of Europe
EU leaders took note of the proposals outlined in the final report of the Conference on the Future of Europe, which was presented to the three co-Presidents during the closing ceremony on 9 May 2022.
The Conference has been a unique opportunity to engage with European citizens, and the EU institutions should ensure that there is an effective follow-up to the final report, each within the institutions’ own spheres of competence and in accordance with the Treaties.
The European Council took note of the work already undertaken and recalled the importance of ensuring that citizens are informed on the follow-up to the report.

Conference on the Future of Europe (background information)

External relations
Eastern Mediterranean
The European Council expressed deep concern about recent repeated actions and statements by Turkey. Turkey must respect the sovereignty and territorial integrity of all EU member states. Recalling its previous conclusions and the statement of 25 March 2021, the European Council expects Turkey to fully respect international law, to de-escalate tensions in the interest of regional stability in the Eastern Mediterranean, and to promote good neighbourly relations in a sustainable way.

EU enlargement: Turkey (background information)
Statement of the members of the European Council, 25 March 2021

Belarus
Leaders reiterated that the Belarusian people have a democratic right to new, free and fair elections.
In this regard, EU leaders stressed the importance of:

upholding human rights
democracy
rule of law

The European Council reiterated its call to end repression and release political prisoners.

EU relations with Belarus (background information)
Restrictive measures against Belarus (background information)

Euro Summit
On 24 June 2022, EU leaders met in Brussels for a Euro Summit in inclusive format. They discussed the current economic situation and efforts for further strengthening the banking union and the capital markets union.

Euro Summit, 24 June 2022

Compliments of the European Council.
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The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, today publishes a letter to the European Commission (EC) providing its findings from the Call for Evidence to gather information on the market structure for ESG rating providers in the European Union (EU).
Key findings
ESMA received a total of 154 responses and found 59 ESG rating providers currently active in the EU. The analysis of the responses further indicated several characteristics and trends as follows:

ESG rating providers – the structure of the market shows that there is a small number of very large non-EU providers, and a large number of significantly smaller EU entities. While the legal entities of respondents are spread out across almost half of the EU Member States, a large number of these are clustered in a small number of Member States;
Users of ESG ratings are typically contracting for these products on an investor-pays basis from several providers simultaneously. Their reasons for selecting several providers are to increase coverage, either by asset class or geographically, or in order to receive different nature of ESG assessments. The most common shortcomings identified by the users were a lack of coverage of a specific industry or a type of entity, insufficient granularity of data, and a lack of transparency around methodologies used by ESG rating providers. However, the provision of ESG ratings on an issuer-pays basis was also evidenced and more prevalent than anticipated; and
Entities covered by ESG ratings dedicate at least some level of resourcing to their interactions with ESG rating providers, although the amount largely depends on the size of the rated entity itself. Most respondents highlighted some degree of shortcoming in their interactions with the rating providers, most notably on the level of transparency as to the basis for the rating, the timing of feedback or the correction of errors.

The feedback received is indicative of an immature but growing market which, following several years of consolidation, has seen the emergence of a small number of large non-EU headquartered providers.
Next steps
ESMA will continue supporting the EC in their assessment of the need for introducing regulatory safeguards for ESG ratings.
Compliments of the European Securities and Markets Authority.
The post ESMA publishes results of its Call for Evidence on ESG ratings first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

Following the further invasion of Ukraine, Russia continues to use natural gas as a political and economic weapon. Russia’s energy coercion has put pressure on energy markets, raised prices for consumers, and threatened global energy security. This was most recently demonstrated by the politically motivated acute disruptions of gas supplies to several European Union Member States. These actions only underscore the importance of the work both the United States and the European Commission are doing to end our reliance on Russian energy. We are also working together to find ways to further reduce Russia’s energy-derived revenues in the coming months to further curtail Russia’s ability to fund its unprovoked war in Ukraine. These actions are important, necessary, and immediate steps we can take, but we also recognize the enormity of the challenge is significant. To meet the challenge and support Europe’s efforts, we established on 25 March 2022 the Task Force on European Energy Security. Since then the United States and the European Commission have made important strides towards reducing the European Union’s dependence on Russian fossil fuels by decreasing natural gas demand, cooperating on energy efficiency technologies, and diversifying energy supplies. The United States and the European Commission are also taking decisive action to reduce overall demand for fossil fuels in line with the Paris Agreement and our shared goal of net zero emissions no later than 2050.
The Task Force has met regularly to discuss options to reduce Europe’s demand for natural gas and has also met with key stakeholders to promote the deployment of heat pumps, smart thermostats, and energy demand response solutions. We will encourage Member States and European and US companies to reach an initial goal of deploying at least 1.5 million energy saving smart thermostats in European households this year. In the coming days we will reconvene with Member States and stakeholders to discuss actionable policy recommendations to accelerate smart thermostat and heat pump deployment and production in an effort to ensure supply for key energy efficiency solutions are ramping to meet the growing demand.
We are also partnering to diversify energy supplies to Europe. While Russia has cut supplies of natural gas to several EU Member States, the United States and other producers have stepped up. Since March, global LNG exports to Europe have risen by 75 percent compared to 2021, while US LNG exports to Europe have nearly tripled. To facilitate these efforts, the European Commission and Member States, in line with a mandate given by the European Council in March 2022, established the EU Energy Platform to coordinate measures to secure reliable and diversified energy supplies for the EU, including through the voluntary common purchase of pipeline gas, LNG, and hydrogen. The Commission has also established the first Regional Energy Platform for South East Europe to support gas diversification of the region traditionally dependent on Russian supplies. The United States is a key partner for the sustainable diversification of gas supplies to this region and other acutely impacted EU Member States, including by supporting demand reduction and accelerating clean technologies.
Mindful of the environmental impact of LNG production and consumption, the United States and the European Commission will step up their cooperation to reduce methane emissions, to ensure that EU-U.S LNG trade is aligned with the scope of an internationally accepted measurement, reporting and verification standard for methane emissions while working to reduce venting and flaring in natural gas production, and methane leakage in the transmission and LNG supply chain. We will also continue our cooperation on reduction of methane emissions globally. Most recently, the joint launch with 11 other countries of the Global Methane Pledge Energy Pathway will advance both climate progress and energy security internationally.
Compliments of the European Commission.
The post Joint Statement by President von der Leyen and President Biden on European Energy Security first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

Vice-President for Interinstitutional Relations and Foresight, Maroš Šefčovič, and Jan Christian Vestre, Norway’s Minister of Trade and Industry, have released the following joint statement on enhanced political and industrial cooperation on the strategic value chains of batteries and raw materials.
The European Union and Norway enjoy a deep and long-standing relationship as neighbours and partners, sharing common political objectives and fundamental values, while being part of the Single Market through the European Economic Area (EEA).
Given the urgent need to tackle climate change, and secure supplies of sustainable energy, materials and technologies instrumental to decarbonisation and the competitiveness of their economies, while increasing resilience of strategic ecosystems, the EU and Norway share the ambition to strengthen and expand their cooperation in the area of the raw materials and battery value chains.
This will pave the way to a strategic partnership, built on a novel comprehensive framework for future-oriented and long-term cooperation, further strengthening political relations and economic ties between the EU and Norway. Development of integrated sustainable value chains for minerals, metals and batteries will help address strategic dependencies and create green long-term growth and high-quality jobs.
The Parties agreed to explore enhanced cooperation in the area of raw materials and batteries with regard to the integration of the materials and battery value chains, environmental, social and governance criteria, research and innovation, and financial and investment instruments.
The Parties agreed on the following initial areas of action: 

Norway will participate in the ministerial meetings of the European Battery Alliance.

Norway intends to participate in and contribute to the European Battery Academy.

The two Parties will discuss the application of the rules of origin laid down in the EU-UK Trade and Cooperation Agreement for battery packs and battery cells of Norwegian origin installed in electric vehicles produced in and traded between the EU and the UK.

Industrial actors, with the support of the European Alliances and Norwegian Associations, will explore business opportunities in view of developing battery and raw materials projects in Norway and the EU, including at a jointly organised business networking event.

The two Parties will work towards advancing best practices for resource classification and mapping, including mapping mineral potential from waste sources.

The two Parties will organise a joint Tracing Net-Zero Battery Minerals event to support research and innovation.

Vice-President Maroš Šefčovič, together with Commissioner for Internal Market Thierry Breton, and Minister Jan Christian Vestre will provide political guidance and strategic steer for the work carried out under the partnership. They will meet on a regular basis to monitor progress and decide on next steps.
A working group consisting of senior officials and experts from Norway and the EU will be created to develop a strategic partnership accompanied by a memorandum of understanding and a roadmap, in line with this joint statement.
Industrial actors, business associations and alliances, and stakeholders will be encouraged to engage in efforts related to the partnership, notably by exploring business opportunities and developing joint industrial projects along the entire battery and raw materials value chains.
The partnership on raw materials and batteries could be followed by partnerships in other areas of green industrial policy of mutual interest to both parties.
The future strategic partnership will be coherent with the EEA agreement and will contribute to the EU-Norway Green Alliance, announced on 23 February 2022, in the Joint Statement by President Ursula von der Leyen and Jonas Gahr Støre, Prime Minister of Norway.
Compliments of the European Commission.
The post Joint statement by Vice-President for Interinstitutional Relations and Foresight Maroš Šefčovič, and Jan Christian Vestre, Norway’s Minister of Trade and Industry first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

II. UKRAINE
4. The European Council discussed the Russian war of aggression against Ukraine in its different dimensions. The European Council reiterates that it firmly stands with Ukraine and that the European Union will continue to provide strong support for Ukraine’s overall economic, military, social and financial resilience, including humanitarian aid.
5. The European Council resolutely condemns Russia’s indiscriminate attacks against civilians and civilian infrastructure, and urges Russia to immediately and unconditionally withdraw all its troops and military equipment from the entire territory of Ukraine within its internationally recognised borders. International humanitarian law, including on the treatment of prisoners of war, must be respected. Ukrainians, notably children, who have been forcibly removed to Russia must be immediately allowed to return safely. Russia, Belarus and all those responsible for war crimes and the other most serious crimes will be held to account for their actions, in accordance with international law.
The adoption of the sixth package of EU sanctions further intensifies pressure on Russia to end its war against Ukraine. Work will continue on sanctions, including to strengthen implementation and prevent circumvention. The European Council calls on all countries to align with EU sanctions, in particular candidate countries. Work should swiftly be finalised on the Council decision adding the violation of Union restrictive measures to the list of EU crimes.
6. The European Union remains strongly committed to providing further military support to help Ukraine exercise its inherent right of self-defence against the Russian aggression and defend its territorial integrity and sovereignty. To this end, the European Council calls on the Council to swiftly work on a further increase of military support.
7. The European Council notes that the Commission will soon present a proposal to grant Ukraine new exceptional macro-financial assistance of up to EUR 9 billion in 2022. It calls on the Commission to swiftly present its proposals on EU support for the reconstruction of Ukraine, in consultation with international partners, organisations and experts.
8. Russia, by weaponising food in its war against Ukraine, is solely responsible for the global food security crisis it has provoked. The European Council urges Russia to immediately stop targeting agricultural facilities and removing cereals, and to unblock the Black Sea, in particular the port of Odesa, so as to allow the export of grain and commercial shipping operations. The European Council supports the efforts of the United Nations Secretary-General to this end. The European Council underlines that EU sanctions against Russia allow the free flow of agricultural and food products and the delivery of humanitarian assistance.
9. The European Council strongly supports the efforts on the Solidarity Lanes to facilitate food exports from Ukraine via different land routes and EU ports. It calls on the Commission and the Member States, building in particular on the FARM initiative as well as UN and G7 initiatives, to step up their efforts:
(1) to support developing countries to reorient, where necessary, their supply chains;
(2) to accelerate the delivery of the relevant Team Europe flagship initiatives agreed at the recent European Union – African Union Summit which seek to develop sustainable food production, strengthen agricultural productivity, including on protein crops, and agri-business capacity on the African continent; and
(3) to work on initiatives together with international partners to support the development of manufacturing capacity of inputs in developing countries, in particular sustainable fertilisers.
III. MEMBERSHIP APPLICATIONS OF UKRAINE, THE REPUBLIC OF MOLDOVA AND GEORGIA
10. The European Council recognises the European perspective of Ukraine, the Republic of Moldova and Georgia. The future of these countries and their citizens lies within the European Union.
11. The European Council has decided to grant the status of candidate country to Ukraine and to the Republic of Moldova.
12. The Commission is invited to report to the Council on the fulfilment of the conditions specified in the Commission’s opinions on the respective membership applications as part of its regular enlargement package. The Council will decide on further steps once all these conditions are fully met.
13. The European Council is ready to grant the status of candidate country to Georgia once the priorities specified in the Commission’s opinion on Georgia’s membership application have been addressed.
14. The progress of each country towards the European Union will depend on its own merit in meeting the Copenhagen criteria, taking into consideration the EU’s capacity to absorb new members.
IV. WESTERN BALKANS
15. The European Union expresses its full and unequivocal commitment to the EU membership perspective of the Western Balkans and calls for the acceleration of the accession process.
16. Building on the revised methodology, the European Council invites the Commission, the High Representative and the Council to further advance the gradual integration between the European Union and the region already during the enlargement process itself in a reversible and merit-based manner.
17. The European Council recalls the importance of reforms, notably in the area of rule of law and in particular those related to the independence and functioning of the judiciary and the fight against corruption. It also calls on the partners to guarantee the rights and equal treatment of persons belonging to minorities.
18. The European Council was informed about the latest developments on discussions between Bulgaria and North Macedonia. It calls for a swift resolution of the last remaining issues so that accession negotiations can be opened without delay.
19. The European Council reaffirms the urgency of making tangible progress in resolving outstanding bilateral and regional disputes, particularly the Belgrade-Pristina Dialogue on normalisation of relations between Serbia and Kosovo*.
20. The European Council welcomes the political agreement reached on 12 June 2022 by the leaders of Bosnia and Herzegovina in Brussels which is needed for the stability and full functioning of the country and in order to respond to the aspirations of the people. It calls on all political leaders in Bosnia and Herzegovina to swiftly implement the commitments set out in the agreement and urgently finalise the constitutional and electoral reform, which will allow the country to advance decisively on its European path, in line with the opinion of the Commission.
21. The European Council is ready to grant the status of candidate country to Bosnia and Herzegovina and to that aim it invites the Commission to report without delay to the Council on implementation of the 14 key priorities set out in its opinion with special attention to those which constitute a substantial set of reforms in order for the European Council to revert to decide on the matter.
VII. EXTERNAL RELATIONS
Eastern Mediterranean
28. The European Council expressed deep concern about recent repeated actions and statements by Turkey. Turkey must respect the sovereignty and territorial integrity of all EU Member States. Recalling its previous conclusions and the statement of 25 March 2021, the European Council expects Turkey to fully respect international law, to de-escalate tensions in the interest of regional stability in the Eastern Mediterranean, and to promote good neighbourly relations in a sustainable way.
Belarus
29. The European Council underlines the democratic right of the Belarusian people to have new, free and fair elections. It calls on the Belarusian authorities to uphold human rights, democracy and the rule of law, to end repression and to release political prisoners.
* This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo declaration of independence.
Compliments of the European Council.
The post European Council conclusions on Ukraine, the membership applications of Ukraine, the Republic of Moldova and Georgia, Western Balkans and external relations, 23 June 2022 first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

The aviation sector, like many others, has been heavily impacted by the COVID shock. It is now confronted with the fall-out of Russia’s military actions against Ukraine.
But we must look ahead. Gone are the days when the aviation sector ignored its responsibility for global warming.
Just recall the commitments taken as part of “Destination 2050”. For the first time, the sector presented a pathway for a climate neutral sector that combines new technologies, improved operations, sustainable aviation fuels and economic measures. And in the Toulouse Declaration, the full range of public and private stakeholders commit to the future sustainability and decarbonisation of aviation.
We must encourage aviation on this path; not banish it from our transport solutions.
Emission-free flight: sustainable and key to the industry’s economic future
Emission-free flight is not just the key to the long-term sustainability of the aviation sector: it is also the key to this industry’s economic future.
Last year, aircraft “made in Europe” accounted for about 65% of commercial aircraft sold globally. The aerospace industry generates 125 billion euros of value added and employs close to one million workers across Europe.
Tens of thousands of aircraft will be sold in the coming decades. In fact, 26 thousand “green” aircraft are expected to be sold by 2050. This represents a total value of 5 trillion euros for the world.
It should be our common ambition that the European industry captures a large share of this global market. So, developing zero-emission solutions for global aviation is therefore a must.
We can be proud that Europe is leading the way in alternative propulsion. Initiatives such as the “flying fuel cell” propulsion system, hydrogen-combustion turbine, or ultralight, safe and reliable tanks for liquid hydrogen storage are all examples of the innovation potential in Europe.
And I am not just referring to the large manufacturers, but also to the many smaller companies and start-ups. The enthusiasm in the aeronautical industry is really encouraging!
The EU is investing heavily to accompany such efforts. Under Horizon Europe programme, 1.7 billion Euros are allocated to the Clean Aviation Partnership.
This comes on top of all the other funds for collaborative research and development actions, as well as national research programmes. 
How to ensure that great technologies turn into great products
We all know that great technologies don’t automatically translate into great products. It is also true in aviation.
This is a complex industry which involves actors from many different sectors. Aircraft manufacturers, airlines, airports, fuel providers, maintenance organisations, regulators all must work together to make the system work.
Because if we don’t, we will end up having great aircrafts, but:

no standardisation and certification to support these,
no hydrogen infrastructure and fuel to fly them with,
and no business case for the aviation sector.

In other words, it is time to prepare the entire aviation community.
How to overcome this challenge? For once, maybe we don’t need only engineers to provide a solution. And you do know that I love engineers. I am one of them!
We need the entire aviation supply chain to come together, understand the challenges, agree to a common ambition. And set to work.  
The missing piece to put all parties together – the Alliance for Zero-Emission Aviation
Today, as part of ILA Berlin, one of the biggest worldwide events in aviation, I officially launched the Alliance for Zero-Emission Aviation.
The Alliance will have one main goal: to prepare the entire aviation community for the entry into service of hydrogen- and electric-powered aircraft.
The Alliance will identify all barriers to the entry into commercial service of these aircraft, establish recommendations and a roadmap to address them, promote investment projects and create synergies and momentum amongst members.
So: if your organisation is committed to zero-emission aviation and wants to help make it possible, I invite you to join the Alliance.
And to come to the first General Assembly of the Alliance foreseen for end of October, in Brussels.
Continuing to live the dream of flight: innovation as the path for sustainability
Not far from Berlin, Otto Lilienthal undertook his first flight attempts. As so many other aviation pioneers, he was fascinated by the dream of flight.
Today, we live that dream. Aviation has brought us closer to the world. It provides us a safe, affordable, quick and comfortable means of transportation.
There will be challenges, of course, but we can address them if we work together.
And if we do, I am convinced: not only the best is yet to come for the aviation sector but also it will play its full part in the fight against global warming.
Compliments of the European Commission.
The post Hydrogen & electric-powered aircraft: Towards Zero-Emission Aviation – Blog of Commissioner Thierry Breton first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

Russia’s war against Ukraine threatens to create a global wave of hunger. We must urgently enable Ukraine to export its grains through the Black Sea. We also see a “battle of narratives” around Russian grains and fertilizer exports. While our sanctions do not target these exports, we are ready to work with the UN and our partners to prevent any unwanted impact on global food security.

“The war of aggression against Ukraine puts the world in danger of a famine affecting hundreds of millions of people. We must urgently enable Ukraine to export its grains. We are also ready to work to prevent any unwanted impact of our sanctions on global food security.”
– Josep Borrell, HR/VP

For several decades, hunger was declining and the international community committed to end it globally by 2030 with the Sustainable Development Goals (SDG) adopted in 2015. However, since then, the number of undernourished people had stopped decreasing and the COVID-19 pandemic had already made things much worse. The World Food Program (WFP) estimates that this number has risen from 132 million people before the COVID-19 pandemic to 276 million in early 2022 and 323 million today.
The unjustified and unprovoked war of aggression against Ukraine puts the world in danger of a famine affecting hundreds of millions of people.
Even before Putin’s war against Ukraine, we were losing ground in the global fight against hunger. Now, this unjustified and unprovoked war puts the world in danger of a famine affecting hundreds of millions of people. According to the UN Global Crisis Response Group, 1.2 billion people – one in six of the world’s population – are living in ‘perfect-storm’ countries that are severely exposed to the combination of rising food prices, rising energy prices and tightening financial conditions.
Ukraine, one of the most important “breadbaskets” of the planet
For decades, Ukraine has been indeed one of the most important “breadbaskets” of the planet. Today, Putin’s troops shell, mine and occupy arable land of Ukraine, attack farm equipment, warehouses, markets, roads, bridges in Ukraine and block Ukraine’s ports, preventing the export of millions of tons of grain to global markets. Russia turned the Black Sea into a war zone, blocking shipments of grain and fertilizer from Ukraine but also affecting Russian merchant shipping. Russia is also applying quotas and taxes on its grain exports. Russia’s conscious political choice is to ‘weaponise’ these exports and use them as a tool for blackmail against anyone that opposes its aggression.
Food prices, that were already affected by the pandemic and climate change, have never been as high as today in real terms and many experts warn that the worst is yet to come.
As a result, food prices, that were already affected by the pandemic and climate change, have never been as high as today in real terms. It has major consequences for many low-income countries and for the World Food Program, which has already had to reduce its interventions in several regions. Many experts warn that the worst is yet to come if Ukrainian exports remain blocked until the next harvest. Meanwhile, several countries have introduced unilateral restrictions on their own agricultural exports, while others are seeking to build up stocks, exacerbating the problems on world markets. Higher energy costs and a loss of fertilizer supply have led to fertilizer prices rising even faster than food prices. Because of this, the price for rice, the most consumed staple in the world, which up to now has low prices, could increase significantly and global food production may not be able to meet rising demand. The UN has warned for “a food catastrophe of global proportions in 2023”.
An absolute urgency to act
There is an absolute urgency to act. With our member states, we are putting together emergency relief. As Team Europe, we have pledged €1 billion for the Sahel and Lake Chad regions and over €600 million for the Horn of Africa. We put in place a €225 million food facility to assist our partners in North Africa – the region most dependent of food supplies from Ukraine and Russia. More structurally, we will also spend €1.5 billion to help develop sustainable food systems in the Eastern and Southern neighborhood, the Western Balkans and Turkey, until 2024.
We are also acting within the G7, the G20, the World Bank and the IMF, to increase their commitment to the countries most in need via emergency financial support, additional debt relief, the emission of new Special Drawing Rights and other instruments. We fully support the efforts in that direction by the UN Secretary General within the Global Crisis Response Group.
To avoid a global food calamity, the top priority remains to stop the war and get Russian troops out of Ukraine.
To avoid a global food calamity, the top priority remains to stop the war and get Russian troops out of Ukraine. This is the aim of the EU’s massive support to Ukraine and of the restrictive measures, we are applying with our allies against Putin’s regime. However, we have never targeted Russian agricultural and fertilizer exports. EU sanctions do not prohibit Russia to export any agricultural goods, payment for such Russian exports or the provision of seeds, provided that sanctioned individuals or entities are not involved. EU sanctions have also no extraterritorial application, i.e. they do not create obligations for non-EU operators, unless their business is conducted at least partly within the EU.
We are fully aware that there is a “battle of narratives” around this issue. Senegal’s President Macky Sall, who chairs the African Union, has talked in particular about difficulties that African countries encounter on this subject following his recent meeting with Vladimir Putin in Sochi and at the OECD ministerial meeting. Last Saturday, I spoke about this issue with Aissata Tall Sall, the Minister of Foreign Affairs of Senegal. On Tuesday, I met also UNCTAD Secretary General Rebeca Grynspan and talked with UN Under-Secretary-General Martin Griffiths, both in charge of the UN-sponsored negotiations about facilitating grain and fertilizer exports out of Russia and reopening export routes for Ukrainian grains. And, on Thursday, I met with the ambassadors to the UN from the African group following my address to the UN Security Council.
We are ready to work with the UN and partners to prevent any unwanted impacts of our sanctions on global food security.
I assured all my interlocutors that we are ready to work with the UN and partners in preventing any unwanted impacts of our sanctions on global food security. We are in close contact with the UN to look into issues such as market avoidance and over compliance which could affect purchases of Russian grain or fertilisers. We are ready to discuss these matters through experts in order to identify concrete obstacles including possible difficulties in payments, and to work towards solutions. I have also instructed EU ambassadors in our African partner countries to discuss with the authorities all relevant aspect of the present situation on payments.
Differentiate between concrete problems and the Kremlin’s disinformation
I urged my African interlocutors to differentiate between concrete problems and the Kremlin’s disinformation. When the Russian propaganda machine claims that we are responsible for the food crisis, this is nothing but cynical lies, like many others that this machine has been spreading for many years. The cynicism of that posture was obvious when Russia bombed Ukraine’s second largest grain silo in Mykolaiv, just a couple of days after President Sall spoke with President Putin in Sochi. All those who want to limit the global food crisis should above all help us to increase the pressure on Russia to stop its war of aggression.
When the Russian propaganda claims that we are responsible for the food crisis, this is nothing but cynical lies, like many others that this machine has been spreading for years.
In the meantime, we continue to help Ukraine to export agricultural products by other routes than the Black Sea through our “Solidarity Lanes Action Plan”. We are working with market players to make additional freight rolling stock, vessels and lorries available. We are facilitating border checks of agri-food products, and we will make storage facilities of member states available for Ukrainian grains. As we did last March for the electricity network, we must  accelerate the integration of the Ukrainian railway network into the European system, although this certainly poses difficulties because of the differences in rail gauge.
The imperative to allow Ukrainian exports by ship to resume
However, we must face the facts: none of these alternatives can provide a sufficient flow of exports in the short term. It is therefore imperative to allow Ukrainian exports by ship to resume. We are working closely with the UN on this issue and the EU and its member states are ready to do their part of the necessary actions to achieve this. We hope that a solution can be found in the coming days. Not doing this threatens to cause a global food catastrophe.
Author:

Josep Borrell, High Representative of the European Union for Foreign Affairs and Security Policy / Vice-President of the European Commission

Compliments of the European Union External Action Service, The Diplomatic Service of the European Union.
The post The battle of narratives around the food crisis first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

Keynote speech by Frank Elderson, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, 10th Annual Conference on Bank Steering & Bank Management at the Frankfurt School of Finance & Management |
I understand that today’s audience includes managers and experts from banks and banking associations, supervisors, academics and students. So this is an ideal platform for exchanging views on the financial sector’s role in addressing the risks of the ongoing climate and environmental crises. Conferences like these are a chance to inform each other of what we are doing and to share the knowledge and expertise we are accumulating to gear ourselves to a world that is already undergoing a climate crisis. Physical and transition risks from climate change and environmental degradation are already materialising all around us.
Today I will update you on the recent progress on both the international agenda and the ECB’s own supervisory agenda on climate-related and environmental risks, or C&E risks for short. I will share some preliminary findings from our review of how banks incorporate C&E risks into their risk management practices.
There will be good, bad and hopeful news.
The good news is that, one year after my first speech on the state of C&E risk management by euro area banks as Vice-Chair of the ECB’s Supervisory Board, banks are starting to progress in their management of these risks. The bad news is that this progress is not across the board, and laggards remain in all areas. But there is hopeful news too. The silver lining is that the state-of-the-art governance and risk management practices now being adopted by some banks confirm that what the ECB is asking is possible. We just need all banks to do it.
The new Basel Committee on Banking Supervision principles for the effective management and supervision of climate-related financial risks
All around the world, there is a growing consensus on the urgency of dealing with the climate and environmental crises. For banks, the prominence of C&E risks is significant, too. During various supervisory exercises recently conducted by the ECB, most banks recognised that they have significant exposures to these risks, which they expected to materialise in the short to medium term. And we see that banks are consequently allocating more and more financial and human resources to managing these risks.
And this is what supervisors around the world expect from banks. Just last week, the Basel Committee on Banking Supervision, the main global standard-setter for the prudential regulation of banks, published its “Principles for the effective management and supervision of climate-related financial risks”.
These principles have been prepared in a Basel Committee task force that I co-chair. They are a major milestone, as it means that supervisors from all around the world now unanimously confirm not only that climate risks may be material, but also that both banks and supervisors urgently need to contend with them. The Basel Committee backed this up by announcing it expects implementation of these principles as soon as possible and that it will monitor progress in these fields across its member jurisdictions.
Importantly, the Basel Committee’s principles promote many of the practices that the ECB had signalled as crucial for the proper management of C&E risks. For instance, they emphasise the importance of assessing the materiality of climate risks and considering their potential impact on banks’ business models. They also highlight the need to fully incorporate material risks into banks’ own internal capital and liquidity adequacy assessment processes.
Moreover, the principles expect a bank’s board and senior management to ensure that the bank’s internal strategies and risk appetite statements are consistent with any publicly communicated climate-related strategies and commitments. This expectation comes at a timely moment as more and more banks publicly commit to aligning their financing activities with the objectives of the Paris Agreement. Failing to meet their commitments may expose these banks to a number of risks, including reputational risks as well as any potential prudential risks of misalignment with these objectives. This is particularly true for jurisdictions, such as the European Union, which have binding climate targets.
Addressed to both banks and supervisors, these principles seek to improve, on the one hand, banks’ risk management and, on the other, the supervisory practices linked to climate-related financial risks. Furthermore, the revisions to the Capital Requirements Directive currently under discussion by the EU co-legislators further reaffirm the ECB’s mandate in this area by broadening the supervisory toolkit to address environmental, social and governance risks, and by explicitly requiring banks to have concrete plans to address C&E risks arising from misalignment with EU climate targets.
The ECB’s supervisory agenda on climate
Indeed, since 2020 the ECB has been starting to implement many of the principles that the Basel Committee has now established on a global scale.
It has now been two years since we started taking concrete steps to include C&E risks in our ongoing supervision. In 2020 we published a guide on C&E risks, which outlined our expectations for the management and disclosure of these risks. In 2021 we published a report on banks’ self-assessments of where they stood relative to those expectations and shared some of the good practices we had observed in the banking industry.
Early in 2021 we also asked all banks under our supervision to devise concrete action plans for ensuring full alignment with our expectations. Banks provided us with such plans, and where we found them deficient, we asked them to be sharpened, which was subsequently done. In 2022 we continue to check progress under these action plans by assessing whether banks have advanced the plans submitted in 2021 and the extent to which they use them as an effective steering instrument to advance their C&E risk practices. Moreover, in 2021, for the first time, C&E risks were qualitatively integrated in the Supervisory Review and Evaluation Process (SREP). This year, our joint supervisory teams will complement the SREP assessments with their observations from a climate risk stress test and a thematic review on how banks incorporate these risks into their day-to-day business. This will also be qualitatively integrated in the SREP scores, which may have an indirect impact on minimum capital requirements.
We are also launching on-site inspections of banks’ management of these risks and are rounding off a targeted review focusing on commercial real estate exposures. All initiatives – the stress test, the thematic review and the on-site inspections – aim to monitor banks’ alignment with the expectations set out in the ECB’s Guide on C&E risks. They are part of what I described at the start of the year as a move towards an immersive approach to the management of climate-related and environmental risks in the banking sector.[1] We intend to fully integrate C&E risks in the regular supervisory dialogue and cycle and keep them there, treating them in the same way as any other material risks that banks face.
The climate risk stress test, the results of which will be published in July, constitutes an unprecedented effort, also on the ECB’s part, to more fully understand how exposed euro area banks are to C&E risks. It will also give us a clearer picture of how resilient they are against these risks, as we are assessing, among other things, banks’ climate risk stress test frameworks, but also the sustainability of their income sources vis-à-vis the green transition.
Let me emphasise that in this exercise we define resilience very broadly. We test the capabilities of banks to analyse, assess and respond to the consequences of climate-related and environmental stress in both a quantitative and qualitative fashion. What I call a narrow stress test – i.e. the typical number-crunching to assess the impact of physical and transition stress on capital and income – is only one part of the overall exercise. At this stage, the fact that banks provide proof of their climate stress testing capabilities is as important as the results of the test.
The results from this stress test will complement the information from the thematic review, in which we will assess the evolution of the soundness, effectiveness and comprehensiveness of banks’ C&E risk management practices, as well as their ability to steer their C&E risk strategies and risk profiles towards the targets they set forth in their action plans.
I will now delve a little deeper into this exercise.
Thematic review on climate-related and environmental risks
A year has passed since banks completed their self-assessments and drew up their action plans. So, where do banks stand in terms of their alignment with the ECB’s supervisory expectations on managing C&E risks? This is the question the ECB’s thematic review on C&E risks seeks to answer.
The thematic review is being carried out jointly by the ECB and the national competent authorities and assesses 107 significant banks and 79 less significant banks. Truly all of European banking supervision is pitching in – supervisors from the ECB and the national competent authorities are working together to ensure the consistency of the supervisory approach as well as the outcomes of the exercise.
This broad scope and our close cooperation have been incredibly enriching, as they have enabled us to actively share our knowledge and experience and to learn from each other’s practices on a daily basis.
While the ultimate objective is for all banks to be fully aligned with our supervisory expectations, the thematic review is intended to be a learning exercise – not just for supervisors across Europe, but also for the banks. This is why we have made a point of sharing good practices we have observed – so that banks can draw inspiration and push forward.
New supervisory tools are being developed as banks step up their modelling and management of C&E risks. There is now a common understanding that these risks are a fundamental part of a bank’s risk map and a key focus of the ECB’s supervision of banks’ risk management.
Preliminary findings from the thematic review
The thematic review is still ongoing, but I would like to share some of our preliminary findings with you today, also ahead of the upcoming supervisory dialogue with banks on this topic. As I said before, there is good and bad news, but also reason to be hopeful.
The good news is that one year after my first speech on the state of C&E risk management in the euro area banking sector, most banks have started to adapt their practices to incorporate C&E risks into their daily business. In early 2021 banks deemed that 90% of their practices were only partially or not at all aligned with our supervisory expectations.
One year on, we are seeing positive change. More and more banks report that they are taking actions to become more closely aligned with the ECB’s expectations. Similarly to last year, banks have made the most progress with the C&E expertise of their management body and within governance structures.
The bad news is that clear gaps remain in all areas of focus of the Guide, and individual banks are not making progress across the board. Moreover, we have observed several inconsistencies. For example, banks’ strategies account significantly more for transition risks than for physical risks. And although an increasing number of banks have deemed themselves to be materially exposed to C&E risks in the short to medium term, there are banks that have still not performed a materiality assessment. In addition, we see that banks do not fully consider how the misalignment of their clients with the Paris Agreement affects their own risk exposures.
Thankfully, there is also reason to be hopeful. For each ECB expectation, there is at least one bank – and often many – with good practices. The governance and risk management practices that some banks have started to adopt confirm that what the ECB is asking of banks can be done.
As the supervisor, our focus is on the safety and soundness of banks. Above all, we want to promote the stability of individual institutions and preserve financial stability.
But banks should also want to effectively manage C&E risks and position themselves to benefit from the green transition. After all, the financing needs of the real economy during the green transition are only going to increase. As intermediaries with comprehensive knowledge about their customers, banks are exceptionally well positioned to support their clients during the transition.
The development and deployment of innovative tools for measuring and monitoring C&E risks is also gaining momentum – among supervisors and banks. For instance, in our supervisory dialogue with banks as part of the thematic review, we have started to discuss real client cases to understand how thorough banks are being in their assessment of their clients’ sustainability trajectories. We are also piloting tools aimed at improving our insights into how well banks are identifying and responding to the transition risk of their corporate clients.
Our joint supervisory teams will soon start another round of feedback sessions with banks. These will give banks a better idea of where they stand relative to their peers. I would like to take this opportunity to invite the banks to use these exchanges to share more good practices and to clarify any of their practices that we have so far overlooked.
After these feedback sessions, banks will receive comprehensive letters setting out any identified shortcomings together with concrete follow-up actions. I have referred to the progress that banks are making, which is in itself encouraging. However, as a supervisor we will only be satisfied when all banks are fully aligned with all of our expectations. This will be our mindset when we draft our feedback letters later this year. Because for all the encouraging progress we are seeing, there is still a long way to go. And this is a journey that needs to be completed as swiftly as possible.
The way ahead
After last year’s supervisory exercises, virtually all banks developed action plans to advance their practices. We have since asked banks to speed up their efforts.
In more than 80% of cases, banks intend to complete the actions set out in their plans before the end of 2023. However, there is still a group of banks whose plans lack sufficient detail across the board and do not define clear and ambitious timelines for their actions.
Having assessed the banks’ action plans and the progress made in their practices for two years now, I see it as reasonable that banks can be fully compliant with all our expectations by the end of 2024 at the latest. At the same time, we remain open to listen to arguments of banks that may render this not feasible in individual cases. The absence for some banks of a thorough and complete assessment of the C&E risks and their materiality cannot be a reason for lack of progress and should be remediated promptly.
Conclusion
Let me conclude.
The recent Basel Committee principles confirm the urgent need for banks and supervisors to incorporate the management of climate-related and environmental risks into their practices. The ECB started to roll out its supervisory agenda on C&E risks in 2020 and, two years later, banks are making tangible progress with their C&E agendas, too.
Many banks are still lagging behind in at least one area, though. That is why the ECB is laying out sufficiently accommodative deadlines for banks to fully implement C&E risks into their daily practices. At the same time, however, many banks already comply with at least one of the areas of C&E risk management the ECB wishes to see developed. We must use this opportunity to learn from each other – an effort that the ECB is happy to support by continuing to share good practices in the industry. This, in my view, is reason to be hopeful.
Compliments of the European Central Bank.
The post ECB | Frank Elderson: Good, bad and hopeful news: the latest on the supervision of climate risks first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.