European Commission President von der Leyen and United States President Biden agreed today to start discussions on a Global Arrangement on Sustainable Steel and Aluminium. This marks a new milestone in the transatlantic relationship, and in EU-US efforts to achieve the decarbonisation of the global steel and aluminium industries in the fight against climate change. The two Presidents also agreed to pause the bilateral World Trade Organization disputes on steel and aluminium. This builds on our recent successes in rebooting the transatlantic trade relationship, such as the launch of the EU-US Trade and Technology Council and the suspension of tariffs in the Boeing-Airbus disputes.
Steel and aluminium manufacturing is one of the highest carbon emission sources globally. For steel and aluminium production and trade to be sustainable, we must address the carbon intensity of the industry, together with problems related to overcapacity. The Global Arrangement will seek to ensure the long-term viability of our industries, encourage low-carbon intensity steel and aluminium production and trade, and restore market-oriented conditions. The arrangement will be open to all like-minded partners to join.
Furthermore, following the United States’ announcement that they will remove Section 232 tariffs on EU steel and aluminium exports up to past trade volumes, the European Union will take the steps to suspend its rebalancing measures against the United States. The two sides have also agreed to pause their respective WTO disputes on this issue.
European Commission President Ursula von der Leyen said: “The global arrangement will add a powerful new tool in our quest for sustainability, achieving climate neutrality, and ensuring a level playing field for our steel and aluminium industries. Defusing yet another source of tension in the transatlantic trade partnership will help industries on both sides. This is an important milestone for our renewed, forward-looking agenda with the US.”
Executive Vice-President and Commissioner for Trade Valdis Dombrovskis said: “We have today agreed to hit the pause button on our steel and aluminium trade dispute, while hitting the start button on cooperating on a new Global Arrangement on Sustainable Steel and Aluminium. This is another significant step in the wider reset of transatlantic relations. The US decision to restore past trading volumes of EU steel and aluminium exports means we can move on from a major irritant with the US. It gives us breathing space to work on a comprehensive solution to tackle global overcapacity. The EU will therefore reciprocate this de-escalation by suspending our own rebalancing measures. We can now focus on a more forward-looking transatlantic trade agenda, while also working on a final, lasting outcome to this issue.”
Background
In June 2018, the US Trump administration introduced tariffs on €6.4 billion of European steel and aluminium exports, and further tariffs in January 2020 that affected around €40 million of EU exports of certain derivative steel and aluminium products. The EU introduced rebalancing measures in June 2018 on US exports to the EU in a value of €2.8 billion (a similar EU response followed the second set of US tariffs in 2020). The remaining rebalancing measures, affecting exports valued up to €3.6 billion, were scheduled to enter into force on 1 June 2021. The EU suspended these measures until 1 December 2021 in order to give space for the parties to work together on a longer-term solution. Following today’s announcement by the US, these measures will not be introduced.
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What is the Global Arrangement on Sustainable Steel and Aluminium?
The arrangement is intended to facilitate the decarbonising of the steel and aluminium industries, as well as addressing the issue of overcapacity in these industries caused by non-market practices in some economies.
The EU and US have agreed to start discussions on this Arrangement as soon as possible, and conclude them within two years. We want to make this Arrangement open to all like-minded economies.
How will the Arrangement help achieve decarbonisation?
Each participant in the arrangement should undertake to facilitate trade in steel and aluminium that meets relevant standards, for instance as regards low-carbon intensity.
They should ensure that domestic policies support the production of steel and aluminium with low carbon intensity.
In addition, they should consult on government investment in decarbonisation, and refrain from non-market practices that contribute to high carbon intensity steel and aluminium production.
How will the Arrangement restore market-oriented conditions in the steel trade?
Each participant will promote trade in carbon friendly steel and aluminium.
Each participant will ensure that domestic policies encourage “Green Steel and Aluminium production”.
Participants would undertake to apply measures in line with their trade defence rules.
Moreover, they will refrain from non-market practices that contribute to non-market oriented capacity.
They will also screen inward investments from non-market-oriented actors in accordance with their respective domestic legal framework.
Is this Arrangement exclusive to the EU and the US?
No; the EU and the US will encourage other like-minded economies to participate.
Will you negotiate one arrangement for both sectors or two separate arrangements?
This is not yet decided, and will depend upon further consultations between the EU and US and with the respective industries.
What did the US do with the Section 232 tariffs?
The US has announced that it will no longer apply the Section 232 tariffs on a certain amount of EU exports of steel and aluminium (under “tariff-rate quotas” (TRQs)), effective as of 1st December 2021.
These TRQs amount to the historical volumes of EU steel and aluminium exports to the US.
What are “historical volumes”?
The volume of EU steel and aluminium that was exported to the US prior to the imposition of the 232 measures in 2018.
What is the EU doing in response?
The EU intends to suspend its rebalancing measures against the US that were introduced in June 2018 in response to the US Section 232 tariffs on steel, aluminium and derivative products. It will also suspend the increase in rebalancing measures set for 1 December.
In addition, the EU has agreed with the US that both sides will hit the pause button on their respective WTO cases against each other.
What are the “rebalancing measures”?
The US tariffs applied towards the EU from June 2018 affected €6.4 billion of European steel and aluminium exports, and further tariffs applied from February 2020 affected around €40 million of EU exports of certain derivative steel and aluminium products.
In response, the EU introduced rebalancing measures in June 2018 on US exports to the EU in a value of €2.8 billion.
The remaining rebalancing measures, affecting exports valued up to €3.6 billion, were scheduled to enter into force on 1 June 2021. The EU suspended these measures until 1 December 2021 in order to give space for the parties to work together to reach a longer-term solution.
Following today’s announcement by the US, all these measures will be suspended.
What are the next steps?
The EU will initiate its decision-making procedure under the EU Trade Enforcement Regulation with a view to suspend the rebalancing measures. The decision-making involves an examination and voting procedure with Member States.
How will this help EU workers and business?
The removal of the Section 232 tariffs on historical volumes of EU exports of steel and aluminium should reduce costs for steel and aluminium exporters, helping to support the sustainability of two industries that together employ 3.6 million people in the EU.
Compliments of the European Commission.
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The United States and the EU have today taken joint steps to re-establish historical transatlantic trade flows in steel and aluminium and to strengthen their partnership and address shared challenges in the steel and aluminium sector. As a part of that partnership, they intend to negotiate for the first time, a global arrangement to address carbon intensity and global overcapacity.
The European Union and the United States have a shared commitment to joint action and deepened cooperation in these sectors and are taking joint steps to defend workers, industries and communities from global overcapacity and climate change, including through a new arrangement to discourage trade in high-carbon steel and aluminum that contributes to global excess capacity from other countries and ensure that domestic policies support lowering the carbon intensity of these industries.
In a demonstration of renewed trust, and reflecting long-standing security and supply chain ties, the United States will not apply section 232 duties and will allow duty-free importation steel and aluminium from the EU at a historical-based volume and the EU will suspend related tariffs on U.S. products.
As a first step, the United States and the EU will create a technical working group charged with developing a common methodology and share relevant data for assessing the embedded emissions of traded steel and aluminum.
The global arrangement reflects a joint commitment to use trade policy to confront the threats of climate change and global market distortions, putting their workers and communities at the center of the trade agenda. The global arrangement will be open to any interested country that shares our commitment to achieving the goals of restoring market-orientation and reducing trade in carbon intensive steel and aluminium products.
Compliments of the European Commission.
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Today, the Commission has taken action to improve the cybersecurity of wireless devices available on the European market. As mobile phones, smart watches, fitness trackers and wireless toys are more and more present in our everyday life, cyber threats pose a growing risk for every consumer. The delegated act to the Radio Equipment Directive adopted today aims to make sure that all wireless devices are safe before being sold on the EU market. This act lays down new legal requirements for cybersecurity safeguards, which manufacturers will have to take into account in the design and production of the concerned products. It will also protect citizens’ privacy and personal data, prevent the risks of monetary fraud as well as ensure better resilience of our communication networks.
Margrethe Vestager, Executive Vice-President for a Europe Fit for the Digital Age, said: “You want your connected products to be secure. Otherwise how to rely on them for your business or private communication? We are now making new legal obligations for safeguarding cybersecurity of electronic devices.”
Thierry Breton, Commissioner for the Internal Market said: “Cyber threats evolve fast; they are increasingly complex and adaptable. With the requirements we are introducing today, we will greatly improve the security of a broad range of products, and strengthen our resilience against cyber threats, in line with our digital ambitions in Europe. This is a significant step in establishing a comprehensive set of common European Cybersecurity standards for the products (including connected objects) and services brought to our market.”
The measures proposed today will cover wireless devices such as mobile phones, tablets and other products capable of communicating over the internet; toys and childcare equipment such as baby monitors; as well as a range of wearable equipment such as smart watches or fitness trackers.
The new measures will help to:

Improve network resilience: Wireless devices and products will have to incorporate features to avoid harming communication networks and prevent the possibility that the devices are used to disrupt website or other services functionality.

Better protect consumers’ privacy: Wireless devices and products will need to have features to guarantee the protection of personal data. The protection of children’s rights will become an essential element of this legislation. For instance, manufacturers will have to implement new measures to prevent unauthorised access or transmission of personal data.

Reduce the risk of monetary fraud: Wireless devices and products will have to include features to minimise the risk of fraud when making electronic payments. For example, they will need to ensure better authentication control of the user in order to avoid fraudulent payments.

The delegated act will be complemented by a Cyber Resilience Act, recently announced by President von der Leyen in the State of the Union speech, which would aim to cover more products, looking at their whole life cycle. Today’s proposal as well as the upcoming Cyber Resilience Act follow up on the actions announced in the new EU Cybersecurity Strategy presented in December 2020.
Next Steps
The delegated act will come into force following a two-month scrutiny period, should the Council and Parliament not raise any objections.
Following the entry into force, manufacturers will have a transition period of 30 months to start complying with the new legal requirements. This will provide the industry with sufficient time to adapt relevant products before the new requirements become applicable, expected as of mid-2024.
The Commission will also support the manufacturers to comply with the new requirements by asking the European Standardisation Organisations to develop relevant standards. Alternatively, manufacturers will also be able to prove the conformity of their products by ensuring their assessment by relevant notified bodies.
Background
Wireless devices have become a key part of the life of citizens. They access our personal information and make use of the communication networks. The COVID-19 pandemic has dramatically increased the use of radio equipment for either professional or personal purposes.
In recent years, studies by the Commission and various national authorities identified an increasing number of wireless devices that pose cybersecurity risks. Such studies have for instance flagged the risk from toys that spy the actions or conversations of children; unencrypted personal data stored in our devices, including those related with payments, that can be easily accessed; and even equipment that can misuse the network resources and thus reduce their capability.
Compliments of the European Commission.
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They say that everything happens for a reason. When it comes to cybercrime, this seems to be an accurate statement. Criminals will target individuals with a very specific reason in mind: steal their money and their personal data. In order to do so, they look for any weak points of entry that they can use to implement their scams and extortion plans. One of the solutions to this threat lies within the field of crime prevention – the more aware individuals are of potential cyber scams, the more prepared and secure they can be.
An essential way to boost awareness is to make sure that the public stays up to date with any new tricks that criminals might have up their sleeves. In order to address this, Europol’s European Cybercrime Centre (EC3) and the European Banking Federation (EBF) have launched Cyber Scams 2.0, a reviewed and updated version of the 2018 Cyber Scams campaign. Over the next two weeks, the new materials, available in eight languages, will be promoted on social media channels by national law enforcement agencies (LEAs), banking associations and other cybercrime fighters.
Some of the Cyber Scams materials added to the campaign include:

Tech support scams
Updated Vishing advice
ID theft methods

In addition, the campaign is also raising awareness on SIM swapping, emphasizing the importance of identifying and reporting any such attempts.
Cyber Scams 2.0 is an excellent example of public-private cooperation, with EU’s banks and law enforcement agencies coming together to help build a more cyber-resilient society. The initiative was launched as part of EBF’s #DigitalThursdays event, against the backdrop of October’s European Cybersecurity Month , the EU’s annual campaign dedicated to promoting cybersecurity.
Compliments of Europol.
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The European Commission has today adopted a review of EU banking rules (the Capital Requirements Regulation and the Capital Requirements Directive). These new rules will ensure that EU banks become more resilient to potential future economic shocks, while contributing to Europe’s recovery from the COVID-19 pandemic and the transition to climate neutrality.
Today’s package finalises the implementation of the Basel III agreement in the EU. This agreement was reached by the EU and its G20 partners in the Basel Committee on Banking Supervision to make banks more resilient to possible economic shocks. Today’s proposals mark the final step in this reform of banking rules.
The review consists of the following legislative elements:

a legislative proposal to amend the Capital Requirements Directive (Directive 2013/36/EU);
a legislative proposal to amend the Capital Requirements Regulation (Regulation 2013/575/EU);
a separate legislative proposal to amend the Capital Requirements Regulation in the area of resolution (the so-called “daisy chain” proposal).

The package is comprised of the following parts:

Implementing Basel III – strengthening resilience to economic shocks

Today’s package faithfully implements the international Basel III agreement, while taking into account the specific features of the EU’s banking sector, for example when it comes to low-risk mortgages. Specifically, today’s proposal aims to ensure that “internal models” used by banks to calculate their capital requirements do not underestimate risks, thereby ensuring that the capital required to cover those risks is sufficient. In turn, this will make it easier to compare risk-based capital ratios across banks, restoring confidence in those ratios and the soundness of the sector overall.
The proposal aims to strengthen resilience, without resulting in significant increases in capital requirements. It limits the overall impact on capital requirements to what is necessary, which will maintain the competitiveness of the EU banking sector. The package also further reduces compliance costs, in particular for smaller banks, without loosening prudential standards.

Sustainability – contributing to the green transition

Strengthening the resilience of the banking sector to environmental, social and governance (ESG) risks is a key area of the Commission’s Sustainable Finance Strategy. Improving the way banks measure and manage these risks is essential, as is ensuring that markets can monitor what banks are doing. Prudential regulation has a crucial role to play in this respect.
Today’s proposal will require banks to systematically identify, disclose and manage ESG risks as part of their risk management. This includes regular climate stress testing by both supervisors and banks. Supervisors will need to assess ESG risks as part of regular supervisory reviews. All banks will also have to disclose the degree to which they are exposed to ESG risks. To avoid undue administrative burdens for smaller banks, disclosure rules will be proportionate.
The proposed measures will not only make the banking sector more resilient, but also ensure that banks take into account sustainability considerations.

Stronger supervision – ensuring sound management of EU banks and better protecting financial stability

Today’s package provides stronger tools for supervisors overseeing EU banks. It establishes a clear, robust and balanced “fit-and-proper” set of rules, where supervisors assess whether senior staff have the requisite skills and knowledge for managing a bank.
Moreover, as a response to the WireCard scandal, supervisors will now be equipped with better tools to oversee fintech groups, including bank subsidiaries. This enhanced toolkit will ensure the sound and prudent management of EU banks.
Today’s review also addresses – in a proportionate manner – the issue of the establishment of branches of third-country banks in the EU. At present, these branches are mainly subject to national legislation, harmonised only to a very limited extent. The package harmonises EU rules in this area, which will allow supervisors to better manage risks related to these entities, which have significantly increased their activity in the EU over recent years.
Members of the College said:
Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, said: “Europe needs a strong banking sector to keep lending to the economy as we recover from the COVID-19 pandemic. Today’s proposals ensure that we implement the key parts of the Basel III international standards. This is important for the stability and resilience of our banks. We do it by taking into account the specificities of the EU banking sector, and avoiding a significant increase in capital requirements. Today’s package will make EU banks stronger and able to support the economic recovery and the green and digital transitions.”
Mairead McGuinness, EU Commissioner responsible for Financial services, financial stability and Capital Markets Union, said: “Banks have an essential role to play in the recovery and it is in all our interests that EU banks are resilient going forward. Today’s package makes sure that the EU banking sector is fit for the future, and can continue to be a reliable and sustainable source of finance for the EU economy. By incorporating ESG risk assessments, banks will be better prepared and protected to weather future challenges such as climate risks.”
Didier Reynders, Commissioner for Justice, said: “The board members and key function holders of banks can have a significant influence on the activities of a credit institution. They play a pivotal role in directing the businesses and managing banks’ activities in a cautious and sound manner. Harmonised rules were necessary to assess whether board members and key function holders are suitable for their duties. Today’s adopted rules will clarify the respective obligations of credit institutions and competent authorities. They will then ensure consistency at EU level and will ultimately contribute to the increased robustness of banks.”
Next steps
The legislative package will now be discussed by the European Parliament and Council.
Background
In the aftermath of the financial crisis, regulators from 28 jurisdictions across the globe, within the Basel Committee on Banking Supervision (BCBS), agreed on a new international standard for strengthening banks, known as Basel III. This agreement was finalised in 2017. The EU has already implemented the vast majority of these rules, which has resulted in the EU’s banking sector being much more robustly capitalised.
As a result, EU banks remained resilient during the COVID-19 crisis, as evidenced by the fact that they continued lending. Today’s reforms complete the post-financial crisis agenda with a view to substantially boosting the competitiveness and sustainability of the EU’s banking sector.
Compliments of the European Commission.
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The Commission adopted today its State of the Energy Union Reports for 2021, taking stock of the progress that the EU is making in delivering the clean energy transition, nearly two years after the launch of the European Green Deal. While there are a number of encouraging trends, greater efforts will be required to reach the 2030 goal of cutting net emissions by at least 55% and achieving climate neutrality by 2050, and the data will need to be analysed carefully next year for more long-term post-COVID trends.
The report shows that renewables overtook fossil fuels as the number one power source in the EU for the first time in 2020, generating 38% of electricity, compared to 37% for fossil fuels. To date, 9 EU Member States have already phased out coal, 13 others have committed to a phase-out date, and 4 are considering possible timelines. Compared to 2019, EU27 greenhouse gas emissions in 2020 fell by almost 10%, an unprecedented drop in emissions due to the COVID-19 pandemic, which brought overall emission reductions to 31%, compared to 1990.
Primary energy consumption declined by 1.9% and final energy consumption by 0.6% last year. However, both figures are above the trajectory required to meet the EU’s 2020 and 2030 targets, and efforts need to continue to address this issue at Member State and EU level. Fossil fuel subsidies dropped slightly in 2020, due to lower energy consumption overall. Renewable energy and energy efficiency subsidies both increased in 2020.
This year’s report is also published against the backdrop of an energy price spike across Europe, and around the world, driven largely by increasing gas prices. While this situation is expected to be temporary, it puts into focus the EU’s dependence on energy imports, which has increased to the highest level in 30 years, and the importance of the clean energy transition to increase the EU’s energy security. Energy poverty affects up to 31 million people in the EU according to the latest data, and this issue will remain in sharp focus in light of the economic challenges of COVID-19, and the current price situation. It is why the Commission has put a strong focus on shielding vulnerable consumers in its recent Energy Prices Communication.
The State of the Energy Union Report analyses how energy and climate policies have been impacted by the COVID-19 pandemic in the past year, and it presents the substantial legislative progress in pursuing the EU’s decarbonisation efforts. It also notes the political efforts to ensure that our post-COVID recovery programmes embrace our climate and energy objectives more than ever.
Background
The State of the Energy Union Report analyses the five pillars of the Energy Union: accelerating decarbonisation with the EU Emission Trading System (ETS) and renewables at is core; scaling up energy efficiency; enhancing energy security and safety; strengthening the internal market; research, innovation and competitiveness. It also identifies areas of future priority action in delivering the European Green Deal. Five inter-related reports accompany the main report.

Annex on Energy subsidies in the EU: Fossil fuel subsidies fell in 2020, principally owing to decreasing energy demand amid the Covid-19 pandemic, however, additional efforts need to be made in order to ensure that fossil subsides are to decrease in the future in the EU, avoiding a rebound in subsidies amid general economic recovery and increasing energy demand.

Progress on competitiveness of clean energy technologies assesses the clean energy ecosystem, from research and innovation to deployment. It assesses progress based on key competitiveness indicators. The report shows that while the EU remains at the forefront of clean energy research, further efforts are needed to increase R&I investments and to bridge the gap between innovation and market

The Climate Action Progress Report: “Speeding up European climate action towards a green, fair and prosperous future” describes progress made by the EU and its Member States in attaining their greenhouse gas emission reduction targets, and reports recent developments in EU climate policy. The report is based on data submitted by Member States under EU Regulation on the Governance of the Energy Union and Climate Action.

The Carbon Market Report describes developments in the functioning of the European carbon market, including on the implementation of auctions, free allocation, verified emissions, balancing supply and demand, market oversight and EU ETS infrastructure and compliance.

The Fuel Quality Report provides information on the progress made with regard to the greenhouse gas intensity reduction of road transport fuels and the quality and composition of fuels supplied in the EU. The report summarises the situation reported by Member States under Articles 7a and 8(3) of the Fuel Quality Directive.

Compliments of the European Commission.
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