Update from the Iowa European Office

July 7, 2022

European Union Update

U.S.-EU Trade and Technology Council (TTC): The European Union and the United States announced the TTC on June 15, 2021 as a forum for the EU and the U.S. to coordinate approaches to address key trade and technology issues, and to deepen transatlantic cooperation based on shared democratic values. Ten working groups were set up last September covering issues such as standards, artificial intelligence, semiconductors, export controls and global trade challenges. At the most recent meeting in Paris on May 16, 2022, both parties agreed on goals, which include:
  • Support to Ukraine – Rebuild its economy and facilitate trade and investment.
  • Trade and Labor Dialogue – Promote internationally recognized labor rights, eradication of forced labor and child labor.
  • Trade barriers – Find solutions that will help increase transatlantic trade and investment, including through increased cooperation on government procurement and conformity assessment, and exchanges on potential new trade barriers both bilaterally and in relation to third countries.
  • Export controls – Deploy export controls on advanced technologies, such as aerospace and cyber surveillance, to undermine Russia's ability to further develop its industrial and military capabilities.
  • Secure supply chains – Advance the resilience of supply chains; for example, develop a common early warning and monitoring mechanism on semiconductor value chains.
  • Technology standards – In the field of emerging technologies, establish a Strategic Standardization Information (SSI) mechanism to promote and defend common interests in international standardization activities in areas of shared strategic interest such as AI, additive manufacturing, recycling of materials or Internet of Things.
  • Environmental and climate aspects of trade and technology – Promote sustainability at the core of the TTC: work on trade and environment/climate issues, a better understanding of the role that trade can play in facilitating the dissemination of environmental goods and services; take a closer cooperation on green public procurement and work on common methodologies for carbon foot printing.

The next meeting of the TTC is planned before the end of 2022 in the United States.
Source: https://ec.europa.eu/commission/presscorner/detail/en/IP_22_3034

Ban on Combustion Engine Cars: On June 8, 2022, EU lawmakers voted to mandate that all new car and van sales should be zero emissions from 2035 as part of efforts to clean up road transport. The legislation is a key part of the Fit for 55 package (the EU master plan against greenhouse gas emissions) and mandates that carmakers should reduce their fleetwide emission averages by 100% from 2035, with interim steps in 2025 and 2030. Environment ministers are set to sign off on their version of the legislation at a summit in Luxembourg on June 28, 2022.

“Harmonized” charging cable: Starting Fall 2024, all small and medium-sized portable electronic devices on the EU market and accessories, such as mobile phones, tablets, cameras, keyboards, speakers, headphones, headsets and earbuds, will be required to use one common form of charging cable, i.e., a USB-C port. Laptops will have to be adapted to fit the requirements 40 months after they come into force. The rule change aims to reduce hassle for consumers as well as electronic waste, as it will enable consumers to use older chargers for new devices.

Germany Update

G7 presidency: In 2022, Germany has assumed the G7 presidency, and it has set itself a number of goals for its one-year presidency of this group of seven leading democratic economies (U.S., Germany, France, UK, Italy, Japan, Canada; the European Union attends all meetings). The highlight will be the G7 summit that is to take place in the Bavarian Alps at the end of June. Focal points include climate protection, fighting the COVID pandemic and international cooperation. The G7 states reacted with an unprecedented package of sanctions against Russia and pledged financial and military support for Ukraine. As a result of the war, global food security has become a key concern. Germany is pushing strongly for an internationally agreed response to counteract the threat of a world hunger crisis resulting from the absence of grain exports from Ukraine. The G7 is not an international organization, but an informal forum – which is why the country that holds the presidency has an important role to play and determining agenda focus.

Germany and the United States launch energy partnership: In May 2022, the partnership launched with a focus on accelerating climate action, speeding up the energy transition with new technologies and promoting climate action in other countries. Both countries signed the joint declaration on the sidelines of the G7 climate and energy ministers’ meeting in Berlin. Working groups on hydrogen, offshore wind energy, zero-emission vehicles, and cooperation with third countries have already been established.

Energy Transition:
  • Hydrogen: The German government sees hydrogen technology as the key to the country's clean energy future. Germany aims to become the "world number one" in clean hydrogen energy technology – with the government investing EUR 9 billion over the next decade, of which EUR 2 billion are set aside for international cooperation. View the German Trade and Investment video on business opportunities in this sector here.
  • Natural Gas & Liquid Natural Gas (LNG): With coal-fired and nuclear power phase-out and strong demand for clean mobility solutions, domestic gas demand is predicted to experience continued growth through 2040. Natural gas plays a short-term key role in Germany’s energy transition, as it strives to cut its ties from Russian oil and gas supplies. Gas is widely accepted as best practice in bridging the German Energy Transition. The German government has announced its support for investments in LNG propulsion systems and infrastructure.

Currently, Germany has no significant LNG market. Except for minor bunkering facilities, LNG infrastructure is non-existent. German government and EU legislature view investments in natural gas infrastructure as a priority. Germany is facilitating small-scale LNG investments with incentives aimed at diversifying German LNG demand.
Source: https://www.gtai.de/en/invest/industries/energy/natural-gas-liquid-natural-gas-lng-energy-transition-105884

Water Technologies: The prospects for German water technologies are bright. Climate change, demographic effects, exploitation of natural resources, digitization and changing requirements in water-intensive industries are directly impacting the sustainability of water systems, creating demand for new solutions that improve efficiency and water quality standards. The German market for sustainable water management is the largest in Europe, with water supply and wastewater treatment alone worth approximately EUR 17.2 billion annually, which is 15.2% of the global market volume (VDMA, 2019). German water protection policy makes legal provisions for the maintenance of good-quality water bodies, the adequate supply of both drinking and supply water in terms of quality and quantity, and the long-term securing of water for public use.

Sewage sludge treatment: Germany’s sewage sludge ordinance regulates the application of sewage sludge on agriculturally or horticulturally used soils. According to the ordinance, the application of sewage sludge for fertilization will be terminated and the recovery of phosphor and other nutrients will become compulsory. Key points include duty to recover phosphorus as of 2029 for wastewater treatment plants covering more than 100,000 inhabitants and duty to recover phosphorus as of 2032 for wastewater treatment plants covering more than 50,000 inhabitants. No specific recovery technologies are defined. This leaves scope for the application and development of innovative recovery procedures. The new provisions of the amended ordinance have led to high demand for new sewage treatment solutions. This is the right time to approach this market in Germany.

E-Commerce: With 65 million people – 80% of the German population – purchasing online on a regular basis, Germany boasts not only the most internet users in Europe but also the greatest e-commerce customer potential. Combined with an extensive, highly developed logistics infrastructure, Germany is the clear continental leader in this area and offers a myriad of opportunities for international online retailers and service providers alike. E-commerce now constitutes around 96% of all interactive commerce. Industry experts expect this trend to continue, with expected turnover of EUR 84.6 billion in 2023. Innovative technologies will become more relevant in the e-commerce B2B sector in the coming years. According to a recent IBI research study, 77% of surveyed companies buy online. More than 50% of companies consider it likely that products will be partially automatically reordered via the “Internet of the Things.” The study discovered that 75% of companies already generate online revenue, with 17% generating more than half of their revenue online. These developments highlight the fact that businesses are rapidly becoming more online-oriented and signal the significant potential of a rapidly expanding virtual B2B environment.

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