31.3.2009   

EN

Official Journal of the European Union

C 77/1

1.1

In its various opinions on the subject of cutting CO2 emissions, the Committee has always strongly supported the Commission's legislative initiatives aimed at reaching specific visible targets on cutting greenhouse gas emissions as a key contribution to the fight against climate change.

1.2

The Committee agrees with the objectives of the proposed regulation, which is aimed at steadily reducing CO2 emissions so as to meet the proposed target of 130 g/km by 2012, by means of improvements in vehicle motor technology.

1.3

Moreover, the Committee calls for the commitment of all stakeholders to meeting the target of 120 g/km by 2012, through an integrated approach, as set out in the Commission communication of 7 February 2007, and calls on the Council and European Parliament to swiftly adopt all pending legislation aimed at curbing climate change.

1.3.1

The Committee recommends that the Commission set long-term targets, as advocated by the European Parliament: bolder solutions will need to be found for 2020.

1.4

Specifically, the Committee calls for the speedy adoption of the proposed Directive on passenger-car related taxes (COM(2005) 261 final) and the enhancement of Directive 1999/94/EEC on CO2-emissions labelling. It also calls on the Commission to propose and coordinate initiatives on motor vehicle advertising and marketing aimed at promoting more fuel-efficient vehicles.

1.5

Specific legislation for the car industry seems warranted, given the need to move on from the phase of voluntary industry commitments, which, although beneficial in terms of the important progress made on passenger car emissions performance, have proved insufficient to achieve the targets set.

1.6

While endorsing the strategy and proposed approach, the Committee would call for measures that are genuinely feasible, insofar as they strike the right balance between achieving crucial environmental progress on the one hand, and, on the other, the need to safeguard jobs in an industry that employs 13 million workers and to fully maintain the competitiveness of European manufacturers in an undoubtedly strategic sector for the EU's economy.

1.7

The Committee agrees that a regulation is the appropriate legal instrument as it will ensure immediate compliance and thus prevent any distortions of competition. The timeframes and specific details of the proposed measures must be carefully thought out in a more consensual manner, so as to maintain and strengthen the competitiveness of EU manufacturers in a global market and to prevent the emergence of artificial advantages amongst the various segments within the sector.

1.8

To this end, the Committee proposes that the Commission consider the possibility of replacing the current system of defining emission limit values solely based on vehicle mass (as used in Japan), and giving more consideration to other parameters such as vehicle footprint (wheelbase by track width), which is already used as the basis for goods vehicles in the USA.

1.9

The Committee calls for further consideration of the linear function inclination (i.e. the % slope), given its direct influence on the way in which the burden is shared amongst manufacturers. The Commission itself, in its Executive summary of the impact assessment [SEC(2007) 1724] says that ‘The application of these criteria would, on the basis of initial analysis, suggest that in order to strike a balance between them, a range between 50 % and 80 % should be considered further at this stage’, thus implicitly acknowledging the need for a much better impact assessment on such a sensitive issue. Opting for a 60 % slope leaves problems unresolved and could provoke a dispute with manufacturers that consider the decision unfair and imbalanced. The Committee recommends that the impact of the final decision, following all necessary further consideration, be neither beneficial nor detrimental.

1.10

Another aspect that requires careful consideration is the introduction of penalties, under Article 7 of the regulation. While the Committee agrees with this dissuasive approach, it believes that their highly progressive nature will not allow EU manufacturers to adapt their production chains to the new limits within the planned timescale. The measures seem out of kilter with those envisaged for other sectors, while creating an inherent imbalance between manufacturers of small and medium-sized vehicles and those of large vehicles, having a much greater impact on the former.

1.11

The Committee thinks that these are hefty, spiralling penalties and that they may be passed on into consumer prices, placing the burden on the purchaser and possibly distorting competition, while slowing the pace of vehicle fleet replacement. It calls on the Commission to ensure that any funds deriving from this measure remain within the car industry, providing incentives for the trade-in of more polluting cars and campaigns to increase awareness of CO2 emissions as a factor when purchasing, as well as contributing to the huge resources needed for research and development.

1.12

The Committee considers that scientific research is crucial to the degree of progress that can be achieved by the industry. While results can be achieved in the initial phase using existing technologies, it is a reasonable assumption that the future will require ‘a technological break from the present’ through the introduction of more advanced technology.

1.13

In the Committee's view, taking the research route requires huge resources and firm commitment, beginning with the need to ensure coordination of ongoing initiatives in the Member States, universities and technological centres of excellence at all levels, while encouraging the direct participation of manufacturers.

1.14

To this end, the Committee thinks that establishing a dedicated Joint Technological Initiative (JTI) for the car industry could help mobilise the scientific community.

1.15

The Committee thinks that the impact assessment does not go far enough, as highlighted by the Impact Assessment Board itself. In document SEC(2007) 1725 the Board calls for clarification of the possible effects on attaining the targets, and for an explanation of any differences between results from TREMOVE and ex-ante analysis. It adds that further analysis is needed of certain sensitive variables such as fuel prices and autonomous weight increase (AWI). There should also be further assessment of the regional impact, particularly on employment, the automotive supplier industry and competitiveness on external markets.

1.16

In the Committee's view, if such a far-reaching strategy is to succeed, suitable measures are needed to support and protect the industrial structure that exists in Europe, with a view to safeguarding or indeed raising the current level of competitiveness, while maintaining quality jobs in the industry. The Committee advocates a phasing-in approach that would require at least 80 % of the final target to be reached by 2012, the ultimate target then being reached incrementally by 2015.

1.17

A key factor in reaching the environmental targets and safeguarding competitiveness is applying the emissions limits stringently to all non-EU-manufactured vehicles sold in Europe. These limits will apply to imported vehicles.

1.18

Considering that this proposal is only the beginning of a process aimed at tackling environmental problems across the whole transport sector, the Committee calls on the Commission to quickly draw up new legislation to limit CO2 emissions from light goods vehicles, heavy-duty and two-wheel vehicles, collating all the relevant data on their emissions.

1.19

The Committee believes that while sectoral policy for the car industry is of real importance, it does not represent the sum total of our wider commitment to general transport policy. Nevertheless, it is an important token of that commitment, helping to guide the entire industry towards the environmental targets already being pursued by other sectors of EU industry.

1.20

The Committee hopes that the proposed sector-specific measures will be flanked by action focusing on transport demand. It is vital to pursue a rigorous policy aimed at an ever greater shift of transport from the roads onto other means generating fewer greenhouse gas emissions such as rail, inland waterway and public transport (very-low-emitting, where possible).

1.21

The Committee does not agree with the temporary derogation under Article 9 of the Regulation as currently being proposed, given that this clearly means unequal treatment of manufacturers. In the Committee's view it is crucial to avoid enshrining any regulatory advantage that could distort competition.

1.22

The Committee recommends devising a model for calculating CO2 that factors in all emissions deriving from car manufacturing. The carbon footprint should be taken into account with regard to the entire lifecycle of vehicles.

1.23

To achieve this aim, we need to launch a debate on lifestyles — an issue on which the Committee has recently drawn up specific opinions. It is a widely-held belief that if the number and size of private vehicles continue to grow, and if goods vehicles that generate high levels of greenhouse gas emissions and NOx continue to receive preference, the goal of cutting CO2 by 20 % will not be achieved. This cannot and must not be accepted.

2.1

The United Nations Framework Convention on Climate Change, which was approved on behalf of the European Community by Council Decision 94/69/EC of 15 December 1993, requires all parties to formulate and implement programmes to mitigate climate change.

2.2

The Commission responded by gradually developing a series of legislative measures which culminated in January 2007 in the EU proposing in the context of international negotiations a 30 % reduction in greenhouse gas emissions by developed countries (compared to 1990 levels) and a 20 % reduction by 2020. These targets were subsequently endorsed by the Council and the European Parliament.

2.3

An analysis of individual sectors shows that, while overall emissions of greenhouse gases fell by approximately 5 % in the period 1990-2004, CO2 emissions from the road transport sector increased in the same period by 26 %.

2.4

In view of this, there is a need for specific legislation to bring the road transport sector back in line with the overall downward trend in greenhouse gas emissions. More particularly, action is urgently needed on passenger cars, given that they account for 12 % of overall EU emissions of carbon dioxide (CO2), the main greenhouse gas.

2.5

Although significant technological progress has been made in the car industry, leading to a 12.4 % cut in CO2 emissions between 1995 and 2004 by increasing fuel efficiency, the steady growth in demand for transport and constant increase in vehicle size have completely offset this saving, and indeed led to an increase in overall emissions of greenhouse gases by the transport sector.

2.6

The result is that, without specific initiatives, the EU is highly unlikely to be able to meet its target of average emissions from the new car fleet of 120 g CO2/km.

3.1

The Community strategy for reducing CO2 emissions began to take shape in 1995. It was based on three elements:

3.2

In 1998, the European Automobile Manufacturers Association (ACEA) adopted a commitment to reduce average emissions from new cars to 140g CO2/km by 2008, and the Japanese and Korean Automobile Manufacturers Associations (JAMA and KAMA) adopted a similar commitment to reduce average emissions by 2009.

3.3

The Commission recognised these commitments by issuing Recommendation 1999/125/EC (on the ACEA voluntary agreement), Recommendation 2000/303/EC (on the KAMA voluntary agreement) and Recommendation 2000/304/EC (on the JAMA voluntary agreement). On the subject of monitoring emissions the EU adopted Decision 1753/2000/EC of the European Parliament and of the Council establishing a scheme to monitor average emissions of CO2 from new passenger cars.

3.4

On 7 February 2007, the Commission adopted two parallel communications for the automobile sector:

3.5

These communications reported progress towards meeting the target of 140 g CO2/km by 2008-2009, but concluded that without other measures it would be impossible to meet the target of 120 g CO2/km for the new car fleet.

3.6

Both communications called for an integrated approach along two lines:

3.7

The Commission stated in these communications that the average target for the new car fleet should take the following factors into account:

3.8

The framework proposed and endorsed by both the Competitiveness Council and the Transport Council relies on all car manufacturers stepping up their efforts to produce more ecological cars, while at the same time pursuing maximum cost efficiency.

3.9

This means that the reduction in CO2 emissions has to be achieved through an integrated approach that involves all parties. A legislative proposal is thus needed that will meet the targets while maintaining the global competitiveness of the automobile industry.

4.1

The aim of the proposed Regulation (COM(2007) 856) is to ‘reduce CO2 emissions from light-duty vehicles’ and to take steps to achieve the target of 130 g/km by 2012. It applies to motor vehicles of category M1 as defined in Annex II to Directive 2007/46/EC and to vehicles to which type-approval is extended in accordance with Article 2(2) of Regulation (EC) No 715/2007 which are registered in the Community for the first time and which have not previously been registered outside the Community.

4.2

The proposal is part of an integrated approach to be rounded off by measures delivering an additional 10g CO2/km reduction in order to meet the Community's final objective of 120 g CO2/km as set out in COM(2007) 19 final.

4.3

When setting the levels of CO2 emissions, the regulation takes into account:

4.4

The proposed Regulation also seeks to:

4.5

The Commission states that the regulation is consistent with the EU's other objectives and policies and is the result of extensive consultation and input from a working group specially set up under the European Climate Change Programme (the CARS 21 group) with the direct involvement of all stakeholders.

4.6

Legal basis. Article 95 of the EC Treaty is regarded as the appropriate legal basis to ensure a level playing field for all economic actors and provide a high level of protection of health and the environment.

4.7

Subsidiarity and proportionality. The proposal complies with the principles of subsidiarity and proportionality in that, even though it does not fall under the exclusive competence of the Community, it prevents the emergence of barriers to the single market, and the adoption of legislative measures at Community level simplifies action to achieve a harmonised reduction in the climate change impact of passenger cars.

4.8

Choice of legislative instrument. In the Commission's view a regulation is the most appropriate instrument to ensure immediate compliance with the provisions adopted, avoiding distortions of competition which could have repercussions for the internal market.

4.9

Monitoring. Information on emissions of carbon dioxide from new passenger cars, measured on a harmonised basis according to the methodology laid down in Regulation (EC) No 715/2007, must be collected by the individual Member States and reported to the Commission under the procedure laid down in Article 6.

4.10

Certificate of conformity. Manufacturers are required under Directive 2007/46/EC to issue a certificate of conformity which must accompany each new passenger car. Member States will permit the registration and entry into service of a new passenger car only on presentation of such a certificate (with the exception of the derogations provided for in Article 9 of the Regulation).

4.11

Excess emissions premium. Under Article 7 of the proposed regulation, an excess emissions premium will be imposed from 2012 on manufacturers or, in the case of a pool, pool managers, whose emissions exceed the specific target. The amount of the premium will increase significantly in the years after 2012 and the sums collected will be considered as revenue for the EU budget.

5.1

In its resolution adopted on 24 October 2007, the European Parliament welcomed the Commission's strategy but proposed that emission targets be implemented from 2011 onwards in order to reach 125 g CO2/km in 2015 by technical improvements to vehicles alone. The Parliament laid stress on the second step to be taken in view of the longer-term target: reaching 95 g CO2/km by 2020 and possibly 70 g CO2/km by 2025, subject to a confirmation or review no later than 2016.

6.1

Consumer behaviour is of particular importance in successfully cutting CO2 emissions from cars. The Commission has thus begun preparatory work on amending Directive 1999/94/EC on consumer information regarding the conformity of new vehicles to the emissions targets and their fuel economy, aimed at increasing the contribution of car users to achieving the objectives set.

7.1

As in previous opinions regarding Commission proposals on cutting CO2 emissions, the Committee reaffirms its support for all EU initiatives aimed at reaching specific targets on cutting greenhouse gas emissions, as a key aspect of the fight against climate change.

7.2

The Committee concurs with the objectives of this proposed regulation subject to the comments set out below. It calls on the Council and European Parliament to swiftly adopt all pending legislation aimed at curbing climate change.

7.3

The Committee calls for the speedy adoption by the EU institutions of Directive COM(2005) 261 on passenger-car related taxes, which would help accelerate the process of reaching the target, encouraging companies to make greater efforts. It also calls on the institutions to undertake a swift improvement on Directive 1999/94/EC on CO2-emissions labelling and for initiatives to be proposed and coordinated on motor vehicle advertising and marketing. These should include measures to promote more fuel-efficient vehicles and to ban the advertising of the most polluting vehicles.

7.4

The Committee supports the choice of Article 95 of the EC Treaty as the legal basis for the proposed regulation, as this is well-suited to ensuring a level playing field for all actors and a high level of protection of health and the environment.

7.5

The Committee agrees that a regulation is the appropriate legal instrument as it will ensure immediate compliance and prevent any distortions of competition. This choice seems necessary as voluntary commitments entered into by the industry, although beneficial in terms of the results achieved on passenger car emissions performance, have proved insufficient to achieve the targets set.

7.6

The Committee approves the proposal to limit emissions to 130 g CO2/km by means of improvements in vehicle motor technology, though regretting that it appears no longer to be practicable to aim for the tighter target of 120 g CO2/km originally envisaged for 2012. It recognises that the Commission now proposes to achieve the 120 g/km in a different way through an integrated approach, including improved standards for tyres, promotion of consumer awareness, incentives for eco-driving (1) and particularly through greater use of biofuels. But given the growing doubts about the feasibility and desirability of the target for use of biofuels in the transport sector, the Committee does not regard this as a satisfactory alternative.

7.7

The Committee therefore recommends that the Commission should set out now further targets for the car industry to improve the carbon performance of vehicles in subsequent years. We believe that establishing now a sequence of progressively tighter targets for future years would give a clear signal of the standards that will apply in those years, enabling European industry to adjust its production plans accordingly.

7.8

The Committee thinks that achieving this target would represent an important contribution by the motor industry to the fight against greenhouse gas emissions from the transport sector, as over that period it would result in a 400-million-tonne cut in CO2 emissions.

7.9

The Committee believes that a key factor in achieving both the current and longer-term objectives is significant investment in research and development. This must be designed to tie in and coordinate with ongoing initiatives in the individual Member States, universities and all industry-related technological centres of excellence and involve the direct participation of manufacturers.

7.9.1

The Committee would draw the attention of the Commission and the Member States to the need for income support measures to be introduced — inter alia via tax incentives — for large families obliged to use large vehicles. Consideration should also be given to the situation in Eastern European markets where the average fleet lifespan is very high and where more highly polluting second and third-hand cars are sold. Ways should be found of incentivising trade-ins in these countries, by means of specific provisions. Clearly, countries with lower per capita income will not be able to benefit from a general cut in emissions, as people there will be unable to purchase the new, more efficient vehicles, which will most likely be more expensive.

7.10

It seems clear that while over the next few years reasonable results can be achieved using existing technologies, there will be a need in future to consider ‘a technological break from the present’ by introducing more advanced technology.

7.11

To this end, the Committee thinks that establishing a Joint Technological Initiative (JTI) could help mobilise the scientific community. This could be co-funded by a sizeable EU budget allocation, matched by funding from the manufacturers, as recently proposed in important sectors such as hydrogen and fuel cells, aeronautics and air transport, innovative medicines, IT systems and nanoelectronics.

7.12

The Committee supports the introduction of penalties from 2012 for failure to meet the targets, as laid down under Article 7 of the regulation, agreeing with this dissuasive approach, but thinks that these penalties should be earmarked for motor industry-related measures, such as:

7.13

The Committee believes that these measures and their highly progressive nature may not be compatible with the capacity of EU manufacturers to adapt their production chains to the new limits. The penalties, which most likely will be passed on into consumer prices, seem particularly high, and could distort competition and effectively penalise the sector in relation to other industries. A solution will need to be found that harmonises the burden, taking account of the average cost borne by the other sectors of industry involved in curbing CO2 emissions.

7.14

The Committee proposes that the Commission consider the possibility of replacing the current system of defining emission limit values based on vehicle mass, with one based on other parameters, such as vehicle footprint (a car's footprint is calculated by multiplying its wheelbase by its track width).

7.15

The inclination of the linear function (i.e. % slope) will influence the way in which the burden is shared amongst manufacturers and the certainty of the environmental outcome. The nearer the slope is to 100, the lighter the burden to be borne by heavier-car manufacturers. Conversely, the nearer the slope is to zero the heavier the burden imposed to meet the targets (an 80 % slope allows a 6 g emission surplus, a 20 % slope allows only a 1.5 g emission surplus). The Commission has indicated a 60 % slope (4.6 g surplus). The Committee calls on the Commission to reflect further on this proposal, to make absolutely sure that the regulation cannot benefit or disadvantage any EU business.

7.16

If the Commission does decide to retain this mass-based approach, it would not make much sense to review the slope in 2010, while the mass increase should be considered from 2013.

7.17

The Committee calls on the Commission to quickly draw up new legislation to limit CO2 emissions from light goods vehicles, heavy-duty and two-wheel vehicles, for which reliable verified data on actual emissions are needed.

7.18

Besides the crucial issue of environmental protection, the Committee calls on the Commission to give due consideration to the potential effects of this complex process on the 13 million workers currently employed across the motor industry. With rising oil prices and consumer demand for fuel economy, European car manufacturers could gain a competitive advantage by producing more efficient vehicles, which could favour employment in the EU.

7.19

In the Committee's view, suitable and practical measures for research into new, innovative and efficient technologies are needed, in order to maintain or indeed increase the European car industry's competitiveness and the quality of the jobs it provides.

7.20

The Committee believes that an important element in this process is applying the emissions limits, fully and stringently, to all non-EU-manufactured vehicles sold in Europe. These limits will be calculated on the basis of imports.

7.21

The Committee thinks that the progress report to be drawn up in 2010 represents a key opportunity to assess the entire strategy. It therefore asks to be involved in these periodic assessments and thus for an opportunity to give its opinion.

7.22

The Committee thinks that the impact assessment does not go far enough. The Impact Assessment Board's opinion called for certain crucial points to be clarified, given the importance of this issue.

7.23

The Board's recommendations, set out in document SEC(2007) 1725, are as follows: to clarify the impact on fleet composition and the effect this may have on attaining the targets, and explain possible differences between results from TREMOVE (2) and ex-ante analysis; to undertake a sensitivity analysis of certain variables such as fuel prices or autonomous weight increase (AWI); to assess the regional impact, particularly regarding employment; and to consider the effects on the automotive supplier industry, and on competitiveness on external markets. The Committee agrees with these suggestions and hopes that the impact analysis will be broadened accordingly.

7.24

Alongside the proposed measures, the Committee stresses the need to step up policies aimed at reducing transport demand, through an ever greater shift of transport from the roads onto other means generating fewer greenhouse gas emissions, such as rail, inland waterway, or public transport.

7.25

The Committee disagrees with the proposed temporary derogation under Article 9 of the Regulation. As currently worded, it goes against the principle of treating companies equally, effectively distorting competition in this particular market segment as regards similar products with similar characteristics. The Committee considers that the derogation should be granted to all manufacturers (regardless of whether or not they are connected to another manufacturer) competing in the same market segment, which in any case is just 0.2 %.

7.26

The Committee recommends that the Commission set long-term targets, as advocated by the European Parliament: bolder solutions will need to be found for 2020, with particular emphasis on their feasibility. It is crucial to continue cutting emissions, giving a clear signal of our intent to persevere along this road.

7.27

The Committee recommends devising a model for calculating CO2 that factors in all emissions deriving from car manufacturing. In certain countries, for example, many car parts are brought in from very far afield, thus increasing the total emissions per car manufactured, before the cars even hit the road. The carbon footprint should be taken into account with regard to the entire lifecycle of vehicles, including the CO2 needed for scrapping.

7.28

In several recent opinions, the Committee has urged the Commission to launch a debate on lifestyles. While agreeing with the proposed targets, the Committee points out that if current levels of growth continue in the number of private vehicles, road transport vehicles and other modes of transport that generate high levels of greenhouse gas emissions and NOx, and if the Commission's growth projections are borne out, it will be impossible to achieve the goal of cutting CO2 by 20 %, as set out in recent Commission proposals.

31.3.2009   

EN

Official Journal of the European Union

C 77/8

1.1

The EESC welcomes the Commission's initiative to revise the toy safety directive, although it comes rather late and is not ambitious enough.

1.2

The EESC notes that the impact assessment on which it is based dates from 2004, and did not take account of all the countries that are now EU Member States.

1.3

In view of the increasing number of alert of toys as revealed in the latest RAPEX report (2007), the EESC is surprised that the impact assessment should be inconclusive not only with regard to the link between the present directive and toy-related accidents to children, but even more with regard to the admitted lack of knowledge as to the effect of the present proposal on the number and seriousness of future toy-related accidents — something that should be the principal concern and fundamental reason for the present initiative.

1.4

Given the Commission's acknowledgement of the lack of reliable and credible statistics on accidents in the EU caused by toys, the EESC suggests that the Commission, in cooperation with the competent Member State authorities, should set up an appropriate system of statistical information on such accidents, at least as comprehensive as that already existing under some legal systems, that is accessible to all actors in the production and marketing chain with a view to preventing accidents (1).

1.5

The EESC believes that the legal basis for the proposal should be Treaty Article 153 rather than Article 95 alone, considering that the most important concern, to protect children effectively, has primacy over simply facilitating cross-border trade in toys.

1.6

The EESC also believes that, in the light of the scope and nature of the new legislative proposal and of experience in implementing the current directive in the various Member States, and since a total harmonisation approach has been accepted, the most appropriate legal instrument would be a regulation rather than a directive.

1.7

The EESC appreciates the technically and legally coherent and well-structured form of the proposal, and generally agrees with its innovative measures, which include:

1.8

The EESC regrets, however, that a number of aspects of key importance have not been covered, or only inadequately. They are:

1.9

The Committee therefore strongly urges the Commission to revise its proposal as suggested in the present opinion, so as to make it a more credible instrument for the effective protection and safety of children when using toys.

1.10

The Committee calls upon the EP and the Council to take on board the suggestions and recommendations presented herein, and to integrate them into the legislative procedure leading up to the adoption of the new directive.

2.1

The Commission first announced its intention to take legislative steps in the field of toy safety in the 1970s, putting forward a number of proposals that were subsequently withdrawn due to a lack of political consensus. Eventually, in the wake of the Council Resolution of 23 June 1986 (2) on consumer protection and safety, a new Commission proposal pointed, in more consensual terms, to the need for European-level harmonisation of the definition of toys, their manufacturing standards, main safety requirements, conditions for putting on the market and guarantees that they could be used by children without hazard.

2.2

Directive 88/378/EC of 3 May 1988, published at that time (3), is one of the first legislative initiatives stemming from the ‘new approach’ in the field of technical harmonisation and standardisation, based on the Council Resolution of 7 May 1985 (4).

2.3

The EESC drew up a mandatory opinion on the Proposal for a Directive presented at that time (5) which, while welcoming the proposal, regretted the long delays in its preparation, and, based on the assumption that all toys should be reliable and that children are vulnerable to risks and must receive special protection, underlined the need for the issue of toy safety to be addressed as part of the broader scope of the product liability directive (6).

2.4

In the meantime, the 1988 directive was the object of a number of corrigenda (7), of a major amendment by Directive 93/68/EEC of 22 July 1993 (8), and of a Communication from the Commission on its implementation (9).

2.5

Two directives on general product safety were adopted and published in 1992 and 2001, covering toy safety in generic terms (10), the latter putting special emphasis on the ‘changes made to the Treaty, especially in Articles 152 concerning public health and 153 concerning consumer protection, and in the light of the precautionary principle’.

2.6

Twenty years after the publication of the 1988 directive, the Commission is proposing a new directive on this matter, realising that the legislation in force has, in the meantime, become out-dated, that its scope and the concepts used need to be clarified and brought into line with present circumstances, that there is an urgent need to ensure that its provisions are consistent with the recently-proposed general legislative framework (11) for the marketing of goods and, most of all, that serious deficiencies and disparities have emerged in transposing and implementing the directive in the various Member States in terms of application, and that this must be resolved.

2.7

The present proposal is based on three major technical studies, to be taken as integral parts of it. Two concern the requirements and use of certain allegedly dangerous substances in manufacturing toys; the third is a general impact assessment, the final report of which dates from 2004.

2.8

In brief, the Commission is pursuing the following objectives with this proposal:

3.1

The EESC welcomes the Commission's initiative, although it comes rather late, given that the directive under review is more than 20 years old and the production and marketing parameters and methods for toys have undergone substantial changes in the meantime, as have the tastes and habits of their most natural users. The EESC moreover believes that the present proposal could be more ambitious in its aims, and its provisions could take account of the concerns aroused by recent events, which have been made public and are moreover reflected not only in strongly-worded speeches and positions on the part of the Commissioner responsible for consumer protection, but also in the EP Resolution of September 2007, the tenor of which the EESC echoes (12). It therefore regrets that the discussions with the EESC were not also accompanied by DG SANCO, which has not been directly involved in its preparation.

3.2

The EESC is surprised that the impact assessment on which the present proposal is based is more than four years old and does not cover the situation in all the Member States. Neither is it clear what account has been taken of consumers' and families' representatives or how far they were actually involved in its preparation.

3.3

In view of the Commission's criticism of the alleged shortcomings in applying the directive, the EESC is surprised that such criticism is not accompanied by initiatives taken by the Commission to ensure proper compliance with this Community law.

3.4

The EESC has difficulty in understanding how, given the acknowledged lack or deficiency of statistical data to which the Commission admits, it is possible to reach proper conclusions on either the state of affairs to be changed, or on the effectiveness of the proposed measures. It is, however, known that the toy market in Europe, estimated in 2002 to represent EUR 17 300 million at retail prices, and with imports amounting to more than EUR 9 000 million, is a prosperous sector involving some 2 000 businesses, mostly SMEs, and directly employing more than 100 000 people (13).

3.5

The EESC is of the view that the nature of the proposal in question requires that not only Article 95, but also necessarily Article 153, be considered as the legal basis, insofar as its scope does not relate only to the completion of the internal market, but rather concerns a particularly vulnerable category of consumer which cannot by any means be assimilated with that of the ‘average consumer’.

3.6

Moreover, the fact that children are indirect consumers of toys, insofar as it is not they who acquire them, but their parents or other adults who make them available to them for their use, should prompt the Commission to take a more rigorous approach to ensuring that the need to inform and educate this class of consumer is duly reflected in the wording of its provisions.

3.7

The EESC understands the Commission's option in this case for full harmonisation, but restates its conviction that, in cases such as this one, there would be everything to gain from selecting a regulation as an instrument rather than a directive, with the obvious advantages in terms of legal certainty and without of the risks of late or defective transposition and the consequent disparities in application, as the Commission acknowledges has occurred with the present directive (14).

3.8

Given the nature of the subject, the on-going evolution of the ‘state of the art’, the possibility of occasional incidents, as clearly shown in the Mattel and Fisher Price cases, and the worrying increase in the number of toy-related alerts as shown in the latest RAPEX annual report (2007), representing by far the sector with the greatest number of notifications (31 %) (15), it might have been hoped that the present proposal would draw all the lessons from events — and particularly from the failure of post-market surveillance — making a more practicable and enforceable Directive, that could lead to a safer toy market. This would mean, in the presence of doubt, prohibiting anything which, while an adequate degree of certainty is still lacking, might legitimately be suspected of presenting a hazard, even if slight, in its use as a toy by children and bearing in mind their unpredictable behaviour: this is not, however, the case.

3.9

Turning to the CE marking, the EESC would simply repeat its view expressed in a previous opinion on a common framework for the marketing of products, that ‘a lack of credibility of the CE marking amounts to a lack of confidence in the whole system: market surveillance authorities, manufacturers, laboratories and certifiers, and ultimately the adequacy of New Approach legislation’ (16).

In this case, the EESC urges the Commission to harmonise the final text of the present proposal with the text adopted for all the proposals concerning the above-mentioned common framework (17).

3.10

The EESC fully supports the EP's suggestion for the introduction of a European toy safety label, that would be awarded by independent third-party bodies, and regrets that the proposal has not fully responded to all the suggestions set out in the EP's resolution of September 2007; the EESC also echoes the concerns of SMEs, not that the toys they manufacture and sell might be less safe, but — as is also discussed in the above-mentioned opinion — relating to the proportionality of the measures used in the conformity assessment procedures, especially for non mass-produced products or products produced in small quantities (18).

3.11

The EESC considers that all substances dully recognised as potentially dangerous, must be completely removed from toy manufacturing, within a framework that is proportional, balanced and workable for responsible manufacturers, as well as being enforceable by the authorities.

3.12

The EESC welcomes the recent Commission Decision on ‘magnetic toys’, but is surprised that this question was not even touched upon in the present proposal for a directive: the Commission's reaction does not seem strong enough given the seriousness of the hazards and accidents that have already occurred with this type of toy, amounting only to a call for the Member States to ensure, each in its own way, that a ‘warning’ is attached.

3.13

The EESC thinks that there grounds for a more precise definition of the level and nature of penalties, as the Commission has already done in fields where the harm caused by improper behaviour is considerably less from a social point of view.

3.14

More generally, the EESC regrets that an opportunity has been missed here to put the protection of European children on at least the same level as exists, including at the manufacturers' initiative, in some Member States and other countries, where certain types of toy are quite simply banned, as pointed out in a study recently commissioned by the EP (19).

3.15

The EESC is aware of the fierce competition at international level in the toy industry. It therefore urges the European Commission, the European Parliament and the Council to take account of the sector's competitiveness when introducing modifications in the course of the legislative process of adopting the present directive. Safety standards for toys must not be lowered at the expense of consumer protection, especially for children, but international trade rules must be observed strictly so that European companies can compete under equal conditions.

3.16

Lastly, the EESC calls upon the Commission to be aware of social concerns relating to toy manufacturing, especially in third countries where young children are employed under atrocious working conditions and for long hours, daily handling toxic, highly dangerous products, and to adopt a clear stance in favour of eco-toys and ethical toys.

—

product packaging, and specifically situations in which toys are packaged in plastic bags;

—

the possibility of certain toy components becoming loose and being swallowed by children;

—

the characteristics of toys if broken.

—

making it clear that it should not be used or regarded as a marking or labelling system for purposes of consumption, nor a guarantee of quality or certification or approval by independent third parties, but only as a declaration of conformity with product requirements and a technical document that the manufacturer or the importer has an obligation and full responsibility to produce for the authorities and the consumer;

—

rationalising the various procedures for assessing conformity;

—

strengthening legal protection of the CE marking by registering it as a collective mark, which means that the public authorities can act swiftly to clamp down on abuses, while keeping open the possibility of additional national markings;

—

strengthening market surveillance mechanisms and border customs checks;

—

getting producers and consumers to look into the pros and cons of a possible voluntary code of conduct on the efficacy of the proliferation of European and national quality marks and labels —voluntary or otherwise — and how they mesh with the CE marking.’.

31.3.2009   

EN

Official Journal of the European Union

C 77/15

1.1

The EESC underlines the importance of the Lisbon Strategy as an aid to maintaining the benefits of the Single Market and its development and consolidation.

1.2

A well functioning, competitive and innovation-friendly Single Market is essential for Europe to make the most of globalisation while safeguarding its welfare standards. In this connection the EESC is concerned by recent decisions of the Court of Justice concerning the posting of workers, and it is in the process of analysing the repercussions of these for the Community's social policy ‘acquis’ (1).

1.3

In order to develop the Single Market, the EESC underlines the importance of promoting and capitalising on scientific research and innovation results, assisting national technology suppliers in promoting at European level the innovative products and technologies, promoting dissemination and trans-national exploitation of research results. The Single Market is a key tool for realising the Lisbon Agenda. Its aim is to benefit consumers, economic growth and employment by progressively dismantling barriers to the free circulation of people, goods, services and capital, even though many remain. The benefits from closer integration are undeniable.

1.4

The Commission's Single Market Review Package provides a good basis for reinvigoration of the Single Market, but its success will depend greatly on the ability and the ambition of national governments and their social partners to take up their responsibilities and put in place the necessary resources to turn this rhetoric into reality.

1.5

Correct and uniform enforcement of existing legislation and standards is one of the most important challenges. Impact Assessments, the reduction of administrative burdens and the cost of legislative compliance which stem from the tax fragmentation of the internal market, better consultation of the social partners and stakeholders, in particular SMEs, are essential both to improve understanding of regulatory goals and to identify non-regulatory solutions.

1.6

Small and medium sized firms make a vital contribution to the effective operation of the Single Market. SMEs in their various forms play a particularly important role in the service sector and are central to the social compromises that support the EU's economy. The Small Business Act and the SME Charter all acknowledge the importance of SMEs in the policy processes and institutions of the EU and member states. However, the EESC believes that greater attention should be paid to the role of SMEs in the implementation of policy, specifically with reference to their contribution to achieving economic, environmental and social policy objectives.

1.7

The EESC underlines that the European Globalisation Fund is an important instrument of solidarity that will provide specific help to workers made redundant as a result of changing global trade patterns to find another job. While it is welcomed that the scheme applies to employees in SMEs the Committee regrets that it is not available to the self employed who will be vulnerable to the same changes.

1.8

The EESC calls upon the Commission and Member States to ensure sufficient allocation of resources to improve enforcement of Single Market rules. Initiatives should also be developed to ensure synergies between Single Market policy, competition policy and social and environmental policy, which are important for a well functioning Single Market.

1.9

The Commission and Member States have to ensure that new regulatory initiatives, which should contribute to the smooth functioning of the Single Market, take into account both the impact on the competitiveness of European companies and the social and environmental effects. In order to ensure coherence and legal certainty for business and consumers, and to avoid new initiatives contradicting each other, there should be a ‘Single Market Compatibility Test’ (2) for new proposals at both EU and national levels, to assess their social and environmental impact.

1.10

Easy and affordable access to justice for citizens and businesses should be provided including adequate means for redress and dispute resolution mechanisms. In this regard, development of out-of-court dispute resolution tools should be improved.

1.11

The EESC can only welcome the objective of the communication of 20 November 2007 on SGIs, aimed at ‘consolidating the EU framework applicable to services of general interest, including for social and health services, providing concrete solutions for concrete problems where they exist’ and ‘a mix of sector-specific and issue-specific actions’.

1.12

Because EU primary law or the treaties recognise that SGEIs as a whole form part of the EU's ‘common values’ and contribute to its ‘social and territorial cohesion’, sector-specific actions (taking account of the specific characteristics of each sector) must be combined with issue-specific approaches.

1.13

By incorporating the distinction between economic and non-economic services into primary legislation, as well as the need to ensure respect for SGEIs' common operating principles, the SGI protocol shows how the process of clarifying the concepts and schemes under consideration is now more important than ever to ensure that such services no longer depend on an exclusive legislative or judicial case-by-case approach.

1.14

Despite repeated demands by the European Parliament for genuine legal certainty for social services of general interest, the proposals set out in the SGI communication are confined to a set of answers to ‘frequently asked questions’, which will certainly be useful, but have no binding legal value.

1.15

The EESC, therefore, proposes a multi-faceted and gradual approach, combining the sector-specific and issue-specific aspects, which would lead to the adoption of legislative initiatives where required and/or to these principles and conditions being adapted to the different sectors concerned (the cross-cutting, issue-specific approach).

2.1

The Commission package under consideration proposes a range of initiatives underpinned by five working papers and two communications concerning services of general interest and the social dimension of the single market (3).

2.2

The EESC has produced opinions on all of these topics (4). It has recently adopted an own-initiative opinion on the external dimension of the Single Market and is currently preparing one on its social and environmental dimension (5).

3.1

The Committee welcomes the emphasis in COM(2007) 724 final on empowering consumers and SMEs in order to help them benefit from the Single Market and respond better to their expectations and concerns. It is therefore welcome that the Single Market policy pays special attention to consumer-related areas, such as energy, telecommunications, retail financial services and the wholesale and retail trades.

3.2

The success of future Single Market policy depends on the combined capacity of Member States and of the Commission to improve its functioning. The Single Market is ‘work in progress’ and is a shared responsibility. Member States have to take greater ownership of it. Often national authorities fail to live up to their responsibilities for the management of the Single Market resulting in new obstacles which undermine the trust which the Single Market should inspire. The important role that social partners have in supporting the Single Market should be more recognised.

3.2.1

The Commission aims at giving higher priority to correct enforcement. There is a need to establish instruments to ensure that legislation works better in practice. Timely and correct transposition of Community legislation and administrative simplification are crucial to facilitate enforcement. Correct transposition of the services directive is particularly important for achieving its goals of creating jobs and growth.

3.3

Provision of easy and quick solutions to problems that citizens and business face in the Single Market should remain a priority. SOLVIT is a particularly helpful but unfortunately ‘underused’ tool due to a lack of knowledge about the system and its usefulness and adequate resources especially at national level. Any initiative to remedy this situation, including actions to ensure sufficient resources in the SOLVIT centres, both human and financial, are highly recommended, as are initiatives to widen their scope.

3.4

The EESC supports the Commission's intentions to streamline and expedite infringement processes by giving priority to infringement cases which present the greatest risk and are economically important without compromising the effectiveness of existing deterrents.

3.5

Much remains to be done in market surveillance of locally produced and imported products. This imposes a duty on Member States' authorities as well as on the European Commission.

3.6

The EESC would like the Commission to place more emphasis on assistance to SMEs by linking SME policy to the social and environmental objectives of the European Union, and finally to abolish all national non-tariff barriers including barriers to the free movement of capital and workers (6).

3.7

In a more general way, it remains crucial that the Commission continues playing a strong role as guardian of the Treaty and exercises its right of initiative in order to make the Single Market function well.

3.8

The EESC supports the importance of continuous efforts to be made for further reducing costs resulting from fiscal fragmentation of the Single Market through promotion of community regulations which will support the development of trans-border activities and provide for consolidation of the Single Market.

4.1

The EESC welcomes the objective of ensuring ‘more inclusive policy-shaping’ and the desire to ‘broaden stakeholder involvement’. Systematic impact assessments are of key importance.

4.2

Consultation of representative stakeholders when an impact assessment is being prepared is essential. Impact Assessments should be scrutinised by an independent and external body of experts including end user groups of the legislation.

4.3

Reduction of the administrative burdens on companies must also be guaranteed without compromising social outcomes.

4.4

In order to ensure coherence and legal certainty for business and consumers, and to avoid new initiatives generating new barriers, there should be a ‘Single Market Compatibility Test’ with an evaluation of the social and environmental consequences (7) for new proposals at both EU and national levels. Unclear legal texts, often implemented and interpreted differently, cause contradictions in Community legislation.

4.5

Improved information and data about the practical implementation of Single Market rules is of paramount importance. The Commission should be more open in disclosing information about those Member States which do not fulfil their responsibilities and in assisting the role of national social partners by making national reporting more consistent and transparent.

5.1

The EESC agrees with the Commission that globalisation is a formidable source of dynamism and competitiveness and that the Single Market is an asset which should be used as a springboard to meet the challenges of globalisation.

5.2

Trade liberalisation is correctly identified as the first pillar of the EU's strategy in this area. An ambitious conclusion of the Doha Round and completion of the far-reaching free-trade agreement negotiations launched under Global Europe will be the measure of the EU's success.

5.3

Regulatory and standards issues are increasingly determinants of companies' ability to engage internationally. European Standardisation Organisations such as CEN, CENELEC and ETSI in cooperation with advisory organisations, such as NORMAPME (9), should ensure that such standards are accessible to all businesses particularly small businesses, across the EU and developing countries.

5.4

The Commission rightly emphasises the need to achieve improved regulatory cooperation, equivalence and convergence internationally. ‘One test, one standard, accepted everywhere’ should be the long-term goal.

5.5

EU regulations must maintain competitiveness. Excessive burdens on EU companies will not be compensated for by international acceptance of EU norms. Regulatory cooperation with partner countries will not be successful without a spirit of openness and innovation to other approaches.

5.6

The EESC is encouraged by the commitment to benchmarking of EU regulation against international best practice particularly with that of EU's main trading partners. This benchmarking should be systematically included in EU impact assessments and the EU should be open to regulatory cooperation with important trading partners. The EU should accept officially recognised international standards for conformity assessment.

5.7

EU initiatives to take a lead on a global scale in rule-setting and the development of high quality, science-based international standards for industrial and food products should be encouraged. Common standards should be accompanied by common regulatory objectives. Therefore the Committee would recommend more focus on bilateral agreements and networks among international regulators.

5.8

The EU should remain supportive of free trade, while at the same time providing an adequate level of market surveillance to guard against the import of unsafe products. The Commission however should make sure that these measures and emerging systems of private standards are not misused in a protectionist manner (10).

6.1

The Committee supports the view that a social dimension will help to improve the functioning of the Single Market, along the lines of the ‘growth and jobs’ strategy and through its strong emphasis on a healthy SME economy.

6.2

Since labour market integration is the best safeguard against social exclusion, better use of Europe's labour force potential in rapidly changing societies must be at the core of the Commission's plan for ‘opportunities, access and solidarity’. The Commission must work with social partners to ensure that this applies especially to vulnerable, immigrant and minority groups.

6.3

To respond to the challenges of globalisation: technological change and evolving social and environmental realities, policy efforts must be geared towards securing social goals through increasing employment rates and creating the framework conditions for high productivity growth.

6.4

The importance of integrating ‘flexicurity’ (11) in all EU policies has been highlighted by the EESC in its opinion (12). SMEs, and especially the self employed, are central to the effective operation of flexible labour markets. To this end a greater understanding of the role of SMEs in relation to social policy provision is needed.

7.1

In order to develop the Single Market, the EESC underlines the importance of promoting and capitalising on scientific research and innovation results, assisting national technology suppliers in promoting at European level the innovative products and technologies, promoting dissemination and trans-national exploitation of research results. Europe's innovative capacity can be greatly influenced by the quality of the Single Market. Coordination of efforts is required at the European level on R&D between ‘clusters’ of SMEs, large firms, research institutes, universities and the new European Institute of Innovation and Technology.

7.2

Progress towards a more competitive patent system in terms of costs of legal certainty is key for Europe's innovation capacity. This includes progress on a common patent jurisdiction system for Europe that should deliver the highest quality, cost-effectiveness and reliability for all companies and a Community Patent also meeting those benchmarks to benefit in particular SMEs. Strong protection of intellectual property rights with effective measures at European and international level against the growing scourge of counterfeiting and piracy is also needed.

7.3

Innovation in social policy administration should embrace the variety of social economy organisations (such as cooperatives) that can bring service provision closer to user communities under appropriate regulatory supervision.

7.4

The new Single Market Policy must play a central role in the creation of an environmentally sustainable global economy.

8.1

A balanced consumer policy is important for a well-functioning Single Market. The EESC sees consumers as central to the Commission's new vision for a truly inclusive Single Market. More attention should be paid to the experience of consumers in the market, for instance through impact assessments or incorporating consumer interests into the Lisbon Agenda.

8.2

The focus should be on one common market that is beneficial to consumers and business and on the role that the service sector can play in the economy, raising quality and consumer trust. Consumers should have effective access to goods and services offered throughout the EU and businesses should be able to offer their goods and services anywhere in the EU as easily as they do on their domestic market. Harmonisation coupled with mutual recognition provides the right basis for this ‘win-win’ situation (13).

9.1

The EESC has stated its concerns in a number of opinions (15) at the situation of legal uncertainty concerning SIG.

9.2

The communication highlights the role of the specific protocol on social services of general interest appended to the Lisbon Treaty (the SIG protocol) which is intended, according to the Commission, to establish a consistent framework that will guide EU action, whilst providing a solid basis for defining services of general interest (16).

9.3

The Communication on SGIs, on the other hand, makes only a passing reference to the new Article 16 of the Lisbon Treaty, without elaborating on its implications, whereas this introduces a new legal base for Services of General Economic Interest (SGEI), giving the Council and the Parliament the task of establishing, by means of regulations, in line with the ordinary legislative procedure, the principles and conditions enabling SGEIs to fulfil their missions.

9.4

The effective implementation of the principle that missions of general interest take precedence, which is now made possible by the new Article 16 of the Lisbon Treaty, will help reducing the frequent recourse to the arbitration of the Court of Justice.

9.5

The Lisbon Treaty involves a number of innovations, not least the new Article 16 referred to above, and a general reference to SGIs and services of non-economic general interest (SNEGI). It helps to refocus the issue of services of general interest in the field of Community action in line with the principle of subsidiarity.

9.6

In the EESC's view, the new Lisbon Treaty (Article 16 TFEU and the SGI protocol) is therefore merely the start of a new approach to achieve greater legal security and more consistent regulation of national and Community SGI schemes.

9.7

The SGI protocol forms a handbook to the rules on SGIs, both economic (SGEI) and non-economic (SNEGI), but makes no attempt to solve the problem of distinguishing between these two categories.

9.8

By incorporating the distinction between economic and non-economic services into primary legislation, as well as the need to ensure respect for SGEIs' common operating principles, the SGI protocol shows how the process of clarifying the concepts and schemes under consideration is now more important than ever to provide legal security for the companies and bodies responsible for managing these services and their main beneficiaries.

9.9

The SGI communication proposes to ‘consolidate the EU framework applicable to services of general interest, including for social and health services, providing concrete solutions for concrete problems where they exist’ and ‘a mix of sector-specific and issue-specific actions’.

9.10

Such action should, of course, take account of the specific characteristics of each sector concerned. Because primary law has recognised, however, that SGEIs as a whole form part of the EU's ‘common values’ and contribute to its ‘social and territorial cohesion’ there is a need to combine sector-specific actions (taking account of the specific characteristics of each sector) and issue-specific approaches.

9.11

The EESC therefore proposes a multi-faceted and gradual approach, combining the sector-specific and issue-specific aspects, which would lead to the adoption of legislative initiatives where required and/or to these principles and conditions being adapted to the different sectors concerned (the cross-cutting, issue-specific approach).

10.1

The EESC underlines the importance of the Lisbon strategy as an aid to maintaining the benefits of the Single Market and its development and consolidation.

10.2

The Commission has introduced the concept of social services of general interest (SSGI) and has detailed it in its White Paper on SGI and in two communications (17) and in a ‘staff working document’ (18).

10.3

The communication does not put forward a definition of these SSGIs and prefers to make a distinction between two broad groups of SSGIs: firstly legal and complementary social protection schemes; and secondly, ‘other essential services provided directly to the person’.

10.4

The Commission's tentative approach shows how difficult it is to classify SSGIs, as they reflect specific and extremely varied tasks that are deeply rooted in national and even local collective preferences.

10.5

During consultation on the 2003 Green Paper, the majority of stakeholders in this sector (local authorities, operators, users' representatives) stated that they felt there to be increased legal uncertainty regarding the body of Community law that applied to them, given their specific characteristics, in particular concerning authorisation to provide the service. They made it clear that they fell into a ‘grey area’, which hampered their work. This led to:

10.6

The Commission has not, however, adhered to this approach, which clearly contradicts the sector-specific approach that it favours, and today intends to limit its proposals to a set of answers to ‘frequently asked questions’ and an interactive information service, which will certainly be useful, but have no binding legal value.

10.7

In order to meet the calls for legal certainty, inter alia under Article 16 TFEU which opens up new prospects with regard to the place and role of SGEIs in the European Union, including SSGIs, the process of clarifying the concepts and also the Community frameworks applicable to public-spirited activities must be pursued.

11.1

The Committee welcomes the objectives stated in the Communication on ‘Opportunities, access and solidarity: towards a new social vision for 21st century Europe’ (21), which addresses EU citizens, civil society and businesses, including SMEs, and is based on Europe's key instruments such as the Single Market, the Lisbon Strategy for Growth and Jobs and the Sustainable Development Strategy.

11.2

The current changes in European societies (EU 27 with 500 million citizens, demographic change, globalisation, technological progress and economic development among others) might represent new work opportunities and skills, but adaptation to change still entails a risk of unemployment and exclusion.

11.3

The EESC supports a more prominent role for the EU in facilitating, anticipating and fostering such structural changes while promoting European values at global level. The Communication sketches out a new ‘life chance’ social vision for 21st century Europe and attempts to complete the consultation expired on 15 February 2008. The Bureau of European Policy Advisers (BEPA) among others, as well as Member States and EU institutions, have been involved in the debate on social changes and on the concept of a European Social Reality. The EESC welcomes the objective of ensuring that the final analysis of these discussions will contribute to the preparation of the renewed Social Agenda to be submitted in 2008 and take into account the new institutional framework provided by the Lisbon Treaty.

—

Opportunities — to start well in life, realise one's own potential and make the most of the chances offered by an innovative, open and modern Europe.

—

Access — new and more effective ways to get an education, progress in the job market, obtain quality healthcare and social protection and participate in culture and society.

—

Solidarity — to foster social cohesion and social sustainability, and make sure that no one is left behind.

11.4.2.1

The EESC agrees with the Commission that there is no ‘one size fits all’ recipe for Europe and that common challenges require joint action supported by active citizenship.

11.4.2.2

Combating social exclusion and improving living by creating opportunities for individuals is essential to sustain economic growth and to reduce risks of shortcomings in the welfare system. Confidence and trust are essential for progress, modernisation and openness to change.

1)

in youth: new social changes and new economy based on innovation and technology request more attention in terms of education and skills; investing in youth has a positive impact both on economic development and social cohesion. The Lisbon Agenda has placed education in the centre of the European social and economic system by turning knowledge into a competitiveness lever for Europe in the global context;

2)

in fulfilling careers: a dynamic economy and labour market require flexible labour market rules and high social standards (see ‘flexicurity’);

3)

in longer and healthier lives: longer life expectancy puts a burden on social protection systems but also creates new economic opportunities in terms of new services, goods and technologies. The EU should promote new social policies to take advantage of these opportunities and to remedy the failure of current protection systems;

4)

in gender quality: new economic models induce new social schemes. For instance, labour policies should consequently adapt to new requirements of gender equality. Some of the Commission's proposals address pay gaps, the tax system and family-friendly practices at the workplace;

5)

in active inclusion and non-discrimination: the recent enlargements revealed deep economic and social disparities between Member States and regions. The European Commission aims at promoting a new cohesion policy based on the acceptance of diversity, active inclusion, the promotion of equality and the eradication of discriminations;

6)

in mobility and successful integration: The Single Market has led to an increasing citizens mobility also impacting on SMEs. This requires new EU-wide approaches based on integration;

7)

in civic participation, culture and dialogue: these aspects play a important role in social cohesion while also involving economic resources connected with innovation and technological development.

11.4.4.1

The EESC stresses the fact that although the main competence for these policies lie in the Member States, the EU and Social Partners play an important role in steering and supporting related actions and reforms. The ‘acquis communautaire’ is a major instrument in particular with regards to enlargement and cohesion policies, the Lisbon Treaty and the Charter of Fundamental Rights.

11.4.4.2

The EESC agrees with the following five strategies set out in the Communication:

—

‘The single market: review of achievements’ [SEC(2007) 1521]

—

‘Instruments for a modernised single market policy’ [SEC(2007) 1518]

—

‘Implementing the new methodology for product, market and sector monitoring: Results of a first sector screening’ [SEC(2007) 1517]

—

‘The external dimension of the single market review’ [SEC(2007) 1519]

—

‘Initiatives in the area of retail financial services’ [SEC(2007) 1520].

—

A Communication on ‘Services of general interest, including social services of general interest: a new European commitment’ [COM(2007) 725 final] and several staff working documents [Commission staff working documents: SEC(2007) 1514, SEC(2007) 1515, SEC(2007) 1516]

—

A Communication on ‘Opportunities, access and solidarity: towards a new social vision for 21st century Europe’ [COM(2007) 726 final].

31.3.2009   

EN

Official Journal of the European Union

C 77/23

1.1

The Committee welcomes the Commission's moves to increase support for the setting-up and growth of micro-enterprises and fostering the entrepreneurial spirit, so as to expand the Community's production and employment base with a view to greater competitiveness, greater cohesion and a higher-quality knowledge-based economy in line with the renewed Lisbon objectives.

1.2

While the Committee welcomes the initiative to set up a new Community support structure for micro-credit, it feels that merely encouraging Member States is not enough, given that the non-bank sector, which is not covered by the EC bank directives, is regulated inadequately in many Member States and by widely differing basic provisions.

1.3

The Committee believes that a pilot project for socially responsible micro-investment bringing together bank and non-bank micro-credit institutions in a European network — through the implementation of memorandums of understanding for socially responsible investment with individual institutions and support from trade associations — should target in particular those unlikely to obtain bank credit:

1.4

The Committee is convinced that an innovative use of new technologies in the field of micro-credit could help extend the reach of micro-finance, by means of a network, while also increasing competition and reducing costs for users.

1.5

In addition, the Committee feels that support for micro-credit must go hand in hand with training credits for applicants, facilitating their development and success on the market, to prevent social exclusion and continually enhance the implementation of the Lisbon Strategy.

1.6

The Committee accepts that any changes to the institutional and legal frameworks supporting micro-credit are primarily a matter for the Member States, to be implemented by means of the annual Lisbon governance cycle. Nevertheless, action is needed to boost the European reference system, particularly by:

1.7

The Committee has misgivings about the proposal to set up a dedicated Community support structure within the Jeremie department of the EIF. It would not give the initiative optimal visibility and would limit the scope it ought to have for coordinating other existing initiatives, while also preventing it from taking on activities other than technical assistance. The Committee therefore thinks that an independent department should be set up, which could act as a micro-credit fund.

1.8

The funding and technical assistance provided by the new support structure should not be directed solely at new non-bank MFIs, but rather should cover all such institutions so as not to distort competition.

1.9

The EU MFI initiative should include measures to increase social dialogue, as well as dialogue between the various civil society players and to make optimum use of EU best-practice-exchange networks, such as the European Microfinance Network, the Microfinance Centre and the European Microfinance Platform.

1.10

The Committee feels that the MFI initiative should enhance the role of employers' associations in ascertaining the reliability and competence of applicants, building up strong relationship and trust potential and providing training, advice and other kinds of support, to bring out the autonomous capacities of beneficiaries and cut red tape, particularly as regards drawing up business plans.

1.11

Setting up a micro-credit fund, operating in conjunction with financial institutions, state administrations (2), trade associations and guarantee cooperatives and credit consortia could play a major role in directing financial engineering towards forms of ‘social credit management’.

1.12

A social view of credit, which could also be the basis for setting up a micro-credit fund, ties in closely with corporate social responsibility principles and the values of better, more widespread employment.

1.13

Support for EMAS environmental certification can provide an excellent means to encourage social growth of businesses and facilitate informed dissemination of a micro-credit fund.

2.1

In April 2007 the SME Observatory noted that the greatest barrier to more product and process innovation lay for European SMEs in gaining access to credit, followed by the difficulty of finding skilled human resources, while for larger businesses human resources were the main problem.

2.2

The market's main shortcomings are insufficient seed capital, available funds and demand. These issues are addressed by the Commission Communication Implementing the Community Lisbon Programme: Financing SME Growth — Adding European Value (3), on which the Committee has commented on several occasions (4).

2.3

In particular, the Committee noted that ‘Policies to assist businesses to start up and develop should be intensified including quicker, lower-cost start-ups, measures to improve access to risk capital, more entrepreneurial training programmes, measures to improve access to public networks and utility services and a denser network of support services for small enterprises’ (5).

2.3.1

The Committee stresses, as in previous opinions (6), that ‘Cooperatives, consortia, mutuals, innovative start-ups and microenterprises can also help boost competitiveness and innovative capacity within the EU’.

2.4

It has also noted that ‘A main issue is to ease access to finance markets’ and that ‘banks and other financial stakeholders, such as venture capital funds, should be encouraged to adopt a more positive attitude to risk-taking’ (7).

2.5

In autumn 2007 the Commission announced that a set of initiatives for SMEs was being discussed, including a European initiative setting up a new support structure for micro-credit (8).

2.6

Micro-credit is generally acknowledged to be a financial instrument which has great impact on entrepreneurship, economic development and productive social inclusion but where there are still many shortcomings and much room for improvement. This relates to difficulties in obtaining seed capital investment, especially when the applicant is unemployed, has recently immigrated, belongs to an ethnic minority, or is based in a convergence region.

2.7

Another problem arises from the fact that for financial institutions economies of scale come into play, linked to fixed transaction costs such as information-gathering, assessment, and the follow-up to loans. This is particularly the case with micro-loans to the self-employed and to SMEs that are insufficiently transparent, with a limited capacity for providing the necessary information to financial institutions.

2.8

The international definition of micro-credit is ‘making small loans — below EUR 25 000 in Europe (9) and below USD 100 000 in the United States — to low-income earners who usually have no access to bank loans because they are insufficiently solvent and/or because the cost of managing such loans is considered too high’ (10). The definition of micro-credit does not include consumer credit.

2.9

The Committee agrees with the Commission that micro-credit has an important role to play in implementing the Lisbon Strategy for growth and jobs and promoting social inclusion. It is essential that micro-credit preserves its main role of encouraging growth of self-employment and development of micro-enterprises, and is not reduced to mere social aid.

2.10

The Committee believes that micro-credit should be used in the EU to address problems revealed by market failures, giving entrepreneurs access to credit, which is necessary to start up or expand economically viable activities, including in the area of development aid and cooperation policy (11).

2.11

At Community level, the EIF's (12) CIP — Micro-Credit Guarantee provides a set of guarantees for micro-credit financing granted by local institutions to microenterprises (13). However, there is currently no specific Community legislation on micro-credit apart from that governing the bank micro-credit sector, which is subject to European banking regulations (14), and the references to micro-credit included in various Community programmes and initiatives (15).

2.12

Furthermore, the micro-credit sector is regulated and managed differently according to the Member State. Only two Member States have specific legislation governing the non-bank microfinance sector (16), although four other Member States do have anti-usury legislation (17).

2.13

The Spring European Council pointed out, inter alia, the urgent need for ‘further facilitation of access to finance, including through existing EU financial instruments’ (18) and to ‘promote higher overall labour force participation and tackle segmentation in order to ensure active social inclusion’.

2.14

The Committee believes that a broader legal and support framework could help to provide greater stimulus to set up new production businesses and facilitate their consolidation, preventing risks of marginalisation and exclusion from the production system which can exacerbate social and criminal scourges such as usury.

3.1

The Commission sets forth two lines of action:

4.1

Micro-credit can be a lever for social inclusion and enable less well-off people and businesses that are excluded from the conventional banking system to gain access to the crucial funds needed to start up and develop income-generating activities.

4.2

At EU level, the Small Business Act for Europe  (19) — whose explicit objective is to establish concrete measures and principles for improving the European SME environment — should make it possible to identify and remove the barriers to unlocking the potential of small businesses, by stepping up the drive for simplification, increasing access to credit, and framing appropriate rules on energy and the environment.

4.3

The Committee feels that there should be better coordination of the array of relevant existing instruments, taking on board the experience of past and present instruments pertaining to micro-credit, as pointed out in the Commission Communication itself (20), i.e.:

4.3.1

The Committee believes that when devising new Community micro-credit initiatives, the successes achieved in the development and practical implementation over several years of DG Europaid's EU-ACP Microfinance Framework Programme should be taken into due account.

4.4.1

Since the early 1980s (24), and particularly as a result of the ideas and proposals arising from discussions during the European Conferences of Crafts and Small Businesses  (25), European financial institutions have promoted and supported a culture of financial engineering in the Member States (26).

4.4.2

The need to take practical steps to ease access to credit and help establish financial engineering prompted the Commission and the EIB, under pressure from European small business organisations, to set up the EIF (27). After an initial, brief diversion into supporting communications networks (28), the EIF turned its attention to providing various forms of guarantee to support measures assisting micro-businesses and SMEs, often involving financial engineering.

4.4.3

By means of the Commission's multi-annual programmes for micro-businesses, SMEs, cooperation and, latterly, through Axis 1 of the CIP (29), financial engineering has been developed through:

4.4.4

On several occasions, the Committee has welcomed the action taken by the Commission, EIB and EIF, particularly in the last fifteen years, to support small businesses. The Committee acknowledged the broadening and modernisation of the EIB group financial support to SMEs (32) but it believes that efforts could be stepped up, inter alia through programmes agreed jointly with:

4.4.5

A micro-credit fund network could be set up at Member State level, drawing on EIB rotating funds and with additional EIF guarantees operating at various levels. At regional (NUTS II) and provincial (NUTS III) levels, credit consortia (where they exist) (33) could provide the structure for granting the loans. Credit consortia have already gained considerable experience in the area of seed capital and, with sufficient risk capital, counter-guaranteed by the EIF, could provide the loan guarantees.

4.4.5.1

This new proposal should be clarified with respect to the creation of the micro-fund by the EIB group and the Commission. The aim of this initiative is to support micro-finance institutions across Europe through the provision of funding (grants, loans, mezzanine or equity instruments) as well as technical assistance. This micro-fund is being established by the EIF with an initial capital of around EUR 40 million for support activities (of which EUR 20 m from the EIB). The Committee believes that the EIF should also, in future, administer the fund.

4.4.6

A micro-loan could be sufficient to cover the purchase of the supplies and basic equipment needed to start up a business, or to replace equipment, which is always necessary in a micro-business (34).

4.4.6.1

The Committee thinks that particular attention should be paid to micro-credit for women entrepreneurs. Here there needs to be greater attention to flexibility and to the practical arrangements and criteria for granting loans, in order to be responsive to situations where social or psychological difficulties come into play; these can be aggravated if the person:

4.4.6.2

When designing and managing microcredit in support of female entrepreneurship, one must keep in mind the priority need to enable women to take on or resume a productive socio-economic role in society, with a view to boosting their self-esteem, building a culture of entrepreneurship and helping them to assume greater responsibilities and risks.

4.4.7

Micro-loans should also provide an opportunity for young people wishing to set up their own business, who have sufficient professional training but lack the financial wherewithal.

4.4.7.1

The initial guarantee for the loan, which in any case must be granted by a financial institution (which may or may not be a bank), consists of the equipment purchased. However, the existence of a European micro-credit fund would encourage financial institutions to be less stringent in offering loans (35): as well as having its own funding and expertise and the ability to intervene from time to time, via the EIF, credit consortia and trade associations, to help pay off any debts, the Fund should also be willing and able to promote exacting standards of soundness, production enhancement and diversification, transparency, and combating usury (36).

4.4.8

Studies on micro and small-business insolvency have found that in the major EU countries over the last ten years, loan-related insolvencies have not exceeded 4 % (37). Thus, with a rate of less than 5 %, a multiplier of 20 can be used to guarantee the loan granted by the financial institution.

4.4.9

With a multiplier of 20 and a guarantee covering 50 % of the insolvency of each individual debtor, a credit consortium with risk capital of EUR 1 million could guarantee loans to a large number of entrepreneurs (38) for a total of up to EUR 40 million.

4.4.9.1

By granting guarantees, the credit consortium system enabled some EUR 6 billion to be loaned to Italian craft firms in 2007.

4.4.10

There are approximately 500 000 business start-ups per annum in the EU-27. The number of businesses that fail is slightly lower (39). SMEs account for 99 % of each year's business start-ups and, of these, at least 240 000 are one-person businesses (40).

4.4.11

Using the example in point 4.4.9, EUR 1 million of risk capital coupled with financial engineering could guarantee loans amounting to EUR 25 000, via a European micro-credit fund, to 1 600 small businesses.

4.5.1

As has already been stated, credit is a key instrument for economic and social development and building a ‘social market economy’.

4.5.2

That is why new concepts of credit have gradually emerged and gained ground, with credit no longer being seen merely as a relationship between client and financial institution but as an instrument with high social value because of its connection with better-quality, more secure jobs and with economic development.

4.5.3

In this new, wider perspective, the risks related to granting credit need to be spread more widely.

4.5.4

Sharing credit risk between a number of bodies:

4.5.5

In keeping with the inherent social value, granting loans must increasingly be made subject to corporate social responsibility and employers must adjust and adhere to sustainable development values.

4.5.6

EMAS environmental certification would be the most appropriate certification to require in a financial engineering process in connection with the social role of credit (41).

4.5.7

In recent years, only a few tens of thousands of businesses have been able to use Community financial instruments (42), revealing the yawning gap between the way the issue is presented and the practical results. This prompts consideration of the practical possibilities of intervening with systems which can boost the involvement of financial institutions and amplify the results.

4.5.8

On 20 and 21 November 1997, the Luxembourg Extraordinary European Council, whose agenda contained a single item — employment — launched three practical initiatives to help businesses stay competitive in the markets, and called upon the Commission to put forward proposals that would boost the business sector and promote employment in that field. The three initiatives were: the ETF Start-Up Facility, the JEV (Joint European Venture) and SME-Guarantee Facility. Two of these initiatives — the ETF Start-Up Facility and SME-Guarantee Facility — were aimed at easing access to credit.

4.5.8.1

Over 277 000 SMEs had availed of the growth and employment programme and MAP (multiannual programme) facilities by the end of 2005 (43).

4.5.8.2

The SME Guarantee Facility is one of the key European programmes for SMEs (44).

4.5.9

There are around 23 million micro enterprises and 1.1 million small businesses in the EU of which 90 % are sole traders or partnerships. Only 5 or 6 % of them make use of venture capital.

4.5.10

The Committee therefore believes that new forms of support for credit must be devised, aimed also at partnerships, as has been the case with financial engineering tools. Failing this, take-up will continue to be negligible, thus creating a barrier to the financial growth of micro and small enterprises.

31.3.2009   

EN

Official Journal of the European Union

C 77/29

1.1

This proposal seeks to amend Council Directive 76/769/EEC by adding restrictions on the marketing and use of dichloromethane (DCM) when used as a major component of paint strippers for industrial, professional and consumer use.

1.2

This is the last such amendment of Council Directive 76/769/EEC before it is replaced on 1 June 2009 by Regulation (EC) 1907/2006 (REACH).

1.3

The EESC recognises the considerable scientific and political difficulties faced by the Commission in proposing and reaching agreement on a proportionate and cost effective amendment which, as Directive 76/769/EEC requires, will preserve the Internal Market and at the same time ensure a high level of protection for human health and the environment.

1.4

The EESC agrees that there is compelling evidence that, where high concentrations of vapour occur due to the high volatility of DCM, these can lead to unconsciousness and death. These result from poor industrial practice, including inadequate ventilation. The evidence for a serious ongoing risk to consumers through occasional domestic use is less compelling. The proposal for a ban on sales is therefore disproportionate and, given the known but so far unquantified risks of the alternative products and processes, seems unlikely to lead to any overall reduction in the, rather low, rate of accidents being recorded.

1.5

The EESC also notes, as did the consultants employed by the Commission, that the special hazards of DCM are not fully covered by existing pictograms or Risk and Safety phrases. The same comment applies to the risks to children, more common in a domestic setting. This is a failing of the labelling system, not of the products or people concerned. Recommendations on packaging and labelling are therefore made to rectify this situation.

1.6

Other problems are identified, most noticeably the absence of agreed Occupational Exposure Limits and guidelines or regulations on good industrial practice. The German TRGS 612 is considered an excellent model in this respect.

1.7

A number of other general points are made for consideration by the Commission, European Parliament and Member States in the hope that agreement can be reached. Failure to do so will lead to a fracturing of the internal market. Users, in and outside the work place, will remain at risk.

2.1

As previously noted, Regulation (EC) No 1907/2006 of 18 December 2006 of the European Parliament and of the Council concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) will come into effect on 1 June 2009. This will repeal and replace a number of existing Council and Commission Regulations and Directives, including Council Directive 76/769/EEC of 27 July 1976 on the marketing and use of certain dangerous substances and preparations.

2.2

Annex I of Council Directive 76/769/EEC sets out the specific restrictions on the marketing and use of certain dangerous substances and preparations that have been agreed and put in place over the last 30 years. On 1 June 2009 these will become the cornerstone of Annex XVII of Regulation (EC) No 1907/2006 (REACH).

2.3

Previous amendments to Council Directive 76/769/EEC (i.e. to add further restrictive measures) have been in the form of Directives requiring implementation by member states. This proposal by the Commission is, however, for a Decision, which will have immediate effect, rather than for a Directive. It will not therefore require transposition into national laws which would also have to be repealed on 1 June 2009 when Regulation (EC) No 1907/2006 (REACH) comes into force.

2.4

All subsequent proposals for restrictions on the marketing and use of dangerous substances or preparations will be under Regulation (EC) No 1907/2006 (REACH).

2.5

The substances (and any preparations containing them) for which restrictions on marketing and use have been deemed necessary have generally resulted from evaluations of certain ‘priority substances’ nominated by Member States and published in four priority lists between 1994 and 2000 under Council Regulation (EEC) No 793/93.

2.6

A number of substances not included in these lists have also been assessed for their impact on human health and the environment, and/or proposals made to restrict their marketing and use, as new problems have been addressed at the request of the Member States. DCM comes under this heading. A number of Member States, for a variety of reasons, have already imposed or sought to impose restrictions on its use, in particular as a component of paint strippers. Other member states view these measures as being disproportionate, costly and likely to lead to less satisfactory outcomes for users. There is some evidence (or a lack of evidence) to support or contradict both positions.

2.7

The first full review of the proposal in Council took place in early June. If a compromise can be found within the coming months, then the proposal is likely to go ahead as planned. If this is not the case, then the proposal will fail. In this case the Internal Market for DCM-based paint strippers will remain fractured and may become more so. DCM would then in due course be assessed under Regulation (EC) No 1907/2006 (REACH) — with its use in paint stripping being one of many exposure routes to be considered. It is obviously unclear what the outcome of this would be or when any final recommendation could be made.

3.1

DCM is a colourless low boiling halogenated aliphatic hydrocarbon with a mild sweet odour. It has been widely used for many years as a powerful solvent with low flammability in the production of pharmaceuticals, aerosols and adhesives and in other processes such as paint stripping, metal degreasing and as an extraction solvent for foodstuffs.

3.2

Although regarded as one of the safer low molecular weight halogenated hydrocarbons, DCM must still be used with care. It is classified in Europe as a Category 3 carcinogen, i.e. it is ‘a substance that causes concern for man owing to possible carcinogenic effects but for which the available information is not adequate to make a satisfactory assessment’. It must therefore carry the R40 phrase (‘limited evidence of a carcinogenic effect’). It is also a priority substance under the Water Framework Directive.

3.3

Of greater concern however is that it is also a powerful narcotic, depressing the central nervous system, and leading to unconsciousness or death. This has led to a series of accidents and fatalities, generally associated with unsafe working practices and gross over-exposure, generally during open tank industrial or large scale professional use. Usage in closed systems, where this is feasible, removes these risks.

3.4

Production levels of DCM in Europe (from sites in Germany, France, Italy, Spain, the Netherlands, UK and Romania) are declining slowly as other products become available. Of the approximately 240 000 tonnes currently manufactured in Europe, approximately 100 000 tonnes are exported. 30-50 % of the remainder goes to the pharmaceutical industry and 10-20 % for sale as ‘virgin’ DCM in paint strippers. Recycled DCM from the pharmaceutical industry provides a similar tonnage. This proposal deals solely with the use of DCM in paint stripping.

3.5

Paint stripping is familiar to most householders as an essential process to conserve and decorate wood, metal, stone and plaster objects and surfaces in and outside their properties. There are also a number of more specialist markets, including fine art restoration, graffiti removal and the repainting of large mobile objects such as trains or planes.

3.6

Paint strippers are divided somewhat arbitrarily into three categories: ‘industrial’ (i.e., with on-site continuing high volume usage); ‘professional’ (multiple site specialists, builders and decorators) and ‘consumers’ (individuals occasionally undertaking home maintenance).

3.7

The numbers of actual incidents for each group are hard to determine. Given that the symptoms of a DCM overdose resemble heart failure, there may (or may not) be some under-reporting. The data presented to the Commission by consultants RPA show 3-4 incidents per year in Europe due to the use of DCM-based paint strippers over the last twenty years, of which 1 per year proved fatal. Fatalities were concentrated in France (6), Germany (6) and the UK (5), non fatalities were concentrated in the UK (36), Sweden (12) and France (6). In the south of Europe, only one incident has been recorded in the period studied by RPA (1930-2007) — an industrial fatality in Spain in 2000. Local climatic conditions and work practices may well be relevant. In warm weather windows are always open, good ventilation is achieved and the risks are negligible; in colder climates, the reverse may be true.

3.8

Fatalities were split equally between industrial and professional users. The bulk of the non-fatal incidents were recorded during use by operators classified as ‘professionals’. The causes of the fatalities were recorded as being almost entirely inadequate ventilation and inadequate use of personal protective equipment, especially in the presence of large open tanks.

3.9

A possible fatality reported for a consumer (or a professional) in France in 1993 cannot now be verified and this particular key piece of data has therefore been challenged. The only other death reported for a consumer was in the Netherlands in 1960. Other factors may be relevant.

3.10

Alternatives to DCM-based chemical paint strippers of course exist. These are generally grouped under three headings — ‘physical/mechanical stripping’ (sanding, scraping, blasting); ‘pyrolitic or thermal stripping’ (in ovens, over hot fluidised beds or using blow torches or heat guns); and ‘chemical stripping’ (using high power solvents, including DCM, or corrosive, generally strongly alkaline, liquids or pastes, or formic acid or hydrogen peroxide based mixtures). Each process may work and may be the preferred course under specific circumstances. All pose risks of one sort or another, either due to particle impact, heat, fire, explosion, eye or skin irritation or due to the composition of the coatings being removed, most notably lead from paints applied prior to 1960. With multiple layers dating back 100 years or more in old but still usable or even highly desirable housing stock, or with sensitive surfaces that must not be damaged, more than one approach and some degree of experimentation will be required.

3.11

No data have been presented on the overall market share of these various alternatives under all 3 headings or of the different costs per square metre stripped. DCM is thought to be still the most widely used solvent, in particular in the consumer sector, with caustic soda based applications also popular. Even within the chemicals group, comparative costings are difficult. There is general agreement that DCM-based paint strippers appear cheaper than competing products on a volume basis. This advantage is likely to disappear if the full costs of protective equipment (if used) and waste disposal (if relevant) are taken into account.

3.12

Total costs are also determined by through-put times. Slower acting but more benign products and processes increase the cost of work in progress and reduce profits. Higher boiling solvents allow larger areas to be coated at one time but take longer to work. For a consumer, short exposures are replaced by longer exposures and potentially greater domestic disruption. (The assumption by RPA that consumers are less time sensitive ‘because they usually carry out stripping in their leisure time’ should certainly be challenged.) For all users, new methods of working and changes to work flow will become essential. For an industrial user, any switch to water-based products decreases the costs of ventilation but sharply increases the cost of tanks and pipe work to minimise corrosion. Given all these variables, predicting the effect of any restriction on any one route becomes extremely difficult. Consumers are particularly at risk under these circumstances, with little evidence, given conflicting views at government level, that their choices of alternative products or processes will be in their own best interest.

3.13

One of the popular alternatives to DCM as a solvent, methyl-2-pyrrolidone (NMP), has recently been classified as ‘toxic to reproduction Category 2’ which will eventually lead to a ban on sales of formulations containing it to the general public (but not to professional or industrial users). Other solvents, such as 1,3 dioxolane, are highly flammable.

3.14

Systems based around dibasic esters (DBEs) — mixtures of dimethyl adipate, succinate and glutarate — currently look to be the most promising alternatives, with little to suggest that there are any significant concerns for human health or the environment. Dimethyl sulfoxide (DMSO) and benzyl alcohol also appear to be relatively ‘safe’. Whether or not any of these are regarded as cost effective by their users, however, depends on many factors, and their eventual choice as widely used ‘safe’ alternatives cannot be guaranteed.

3.15

Overall it is clear that there is no single totally acceptable approach — and that inappropriate action may well lead to an increase in the current, relatively low, rate of recorded incidents. The difficulty is to identify a solution which satisfies all the parties, in particular member states with different experiences and, quite reasonably, strongly held positions.

4.1

The Commission's proposal seeks to protect human health and the environment whilst preserving the Internal Market for dichloromethane, in particular when used as a major component of paint strippers for industrial, professional and consumer use.

4.2

The proposal seeks to ban all sales of DCM-based paint strippers to the general public and to professionals, other than to those specially trained and licensed by competent authorities in the member states. Sales to industrial installations would be possible only where a series of protective measures, in particular effective ventilation and the provision and use of the appropriate personal protective equipment, are in place. All DCM-based formulations should be indelibly marked as being ‘reserved for industrial and professional uses’ (and then presumably only to those suitably licensed).

4.3

No new DCM-based paint strippers should be placed on the market for supply to the general public or to professionals within 12 months of the entry into force of the Decision. All supplies to these two groups would be banned after a further 12 months.

4.4

The Decision would come into force on the third day following that of its publication in the Official Journal of the EU.

4.5

The proposal is accompanied by an explanatory memorandum and a Commission staff working document (impact assessment report). Further material is available in impact assessments prepared for the Commission by outside consultants (RPA, TNO) or in reports on specific topics (ETVAREAD, on the effectiveness of vapour retardants). These have been in turn reviewed by the appropriate scientific committee (SCHER). There is no formal EU Risk Assessment Report (RAR) as DCM was not defined by any of the stakeholders to be a priority substance despite concerns already being noted.

4.6

Some EU member states (and other major economies and trading partners such as Switzerland and the US) have also conducted studies to support particular — and often strongly conflicting — regulatory and political positions. The concerned industries have generated a wealth of data on the possible risks and comparative benefits of different products and processes; not surprisingly, these too conflict. Comments from other stakeholders were recorded during the European Health and Safety Week ‘Building in Safety’ in 2004 after a conference of experts hosted by the Danish Painters Union. According to RPA in April 2007, BEUC, EMCEF and the ETUC had not yet expressed formal opinions.

5.1

The EESC recognises the difficulties faced by the Commission in proposing a proportionate and cost effective amendment to Directive 76/769/EEC for DCM usage as a solvent in paint stripping. There have been relatively few incidents reported and verified. There may (or may not) have been under-reporting. Existing legislation has not always been followed — and in respect to labelling, appears inadequate. Alternative products and processes exist but these have not been evaluated and all pose risks. There are good reasons why the views of member states differ. There is no guarantee that the overall outcome will be favourable to any of the groups most likely to be affected.

5.2

The EESC also recognises that, due to obvious time constraints, this is the last opportunity to introduce any measures under the above Directive. If a common position between the member states and the European Parliament cannot be agreed and the proposed Decision (or any variation to it) adopted and implemented, there will be no further action until DCM is assessed for all its uses under Regulation (EC) No 1907/2006 (REACH).

5.3

The EESC strongly believes that such a delay is unnecessary and undesirable, with respect to protecting the environment and the health of all users in or outside the work place. The EESC would also deeply regret any fracturing of the internal market over this, or any other, issue. The need to find a basis for agreement should be obvious to all concerned. This should seek to manage the risks, not to replace one hazard with another.

5.4

In this respect the EESC notes that DCM can be manufactured, stored, transported and used safely in closed systems. DCM is non-flammable and does not contribute to ground level ozone formation. However, in open systems, for instance in paint stripping, DCM clearly presents problems due to its volatility (it evaporates quickly), the density of the ensuing vapour (it accumulates at the lowest point or where there is inadequate ventilation), and its behaviour as a narcotic (it induces unconsciousness and death). All of these contribute to increased risks for children. DCM is also classified as a category 3 carcinogen and it is this potential risk that dominates the labelling of any product containing DCM.

5.5

RPA and others have all noted that this is both misleading and inadequate to properly protect users in or outside the workplace. There are no R (Risk), S (Safety) phrases or pictograms under existing legislation, or their counterparts under the revised UN Globally Harmonised System of Classification and Labelling, which adequately warn against either narcosis (and a subsequent risk of death) or, more surprisingly, of the serious risk to children (which would of course apply to many products and processes used in domestic situations).

5.6

The focus on the possible but so far unproven cancer risk is also misleading. SCHER, in their Opinion on the ETVAREAD Report on vapour retardants noted that the metabolic mechanism in a mouse for the end-point tested is not the same as in a human and therefore DCM, on the basis of the evidence presented, is unlikely to be a carcinogen. There is little evidence based on actual usage. The results of two major epidemiological studies on cohorts exposed to DCM in the US in other industries are still awaited. Cohorts in the EU may have been exposed to other known carcinogens such as styrene. RPA did not present any evidence of actual risks under this heading from exposures to DCM used in paint stripping. The required R68 phrase (‘possible risk of irreversible effects’) is not the most useful under the circumstances.

5.7

It should also be noted that the incident statistics presented by RPA for the period 1930-2007 clearly demonstrated the dangers of gross over-exposure to DCM, generally through very poor working practices. The corresponding data for alternative processes and products were not collected. The extent to which these data can be extended to use by either ‘professionals’ or ‘consumers’ in a domestic environment is however questionable. Indications of chronic (long term) industrial health effects may (or may not) indicate problems for acute (short term) consumer exposures; accident statistics, which perhaps these are, are harder to pro-rate.

5.8

The studies also highlighted the lack of consistent Occupational Exposure Levels (OELs) for work places across the EU. Limits vary considerably for a single substance (DCM) between member states and between substances (DCM v DBE or DMSO, for example). Manufacturers must recognise their duty of care to their workers; regulators must provide a clear, consistent data-based regulatory framework to achieve this.

5.9

In this respect the EESC took note in particular of the Technical Rules for Hazardous Substances TRGS 612 for alternatives to DCM-based paint strippers produced by the German Federal Ministry of Labour and Social Affairs (BMAS), version dated February 2006. This appears to be a model which others could follow to help ensure work place safety and is considerably more detailed than the current proposal from the Commission.

5.10

The hierarchy of questions to be answered under the above (a) can you make your process safer by substitution? (b) if not, why not? and (c) have you taken all appropriate measures to make your work place safe? should be followed in most cases. The potential risks, as well as benefits, from alternative processes and products should be fully recognised. Above all, there must be some estimate of the likely outcomes of any decision to remove a significant quantity of any material from any market; what actually will users do and will their choice improve their personal safety?

5.11

As an example, taken from a Member State that has already implemented a ban on DCM-based products and applicable to industrial and professional users alike, this is a ban on sales of products containing DCM, not on DCM itself. A powerful paint stripper can still be made by mixing DCM with methanol at the place of use. The resulting product is cheaper but lacks the surfactants and vapour retardants which increase both the effectiveness and the safety of the properly formulated product. This is therefore an undesirable outcome.

5.12

As RPA and the Commission have noted, the distinctions between the different categories of user are hard to justify or maintain in real life. The only real difference is that single site, high throughput, continuous paint stripping operations require large open tanks of chemical agents into which products are dipped; off-site operations generally do not depend on dipping and therefore do not involve large open tanks. Single sites are covered by other Directives, for instance on solvents emissions and water waste quality which should be strictly enforced; off-site operations depend more on the care and common sense of the individual. Where there is an employer, the duty of care of course rests with him or her to ensure the best possible working environment for any employees involved.

5.13

The ‘professional’ category should also be split between those engaged permanently in specialty cleaning operations (e.g. graffiti removal, façade restoration, trains and planes) and those having only an occasional need to strip paint (builders, decorators and ‘consumers’) as a necessary but time-consuming prelude to more profitable activity. The needs, capabilities and vulnerabilities of this last group appear to be identical and they should be treated equally.

5.14

Finally, a proposal to train and license certain operators has been introduced as a possible derogation to enable a compromise between different views. It is however difficult to equate the use of DCM-based paint strippers with, say, asbestos removal or the handling of nuclear waste, for which licenses most certainly are required. Given the high costs of installing and monitoring such a system, it is difficult to see this proposal as likely to meet anyone's needs.

6.1

Given the above, the EESC do not believe that the current proposal is either proportionate or, by itself, likely to lead to fewer incidents in or outside the work place. Given the wide actual and political differences between member states, other approaches must be considered and implemented without further delay.

6.2

This would include changes to the packaging and labelling of DCM-based paint strippers to minimise the risk of accident and to highlight the real dangers. Sales to anyone not permanently engaged in paint-stripping, on or off-site, whether regarded as being a ‘professional’ or a ‘consumer’ should be limited to a maximum of 1L per container and purchase. The containers should have child-proof seals as defined by the relevant existing or new EU Regulations and Directives and/or EN-ISO standards 8317:2004 and 862:2005. Narrow necks to limit spillage would also be useful, although the consequent need to decant before use with a brush limits their effect. Manufacturers should actively work towards new and safer delivery systems if they wish to maintain the long term viability of these products. Bulk sales to all other users for ‘industrial’ or ongoing ‘professional’ use should be in quantities of not less than 20 L. Manufacturers and suppliers should recognise their duty of care under such circumstances and ensure that sufficient information and training is provided to ensure safe handling and disposal under all conditions of use.

6.3

New pictograms and R and S phrases for narcotics and to warn of the dangers to children should be developed as a matter of urgency to complement those already in use. For DCM-based paint strippers (and other products with similar effects) the appropriate wording for all users would be along the lines of: ‘Narcotic: high concentrations lead to unconsciousness and death’; ‘Do not use in the presence of children or vulnerable adults’; ‘Do not use in an enclosed space: heavy vapours asphyxiate’. These seem to be justified by the evidence and are relevant to actual needs. The phrases should not be lost in an array of less significant warnings. An effective warning and unmistakeable pictogram on the need to protect children would be likely to have more effect than many more complicated pieces of advice. The current S2 phrase (‘Keep out of the reach of children’) is inadequate in this respect.

6.4

There is also a clear need for a standardised and internally consistent set of EU-wide Occupational Exposure Limits (OELs) to further improve work place safety. This should be considered as a useful output of the REACH programme over the coming years.

6.5

Good working practice, and the close observance of all existing controls, is obviously key to risk management, in and outside the work place. Manufacturers and retailers share the responsibility of providing good advice and ensuring that recommendations can be followed by members of the general public and others using hazardous materials or processes on an infrequent basis. Safety advice and equipment should be promoted with the same enthusiasm and incentives as the materials for which they are required.

6.6

The approach used in the German TRGS 612 should form the basis of EU-wide controls. Additional technical advice on ventilation or waste treatment can be added as necessary. Best practices should be published and shared.

6.7

Ongoing studies in the US on the effects of long-term exposure to DCM should be completed as quickly as possible and the results presented to SCHER for evaluation. Opportunities should be explored to identify any valid cohorts for study in Europe.

6.8

A systematic evaluation of the risks associated with paint stripping should also be undertaken so that all the products and processes can be evaluated on a comparable basis. This would lead to a better understanding of their relative performance characteristics and risks and eventually the possibility of more informed choices being made by users in and outside the work place. Neither of these proposals should however delay the adoption of the control measures discussed above.

31.3.2009   

EN

Official Journal of the European Union

C 77/35

1.1

The Committee approves of the content of the proposed directive and considers it a further step forward in the administrative simplification strategy, as envisaged in the communication on A strategic review of Better Regulation in the European Union.

1.2

This follows the positive view taken by the EESC's Single Market Observatory, which in several opinions has consistently supported the various simplification initiatives undertaken in the field of company law. It believes that by cutting costs for companies, these initiatives make an important contribution to the competitiveness of EU firms, as long as they do not undermine the protection of other stakeholders' interests.

1.3

The Committee points out that the proposal under review to amend Directives 68/151/EEC (First Company law Directive) and 89/666/EEC (Eleventh Company law Directive) is aimed at simplifying and reducing administrative burdens in the sensitive area of publication and translation obligations for certain types of companies that are often burdened by disproportionate and sometimes unnecessary costs.

1.4

The Committee supports the proposed measures, achievable through minor changes to the EU acquis, which — as well as cutting administrative burdens for companies, as demonstrated in the accompanying impact assessment — will prevent the emergence within the EU of unjustified barriers to the free movement of goods and services.

1.5

The Committee therefore welcomes such intervention and joins with the Council in calling on the Commission to propose further measures to reduce other remaining unnecessary obligations in other areas which, without providing any added value to users, are a burden to companies and reduce their capacity to respond to the current challenges posed by global competition.

1.6

The Committee recommends that the Commission encourage the Member States to pursue administrative simplification for business by transferring online all information that is required to be published under existing legislation.

2.1

After launching a series of assessments in 2005, the Commission embarked on a simplification drive to reduce administrative costs and burdens on companies deriving from existing legislation, taking the view that unnecessary costs were hampering economic activity in the EU and damaging the competitiveness of businesses.

2.2

On 14 November 2006, the Commission presented a communication with the significant title of Better Regulation in the European Union  (1) and a working document on Measuring administrative costs and reducing administrative burdens in the European Union  (2). Both initiatives stress the need to pursue tangible economic benefits for companies where simplification is possible without adverse effect on the users of the information concerned.

2.3

In March 2007, this strategy was backed up by an action programme aimed at reducing administrative burdens (3) (not yet published in the Official Journal), which set the target of a 25 % cost reduction by 2012.

2.4

A number of fast-track proposals were adopted by the Commission in March 2007 aimed at reducing administrative burdens and on 10 July 2007 it presented a communication setting out its proposals for simplification in the fields of company law, accounting and auditing (4).

2.5

At its meeting of 13 and 14 March 2008, the European Council called on the Commission to continue identifying new burden-cutting legislative proposals (5).

2.6

This is the background to the proposed directive on publication and translation obligations in the field of company law, which provides for the reduction and/or removal of information obligations that provide no added value for users.

3.1

The aim of the proposed directive, according to the Commission, is to enhance the competitiveness of EU companies by reducing and/or removing the administrative obligations laid down under existing legislation that do not meet the requirements of the users of the resulting information and represent unnecessary additional costs for companies.

3.2

The proposal involves amending Directives 68/151/EEC (First Directive) and 89/666/EEC (Eleventh Directive), as regards the publication and translation obligations arising from the establishment of certain types of company.

3.3

With regard to the First Directive, a new minimum publication requirement is to be set with regard to what is currently contained in Article 3(4) of Directive 68/151/EEC on company law. The proposed amendment to the article is aimed at eliminating some of the current obligations to publish in national gazettes information on the company's foundation as well as the annual accounts, which under the current legislation have to be published on a yearly basis.

3.4

The proposed simplification by no means reduces the added value for users, particularly now that the information contained in commercial registers, through which Member States are required to provide the necessary information, is increasingly available online as the use of electronic means becomes more common.

3.5

Member States are required to provide for an electronic chronological access to the information, but remain free to prescribe the use of additional means of publication, provided that this does not lead to additional costs for companies.

3.6

As regards Directive 89/666/EEC (Eleventh Directive) on company law, an amendment is envisaged to Article 4, which currently requires the translation of all documents in the company file upon registration of a new branch.

3.7

The new Article 4 requires that the documents are published in an official language of the Community but considers it sufficient that the translations be certified in a procedure accepted by the authorities of any Member State. All Member States are to accept this attestation and are not to impose any formal requirement other than those laid down in paragraphs 1 and 2, in keeping with the aim of minimising translation and certification costs.

3.8

The legal basis for the proposal remains the same as for the previous directives: Article 44(2)(g) of the Treaty. Furthermore, the Commission deems it in line with the principles of subsidiarity and proportionality.

3.9

The Commission points out that the proposal and impact assessment have stood up to the scrutiny of a very broad representation of stakeholders (110 in total from 22 Member States). The positive findings are available on the website of the Directorate-General for Internal Market and Services (DG MARKT).

3.10

In its impact assessment, the Commission estimated that around EUR 410 million per year would be saved on the publication of annual accounts and about EUR 200 m per year on the publication of amendments to registers. Approximately EUR 22 m would be saved on translation and certification.

4.1

Through several opinions drawn up by the Single Market Observatory, the Committee has expressed its support for the administrative simplification drive envisaged under the Strategic review of Better Regulation in the European Union.

4.2

The Committee's opinions have fully supported this drive, which is making a practical contribution to the competitiveness of EU companies by cutting their costs — which in the field of company law seem largely redundant and excessive — without undermining the protection of other stakeholders' interests.

4.3

The Committee points out that by intervening in such sensitive areas as publication and translation obligations, this proposal not only significantly reduces costs, as demonstrated in the impact assessment, but also increases the credibility of the EU by removing all possible temptation to raise artificial unjustified barriers to the free movement of goods and services.

4.4

It notes that the initiatives launched to date have followed careful assessment of the intended objectives and of the fundamental principles of subsidiarity and proportionality and have also been subject to the prior in-depth consultation of all stakeholders.

4.5

The Committee therefore approves of the content of the proposed directive, considering it a welcome step forward within the broader simplification strategy. It also fully backs the Council in calling on the Commission to intervene in other areas and fields in which there is also a need for simplification to reduce the many obligations that continue to burden companies.

31.3.2009   

EN

Official Journal of the European Union

C 77/37

1.1

The EESC welcomes that the exemptions foreseen for small companies in the 4th Company Law Directive are extended to medium-sized companies as they lead to a reduction of reporting burden for those companies.

1.2

The EESC also welcomes the proposed changes to the 7th Directive as they simply clarify the interaction between consolidated rules set out in this Directive and in the International Financial Reporting Standards.

1.3

The EESC especially appreciates that the objective of simplifying financial reporting is respected: there is no significant loss of information for users of accounts, and other stakeholders are basically not affected. The proposed simplification is based on the needs of SMEs and users of financial information.

1.4

To date there has been a lack of research and supporting evidence to determine the needs of users, which may vary across EU Member States. Before introducing further changes to financial requirements for SMEs, the current position in terms of uptake of options under the 4th and the 7th Directives should be considered. This investigation should include (a) use of existing options, (b) motives cited by Member States to explain their choice of options and (c) a review of Member States' success in meeting their objectives.

1.5

The EESC therefore recommends that research in this area should be undertaken as a basis for rational policy proposals in the future.

1.6

Accounting requirements were among the first areas of legislation that were harmonised at European level. The EESC recalls that it is a central element to achieve the common market and stresses the importance that harmonisation creates a level playing field in the EU.

1.7

Cross-border trading by SMEs is growing within the EU. There is a strong case, therefore, for developing the harmonisation of financial reporting frameworks and rules to (a) support this growth in trade and (b) create a level playing field.

2.1

In its Conclusions, the European Council of 8 and 9 March 2007 emphasised that reducing administrative burdens is important for boosting the European economy, especially considering the benefits this could bring for small and medium-sized companies.

2.2

It stressed that a strong joint effort by the European Union and the Member States is necessary to reduce administrative burdens by simplifying accounting rules for small and medium-sized companies; the legal basis for such measures would be Article 44(1) of the Treaty establishing the European Community (1).

2.3

Accounting and auditing have been identified as areas for reducing administrative burdens for companies within the Community (2).

2.4

Special attention was given to additional relief from reporting requirements for small and medium-sized companies.

2.5

In the past, a number of changes were made in order to enable companies falling within the scope of Directives 78/660/EEC and 83/349/EEC to use accounting methods in accordance with International Financial Reporting Standards (IFRS).

2.6

Pursuant to Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards (3), companies whose securities are admitted to trading on a regulated market of any Member State must prepare their consolidated accounts in accordance with IFRS, and are consequently relieved from most of the requirements in Directives 78/660/EEC and 83/349/EEC. Those Directives, however, still form the basis for accounting by small and medium-sized companies in the Community.

2.7

Small and medium-sized companies are often subject to the same rules as larger companies, but their specific accounting needs have rarely been assessed. In particular, the increasing number of disclosure requirements raises concerns for such companies. Extensive reporting rules create a financial burden and can hinder efficient use of capital for productive purposes.

2.8

The application of Regulation (EC) No 1606/2002 has also highlighted the need to clarify the relationship between the accounting standards required by Directive 83/349/EEC and IFRS.

2.9

Where formation expenses can be treated as an asset in the balance sheet, Article 34(2) of Directive 78/660/EEC requires that such expenses are explained in the notes to the accounts.

2.10

Small companies can be exempted from this disclosure requirement in accordance with Article 44(2) of that Directive. In order to reduce unnecessary administrative burdens, it should also be possible to exempt medium-sized companies from such disclosures.

2.11

Directive 78/660/EEC requires disclosure of a breakdown of turnover according to activity and geographical markets. This is required for all companies, but small companies can be exempted in accordance with Article 44(2) of that Directive. In order to reduce unnecessary administrative burdens, it should also be possible to exempt medium-sized companies from this disclosure requirement.

2.12

Directive 83/349/EEC requires a parent company to prepare consolidated accounts even if its only subsidiary, or all of the subsidiaries as a whole, are immaterial for the purposes of Article 16(3) of Directive 83/349/EEC. As a consequence these companies fall under Regulation (EC) No 1606/2002 and therefore have to prepare consolidated financial statements in accordance with IFRS. This requirement is considered burdensome where a parent company has only immaterial subsidiaries.

2.13

Therefore, it should be possible to exempt a parent undertaking from the obligation to draw up consolidated accounts and a consolidated annual report, if all the subsidiary undertakings of the parent undertaking, taken individually or as a whole, can be considered as immaterial.

2.14

Since the objectives of this Directive, namely reducing administrative burdens relating to certain disclosure requirements for medium-sized companies and the obligation to draw up consolidated accounts for certain companies within the Community, cannot be sufficiently achieved by Member States and can therefore, in terms of scale and effects, be better achieved at Community level, the Community may adopt measures in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty.

2.15

In compliance with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in order to achieve those objectives.

2.16

Directives 78/660/EEC and 83/349/EEC should therefore be amended accordingly.

3.1

The purpose of changes to Directive 78/660/EEC (4th Company Law Directive) (4) is to simplify financial reporting for medium-sized companies (5) and relieve them from financial reporting burdens in a short term perspective. The changes should lead to a reduced administrative burden without loss of relevant information.

3.2

The purpose of changes to Directive 83/349/EEC (7th Company Law Directive) (6) is to clarify the interaction between consolidation rules set out in this Directive and in the International Financial Reporting Standards.

3.3.1

The discussion on achieving meaningful reductions in the regulatory burden on SMEs under the 4th and 7th Company Law Directives was launched in good time by the EC together with the consultation process, taking into account the objective of ensuring that SMEs prosper in the European Single Market. The problem of regulatory burdens on SMEs is invariably caused by the original regulations being designed for large business entities. Such regulations are not necessarily relevant to SMEs and often impose a significant burden in terms of administration and cost.

3.4.1

It is important for discussions to focus not only on ‘simplification’ but also on the ‘relevance’ to SMEs — as opposed to large listed companies — of financial reporting requirements. The debate on simplification tends to focus on costs whereas the debate on relevance is concerned with the benefits of financial reporting and with particular users and their needs.

3.4.2

The simplification of ‘the Accounting Directive must take as its starting point the actual needs of SMEs and the users of their accounts’. If financial reports are to be useful and relevant, investigating users and their needs is critical in the development of a European financial reporting framework for SMEs. The users are multiple: financial institutions (rating), public authorities (taxation, money-laundering, …).

3.4.3

It is also important to remember that SMEs themselves are major users of financial information, e.g. as suppliers and contracting parties to other SMEs, in situations where it is important to evaluate creditworthiness.

3.4.4

In the context of ‘simplifying’ accounting rules for SMEs, it is important that rigorous impact assessments are carried out, including assessment of the benefits of financial reporting as well as cost/administrative burdens. Such impact assessments should take into account the reasons for initially imposing financial reporting requirements and stakeholders' interests (transparency, …) which they were intended to protect.

3.5.1

Cross-border trading by SMEs is growing (7) within the EU. There is a strong case, therefore, for developing the harmonisation of financial reporting frameworks and rules to (a) support this growth in trade and (b) create a level playing field. This may require fewer options and a move to maximised harmonisation, e.g. in the field of publication of financial information and public access to such information.

3.6.1

The IASB's SMEs project is a consequence of demands from standard setters, accountants and other stakeholders for an alternative to the full IFRS. Although originally reluctant to take on the project, the IASB was persuaded that the majority of these stakeholders wanted it to go ahead and that only the IASB had the perceived credibility and authority to establish high-quality, enforceable accounting standards. However the starting point for this project was the full IFRS, developed for listed companies.

3.6.2

The full IFRS were developed with the use of financial reporting by listed companies and their stakeholders in mind. As mentioned above, financial reporting for SMEs is more often for internal or informal use (in connection with suppliers, contracting parties, financial institutions, etc.) than because of legal or other obligations to report to a wide range of users.

3.6.3

The mandatory implementation of IFRS, or a different set of new rules, based on those developed for listed companies, would generate substantial administrative burdens and a financial cost for SMEs that is likely to outweigh any positive effects. The close connection between annual accounts and the tax returns would also force SMEs in different Member States to maintain two set of financial reports, also adding to the administrative burden.

3.7.1

Concerning the options for achieving simplification for SMEs in the Accounting Directives which are mainly extensions of the existing options for SMEs under the Directives, it is important to investigate how these options are working in the Member States prior to introducing new Directives. The EESC recommends in addition to systematically apply the only once principle at all levels (8).

3.7.2

Before introducing further changes to financial reporting requirements for SMEs, the current position in terms of uptake of options under the 4th and 7th Directive should be considered. This investigation should include (a) use of existing options, (b) motives cited by Member States to explain their choice of options and (c) a review of Member States' success in meeting their objectives.

3.7.3

A major problem with the current situation is a ‘top-down approach’ which (a) results in administrative burdens on SMEs, and (b) reduces the relevance of financial accounting frameworks and standards for those entities. A future review of financial reporting in the EU should address this problem by taking a ‘bottom up approach’. Such an approach would concentrate on the needs of SMEs and other stakeholders, and would be informed by research into users and their needs, as proposed above.

—

CESE 952/2006 on A strategy for the simplification of the regulatory environment (INT/296), OJ C 309 of 16.12.2008, p. 18;

—

CESE 89/2007 on the Review of the Single Market (INT/332), OJ C 93 of 27.04.2007, p. 25;

—

CESE 1187/2008 on Policy measures for SMEs (INT/390) (not yet published in the OJ);

—

CESE 979/2008 on International public procurement (INT/394) (not yet published in the OJ).

31.3.2009   

EN

Official Journal of the European Union

C 77/41

31.3.2009   

EN

Official Journal of the European Union

C 77/41

31.3.2009   

EN

Official Journal of the European Union

C 77/42

31.3.2009   

EN

Official Journal of the European Union

C 77/42

31.3.2009   

EN

Official Journal of the European Union

C 77/43

1.1

The EESC welcomed the European Commission's 2007 climate protection plans, which this directive is intended to help implement.

1.2

The Committee fully endorses the Commission's statement that the proposed development of renewable energies not only makes sense in climate policy terms but also has, or can have, a clear positive impact on security of energy supply, regional and local development opportunities, rural development, export prospects, social cohesion and employment opportunities, especially as concerns small and medium-sized undertakings as well as independent power producers.

1.3

The EESC therefore welcomes the draft directive and the renewables target of 20 %. It sees renewable energies not only as a contribution to climate protection but also as correct in strategic energy-policy terms, leading to a higher degree of energy self-sufficiency and thus greater security of supply.

1.4

The objective of cutting CO2 by 20 % by 2020, which is to be achieved by means of other directives (1), and the target of 20 % of final energy from renewables, which is dealt with in this draft, are closely correlated and complement each other. They should, however, always be considered independently of each other, particularly as some renewable energies do not have a clearly positive impact on the climate (see point 6 on agrofuels).

1.5

As the necessary reorganisation of our energy system will entail heavy investment costs, the Member States need to be allowed a high degree of flexibility to ensure that they can always act in those areas where the greatest impact can be achieved in terms of climate protection and job creation, at the lowest cost.

1.6

The EESC wishes to make it clear that it fully supports the expansion of renewables and that it is aware that in the medium to long term a much higher percentage of renewables than the 20 % envisaged for 2020 will be required if the Council's ambitious target (a 60-80 % CO2 emissions reduction and greater energy self-sufficiency) is to be achieved.

1.7

The EESC notes that the strategic requirement for the partial substitution of diesel or petrol by agrofuels is one of the least effective and most expensive climate protection measures, and that it represents an extreme misallocation of financial resources. The EESC cannot understand why the most expensive measures are to be promoted politically with the greatest intensity, particularly as a huge number of environmental and social questions, let alone economic ones, remain completely unanswered (see point 6). It therefore opposes the separate 10 % target for agrofuels.

1.8

The EU's plan to introduce sustainability criteria for agrofuels is welcome. However, the environmental criteria set out in the draft do not go far enough. Moreover, social questions are not touched on at all, and the draft directive is completely inadequate in this respect (2).

2.1

The directive will establish binding targets for the development of renewable energies. The aim is a 20 % share of renewable energy sources in final energy consumption in the EU by 2020 and a 10 % binding minimum target for biofuels (3) in transport to be achieved by each Member State (4).

2.2

The European 20 % goal is to be achieved by applying individual national targets which are listed in part A of Annex I. The Member States are required to draw up national action plans setting out sectoral targets for electricity, heating/cooling and transport/agrofuels, as well as measures for the achievement of these goals.

2.3

The directive is based on the decisions of the spring 2007 European Council on the grounds that the use of regenerative energies can counter climate change. At the same time, however, it states that ‘the renewable energy sector stands out for its ability to (…) exploit local and decentralised energy sources, and stimulate world-class high-tech industries’.

2.4

The Commission states that ‘renewable energy sources are largely indigenous, they do not rely on the future availability of conventional sources of energy, and their predominantly decentralised nature makes our economies less vulnerable to volatile energy supply’. Security of supply is then, alongside climate protection and innovation and economic growth, a further important argument used by the Commission.

2.5

The Commission argues that: ‘The development of a market for renewable energy sources and technologies also has a clear positive impact on security of energy supply, regional and local development opportunities, rural development, export prospects, social cohesion and employment opportunities, especially as concerns small and medium-sized undertakings as well as independent power producers’.

2.6

The directive does not only lay down the quantitative targets referred to above but also, inter alia, addresses the following issues:

2.7

The new directive replaces Directives 2001/77/EC on the Promotion of the electricity produced from renewable energy source in the internal electricity market, which laid down the existing target of 21 % of total electricity consumption to come from renewable energy sources by 2010, and Directive 2003/30/EC on the Promotion of the use of biofuels or other renewable fuels for transport, under which a 5.75 % share was to be achieved by 2010.

3.1

The European Council reiterated in 2007 ‘that absolute emission reduction commitments are the backbone of a global carbon market and that developed countries should continue to take the lead by committing to collectively reducing their emissions of greenhouse gases in the order of 30 % by 2020 compared to 1990 with a view to collectively reducing their emissions by 60 to 80 % by 2050 compared to 1990’.

3.2

The draft directive under consideration is part of the implementation of this decision. The EESC has welcomed the climate decisions of the European Council and has stressed that energy economies and efficiency must enjoy the highest priority. There is no alternative to a massive development of renewable energy. Not only is it a requirement for climate protection; growing shortages of fossil resources will in themselves make it necessary in the medium to long term. The rapid increases in the prices of fossil energies currently being experienced will help ensure that many renewable energies become financially viable sooner.

3.3

The EESC is very glad that, in the explanatory memorandum, the Commission does not only address the climate aspects but also attaches high importance to the questions of security of supply and employment. The importance of decentralised energy supply structures for the regional economy and rural areas is, for example, repeatedly stressed (points 2.4 and 2.5). The Committee shares this view. But it also feels it essential to consider the individual strategies for renewables in a more differentiated way than hitherto, taking these aspects into account.

3.4

The EESC shares the Commission's view that a leading role for Europe in the development and implementation of renewable energies will not only be good for climate policy but also hold out the prospect of making Europe a more competitive location for business. The draft directive is a clear energy, environmental and industrial policy signal — also a signal to the international community in the run-up to the international climate negotiations.

3.5

The actual arrangements for sharing the burden, i.e. the individual national contributions to the European target of an overall 20 % CO2 reduction, are set out in the Proposal for a Decision of the European Parliament and of the Council on the effort of Member States to reduce their greenhouse gas emissions to meet the Community's greenhouse gas emission reduction commitments up to 2020 (COM(2008) 17 final) and the Proposal for a Directive of the European Parliament and of the Council amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading system of the Community (COM(2008) 16 final).

3.6

The EESC considers a target of 20 % renewable energy by 2020 to be appropriate in political and strategic terms as well as technically and economically feasible. It is a tangible sign of the transition to a post-fossil energy policy. The Committee also believes that the individual national goals can be achieved, particularly as the Member States are offered flexible options (purchase, participation in projects etc). What is clear is that reorganisation of the energy system will not be free, nor can it be done without structural change. Investment is not only needed in plants for generating electricity from renewable energy sources but also in energy storage technologies and capacities to even out fluctuations in power generation resulting from insufficient wind strength or solar radiation, as well as in the development of international power lines in the EU. We will not achieve the planned objectives by concentrating exclusively on power generation.

3.7

Germany for example promotes power generation from renewable energies via its electricity feed law, and the country's proportion of green electricity is currently 15 %. The additional costs of higher feed premiums to be borne by electricity users amount to around EUR 3.5 bn per year. This does not, however, allow for the economic benefit in terms of new jobs, the prevention of environmental damage and additional tax revenues.

3.8

In order to keep the cost of meeting the target to a minimum, it is provided in the directive that individual targets can also be met by supporting measures for the development of renewable energy in other Member States. The import of electricity from guaranteed renewable sources is also allowed. The EESC considers this to be a good idea in principle. However, it supports the calls by some Member States for this trade to be subject to authorisation, in order to prevent measures to promote renewable energy financed by one Member State (5) from being used to achieve cost savings in another Member State.

4.1

The EESC considers the Commission's approach of laying down an overall target for the three sectors in which renewable energies will play a part (electricity, heating/cooling and transport) rather than three separate targets to be correct. In this way Member States are given the freedom to decide how they will combine measures in the three individual sectors in such a way that the overall national targets can be achieved.

4.2

This flexibility is, however, massively compromised, by the fact that a separate, binding goal is to be set, applicable to only one of these three sectors, i.e. the replacement of diesel fuel and petrol in the transport sector.

5.1

The Commission assigns a special role to agrofuels.

5.2

Many studies published in recent months on the subject of agrofuels have pointed out that biomass, unlike solar energy, is a limited resource and will inevitably find itself in competition with foodstuff production or the maintenance of biodiversity. Just how massive this competition will be is at present still a matter of debate. Before policy intervenes there is therefore a need for a very precise strategic analysis of which form of renewable energy can most usefully be deployed, and in which area. This will require very precise impact assessments.

5.3

In a November 2007 recommendation on the use of biomass for energy production, the scientific advisory council of the German Federal Agriculture Ministry expressed the view that in the long term solar and wind energy will play the dominant role in renewable energies, in part because they have considerably higher potential than biomass. The council cites three reasons for this:

5.4

When existing natural resources are scarce, while at the switch to new, regenerative and as far as possible decentralised energy supply structures will require relatively heavy investment, the principle to keep in mind must be that of concentrating financial resources on the most efficient climate protection strategies.

5.5

At EU level, however, some of the existing forms of bioenergy, which in some cases benefit from state support, such as agrofuels (as well as the production of biogas from maize) go hand-in-hand with very high CO2 prevention costs (6) (EUR 150 to over 300 per tonne CO2).

5.6

Other types of bioenergy, e.g. biogas production from liquid manure (ideally combined with heat production), combined heat and power production from wood chips (wood residues, short rotation farming) and the combustion of wood chips in existing large power plants have CO2 prevention costs of only EUR 50 per tonne CO2  (7).

5.7

The European Commission's Joint Research Centre concludes that in terms of GHG reduction per ha of land it is substantially more efficient to use the biomass to generate electricity than to produce liquid agrofuels (8). The efficiency of modern biomass burners is nearly as high as fossil fuel burners, so in heating and electricity production, 1MJ biomass replaces about 0.95 MJ fossil fuel. Transforming biomass into liquid fuel for transport is typically only 30-40 % efficient in energy terms. 1 MJ biomass replaces only around 0.35-0.45MJ crude oil in the transport sector.

5.8

A CO2 prevention figure of 3 t CO2/ha can be achieved with the production of agrofuels, and more than 12 t CO2/ha with the bioenergy products described (in point 4.6).

5.9

Against this background the EESC wonders why the Commission wishes to lay down an explicit 10 % target for agrofuels. It points out that the Spring European Council said that this objective should be achieved ‘cost efficiently’, and that three conditions had to be met, namely that:

5.10

Where sustainability is concerned, there are more questions than answers (see also point 5), and second-generation agrofuels are still not available. Thus, at least two out of the three criteria laid down by the European Council have not been met, which has not, however, prevented the Commission from planning to include the 10 % target in the directive.

5.11

It justifies this, inter alia, with the arguments that the transport sector is the economic sector showing the fastest rise in greenhouse gas emissions and that agrofuels ‘are currently more expensive to produce than other forms of renewable energy, which might mean that they would hardly be developed without a specific requirement’.

5.12

The EESC cannot endorse this line of argument:

5.12.1

It is true that greenhouse gas emissions are getting out of control in the transport sector. But, in the EESC's view, more stringent exhaust gas limit values and a 10 % additive for petrol and diesel will not solve the problem, nor even compensate for the environmental impact of the growth expected in the transport sector over the next few years.

5.12.2

The EESC has pointed out on a number of occasions that this problem should be tackled with a policy of traffic prevention and a change in the modal split in favour of more climate-friendly modes of transport like railways, local public transport and shipping.

5.12.3

In technological terms the EESC believes that the future of private cars lies not with the internal combustion engine but with electric traction powered by renewable energies. To power a VW Golf over 10 000 km with agrodiesel would, according to an estimate by EMPA (9), require the entire annual crop from 2 062 m2 of arable land planted with oilseed rape. The same energy could, on the other hand, be obtained from the annual output of solar cells covering 37 m2, around one sixtieth of the area.

5.12.4

The strategic requirement for the substitution of diesel or petrol by agrofuels is one of the least effective and most expensive climate protection measures, and it represents an extreme misallocation of financial resources. The EESC cannot understand why the most expensive measures are being promoted politically with the greatest intensity, particularly as a huge number of environmental and social questions, let alone economic ones, remain completely unanswered.

5.12.5

The Committee does not therefore agree with the Commission's statement that ‘increased use of biofuels for transport is one of the most effective tools’ for meeting the challenges.

5.13

Considering that the Commission is aiming to authorise agrofuels if they offer at least a 35 % cut in greenhouse gas emissions — by comparison with fuels derived from fossil oils — the 10 % target will — assuming unchanged traffic volumes — mean a cut in greenhouse gas emissions from motorised transport of only 3.5 %. As transport accounts for around a quarter of total greenhouse gas emissions, we are speaking here of a potential 1 % cut in total emissions! This is a value which is out of all proportion to the cost and the associated risks.

5.14

Even if agrofuels for transport were seen as a way of usefully harnessing biomass, the accent should be on absolute efficiency. Annex VII to the directive makes it clear, however, that the conversion of biomass to esters or ethanol is not the right approach. Any (industrial) molecular change is associated with energy input and thus energy loss. It would make more sense to use the biomass directly, without industrial/chemical change.

5.15

The fact that some tractor manufacturers are now offering engines which run on pure plant oil shows that this is technically possible.

5.16

Annex VII demonstrates that the greatest greenhouse gas emission savings can be achieved using this technology; pure rape seed oil offers standard greenhouse gas emission savings of 55 %, agrodiesel from rape only 36 %, ethanol from wheat 0 %, compared with fuels derived from fossil oil. The EESC cannot understand why the Commission does not make it clear that this path offers the greatest benefits, particularly as this is the way in which decentralised energy supply structures — and thus jobs in agriculture and rural areas — can be most easily developed.

5.17

The EESC considers that a good strategy would be to promote the use of pure plant oils, which can, for example, be obtained from environment-friendly mixed cultivation, in agriculture itself and also, for example, in local transport and waterborne transport (10). In this way farmers could be directly involved in the development of regional energy cycles and would benefit directly from this. Under the agrofuel strategy, on the other hand, they would become producers of the cheapest possible raw materials for the oil industry, if indeed raw materials grown in Europe were used at all.

6.1

The Commission believes that the bulk of the biomass needed for agrofuels will be produced in regions with more suitable climates outside the EU. Replacing imports of crude oil with imports of biomass does not, however, mean reducing import dependency but merely diversifying it.

6.2

It cannot seriously be the objective of a new EU energy policy to replace one form of dependency with another.

6.3

Rather, the priority approach should be actually to place decentralised, locally or regionally available sources at the heart of the new renewable energy strategy. Bioenergies could and must play a role here, but not the one envisaged by the agrofuel strategy.

7.1

The Commission writes that ‘renewable energy is a close substitute for conventional energy and is supplied through the same infrastructure and logistic systems’. The EESC considers this statement to be crucially misleading: renewable energies from decentralised structures are diametrically opposed to conventional energies, which tend to be produced in centrally organised, large-scale plants.

7.2

An agrofuels strategy based on energy imports and diesel and petrol additives uses the traditional, i.e. centrally organised, structures of global oil companies. It thus cements their central production and distribution structures, which is entirely in the industry's interests. It creates hardly any new jobs in Europe, however (11).

7.3

If, on the other hand, the accent is placed on the energy-efficient use of, for example, wood chips for heat and power production, or pure plant oils grown regionally, or the use of biogas in vehicles or in areas without mains gas, or decentralised solar technologies etc, new, regionally organised forms of manufacturing and distribution can be developed which will open up major potential for new jobs.

7.4

In the case of solar thermal energy and the decentralised use of photovoltaic technology (energy) consumers produce the bulk of their energy needs themselves, which is also proof that energy supply based on renewable energies is organised quite differently from the existing energy supply structure.

7.5

Other measures, such as greater energy-efficiency and energy savings, could create hundreds of thousands of jobs in small and medium-sized businesses — in the construction phase alone. Insulation of buildings, the installation of solar and wind energy equipment and the construction of biogas plants are examples of this. The role of policy-making is to ensure that this potential is actually tapped; the agrofuels strategy envisaged by the directive is not the most efficient way.

7.6

This means that, in relation to the question of jobs too, a very precise and much more differentiated analysis of the various renewable energies is urgently needed. Renewable energies can indeed promote and support regional economic structures; they can, however, also help to perpetuate large-scale, centralised structures.

7.7

The same also applies to the countries in which biomass for agrofuels is grown. In a March 2008 discussion paper entitled Development-policy position on agrofuels, the German federal ministry responsible for development aid comes to the conclusion that, in terms of the economic, environmental and social development of developing countries, a strategy of export-orientated mass production of biomass, as a reaction to sharply increased demand from industrialised countries, is associated with high risks and will not create jobs, whereas biomass for decentralised energy supply, with small farms involved in production, gets a generally positive assessment.

8.1

The EESC is glad that the Commission also plans to introduce sustainability criteria for the production of agrofuels. This is a major step forward, but the Committee considers the proposal submitted to be completely inadequate.

8.2

The Commission itself has repeatedly stressed the importance for sustainability policy of a balance between the economic, environmental and social pillars. And yet this total exclusion of social issues from the criteria alone leads the EESC to the conclusion that the draft directive does not implement a well thought-out sustainability strategy or sustainability criteria for agrofuels. In this respect the draft needs to be completely revised.

8.3

The EESC considers it important in this context that, because of indirect changes to land use, effective environmental and social criteria be drawn up not only for agrofuels but for all imported agricultural products, including feed.

8.4

Moreover, it is illusory to believe that, for example, rainforests or peat bogs can be protected against use for agrofuel production by setting a cut-off date (in this case January 2008). This would require a functioning land registry system as well as a functioning administrative and monitoring system. Experience shows that these do not exist in most emerging and developing countries.

8.5

The EESC considers the criteria, listed in Article 15(3) and (4), for preserving biodiversity and preventing land with a high carbon content from being used to be inadequate. Far more areas than just those listed in paragraphs 3(a) to (c) are important for the maintenance of biodiversity. The same is true of paragraphs 4(a) and (b) in relation to carbon sinks.

8.6

In Annex VII part B the Commission lists ‘estimated typical and default values for future biofuels that are not or in negligible quantities on the market’. The EESC believes that values based on hard data should be used rather than estimates.

31.3.2009   

EN

Official Journal of the European Union

C 77/49

1.1

The EESC endorses the mechanisms in the proposal for promoting the demonstration of CCS (Carbon Capture and Storage) in power stations, as set out in the Commission's Communication, however the lack of financing capacity and clearly established financing options for the medium (2010-2020) and long term (2020 and beyond) is a concern.

1.2

Care should be taken to ensure that the lack of financing capacity by the Commission can be partly compensated by revenue generated via the European Emission Trading Scheme (EU-ETS) e.g. through the auctioning of emission allowances by the power generating sector after 2013. It is important to note that so far, no specific financial scheme — including necessary security — has been suggested at EU level.

1.3

It is important that financial conditions are clear and well-established by the end of 2009 at the latest. Only this will ensure a financial basis for launching the preparation of large-scale CCS demonstration sites to be operational in 2015.

1.4

Revenue generated by the EU-ETS should be collected at national level as part of the implementation of the revised EU-ETS directive from 2013 on.

1.5

The Commission's idea to have 20 % of the total revenue from national EU-ETS auctions dedicated to measures to support reductions in CO2 emissions is completely inadequate and a missed financing opportunity. Member States should be strongly urged to revolutionise their position on EU-ETS revenue, and dedicate all EU-ETS revenue to low-carbon and carbon-neutral technologies with a specific envelope for CCS. In this way the billions of euros that the Commission currently lacks but are needed to support the early demonstration of large-scale CCS may become available.

1.6

The Commission should draw up a plan defining the organisation and role of the European Industrial Initiative, ensuring that it complements but does not overlap with other initiatives such as the projects supported by the Seventh Framework Programme, the European Technology Platform for Zero-Emission Fossil Fuel Power Plants and the European Flagship programme.

1.7

The EESC agrees with the need for joint European CO2 transport and storage infrastructure. A European-wide transport system is required to connect Member States that may not be able to create national storage facilities themselves.

1.8

Because of the importance of transport as an essential element in creating large-scale CCS infrastructure, the acronym CCTS (Carbon Capture Transport and Storage, i.e. including transport) could be adopted.

2.1

The development of the overall CCS value-added chain, involving the capture, transport and storage of CO2, remains at an early — and, in some cases, still at an exploratory — stage. Measures to increase the degree of efficiency of conventional power station technology, on the other hand, are gradually making progress. Bearing in mind the urgent and high level of need to replace power-station capacity in Europe over the next few decades, the EESC therefore urges that a pragmatic approach be adopted under which both technologies are developed and employed side by side. Whilst the development of a higher level of efficiency may be largely market-driven, CCS technologies — in respect of both power stations and infrastructure — require additional support at the demonstration and marketing stages.

2.2

CCS technology is being pursued along two development paths: (a) integrated power station technology involving the capture of CO2 before the combustion process and (b) post-combustion technology, which involves washing out CO2 from the flue gas after combustion (CO2 washing). Once it has undergone suitable development, method (b) would be suitable for deployment in highly efficient new power stations which are now in the process of construction, on condition that certain power stations are designed accordingly (‘capture ready’). A common feature of both these development paths is the fact the CO2 so captured has to be brought from the power station to a suitable storage site.

2.3

The issue of the safe, long-term storage of CO2 is a matter of decisive importance in respect of the social and political acceptance of this process. This aspect is, in the final analysis, the major environmental question confronting this technology as such (2).

2.4

At a meeting in Aomori, Japan, 9 June 2008, the Group of Eight industrial powers (G8) has agreed to launch 20 large carbon capture storage (CCS) demonstration projects by 2010, with the view to support the technology development and cost reduction for broad deployment of CCS from 2020 on.

2.5

The G8 meeting was attended by representatives from Britain, Canada, Italy, Japan, France, Germany, Russia, the United States, China, India and South Korea.

2.6

To support the G8's CCS commitment, the United States Department of Energy (DOE) pledged to provide funding for the addition of CCS technology to multiple commercial-scale Integrated Gasification Combined Cycle (IGCC), or other advanced clean-coal technology power plants, under its FutureGen programme. The U.S. is also funding seven regional carbon sequestration partnerships to demonstrate the effectiveness of large-scale, long-term terrestrial storage of carbon dioxide.

2.7

The G8's CCS announcement is in line with the International Energy Agency's (IEA) recommendation to use CCS technology as part of a package solution to halve greenhouse gas emissions by 2050.

3.1

Technologies for the capture and storage of CO2 (CCS) represent a crucial element in a portfolio of existing and emerging technologies with the potential to bring the cuts of CO2 emissions needed for meeting targets beyond 2020 (3).

3.2

Wide-scale application of CCS in power plants can be commercially feasible in 10-15 years, enabling CCS by 2020, or soon after, to stand on its own feet in an Emission Trading Scheme (ETS)-driven system as a crucial instrument for the elimination of CO2 emissions from fossil fuels in power generation.

3.3

This will not happen without an immediate start to the necessary preparatory steps; early demonstration is particularly needed for CCS technologies, already globally developed and used in other applications, to be adequately adapted for large-scale application in power generation.

3.4

The European Council gave its endorsement in March 2007, and reiterated it in March 2008, to the Commission's intention to stimulate the construction and operation by 2015 of up to 12 demonstration plants of sustainable fossil fuel technologies in commercial power generation.

3.5

Complementing the Commission proposal for a Directive on Geological Storage of CO2 creating the legal framework for CCS in the EU, the present Communication takes the work on CCS forward, aiming to create a structure to coordinate and effectively support large-scale CCS demonstrations and the conditions for bold industrial investments in a series of plants.

3.6

It is imperative that European efforts on CCS demonstration within an integrated policy framework, including focused R&D efforts and public awareness and acceptance measures, start as soon as possible. According to the European Commission, a delay of 7 years in demonstration leading to a similar delay in global introduction of CCS could mean over 90 Gt of avoidable CO2 emissions being released by 2050 worldwide (4), equivalent to over 20 years of current overall EU emissions of CO2.

3.7

Clear and decisive commitments from European industry backed by Commission incentives and guarantees are essential if contributions are to be paid from public funds. In particular, those Member States intending to rely on coal in their future energy mix should implement support measures for early demonstration of CCS.

3.8

Two main types of obstacle are mentioned:

The Commission's document suggests that there is an opportunity to take leadership in international regulation.

3.9

The proposed European Industrial Initiative should bring together the efforts of first movers in a network of demonstration projects. This should assist in exchanging experience and information, increase public awareness and provide input for policies enabling a complete CCS value chain. In addition, the proposed European Industrial Initiative is also expected to assist in attracting national and international funds.

3.10

The Commission states that it can only provide a minimum of support and therefore focuses on catalysing financing by first movers themselves and public funding from national governments and international NGOs.

3.11

Three actions are defined:

In addition it is pointed out that the longer industry takes to start embracing CCS, the more policy-makers will be obliged to look at compulsory measures.

3.12

The need for a joint European CO2 transport and storage infrastructure is addressed. A revision of the TEN-E guidelines including CCS is envisaged.

4.1

Following the Council decisions of March 2007 on climate change and threats to the security of energy supplies, the Commission proposed a package of measures in the form of separate documents in order to meet the objectives set by the Council decisions. These measures focus on energy efficiency, promoting renewable energy sources and developing and using the relevant innovative technologies. The Committee has drawn up specific opinions on each measure (5).

4.2

One area of key importance in this context is the development of methods to sustainably reduce greenhouse gas emissions arising from the use of fossil fuels, which is the subject discussed in this opinion.

4.3

This opinion ties in with a Committee opinion (6) on the same technology discussing the Commission's Proposal for a Directive on the geological storage of carbon dioxide.

5.1

In its Communication, the Commission repeatedly makes the point that if its plans are to succeed, it is crucial to demonstrate at an early stage that f (a) the European Emission Trading Scheme (EU-ETS) will play a key role and (b) there is scope for ‘real commercial benefits’. Obviously, the EU-ETS promises to generate real commercial benefit for first movers. However, it will come too late if the Commission fails to provide a clear and final basic set of rules for the post-2012 EU-ETS scheme before the end of 2009.

By the end of 2009, industry will need to have a solid basis for taking investment decisions in order to start the engineering and construction phase in time for the first CCS sites to become operational in 2015. This aspect has not been sufficiently stressed, especially in view of the current lack of clarity surrounding the EU-ETS and vague demands from the Commission on industry and national governments that keep the financing issue in the air.

5.2

The EU-ETS does indeed constitute an important carbon market, which may prove to be very effective, but this will only be the case if the scheme is strongly geared towards establishing of a price for emission allowances which more than covers the extra costs incurred by carbon mitigation measures. If the Commission fails to set out clear provisions in respect of the rules and scope for auctioning and appropriate recovery of such collected revenues and if it fails to play a supervisory role, potential investors will be inclined to adopt a ‘wait and see’ position because of too large uncertainties.

5.3

A joint European CO2 transport and storage infrastructure is indeed something which would clearly facilitate large-scale implementation of CCS throughout Europe. Some Member States may not be able to create national storage facilities themselves (7). Where possible, use should be made of existing infrastructure that has fallen into disuse or new facilities integrated with other infrastructure. Because of the importance of transport, the EESC would even suggest adopting the acronym CCTS (Carbon Capture Transport and Storage) explicitly including transport, even though the acronym CCS is already internationally known and acknowledged.

5.4

The Commission imposes a considerable burden upon national authorities in respect of CCS financing as there is no scope for a significant contribution from the Commission's current budget. Bearing in mind that the subject at hand is an important issue to the EU and in view of the need for EU-level supervision to ensure the success of the demonstration projects, the Commission should take a much larger share in financing CCS projects than it now envisages, backed up, where necessary, by Member State contributions provided by the Member States (8).

5.4.1

The auctioning of emission rights under the EU-ETS has provided an opportunity to tackle the issue of insufficient Commission financing. At present only 20 % is dedicated to supporting low-carbon and carbon-neutral technologies. Member States should be strongly urged to revolutionise their position on EU-ETS revenue, and dedicate all EU-ETS revenue to low-carbon and carbon-neutral technologies with a specific envelope for CCS (9). In this way the billions of euros that the Commission currently lacks but are needed to support the early demonstration of large-scale CCS, may become available.

5.4.2

Moreover, as the Committee already has suggested, the budget for energy within the Seventh Framework programme (FP7) could be significantly increased by 15 % resulting in an increase of 2 % to 3 % of GDP invested in R&D. In this way a real contribution to promoting CCS demonstration could be made via FP7.

5.4.3

There are a number of other measures supported under the Seventh Framework Programme which can also contribute to the preparation of large-scale demonstration projects. The various measures should be clearly linked with the proposed mechanisms for promoting demonstration.

5.5

No mention is made of how the European Industrial Initiative ties in with the range of other measures and initiatives in which the Commission is involved (10). To ensure an integrated approach, it is essential to indicate which measures are to be taken.

5.6

It is anticipated that the development and implementation of CCS technologies will have a substantial positive impact on employment in Europe. Some major CCS equipment and transport infrastructure providers are based in Europe. They develop and would also sell and install e.g. equipment and pipelines when CCS is implemented worldwide. Europe has a strong worldwide position on CCS that would be strengthened further if the EU succeeded in early large-scale demonstration of CCS technology within Europe (11).

5.7

The EESC proposes using the word ‘clean’ instead of ‘sustainable’ fossil fuels. Sustainable is more appropriate for e.g. solar and bio energy and less appropriate for CCS technologies that bridge the gap, using fossil fuels in a clean way, until we have succeeded in a full transition towards a sustainable energy supply.

5.8

With regard to the feasibility of safe storage of CO2 there is already considerable experience in this field, as indicated briefly below:

6.1

The EESC is able to endorse the mechanisms in the proposal for promoting the demonstration of CCS in power stations, as set out in the Commission's Communication, but wishes to make a number of observations:

6.1.1

The Commission should have a strategy ensuring that the European Industrial Initiative does not overlap with the European Flagship Programme and the European Technology Platform for Zero Emission Fossil Fuel Power Plants (ZEP). These activities should be properly coordinated and mutually reinforcing.

6.1.2

In its Communication, the Commission speaks of ‘extending the scope of the European Industrial Initiative beyond a project network’. The aim of this statement is not clear. It is also pointed out that the requisite financing still has to be found. What added value is provided by such extension and how does it tie in with the abovementioned measures in the field of CCS?

6.2

The EESC does not endorse the proposal for catalysing the finance for CCS demonstrations because it does not go far enough.