15.7.2022

Official Journal of the European Union

L 188/1

COMMISSION DELEGATED REGULATION (EU) 2022/1214

of 9 March 2022

amending Delegated Regulation (EU) 2021/2139 as regards economic activities in certain energy sectors and Delegated Regulation (EU) 2021/2178 as regards specific public disclosures for those economic activities

(Text with EEA relevance)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (1), and in particular Articles 8(4), 10(3) and 11(3) thereof,

Whereas:

(1)

The technical screening criteria set out in Commission Delegated Regulation (EU) 2021/2139 (2) cover severaleconomic sectors and activities that have a potential to contribute to the Union climate change mitigation and climate change adaptation objectives. Those economic sectors and activities were chosen because of their share in overall greenhouse gas emissions, and their proven potential for avoiding the production of greenhouse gas emissions, reducing such emissions, or removing such emissions. In addition, those economic sectors and activities have a proven potential to enable such avoidance, reduction and removal for other economic sectors and activities, or to ensure long-term storage of such emissions for other sectors and activities.

(2)

The total energy use accounts for approximately 75 % of direct greenhouse gas emissions in the Union. Thus, the energy sector has a crucial role in continuing to reduce greenhouse gas emissions. The technical screening criteria laid down in Delegated Regulation (EU) 2021/2139 therefore cover a wide range of economic sectors and activities related to the energy supply chain, ranging from electricity or heat generation from different sources, through transmission and distribution networks to storage, as well as heat pumps and the manufacture of biogas and biofuels. However, Delegated Regulation (EU) 2021/2139 does not contain technical screening criteria for economic activities in the fossil gas and nuclear energy sectors, despite their potential to contribute to the decarbonisation of the Union’s economy.

(3)

As set out in Commission Communication of 21 April 2021 (‘EU Taxonomy, Corporate Sustainability Reporting, Sustainability Preferences and Fiduciary Duties: Directing finance towards the European Green Deal’) and in Commission Communication of 6 July 2021 (‘Strategy for Financing the Transition to a Sustainable Economy’), theestablishment of technical screening criteria for energy generation from fossil gas was postponed in view of the need for further technical assessment, notably on the transitional role of fossil gas in the decarbonisation of the economy (3). The establishment of technical screening criteria for nuclear energy generation activities was also postponed awaiting an in-depth expert assessment, launched in 2020, of whether the nuclear life-cycle, and notably nuclear waste, could be considered compatible with the requirement, laid down in Article 17 of Regulation (EU) 2020/852, that an activity can do no significant harm to other environmental objectives. In the light of those assessments, it is necessary to recognise that the fossil gas and nuclear energy generation activities can contribute to the decarbonisation of the Union’s economy.

(4)

In accordance with Article 10(2) of Regulation (EU) 2020/852 covering transitional economic activities, it is necessary to lay down technical screening criteria for electricity generation, high-efficiency co-generation of power and heat/cool, and production of heat/cool in efficient district heating and cooling systems from fossil gas, where greenhouse gas emissions from fossil gas are below an appropriate threshold. In addition, it is necessary to lay down technical screening criteria for the use of fossil gas in electricity generation, high-efficiency co-generation of power and heat/cool, and production of heat/cool in efficient district heating and cooling systems, where such electricity generation, high-efficiency co-generation of power and heat/cool, and production of heat/cool in efficient district heating and cooling systems do not yet comply with that appropriate threshold, as in addition to the use of climate-neutral energy and more investments in already low-carbon economic activities and sectors, the transition requires substantial reductions in greenhouse gas emissions in other economic activities and sectors for which there are no technologically and economically feasible low-carbon alternatives. All those economic activities should be qualified as transitional under Article 10(2) of Regulation (EU) 2020/852, given that technologically and economically feasible low-carbon alternatives may not yet be commercially available at a sufficient scale to cover the energy demand in a continuous and reliable manner. In particular, for electricity generation, it is appropriate to provide for an alternative approach to directly limiting the greenhouse gas emissions. Under this alternative approach, that should deliver similar results over a 20 years period, facilities may reach such results by limiting the number of hours in operation or by advancing the switch to renewable or low-carbon gases to an earlier date. The technical screening criteria should facilitate an accelerated phase-out from more emissions-intensive energy sources, including solid fossil fuels. In addition, in order to fulfil the requirements laid down in Article 10(2), first subparagraph, points (a), (b) and (c), of Regulation (EU) 2020/852, the technical screening criteria for the use of fossil gas should also ensure that robust evidence is available to demonstrate that the same energy capacity cannot be generated with renewable sources, and that effective plans are put in place for each facility, in line with the best performance in the sector, to switch entirely to renewables or low carbon gases by a specific date. Finally, the technical screening criteria should provide for a time-limited recognition of the contribution of those activities to decarbonisation.

(5)	Renewables will play a fundamental role in meeting the climate and environmental goals of the Union. In that light, investments in renewables need to scale-up to meet the needs of the energy market of the Union for more renewable and clean energy.

(6)

Nuclear energy-related activities are low-carbon activities, they do not constitute energy from renewable sources as defined in Article 2, second subparagraph, point (1) of Directive (EU) 2018/2001 of the European Parliament and of the Council (4), and as referred to in Article 10(1), point (a) of Regulation (EU) 2020/852 and do not fall under the other categories of economic activities listed in points (b) to (i) of that provision. Such nuclear energy related economic activities should be qualified under Article 10(2) of Regulation (EU) 2020/852, in the absence of technologically and economically feasible low-carbon alternative at a sufficient scale to cover the energy demand in a continuous and reliable manner. In addition, in the Final Report of the Technical Expert Group on Sustainable Finance from March 2020 (5), it was stated that ‘nuclear energy generation has near to zero green-house gas emissions in the energy generation phase’ and ‘evidence on the potential substantial contribution of nuclear energy to climate change mitigation objectives was extensive and clear’. Moreover, a number of Member States’ plans include nuclear energy along with renewable energy in the energy sources to be used to meet climate targets, including the 2050 decarbonisation objective set out in Regulation (EU) 2021/1119 of the European Parliament and of the Council (6). Finally, by providing a stable baseload of energy supply, nuclear energy facilitates the deployment of intermittent renewable sources and does not hamper their development, as required by Article 10(2), point (b), of Regulation (EU) 2020/852. Nuclear energy related activities should therefore be considered as complying with Article 10(2) of Regulation (EU) 2020/852.

(7)

Scientific review conducted by experts (7) concluded that technical screening criteria for nuclear energy related economic activities should ensure that no significant harm is done to other environmental objectives due to potential risks arising from the long-term storageand final disposal of nuclear waste. Those technical screening criteria should therefore reflect the highest standards of nuclear safety, radiation protection and radioactive waste management, building upon requirements laid down in the Treaty establishing the European Atomic Energy Community (‘Euratom Treaty’) and in legislation adopted under that Treaty, and in particular in Council Directive 2009/71/Euratom (8). That Directive contains a high-level nuclear safety objective covering all stages of the life-cycle of each nuclear installation, including the siting, design, construction, commissioning, operation and decommissioning of such installations. In particular, that Directive calls for significant safety enhancements in the design of new reactors, including the so-called Generation III+ reactors, for which state of the art knowledge and technology should be used, taking into account the latest international safety requirements. Those requirements provide for an effective implementation of the nuclear safety objective, including the application of the defence-in-depth principle and of an effective safety culture. Those requirements ensure that the impact of extreme human-made and natural hazards, including earthquakes and floods, is minimised and that accidents, abnormal operations and failures or loss of control systems are prevented, inter alia, by protective structures or back-up cooling and electricity supply systems.

(8)

Accident-tolerant fuel for nuclear power plants which provides additional protection against accidents resulting from structural damages to fuel or reactor components has become available in the market. In order to take into account those recent technological developments, the use of that type of fuel should be set out as a requirement in the technical screening criteria, taking into account its licensing within the Union.

(9)

Worldwide, research and development efforts are ongoing to develop new nuclear reactor technologies that use, among others, closed fuel cycles or fuel self-breeding concepts and that minimise the production of high-level radioactive waste (‘Generation IV reactors’). Although those Generation IV reactors are not yet commercially viable, technical screening criteria should be laid down for such reactors in light of their potential contribution to the objective of decarbonisation and minimisation of radioactive waste.

(10)

Nuclear energy is part of the future energy sources in a number of Member States, as part of their decarbonisation efforts. The scenarios assessed by the Commission lead to a decarbonised energy system based on renewables to a very large extent and on nuclear energy with a stable installed capacity compared to current levels. As the nuclear installations being currently exploited age, they need safety upgrades to extend operational life as well as newly built nuclear installations to replace obsolete installations. This is a continuous process that should ensure the availability of the necessary capacity for the decarbonisation of the energy system by 2050 and beyond this date as needed. Accordingly, significant investments in nuclear energy will be needed throughout the period until 2050 and beyond. It is necessary to ensure that new nuclear power plants use the most advanced solutions resulting from technological progress. The technical screening criteria for such new nuclear power plants should therefore provide for regular reviews of each investment project, and for technical parameters that correspond to the best-available technology in view of the outcomes of sustained research and development efforts and the continuous improvements of technologies. Specific dates should be defined to ensure phasing in of new technologies compatible with sustainable decarbonisation as soon as they become available.

(11)

Annex II to the Euratom Treaty and Council Regulation (Euratom) No 2587/1999 (9) establish thresholds and other requirements for the notification to the Commission of investments in nuclear energy. To ensure, for the purpose of meeting the goals of the taxonomy, the highest possible regard to the principles and requirements of the Euratom legislation, including the nuclear safety objective, such investments should be subject to an opinion from the Commission, irrespective of whether Annex II to the Euratom Treaty and Regulation (Euratom) No 2587/1999 require any notification. For the same reason, all issues concerning the application of Article 10(2) and Article 17 of Regulation (EU) 2020/852 and the technical screening criteria identified by the Commission in its opinion should be satisfactorily addressed.

(12)

In view of the long lead times for investments in new nuclear generation capacity, extending the service time of selected existing nuclear installations can support the decarbonisation of the energy system in the near to medium term. The technical screening criteria for such extensions should, however, require modifications and safety upgrades to ensure that those nuclear installations comply with the highest achievable safety standards and with all safety objective requirements laid down in legislation adopted under the Euratom Treaty.

(13)

In the light of the expected technological and scientific developments, investments in the construction and safe operation of new nuclear installations using best available technologies and approved by an appropriate date by Member States’ competent authorities in accordance with applicable national law should be subject to technical screening criteria and to time-limits that will encourage the development and future use of Generation IV reactors with closed fuel cycle or fuel self-breeding once they become commercially available. These time-limits should be appropriately reviewed in light of progress in the development of such technologies.

(14)

The technical screening criteria related to climate change mitigation or climate change adaptation objectives should ensure that economic activities do not cause significant harm to any of the other environmental objectives. Specifically for nuclear energy related economic activities, it is necessary to ensure that the long term disposal of waste does not cause significant and long-term harm to the environment, as referred to in Article 17(1), point (d)(iii), of Regulation (EU) 2020/852. It is therefore appropriate to set out in the technical screening criteria specific requirements for a radioactive waste management fund and a nuclear decommissioning fund, which can be combined, in line with the principle that waste generators should be responsible for the cost of managing it, and to require operational final disposal facilities for all radioactive waste, which should prevent any export of radioactive waste for disposal in third countries. In several Member States, low and intermediate level radioactive waste is currently being disposed of in near-surface disposal facilities already, and substantial experience and know-how in waste management have been accumulated during decades of operating those near-surface disposal facilities. For high-level radioactive waste and spent fuel, deep geological disposal represents the state of the art solution that is broadly accepted in the expert community worldwide as the safest and the most sustainable option for the end point of the management of high-level radioactive waste and spent fuel considered as waste. Member States, while retaining responsibility for their policies in respect of the management of their spent fuel and low, intermediate or high-level radioactive waste, should include planning and implementation of disposal options in their national policies, in particular under the national programmes for the management of spent fuel and radioactive waste, covering all types of spent fuel and radioactive waste and all stages of spent fuel and radioactive waste management from generation to disposal. The national programmes’ content is specified in Council Directive 2011/70/Euratom (10) and includes key performance indicators to monitor progress transparently. The Member States have to report regularly on the progress of implementation of the national programmes to the Commission. Reporting from Member States from 2021 demonstrates that substantial progress is made in the realisation of the first deep geological disposal facilities on the Union territory. Realistic solutions are becoming available for Member States to develop and operate such facilities by 2050. Therefore, the inclusion of a corresponding requirement in the technical screening criteria ensures that no significant harm is caused to the environment.

(15)

It is necessary that non-financial and financial undertakings provide investors with a high degree of transparency concerning their investments in fossil gas and nuclear energy generation activities for which technical screening criteria should be laid down. To provide that transparency, specific disclosure requirements for non-financial and financial undertakings should be laid down. In order to ensure comparability of the information disclosed to investors, that information should be presented in the form of a template that indicates clearly the proportion of fossil gas and nuclear energy activities in the denominator and, where appropriate, the numerator of key performance indicators of those undertakings. In order to provide a high degree of transparency to investors in financial products referred to in Article 5 and Article 6 of Regulation (EU) 2020/852 concerning exposures to fossil gas and nuclear energy activities, for which technical screening criteria are laid down, the Commission will amend or propose to amend the disclosure framework pertaining to those financial products as appropriate to provide for full transparency over the whole life of those financial products. To ensure that such information is clearly identified by end-investors, the Commission will consider amending the requirements on the financial and insurance advice given by distributors.

(16)

To enhance investor confidence, compliance with the technical screening criteria related to fossil gas activities should be verified by an independent third party. To ensure an impartial and diligent verification of compliance, the independent third-party should have the resources and expertise to perform that verification, be independent to avoid any conflict of interest with the owner or the funder, and should not be involved in the development or operation of such fossil gas activities. In addition to the verification mechanism, financial and non-financial undertakings may be subject to specific verification requirements provided in other Union legislation on sustainable finance that cover compliance with the technical screening criteria. In accordance with Article 26(1), point (c), of Regulation (EU) 2020/852, the Commission should review the provisions required for setting up verification mechanisms of compliance with the criteria set out in that Regulation.

(17)

The fossil gas and nuclear energy sectors are characterised by rapid technological development. It is therefore necessary to review the technical screening criteria covering energy generation activities in those sectors regularly, as required by Article 19(5) of Regulation (EU) 2020/852. In addition, based on the conditions laid down in Article 10(2) of Regulation (EU) 2020/852, such review should cover the appropriateness of the periods of time laid down in the technical screening criteria.

(18)

Delegated Regulation (EU) 2021/2139 and Commission Delegated Regulation (EU) 2021/2178 (11) should therefore be amended accordingly. The amendments to Delegated Regulation (EU) 2021/2139 and Delegated Regulation (EU) 2021/2178 do not mandate any investments, but are intended to help financial markets and investors to identify, subject to strict conditions, relevant gas and nuclear related activities needed for the transition of the Member States’ energy systems towards climate neutrality in line with Union climate goals and commitments.

(19)

The amendments to Delegated Regulation (EU) 2021/2139 and Delegated Regulation (EU) 2021/2178 laid down in this Delegated Regulation are closely linked. In order to ensure coherence between those provisions, which should enter into force at the same time to facilitate a comprehensive view of the legal framework for stakeholders and to facilitate the application of Regulation (EU) 2020/852, it is necessary to include those provisions in a single Regulation.

(20)

It is necessary to provide non-financial and financial undertakings with sufficient time to assess whether their economic activities related to fossil gas and nuclear energy comply with the technical screening criteria laid down in this Regulation, and to report on the basis of that assessment in accordance with Delegated Regulation (EU) 2021/2178. The date of application of this Regulation should therefore be deferred to 1 January 2023,

HAS ADOPTED THIS REGULATION:

Article 1

Amendments to Delegated Regulation (EU) 2021/2139

Delegated Regulation (EU) 2021/2139 is amended as follows:

(1)

the following Article 2a is inserted:

‘Article 2a

Review

When performing the review referred to in Article 19(5) of Regulation (EU) 2020/852, the Commission shall also review and assess the necessity to amend the dates referred to in Annex I, Section 4.27, Section 4.28, Section 4.29, point 1(b), Section 4.30, point 1(b) and Section 4.31, point 1(b).

Any review of the date referred to in point (2) of Sections 4.27 and 4.28 to Annex I shall take into account the technical progress in accident-tolerant fuel commercialisation in the Union and worldwide.’;

(2)	Annex I is amended in accordance with Annex I to this Regulation;

(3)	Annex II is amended in accordance with Annex II to this Regulation.

Article 2

Amendments to Delegated Regulation (EU) 2021/2178

Delegated Regulation (EU) 2021/2178 is amended as follows:

(1)

in Article 8, the following paragraphs 6, 7 and 8 are added:

‘6. Non-financial undertakings and financial undertakings shall disclose the amount and proportion of:

(a)	the taxonomy-aligned economic activities referred to in Sections 4.26, 4.27 and 4.28 of Annexes I and II to Delegated Regulation (EU) 2021/2139 in the denominator and the numerator of their key performance indicators;

(b)	the taxonomy-eligible, but not taxonomy-aligned, economic activities referred to in Sections 4.26, 4.27 and 4.28 of Annexes I and II to Delegated Regulation (EU) 2021/2139 in the denominator of their key performance indicators;

(c)	the taxonomy-non-eligible nuclear energy related activities in the denominator of their key performance indicators.

7. Non-financial undertakings and financial undertakings shall disclose the amount and proportion of:

(a)	the taxonomy-aligned economic activities referred to in Sections 4.29, 4.30 and 4.31 of Annexes I and II to Delegated Regulation (EU) 2021/2139 in the denominator and the numerator of their key performance indicators;

(b)	the taxonomy-eligible, but not taxonomy-aligned, economic activities referred to in Sections 4.29, 4.30 and 4.31 of Annexes I and II to Delegated Regulation (EU) 2021/2139 in the denominator of their key performance indicators;

(c)	the taxonomy-non-eligible fossil gas related activities in the denominator of their key performance indicators.

8. The information referred to in paragraphs 6 and 7 shall be presented in tabular form by using the templates set out in Annex XII to this Regulation.’;

(2)	the text set out in Annex III to this Regulation is added as Annex XII.

Article 3

Entry into force and application

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

It shall apply from 1 January 2023.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 9 March 2022.

For the Commission

The President

Ursula VON DER LEYEN

(1) OJ L 198, 22.6.2020, p. 13.

(2) Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by establishing the technical screening criteria for determining the conditions under which an economic activity qualifies as contributing substantially to climate change mitigation or climate change adaptation and for determining whether that economic activity causes no significant harm to any of the other environmental objectives (OJ L 442, 9.12.2021, p. 1).

(3) Communication from the Commission of 21 April 2021 to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, EU Taxonomy, Corporate Sustainability Reporting, Sustainability Preferences and Fiduciary Duties: Directing finance towards the European Green Deal (COM(2021) 188 final) and Communication from the Commission of 6 July 2021 to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, Strategy for Financing the Transition to a Sustainable Economy (COM(2021) 390 final).

(4) Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (OJ L 328, 21.12.2018, p. 82).

(5) The TEG report available on: https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/200309-sustainable-finance-teg-final-report-taxonomy_en.pdf

(6) Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’) (OJ L 243, 9.7.2021, p. 1).

(7) JRC report: Technical assessment of nuclear energy with respect to the ‘do no significant harm’ criteria of Regulation (EU) 2020/852 (‘Taxonomy Regulation’) available on: https://ec.europa.eu/info/file/210329-jrc-report-nuclear-energy-assessment_en

(8) Council Directive 2009/71/Euratom of 25 June 2009 establishing a Community framework for the nuclear safety of nuclear installations (OJ L 172, 2.7.2009, p. 18).

(9) Council Regulation (Euratom) No 2587/1999 of 2 December 1999 defining the investment projects to be communicated to the Commission in accordance with Article 41 of the Treaty establishing the European Atomic Energy Community (OJ L 315, 9.12.1999, p. 1).

(10) Council Directive 2011/70/Euratom of 19 July 2011 establishing a Community framework for the responsible and safe management of spent fuel and radioactive waste (OJ L 199, 2.8.2011, p. 48).

(11) Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by specifying the content and presentation of information to be disclosed by undertakings subject to Articles 19a or 29a of Directive 2013/34/EU concerning environmentally sustainable economic activities, and specifying the methodology to comply with that disclosure obligation (OJ L 443, 10.12.2021, p. 9).

ANNEX I

In Annex I to Delegated Regulation (EU) 2021/2139, the following Sections 4.26, 4.27, 4.28, 4.29, 4.30 and 4.31 are inserted:

‘4.26. Pre-commercial stages of advanced technologies to produce energy from nuclear processes with minimal waste from the fuel cycle

Description of the activity

Research, development, demonstration and deployment of innovative electricity generation facilities, licenced by Member States’ competent authorities in accordance with applicable national law, that produce energy from nuclear processes with minimal waste from the fuel cycle.

The activity is classified under NACE code M72 and M72.1 in accordance with the statistical classification of economic activities established by Regulation (EC) No 1893/2006.

An economic activity in this category is an activity as referred to in Article 10(2) of Regulation (EU) 2020/852 where it complies with all the technical screening criteria set out in this Section.

Technical screening criteria

General criteria pertaining to substantial contribution to climate change mitigation and Do no significant harm (‘DNSH’)

The project related to the economic activity (‘the project’) is located in a Member State which complies with all of the following:

(a)	the Member State has fully transposed Council Directive 2009/71/Euratom (1) and Council Directive 2011/70/Euratom (2);

(b)

the Member State complies with the Treaty establishing the European Atomic Energy Community (‘Euratom Treaty’) and with legislation adopted on its basis, in particular, Directive 2009/71/Euratom, Directive 2011/70/Euratom and Council Directive 2013/59/Euratom (*3), as well as applicable Union environmental law adopted under Article 192 TFEU, in particular Directive 2011/92/EU of the European Parliament and of the Council (*4) and Directive 2000/60/EC of the European Parliament and of the Council (*5);

(c)	the Member State has in place, as of the approval date of the project, a radioactive waste management fund and a nuclear decommissioning fund which can be combined;

(d)	the Member State has demonstrated that it will have resources available at the end of the estimated useful life of the nuclear power plant corresponding to the estimated cost of radioactive waste management and decommissioning in compliance with Commission Recommendation 2006/851/Euratom (*6);

(e)

the Member State has operational final disposal facilities for all very low-, low- and intermediate-level radioactive waste, notified to the Commission under Article 41 Euratom Treaty or Article 1(4) of Council Regulation (Euratom) No 2587/1999, and included in the national programme updated under Directive 2011/70/Euratom;

(f)

the Member State has a documented plan with detailed steps to have in operation, by 2050, a disposal facility for high-level radioactive waste describing all of the following:

(i)	concepts or plans and technical solutions for spent fuel and radioactive waste management from generation to disposal;

(ii)	concepts or plans for the post-closure period of a disposal facility’s lifetime, including the period during which appropriate controls are retained and the means to be employed to preserve knowledge of that facility in the longer term;

(iii)

the responsibilities for the plan implementation and the key performance indicators to monitor its progress;

(iv)	cost assessments and financing schemes.

For the purposes of point (f), Member States may use plans drawn up as part of the national programme required by Articles 11 and 12 of Directive 2011/70/Euratom.

The project is part of a Union financed research programme or the project has been notified to the Commission in accordance with Article 41 of the Euratom Treaty or with Article 1(4) of Council Regulation (Euratom) No 2587/1999, where either of these provisions is applicable, the Commission has given its opinion on it in accordance with Article 43 of the Euratom Treaty, and all the issues raised in the opinion, with relevance for the application of Article 10(2) and Article 17 of Regulation (EU) 2020/852, and of the technical screening criteria laid down in this Section have been satisfactorily addressed.

The Member State concerned has committed to report to the Commission every five years for each project on all of the following:

(a)	the adequacy of the accumulated resources referred to in point 1(c);

(b)	actual progress in the implementation of the plan referred to in point 1(f).

On the basis of the reports, the Commission shall review the adequacy of the accumulated resources of the radioactive waste management fund and the nuclear decommissioning fund referred to in point 1(c) and the progress in the implementation of the documented plan referred to in point 1(f) and it may address an opinion to the Member State concerned.

The activity complies with national legislation that transposes the legislation referred to in point 1(a) and (b), including as regards the evaluation, in particular through stress tests, of the resilience of the nuclear power plants located on the territory of the Union against extreme natural hazards, including earthquakes. Accordingly, the activity takes place on the territory of a Member State where the operator of a nuclear installation:

(a)	has submitted a demonstration of nuclear safety, whose scope and level of detail is commensurate with the potential magnitude and nature of the hazard relevant for the nuclear installation and its site (Article 6, point (b), of Directive 2009/71/Euratom);

(b)	has taken defence-in-depth measures to ensure, inter alia, that the impact of extreme external natural and unintended man-made hazards is minimised (Article 8b(1), point (a) of Directive 2009/71/Euratom);

(c)	has performed an appropriate site and installation-specific assessment when the operator concerned applies for a licence to construct or operate a nuclear power plant (Article 8c(a) of Directive 2009/71/Euratom).

The activity fulfils the requirements of Directive 2009/71/Euratom, supported by the latest international guidance from the International Atomic Energy Agency (‘IAEA’) and the Western European Nuclear Regulator’s Association (‘WENRA’), contributing to increasing the resilience and the ability of new and existing nuclear power plants to cope with extreme natural hazards, including floods and extreme weather conditions.

Radioactive waste as referred to in point 1(e) and (f), is disposed of in the Member State in which it was generated, unless there is an agreement between the Member State concerned and the Member State of destination, as established in Directive 2011/70/Euratom. In that case, the Member State of destination has radioactive waste management and disposal programmes and a suitable disposal facility in operation in compliance with the requirements of Directive 2011/70/Euratom.

Additional criteria pertaining to substantial contribution to climate change mitigation

The activity aims at generating or generates electricity using nuclear energy. Life-cycle greenhouse gas (GHG) emissions from the generation of electricity from nuclear energy are below the threshold of 100 g CO2e/kWh.

Life-cycle GHG emission savings are calculated using Commission Recommendation 2013/179/EU or, alternatively, using ISO 14067:2018 or ISO 14064-1:2018.

Quantified life-cycle GHG emissions are verified by an independent third party.

Additional criteria pertaining to Do no significant harm (‘DNSH’)

(2)	Climate change adaptation

The activity complies with the criteria set out in Appendix A to this Annex.

The activity complies with the requirements laid down in Article 6(b), 8b(1), point (a), and Article 8c(a) of Directive 2009/71/Euratom.

The activity fulfils the requirements of Directive 2009/71/Euratom implemented in accordance with the international guidance of the IAEA and WENRA relating to extreme natural hazards, including floods and extreme weather conditions.

(3)	Sustainable use and protection of water and marine resources

The activity complies with the criteria set out in Appendix B to this Annex.

Environmental degradation risks related to preserving water quality and avoiding water stress are identified and addressed, in accordance with a water use and protection management plan, developed in consultation with stakeholders concerned.

In order to limit thermal anomalies associated with the discharge of waste heat, operators of inland nuclear power plants utilising once-through wet cooling by taking water from a river or a lake control:

(a)	the maximum temperature of the recipient freshwater body after mixing, and

(b)	the maximum temperature difference between the discharged cooling water and the recipient freshwater body.

The temperature control is implemented in accordance with the individual licence conditions for the specific operations, where applicable, or threshold values in line with Union law.

The activity complies with the Industry Foundation Classes (IFC) standards.

Nuclear activities are operated in compliance with requirements on water intended for human consumption of Directive 2000/60/EC and of Directive 2013/51/Euratom laying down requirements for the protection of the health of the general public with regard to radioactive substances in water intended for human consumption.

(4)	Transition to a circular economy

A plan for the management of both non-radioactive and radioactive waste is in place and ensures maximal reuse or recycling of such waste at end of life in accordance with the waste hierarchy, including through contractual agreements with waste management partners, the reflection in financial projections or the official project documentation.

During operation and decommissioning, the amount of radioactive waste is minimised and the amount of free-release materials is maximised in accordance with Directive 2011/70/Euratom, and in compliance with the radiation protection requirements laid down in Directive 2013/59/Euratom.

A financing scheme is in place to ensure adequate funding for all decommissioning activities and for the management of spent fuel and radioactive waste, in compliance with Directive 2011/70/Euratom and Recommendation 2006/851/Euratom.

An Environmental Impact Assessment is completed prior to the construction of a nuclear power plant, in accordance with Directive 2011/92/EU. The required mitigation and compensatory measures are implemented.

The relevant elements in this Section are covered by Member States’ reports to the Commission in accordance with Article 14(1) of Directive 2011/70/Euratom.

(5)	Pollution prevention and control

The activity complies with the criteria set out in Appendix C to this Annex.

Non-radioactive emissions are within or lower than the emission levels associated with the best available techniques (BAT-AEL) ranges set out in the best available techniques (BAT) conclusions for large combustion plants. No significant cross-media effects occur.

For nuclear power plants greater than 1 MW thermal input but below the thresholds for the BAT conclusions for large combustion plants to apply, emissions are below the emission limit values set out in Annex II, part 2, to Directive (EU) 2015/2193.

Radioactive discharges to air, water bodies and ground (soil) comply with individual licence conditions for the specific operations, where applicable, or national threshold values in line with Directive 2013/51/Euratom (*7) and Directive 2013/59/Euratom.

Spent fuel and radioactive waste is safely and responsibly managed in accordance with Directive 2011/70/Euratom and Directive 2013/59/Euratom.

An adequate capacity of interim storage is available for the project, while national plans for disposal are in place to minimise the duration of interim storage, in compliance with the provision of Directive 2011/70/Euratom that considers radioactive waste storage, including long-term storage, as an interim solution, but not an alternative to disposal.

(6)	Protection and restoration of biodiversity and ecosystems

The activity complies with the criteria set out in Appendix D to this Annex.

For sites/operations located in or near biodiversity sensitive areas likely to have a significant effect on biodiversity sensitive areas (including the Natura 2000 network of protected areas, Unesco World Heritage sites and Key Biodiversity Areas, as well as other protected areas), an appropriate assessment, where applicable, has been conducted and based on its conclusions the necessary mitigation measures are implemented.

The sites/operations shall not be detrimental to the conservation status of any of the habitats or species present in protected areas.

4.27. Construction and safe operation of new nuclear power plants, for the generation of electricity or heat, including for hydrogen production, using best-available technologies

For the purposes of this Section, best-available technologies mean technologies that fully comply with the requirements of Directive 2009/71/Euratom and fully respect the most recent technical parameters of the IAEA standards and the WENRA Safety objectives and Reference Levels.

Description of the activity

Construction and safe operation of new nuclear installations for which the construction permit has been issued by 2045 by Member States’ competent authorities, in accordance with applicable national law, to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production (new nuclear installations), as well as their safety upgrades.

The activity is classified under NACE codes D35.11 and F42.22 in accordance with the statistical classification of economic activities established by Regulation (EC) No 1893/2006.

An economic activity in this category is an activity as referred to in Article 10(2) of Regulation (EU) 2020/852 where it complies with all the technical screening criteria set out in this Section.

Technical screening criteria

General criteria pertaining to substantial contribution to climate change mitigation and Do no significant harm (‘DNSH’)

The project related to the economic activity (‘the project’) is located in a Member State which complies with all of the following:

(a)	the Member State has fully transposed Council Directive 2009/71/Euratom and Council Directive 2011/70/Euratom;

(b)

the Member State complies with the Euratom Treaty and with legislation adopted on its basis, in particular, Directive 2009/71/Euratom, Directive 2011/70/Euratom and Directive 2013/59/Euratom, as well as applicable Union environmental law adopted under Article 192 TFEU, in particular Directive 2011/92/EU and Directive 2000/60/EC;

(c)	the Member State has in place, as of the approval date of the project, a radioactive waste management fund and a nuclear decommissioning fund which can be combined;

(d)	the Member State has demonstrated that it will have resources available at the end of the estimated useful life of the nuclear power plant corresponding to the estimated cost of radioactive waste management and decommissioning in compliance with Recommendation 2006/851/Euratom;

(e)

the Member State has operational final disposal facilities for all very low-, low- and intermediate-level radioactive waste, notified to the Commission under Article 41 of the Euratom Treaty or under Article 1(4) of Council Regulation 2587/1999 and included in the national programme updated under Council Directive 2011/70/Euratom;

(f)

the Member State has a documented plan with detailed steps to have in operation, by 2050, a disposal facility for high-level radioactive waste describing all of the following:

(i)	concepts or plans and technical solutions for spent fuel and radioactive waste management from generation to disposal;

(ii)	concepts or plans for the post-closure period of a disposal facility’s lifetime, including the period during which appropriate controls are retained and the means to be employed to preserve knowledge of that facility in the longer term;

(iii)

the responsibilities for the plan implementation and the key performance indicators to monitor its progress;

(iv)	cost assessments and financing schemes.

For the purposes of point (f), Member States may use the plans drawn up as part of the national programme required by Articles 11 and 12 of Directive 2011/70/Euratom.

The project fully applies the best-available technology and from 2025 accident-tolerant fuel. The technology is certified and approved by the national safety regulator.

The project has been notified to the Commission in accordance with Article 41 of the Euratom Treaty or with Article 1(4) of Council Regulation 2587/1999, where either of these provisions is applicable, the Commission has given its opinion on it in accordance with Article 43 of the Euratom Treaty, and all the issues raised in the opinion, with relevance for the application of Article 10(2) and Article 17 of Regulation (EU) 2020/852, and of the technical screening criteria laid down in this Section, have been satisfactorily addressed.

The Member State concerned has committed to report to the Commission every five years for each project on all of the following:

(a)	the adequacy of the accumulated resources referred to in point 1(c);

(b)	actual progress in the implementation of the plan referred to in point 1(f).

The Commission shall review, as of 2025 and at least every 10 years, the technical parameters corresponding to the best-available technology on the basis of the assessment by the European Nuclear Safety Regulators’ Group (‘ENSREG’).

The activity complies with national legislation that transposes the legislation referred to in point 1(a) and (b), including as regards the evaluation, in particular through stress-tests, of the resilience of the nuclear power plants located on the territory of the Union against extreme natural hazards, including earthquakes. Accordingly, the activity takes place on the territory of a Member State where the operator of a nuclear installation:

(a)	has submitted a demonstration of nuclear safety, whose scope and level of detail is commensurate with the potential magnitude and nature of the hazard relevant for the nuclear installation and its site (Article 6, point (b), of Directive 2009/71/Euratom);

(b)	has taken defence-in-depth measures to ensure, inter alia, that the impact of extreme external natural and unintended man-made hazards is minimised (Article 8b(1), point (a), of Directive 2009/71/Euratom);

(c)	has performed an appropriate site and installation-specific assessment when the operator concerned applies for a licence to construct or operate a nuclear power plant (Article 8c(a) of Directive 2009/71/Euratom).

The activity fulfils the requirements of Directive 2009/71/Euratom, supported by the latest international guidance from the IAEA and WENRA, contributing to increasing the resilience and the ability of new and existing nuclear power plants to cope with extreme natural hazards, including floods and extreme weather conditions.

Radioactive waste as referred to in point 1(e) and (f) is disposed of in the Member State in which it was generated, unless there is an agreement between the Member State concerned and the Member State of destination, as established in Directive 2011/70/Euratom. In that case, the Member State of destination has radioactive waste management and disposal programmes and a suitable disposal facility in operation in compliance with the requirements of Directive 2011/70/Euratom.

Additional criteria pertaining to substantial contribution to climate change mitigation

The activity generates electricity using nuclear energy. Life-cycle greenhouse gas (GHG) emissions from the generation of electricity from nuclear energy are below the threshold of 100 g CO2e/kWh.

Life-cycle GHG emission savings are calculated using Recommendation 2013/179/EU or, alternatively, using ISO 14067:2018 or ISO 14064-1:2018.

Quantified life-cycle GHG emissions are verified by an independent third party.

Additional criteria pertaining to Do no significant harm (‘DNSH’)

(2)	Climate change adaptation

The activity complies with the criteria set out in Appendix A to this Annex.

The activity complies with the requirements laid down in Article 6(b), Article 8b(1), point (a), and Article 8c(a) of Directive 2009/71/Euratom.

The activity fulfils the requirements of Directive 2009/71/Euratom, implemented in accordance with the international guidance of the IAEA and WENRA relating to extreme natural hazards, including floods and extreme weather conditions.

(3)	Sustainable use and protection of water and marine resources

The activity complies with the criteria set out in Appendix B to this Annex.

(a)	the maximum temperature of the recipient freshwater body after mixing, and

(b)	the maximum temperature difference between the discharged cooling water and the recipient freshwater body.

The temperature control is implemented in accordance with the individual licence conditions for the specific operations, where applicable, or threshold values in line with the Union law.

The activity complies with the Industry Foundation Classes (IFC) standards.

(4)	Transition to a circular economy

The relevant elements in this Section are covered by Member States’ reports to the Commission in accordance with Article 14(1) of Directive 2011/70/Euratom.

(5)	Pollution prevention and control

The activity complies with the criteria set out in Appendix C to this Annex.

Spent fuel and radioactive waste is safely and responsibly managed in accordance with Directive 2011/70/Euratom and Directive 2013/59/Euratom.

An adequate capacity of interim storage is available for the project, while national plans for disposal are in place to minimise the duration of interim storage, in compliance with Directive 2011/70/Euratom that considers radioactive waste storage, including long-term storage, as an interim solution, but not an alternative to disposal.

(6)	Protection and restoration of biodiversity and ecosystems

The activity complies with the criteria set out in Appendix D to this Annex.

The sites/operations shall not be detrimental to the conservation status of any of the habitats or species present in protected areas.

4.28. Electricity generation from nuclear energy in existing installations

Description of the activity

Modification of existing nuclear installations for the purposes of extension, authorised by Member States’ competent authorities by 2040 in accordance with applicable national law, of the service time of safe operation of nuclear installations that produce electricity or heat from nuclear energy (‘nuclear power plants’).

The activity is classified under NACE codes D35.11 and F42.22 in accordance with the statistical classification of economic activities established by Regulation (EC) No 1893/2006.

An economic activity in this category is an activity as referred to in Article 10(2) of Regulation (EU) 2020/852 where it complies with all the technical screening criteria set out in this Section.

Technical screening criteria

General criteria pertaining to substantial contribution to climate change mitigation and Do no significant harm (‘DNSH’)

The project related to the economic activity (‘the project’) is located in a Member State which complies with all of the following:

(a)	the Member State has fully transposed Council Directive 2009/71/Euratom and Council Directive 2011/70/Euratom;

(b)

the Member State complies with the Euratom Treaty and with legislation adopted on its basis, in particular, Directive 2009/71/Euratom, Directive 2011/70/Euratom and Directive 2013/59/Euratom, and with applicable Union environmental law adopted under Article 192 TFEU, in particular Directive 2011/92/EU and Directive 2000/60/EC;

(c)	the Member State has in place, as of the approval date of the project, a radioactive waste management fund and a nuclear decommissioning fund which can be combined;

(d)	the Member State has demonstrated that it will have resources available at the end of the estimated useful life of the nuclear power plant corresponding to the estimated cost of radioactive waste management and decommissioning in compliance with Recommendation 2006/851/Euratom;

(e)

(f)

for projects authorised after 2025, the Member State has a documented plan with detailed steps to have in operation, by 2050, a disposal facility for high-level radioactive waste describing all of the following:

(i)	concepts or plans and technical solutions for spent fuel and radioactive waste management from generation to disposal;

(ii)	concepts or plans for the post-closure period of a disposal facility’s lifetime, including the period during which appropriate controls are retained and the means to be employed to preserve knowledge of that facility in the longer term;

(iii)

the responsibilities for the plan implementation and the key performance indicators to monitor its progress;

(iv)	cost assessments and financing schemes.

For the purposes of point (f), Member States may use the plans drawn up as part of the national programme required by Articles 11 and 12 of Directive 2011/70/Euratom.

The upgraded project implements any reasonably practicable safety improvement and from 2025 makes use of accident-tolerant fuel. The technology is certified and approved by the national safety regulator.

The Member State concerned has committed to report to the Commission every five years for each project on all of the following:

(a)	the adequacy of the accumulated resources referred to in point 1(c);

(b)	actual progress in the implementation of the plan referred to in point 1(f).

The activity complies with national legislation that transposes the legislation referred to in point 1(a) and (b), including as regards the evaluation, in particular through stress-tests, of the resilience of the Union nuclear power plants against extreme natural hazards, including earthquakes. Accordingly, the activity takes place on the territory of a Member State where the operator of a nuclear installation:

(a)	has submitted a demonstration of nuclear safety, whose scope and level of detail is commensurate with the potential magnitude and nature of the hazard relevant for the nuclear installation and its site (Article 6, point (b), of Directive 2009/71/Euratom);

(b)	has taken defence-in-depth measures to ensure, inter alia, that the impact of extreme external natural and unintended man-made hazards is minimised (Article 8b(1), point (a), of Directive 2009/71/Euratom);

(c)	has performed an appropriate site and installation-specific assessment when the operator concerned applies for a licence to construct or operate a nuclear power plant (Article 8c(a) of Directive 2009/71/Euratom).

Radioactive waste referred to in point 1(e) and (f) is disposed of in the Member State in which it was generated, unless there is an agreement between the Member State concerned and the Member State of destination, as established in Directive 2011/70/Euratom. In that case, the Member State of destination has radioactive waste management and disposal programmes and a suitable disposal facility in operation in compliance with the requirements of Directive 2011/70/Euratom.

Additional criteria pertaining to substantial contribution to climate change mitigation

The activity generates electricity using nuclear energy. Life-cycle greenhouse gas (GHG) emissions from the generation of electricity from nuclear energy are below the threshold of 100 g CO2e/kWh.

Life-cycle GHG emission savings are calculated using Recommendation 2013/179/EU or, alternatively, using ISO 14067:2018 or ISO 14064-1:2018.

Quantified life-cycle GHG emissions are verified by an independent third party.

Additional criteria pertaining to Do no significant harm (‘DNSH’)

(2)	Climate change adaptation

The activity complies with the criteria set out in Appendix A to this Annex.

The activity complies with the requirements laid down in Article 6(b), Article 8b(1), point (a), and Article 8c(a) of Directive 2009/71/Euratom.

The activity fulfils the requirements of Directive 2009/71/Euratom implemented in accordance with international guidance of the IAEA and WENRA relating to extreme natural hazards, including floods and extreme weather conditions.

(3)	Sustainable use and protection of water and marine resources

The activity complies with the criteria set out in Appendix B to this Annex.

(a)	the maximum temperature of the recipient freshwater body after mixing, and

(b)	the maximum temperature difference between the discharged cooling water and the recipient freshwater body.

The temperature control is implemented in accordance with the individual licence conditions for the specific operations, where applicable, or threshold values in line with Union law.

The activity complies with the Industry Foundation Classes (IFC) standards.

(4)	Transition to a circular economy

The relevant elements in this Section are covered by Member States’ reports to the Commission in accordance with Article 14(1) of Directive 2011/70/Euratom.

(5)	Pollution prevention and control

The activity complies with the criteria set out in Appendix C to this Annex.

Spent fuel and radioactive waste is safely and responsibly managed in accordance with Directive 2011/70/Euratom and Directive 2013/59/Euratom.

An adequate capacity of interim storage is available for the project, while national plans for disposal are in place to minimise the duration of interim storage, in compliance with Directive 2011/70/Euratom that considers radioactive waste storage, including long-term storage, as an interim solution, but not an alternative to disposal.

(6)	Protection and restoration of biodiversity and ecosystems

The activity complies with the criteria set out in Appendix D to this Annex.

The sites/operations shall not be detrimental to the conservation status of any of the habitats or species present in protected areas.

4.29. Electricity generation from fossil gaseous fuels

Description of the activity

Construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels. This activity does not include electricity generation from the exclusive use of renewable non-fossil gaseous and liquid fuels as referred to in Section 4.7 of this Annex and biogas and bio-liquid fuels as referred to in Section 4.8 of this Annex.

The economic activities in this category may be associated with several NACE codes, notably D35.11 and F42.22 in accordance with the statistical classification of economic activities established by Regulation (EC) No 1893/2006.

An economic activity in this category is a transitional activity as referred to in Article 10(2) of Regulation (EU) 2020/852 where it complies with the technical screening criteria set out in this Section.

Technical screening criteria

Substantial contribution to climate change mitigation

The activity meets either of the following criteria:

(a)

the life-cycle GHG emissions from the generation of electricity using fossil gaseous fuels are lower than 100 g CO2e/kWh.

Life-cycle GHG emissions are calculated based on project-specific data, where available, using Recommendation 2013/179/EU or, alternatively, using ISO 14067:2018 or ISO 14064-1:2018.

Quantified life-cycle GHG emissions are verified by an independent third party.

Where facilities incorporate any form of abatement, including carbon capture or use of renewable or low-carbon gases, that abatement activity complies with the criteria set out in the relevant Section of this Annex, where applicable.

Where the CO2 that would otherwise be emitted from the electricity generation process is captured for the purpose of underground storage, the CO2 is transported and stored underground, in accordance with the technical screening criteria set out in Sections 5.11 and 5.12 of this Annex.

(b)

facilities for which the construction permit is granted by 31 December 2030 comply with all of the following:

(i)	direct GHG emissions of the activity are lower than 270g CO2e/kWh of the output energy, or annual direct GHG emissions of the activity do not exceed an average of 550kgCO2e/kW of the facility’s capacity over 20 years;

(ii)

the power to be replaced cannot be generated from renewable energy sources, based on a comparative assessment with the most cost-effective and technically feasible renewable alternative for the same capacity identified; the result of this comparative assessment is published and is subject to a stakeholder consultation;

(iii)

the activity replaces an existing high emitting electricity generation activity that uses solid or liquid fossil fuels;

(iv)	the newly installed production capacity does not exceed the capacity of the replaced facility by more than 15 %;

(v)	the facility is designed and constructed to use renewable and/or low-carbon gaseous fuels and the switch to full use of renewable and/or low-carbon gaseous fuels takes place by 31 December 2035, with a commitment and verifiable plan approved by the management body of the undertaking;

(vi)	the replacement leads to a reduction in emissions of at least 55 % GHG over the lifetime of the newly installed production capacity;

(vii)

where the activity takes place on the territory of a Member State in which coal is used for energy generation, that Member State has committed to phase-out the use of energy generation from coal and has reported this in its integrated national energy and climate plan referred to in Article 3 of Regulation (EU) 2018/1999 of the European Parliament and of the Council (*8) or in another instrument.

Compliance with the criteria referred to in point 1(b) is verified by an independent third party. The independent third-party verifier has the necessary resources and expertise to perform such verification. The independent third party verifier does not have any conflict of interest with the owner or the funder, and is not involved in the development or operation of the activity. The independent third party verifier carries out diligently the verification of compliance with the technical screening criteria. In particular, every year the independent third party publishes and transmits to the Commission a report:

(a)	certifying the level of direct GHG emissions referred to in point 1(b)(i);

(b)	where applicable, assessing whether annual direct GHG emissions of the activity are on a credible trajectory to comply with the average threshold over 20 years referred to in point 1(b)(i);

(c)	assessing whether the activity is on a credible trajectory to comply with point 1(b)(v).

When undertaking the assessment referred to in point 1(b), the independent third party verifier takes into account in particular the planned annual direct GHG emissions for each year of the trajectory, realised annual direct GHG emissions, planned and realised operating hours, and planned and realised use of renewable or low carbon gases.

On the basis of the reports transmitted to it, the Commission may address an opinion to the relevant operators. The Commission shall take those reports into account when performing the review referred to in Article 19(5) of Regulation (EU) 2020/852.

The activity meets either of the following criteria:

(a)	at construction, measurement equipment for monitoring of physical emissions, such as those from methane leakage, is installed or a leak detection and repair programme is introduced;

(b)	at operation, physical measurement of emissions are reported and leak is eliminated.

Where the activity blends fossil gaseous fuels with gaseous or liquid biofuels, the agricultural biomass used for the production of the biofuels complies with the criteria laid down in Article 29, paragraphs 2 to 5, of Directive (EU) 2018/2001 while forest biomass complies with the criteria laid down in Article 29, paragraphs 6 and 7, of that Directive.

Do no significant harm (‘DNSH’)

(2)	Climate change adaptation

The activity complies with the criteria set out in Appendix A to this Annex.

(3)	Sustainable use and protection of water and marine resources

The activity complies with the criteria set out in Appendix B to this Annex.

(4)	Transition to a circular economy

N/A

(5)	Pollution prevention and control

The activity complies with the criteria set out in Appendix C to this Annex.

Emissions are within or lower than the emission levels associated with the best available techniques (BAT-AEL) ranges set out in the latest relevant best available techniques (BAT) conclusions, including the best available techniques (BAT) conclusions for large combustion plants.

No significant cross-media effects occur.

For combustion plants with thermal input greater than 1 MW but below the thresholds for the BAT conclusions for large combustion plants to apply, emissions are below the emission limit values set out in Annex II, part 2, to Directive (EU) 2015/2193.

(6)	Protection and restoration of biodiversity and ecosystems

The activity complies with the criteria set out in Appendix D to this Annex.

4.30. High-efficiency co-generation of heat/cool and power from fossil gaseous fuels

Description of the activity

Construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels. This activity does not include high-efficiency co-generation of heat/cool and power from the exclusive use of renewable non-fossil gaseous and liquid fuels referred to in Section 4.19 of this Annex, and biogas and bio-liquid fuels referred to in Section 4.20 of this Annex.

The economic activities in this category may be associated with NACE codes D35.11 and D35.30 in accordance with the statistical classification of economic activities established by Regulation (EC) No 1893/2006.

Technical screening criteria

Substantial contribution to climate change mitigation

The activity meets either of the following criteria:

(a)

the life-cycle GHG emissions from the co-generation of heat/cool and power from gaseous fuels are lower than 100 g CO2e per 1 kWh of energy output of the co-generation.

Life-cycle GHG emissions are calculated based on project-specific data, where available, using Recommendation 2013/179/EU or, alternatively, using ISO 14067:2018 or ISO 14064-1:2018.

Quantified life-cycle GHG emissions are verified by an independent third party.

Where facilities incorporate any form of abatement, including carbon capture or use of renewable or low-carbon gases, that abatement activity complies with the relevant Sections of this Annex, where applicable. Where the CO2 emitted from the electricity generation is captured, the CO2 shall meet the emissions limit set out in point 1 of this Section and, the CO2 be transported and stored underground in a way that meets the technical screening criteria for transport of CO2 and storage of CO2 set out in Sections 5.11 and 5.12, respectively of this Annex.

(b)

facilities for which the construction permit is granted by 31 December 2030 comply with all of the following:

(i)	the activity achieves primary energy savings of at least 10 % compared with the references to separate production of heat and electricity; the primary energy savings are calculated on the basis of formula provided in Directive 2012/27/EU;

(ii)	direct GHG emissions of the activity are lower than 270 g CO2e/kWh of the output energy;

(iii)

the power and/or heat/cool to be replaced cannot be generated from renewable energy sources, based on a comparative assessment with the most cost-effective and technically feasible renewable alternative for the same capacity identified; the result of this comparative assessment is published and is subject to a stakeholder consultation;

(iv)	the activity replaces an existing high emitting combined heat/cool and power generation activity, a separate heat/cool generation activity, or a separate power generation activity that uses solid or liquid fossil fuels;

(v)	the newly installed production capacity does not exceed the capacity of the replaced facility;

(vi)	the facility is designed and constructed to use renewable and/or low-carbon gaseous fuels and the switch to full use of renewable and/or low-carbon gaseous fuels takes place by 31 December 2035, with a commitment and verifiable plan approved by the management body of the undertaking;

(vii)

the replacement leads to a reduction in emissions of at least 55 % GHG per kWh of output energy;

(viii)

the refurbishment of the facility does not increase production capacity of the facility;

(ix)

Compliance with the criteria referred to in point 1(b) is verified by an independent third party. The independent third party verifier has the necessary resources and expertise to perform such verification. The independent third party verifier does not have any conflict of interest with the owner or the funder, and is not involved in the development or operation of the activity. The independent third party verifier carries out diligently the verification of compliance with the technical screening criteria. In particular, every year the independent third party publishes and transmits to the Commission a report:

(a)	certifying the level of direct GHG emissions referred to in point 1(b)(ii);

(b)	assessing whether the activity is on a credible trajectory to comply with point 1(b)(vi).

On the basis of the reports transmitted to it, the Commission may address an opinion to the operators concerned. The Commission shall take those reports into account when performing the review referred to in Article 19(5) of Regulation (EU) 2020/852.

The activity meets either of the following criteria:

(a)	at construction, measurement equipment for monitoring of physical emissions, including those from methane leakage, is installed or a leak detection and repair program is introduced;

(b)	at operation, physical measurement of emissions are reported and any leak is eliminated.

Do no significant harm (‘DNSH’)

(2)	Climate change adaptation

The activity complies with the criteria set out in Appendix A to this Annex.

(3)	Sustainable use and protection of water and marine resources

The activity complies with the criteria set out in Appendix B to this Annex.

(4)	Transition to a circular economy

N/A

(5)	Pollution prevention and control

The activity complies with the criteria set out in Appendix C to this Annex.

No significant cross-media effects occur.

(6)	Protection and restoration of biodiversity and ecosystems

The activity complies with the criteria set out in Appendix D to this Annex.

4.31. Production of heat/cool from fossil gaseous fuels in an efficient district heating and cooling system

Description of the activity

Construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels connected to efficient district heating and cooling within the meaning of Article 2, point (41) of Directive 2012/27/EU. This activity does not include production of heat/cool in an efficient district heating from the exclusive use of renewable non-fossil gaseous and liquid fuels referred to in Section 4.23 of this Annex and biogas and bio-liquid fuels referred to in Section 4.24 of this Annex.

The activity is classified under NACE code D35.30 in accordance with the statistical classification of economic activities established by Regulation (EC) No 1893/2006.

Technical screening criteria

Substantial contribution to climate change mitigation

The activity meets either of the following criteria:

(a)

Life-cycle GHG emissions from the generation of heat/cool from gaseous fuels are lower than 100 g CO2e/kWh. Life-cycle GHG emission savings are calculated using Recommendation 2013/179/EU or, alternatively, using ISO 14067:2018 or ISO 14064-1:2018.

Quantified life-cycle GHG emissions are verified by an independent third party.

Where facilities incorporate any form of abatement, including carbon capture or use of renewable or low-carbon gases, that abatement activity complies with the relevant Sections of this Annex, where applicable. Where the CO2 emitted from the electricity generation is captured, the CO2 shall meet the emissions limit set out in point 1 of this Section and shall be transported and stored underground in a way that meets the technical screening criteria for transport of CO2 and storage of CO2 set out in Sections 5.11 and 5.12, respectively of this Annex.

(b)

facilities for which the construction permit is granted by 31 December 2030 comply with all of the following:

(i)	the thermal energy generated by the activity is used in an efficient district heating and cooling system as defined in Directive 2012/27/EU;

(ii)	the direct GHG emissions of the activity are lower than 270 g CO2e/kWh of the output energy;

(iii)

the heat/cool to be replaced cannot be generated from renewable energy sources, based on a comparative assessment with the most cost-effective and technically feasible renewable alternative for the same capacity identified; the result of this comparative assessment is published and is subject to a stakeholder consultation;

(iv)	the activity replaces an existing high emitting heating/cooling activity using solid or liquid fossil fuel;

(v)	the newly installed production capacity does not exceed the capacity of the replaced facility;

(vi)	the facility is designed and constructed to use renewable and/or low-carbon gaseous fuels and the switch to full use of renewable and/or low-carbon gaseous fuels takes place by 31 December 2035, with a commitment and verifiable plan approved by the management body of the undertaking;

(vii)

the replacement leads to a reduction in emissions of at least 55 % GHG per kWh of output energy;

(viii)

the refurbishment of the facility does not increase production capacity of the facility;

(ix)

Compliance with the criteria referred to in point 1(b) is verified by an independent third party. The independent third-party verifier has the necessary resources and expertise to perform such verification. The independent third party verifier does not have any conflict of interest with the owner or the funder, and is not be involved in the development or operation of the activity. The independent third party verifier carries out diligently the verification of compliance with the technical screening criteria. In particular, every year the independent third party publishes and transmits to the Commission a report:

(a)	certifying the level of direct GHG emissions referred to in point 1(b)(ii);

(b)	assessing whether the activity is on a credible trajectory to comply with point 1(b)(vi).

The activity meets either of the following criteria:

(a)	at construction, measurement equipment for monitoring of physical emissions, such as those from methane leakage, is installed or a leak detection and repair program is introduced;

(b)	at operation, physical measurement of emissions are reported and any leak is eliminated.

Do no significant harm (‘DNSH’)

(2)	Climate change adaptation

The activity complies with the criteria set out in Appendix A to this Annex.

(3)	Sustainable use and protection of water and marine resources

The activity complies with the criteria set out in Appendix B to this Annex.

(4)	Transition to a circular economy

N/A

(5)	Pollution prevention and control

The activity complies with the criteria set out in Appendix C to this Annex.

No significant cross-media effects occur.

(6)	Protection and restoration of biodiversity and ecosystems

The activity complies with the criteria set out in Appendix D to this Annex.

(*1) Council Directive 2009/71/Euratom of 25 June 2009 establishing a Community framework for the nuclear safety of nuclear installations (OJ L 172, 2.7.2009, p. 18).

(*2) Council Directive 2011/70/Euratom of 19 July 2011 establishing a Community framework for the responsible and safe management of spent fuel and radioactive waste (OJ L 199, 2.8.2011, p. 48).

(*3) Council Directive 2013/59/Euratom of 5 December 2013 laying down basic safety standards for protection against the dangers arising from exposure to ionising radiation, and repealing Directives 89/618/Euratom, 90/641/Euratom, 96/29/Euratom, 97/43/Euratom and 2003/122/Euratom (OJ L 13, 17.1.2014, p. 1).

(*4) Directive 2011/92/EU of the European Parliament and of the Council of 13 December 2011 on the assessment of the effects of certain public and private projects on the environment (OJ L 26, 28.1.2012, p. 1).

(*5) Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy (OJ L 327, 22.12.2000, p. 1).

(*6) Commission Recommendation 2006/851/Euratom of 24 October 2006 on the management of financial resources for the decommissioning of nuclear installations, spent fuel and radioactive waste (OJ L 330, 28.11.2006, p. 31).

(*7) Council Directive 2013/51/Euratom of 22 October 2013 laying down requirements for the protection of the health of the general public with regard to radioactive substances in water intended for human consumption (OJ L 296, 7.11.2013, p. 12).

(*8) Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action, amending Regulations (EC) No 663/2009 and (EC) No 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC, 2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No 525/2013 of the European Parliament and of the Council (OJ L 328, 21.12.2018, p. 1)’.

ANNEX II

In Annex II to Delegated Regulation (EU) 2021/2139, the following Sections 4.26, 4.27, 4.28, 4.29, 4.30, and 4.31 are inserted:

“4.26. Pre-commercial stages of advanced technologies to produce energy from nuclear processes with minimal waste from the fuel cycle

Description of the activity

The activity is classified under NACE code M72 and M72.1 in accordance with the statistical classification of economic activities established by Regulation (EC) No 1893/2006.

Technical screening criteria

Substantial contribution to climate change adaptation

1.	The economic activity has implemented physical and non-physical solutions (‘adaptation solutions’) that substantially reduce the most important physical climate risks that are material to that activity.

The physical climate risks that are material to the activity have been identified from those listed in Appendix A to this Annex by performing a robust climate risk and vulnerability assessment with the following steps:

(a)	screening of the activity to identify which physical climate risks from the list in Appendix A to this Annex may affect the performance of the economic activity during its expected lifetime;

(b)	where the activity is assessed to be at risk from one or more of the physical climate risks listed in Appendix A to this Annex, a climate risk and vulnerability assessment to assess the materiality of the physical climate risks on the economic activity;

(c)	an assessment of adaptation solutions that can reduce the identified physical climate risk.

The climate risk and vulnerability assessment is proportionate to the scale of the activity and its expected lifespan, such that:

(a)	for activities with an expected lifespan of less than 10 years, the assessment is performed, at least by using climate projections at the smallest appropriate scale;

(b)

for all other activities, the assessment is performed using the highest available resolution, state-of-the-art climate projections across the existing range of future scenarios (1) consistent with the expected lifetime of the activity, including, at least, 10 to 30 year climate projections scenarios for major investments.

The climate projections and assessment of impacts are based on best practice and available guidance and take into account the state-of-the-art science for vulnerability and risk analysis and related methodologies in line with the most recent Intergovernmental Panel on Climate Change reports (2), scientific peer-reviewed publications and open source (3) or paying models.

The adaptation solutions implemented:

(a)	do not adversely affect the adaptation efforts or the level of resilience to physical climate risks of other people, of nature, of cultural heritage, of assets and of other economic activities;

(b)	favour nature-based solutions (4) or rely on blue or green infrastructure (5) to the extent possible;

(c)	are consistent with local, sectoral, regional or national adaptation plans and strategies;

(d)	are monitored and measured against pre-defined indicators and remedial action is considered where those indicators are not met;

(e)	where the solution implemented is physical and consists in an activity for which technical screening criteria have been specified in this Annex, the solution complies with the do no significant harm technical screening criteria for that activity.

The activity complies with the provisions laid down in the Euratom Treaty and the legislation adopted on its basis, in particular, Directive 2013/59/Euratom, Directive 2009/71/Euratom, and Directive 2011/70/Euratom as well as applicable Union environmental law adopted under Article 192 TFEU, in particular Directive 2011/92/EU and Directive 2000/60/EC.

The activity complies with national legislation that transposes Directive 2009/71/Euratom, including as regards the evaluation, through stress-tests, of the resilience of the Union nuclear power plants against extreme natural hazards, including earthquakes. Accordingly, the activity takes place on the territory of a Member State where the operator of a nuclear installation:

(a)	has submitted a demonstration of nuclear safety, whose scope and level of detail is commensurate with the potential magnitude and nature of the hazard relevant for the nuclear installation and its site (Article 6, point (b), of Directive 2009/71/Euratom);

(b)	has taken defence-in-depth measures to ensure, inter alia, that the impact of extreme external natural and unintended man-made hazards is minimised (Article 8b(1), point (a), of Directive 2009/71/Euratom);

(c)	has performed an appropriate site and installation-specific assessment when the operator concerned applies for a licence to construct or operate a nuclear power plant (Article 8c(a) of Directive 2009/71/Euratom).

The activity fulfils the requirements of Directive 2009/71/Euratom, supported by the latest international guidance through the IAEA and WENRA, contributing to increasing the resilience and the ability of new and existing nuclear power plants to cope with extreme natural hazards, including floods and extreme weather conditions.

Do no significant harm (‘DNSH’)

(1)	Climate change mitigation

The direct GHG emissions of the activity are lower than 270 g CO2e/kWh.

(3)	Sustainable use and protection of water and marine resources

The activity complies with the criteria set out in Appendix B to this Annex.

(a)	the maximum temperature of the recipient freshwater body after mixing, and

(b)	the maximum temperature difference between the discharged cooling water and the recipient freshwater body.

The temperature control is implemented in accordance with the individual licence conditions for the specific operations, where applicable, or threshold values in line with the EU regulatory framework.

The activity complies with the Industry Foundation Classes (IFC) standards.

(4)	Transition to a circular economy

The relevant elements in this Section are covered by Member States’ reports to the Commission in accordance with Article 14(1) of Directive 2011/70/Euratom.

(5)	Pollution prevention and control

The activity complies with the criteria set out in Appendix C to this Annex. Non-radioactive emissions are within or lower than the emission levels associated with the best available techniques (BAT-AEL) ranges set out in the best available techniques (BAT) conclusions for large combustion plants. No significant cross-media effects occur.

Radioactive discharges to air, water bodies and ground (soil) comply with individual licence conditions for the specific operations, where applicable, and/or national threshold values in line with Directive 2013/51/Euratom and Directive 2013/59/Euratom.

Spent fuel and radioactive waste is safely and responsibly managed in accordance with Directive 2011/70/Euratom and Directive 2013/59/Euratom.

(6)	Protection and restoration of biodiversity and ecosystems

The activity complies with the criteria set out in Appendix D to this Annex.

The sites/operations shall not be detrimental to the conservation status of any of the habitats or species present in protected areas.

4.27. Construction and safe operation of new nuclear power plants, for the generation of electricity and/or heat, including for hydrogen production, using best-available technologies

Description of the activity

Construction and safe operation of new nuclear installations, for which the construction permit has been issued by 2045 by Member States’ competent authorities in accordance with applicable national law, to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production (new nuclear installations), as well as their safety upgrades.

The activity is classified under NACE codes D35.11 and F42.22 in accordance with the statistical classification of economic activities established by Regulation (EC) No 1893/2006.

Technical screening criteria

Substantial contribution to climate change adaptation

1.	The economic activity has implemented physical and non-physical solutions (‘adaptation solutions’) that substantially reduce the most important physical climate risks that are material to that activity.

(a)	screening of the activity to identify which physical climate risks from the list in Appendix A to this Annex may affect the performance of the economic activity during its expected lifetime;

(b)	where the activity is assessed to be at risk from one or more of the physical climate risks listed in Appendix A to this Annex, a climate risk and vulnerability assessment to assess the materiality of the physical climate risks on the economic activity;

(c)	an assessment of adaptation solutions that can reduce the identified physical climate risk.

The climate risk and vulnerability assessment is proportionate to the scale of the activity and its expected lifespan, such that:

(a)	for activities with an expected lifespan of less than 10 years, the assessment is performed, at least by using climate projections at the smallest appropriate scale;

(b)

for all other activities, the assessment is performed using the highest available resolution, state-of-the-art climate projections across the existing range of future scenarios (6) consistent with the expected lifetime of the activity, including, at least, 10 to 30 year climate projections scenarios for major investments.

The climate projections and assessment of impacts are based on best practice and available guidance and take into account the state-of-the-art science for vulnerability and risk analysis and related methodologies in line with the most recent Intergovernmental Panel on Climate Change reports (7), scientific peer-reviewed publications and open source (8) or paying models.

The adaptation solutions implemented:

(a)	do not adversely affect the adaptation efforts or the level of resilience to physical climate risks of other people, of nature, of cultural heritage, of assets and of other economic activities;

(b)	favour nature-based solutions (9) or rely on blue or green infrastructure (10) to the extent possible;

(c)	are consistent with local, sectoral, regional or national adaptation plans and strategies;

(d)	are monitored and measured against pre-defined indicators and remedial action is considered where those indicators are not met;

(e)	where the solution implemented is physical and consists in an activity for which technical screening criteria have been specified in this Annex, the solution complies with the do no significant harm technical screening criteria for that activity.

(a)	has submitted a demonstration of nuclear safety, whose scope and level of detail is commensurate with the potential magnitude and nature of the hazard relevant for the nuclear installation and its site (Article 6, point (b), of Directive 2009/71/Euratom);

(b)	has taken defence-in-depth measures to ensure, inter alia, that the impact of extreme external natural and unintended man-made hazards is minimised (Article 8b(1), point (a), of Directive 2009/71/Euratom);

(c)	has performed an appropriate site and installation-specific assessment when the operator concerned applies for a licence to construct or operate a nuclear power plant (Article 8c(a) of Directive 2009/71/Euratom).

Do no significant harm (‘DNSH’)

(1)	Climate change mitigation

The direct GHG emissions of the activity are lower than 270 g CO2e/kWh.

(3)	Sustainable use and protection of water and marine resources

The activity complies with the criteria set out in Appendix B to this Annex.

(a)	the maximum temperature of the recipient freshwater body after mixing, and

(b)	the maximum temperature difference between the discharged cooling water and the recipient freshwater body.

The temperature control is implemented in accordance with the individual licence conditions for the specific operations, where applicable, and/or threshold values in line with the EU regulatory framework.

The activity complies with the Industry Foundation Classes (IFC) standards.

(4)	Transition to a circular economy

The relevant elements in this Section are covered by Member States’ reports to the Commission in accordance with Article 14(1) of Directive 2011/70/Euratom.

(5)	Pollution prevention and control

Spent fuel and radioactive waste is safely and responsibly managed in accordance with Directive 2011/70/Euratom and Directive 2013/59/Euratom.

(6)	Protection and restoration of biodiversity and ecosystems

The activity complies with the criteria set out in Appendix D to this Annex.

The sites/operations shall not be detrimental to the conservation status of any of the habitats or species present in protected areas.

4.28. Electricity generation from nuclear energy in existing installations

Description of the activity

The activity is classified under NACE codes D35.11 and F42.2 in accordance with the statistical classification of economic activities established by Regulation (EC) No 1893/2006.

Technical screening criteria

Substantial contribution to climate change adaptation

1.	The economic activity has implemented physical and non-physical solutions (‘adaptation solutions’) that substantially reduce the most important physical climate risks that are material to that activity.

(a)	screening of the activity to identify which physical climate risks from the list in Appendix A to this Annex may affect the performance of the economic activity during its expected lifetime;

(b)	where the activity is assessed to be at risk from one or more of the physical climate risks listed in Appendix A to this Annex, a climate risk and vulnerability assessment to assess the materiality of the physical climate risks on the economic activity;

(c)	an assessment of adaptation solutions that can reduce the identified physical climate risk.

The climate risk and vulnerability assessment is proportionate to the scale of the activity and its expected lifespan, such that:

(a)	for activities with an expected lifespan of less than 10 years, the assessment is performed, at least by using climate projections at the smallest appropriate scale;

(b)

for all other activities, the assessment is performed using the highest available resolution, state-of-the-art climate projections across the existing range of future scenarios (11) consistent with the expected lifetime of the activity, including, at least, 10 to 30 year climate projections scenarios for major investments.

The climate projections and assessment of impacts are based on best practice and available guidance and take into account the state-of-the-art science for vulnerability and risk analysis and related methodologies in line with the most recent Intergovernmental Panel on Climate Change reports (12), scientific peer-reviewed publications and open source (13) or paying models.

The adaptation solutions implemented:

(a)	do not adversely affect the adaptation efforts or the level of resilience to physical climate risks of other people, of nature, of cultural heritage, of assets and of other economic activities;

(b)	favour nature-based solutions (14) or rely on blue or green infrastructure (15) to the extent possible;

(c)	are consistent with local, sectoral, regional or national adaptation plans and strategies;

(d)	are monitored and measured against pre-defined indicators and remedial action is considered where those indicators are not met;

(e)	where the solution implemented is physical and consists in an activity for which technical screening criteria have been specified in this Annex, the solution complies with the do no significant harm technical screening criteria for that activity.

(a)	has submitted a demonstration of nuclear safety, whose scope and level of detail is commensurate with the potential magnitude and nature of the hazard relevant for the nuclear installation and its site (Article 6, point (b), of Directive 2009/71/Euratom);

(b)	has taken defence-in-depth measures to ensure, inter alia, that the impact of extreme external natural and unintended man-made hazards is minimised (Article 8b(1), point (a), of Directive 2009/71/Euratom);

(c)	has performed an appropriate site and installation-specific assessment when the operator concerned applies for a licence to construct or operate a nuclear power plant (Article 8c(a) of Directive 2009/71/Euratom).

Do no significant harm (‘DNSH’)

(1)	Climate change mitigation

The direct GHG emissions of the activity are lower than 270 g CO2e/kWh.

(3)	Sustainable use and protection of water and marine resources

The activity complies with the criteria set out in Appendix B to this Annex.

(a)	the maximum temperature of the recipient freshwater body after mixing, and

(b)	the maximum temperature difference between the discharged cooling water and the recipient freshwater body.

The temperature control is implemented in accordance with the individual licence conditions for the specific operations, where applicable, or threshold values in line with the Union law.

The activity complies with the Industry Foundation Classes (IFC) standards.

(4)	Transition to a circular economy

The relevant elements in this Section are covered by Member States’ reports to the Commission in accordance with Article 14(1) of Directive 2011/70/Euratom.

(5)	Pollution prevention and control

Spent fuel and radioactive waste is safely and responsibly managed in accordance with Directive 2011/70/Euratom and Directive 2013/59/Euratom.

An adequate capacity of interim storage is available for the project, while national plans for disposal are in place to minimize the duration of interim storage, in compliance with the provision of Directive 2011/70/Euratom that considers radioactive waste storage, including long-term storage, as an interim solution, but not an alternative to disposal.

(6)	Protection and restoration of biodiversity and ecosystems

The activity complies with the criteria set out in Appendix D to this Annex.

The sites/operations shall not be detrimental to the conservation status of any of the habitats or species present in protected areas.

4.29. Electricity generation from fossil gaseous fuels

Description of the activity

Construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels that meet the criteria in point 1(a) of Section 4.29 of Annex I. This activity does not include electricity generation from the exclusive use of renewable non-fossil gaseous and liquid fuels referred to in Section 4.7 of Annex I and biogas and bio-liquid fuels referred to in Section 4.8 of Annex I.

Technical screening criteria

Substantial contribution to climate change adaptation

1.	The economic activity has implemented physical and non-physical solutions (‘adaptation solutions’) that substantially reduce the most important physical climate risks that are material to that activity.

(a)	screening of the activity to identify which physical climate risks from the list in Appendix A to this Annex may affect the performance of the economic activity during its expected lifetime;

(b)	where the activity is assessed to be at risk from one or more of the physical climate risks listed in Appendix A to this Annex, a climate risk and vulnerability assessment to assess the materiality of the physical climate risks on the economic activity;

(c)	an assessment of adaptation solutions that can reduce the identified physical climate risk.

The climate risk and vulnerability assessment is proportionate to the scale of the activity and its expected lifespan, such that:

(a)	for activities with an expected lifespan of less than 10 years, the assessment is performed, at least by using climate projections at the smallest appropriate scale;

(b)

for all other activities, the assessment is performed using the highest available resolution, state-of-the-art climate projections across the existing range of future scenarios (16) consistent with the expected lifetime of the activity, including, at least, 10 to 30 year climate projections scenarios for major investments.

The climate projections and assessment of impacts are based on best practice and available guidance and take into account the state-of-the-art science for vulnerability and risk analysis and related methodologies in line with the most recent Intergovernmental Panel on Climate Change reports (17), scientific peer-reviewed publications and open source (18) or paying models.

The adaptation solutions implemented:

(a)	do not adversely affect the adaptation efforts or the level of resilience to physical climate risks of other people, of nature, of cultural heritage, of assets and of other economic activities;

(b)	favour nature-based solutions (19) or rely on blue or green infrastructure (20) to the extent possible;

(c)	are consistent with local, sectoral, regional or national adaptation plans and strategies;

(d)	are monitored and measured against pre-defined indicators and remedial action is considered where those indicators are not met;

(e)	where the solution implemented is physical and consists in an activity for which technical screening criteria have been specified in this Annex, the solution complies with the do no significant harm technical screening criteria for that activity.

Do no significant harm (‘DNSH’)

(1)	Climate change mitigation

The direct GHG emissions of the activity are lower than 270 g CO2e/kWh.

(3)	Sustainable use and protection of water and marine resources

The activity complies with the criteria set out in Appendix B to this Annex.

(4)	Transition to a circular economy

N/A

(5)	Pollution prevention and control

The activity complies with the criteria set out in Appendix C to this Annex.

No significant cross-media effects occur.

(6)	Protection and restoration of biodiversity and ecosystems

The activity complies with the criteria set out in Appendix D to this Annex.

4.30. High-efficiency co- generation of heat/cool and power from fossil gaseous fuels

Description of the activity

Construction, refurbishment and operation of combined heat/cool and power generation facilities using fossil gaseous fuels that meet the criteria in point 1(a) of Section 4.30 of Annex I. This activity does not include high-efficiency co-generation of heat/cool and power from the exclusive use of renewable non-fossil gaseous and liquid fuels referred to in Section 4.19 of Annex I and biogas and bio-liquid fuels referred to in Section 4.20 of Annex I.

Technical screening criteria

Substantial contribution to climate change adaptation

1.	The economic activity has implemented physical and non-physical solutions (‘adaptation solutions’) that substantially reduce the most important physical climate risks that are material to that activity.

(a)	screening of the activity to identify which physical climate risks from the list in Appendix A to this Annex may affect the performance of the economic activity during its expected lifetime;

(b)	where the activity is assessed to be at risk from one or more of the physical climate risks listed in Appendix A to this Annex, a climate risk and vulnerability assessment to assess the materiality of the physical climate risks on the economic activity;

(c)	an assessment of adaptation solutions that can reduce the identified physical climate risk.

The climate risk and vulnerability assessment is proportionate to the scale of the activity and its expected lifespan, such that:

(a)	for activities with an expected lifespan of less than 10 years, the assessment is performed, at least by using climate projections at the smallest appropriate scale;

(b)

for all other activities, the assessment is performed using the highest available resolution, state-of-the-art climate projections across the existing range of future scenarios (21) consistent with the expected lifetime of the activity, including, at least, 10 to 30 year climate projections scenarios for major investments.

The climate projections and assessment of impacts are based on best practice and available guidance and take into account the state-of-the-art science for vulnerability and risk analysis and related methodologies in line with the most recent Intergovernmental Panel on Climate Change reports (22), scientific peer-reviewed publications and open source (23) or paying models.

The adaptation solutions implemented:

(a)	do not adversely affect the adaptation efforts or the level of resilience to physical climate risks of other people, of nature, of cultural heritage, of assets and of other economic activities;

(b)	favour nature-based solutions (24) or rely on blue or green infrastructure (25) to the extent possible;

(c)	are consistent with local, sectoral, regional or national adaptation plans and strategies;

(d)	are monitored and measured against pre-defined indicators and remedial action is considered where those indicators are not met;

(e)	where the solution implemented is physical and consists in an activity for which technical screening criteria have been specified in this Annex, the solution complies with the do no significant harm technical screening criteria for that activity.

Do no significant harm (‘DNSH’)

(1)	Climate change mitigation

The direct GHG emissions of the activity are lower than 270 g CO2e/kWh.

(3)	Sustainable use and protection of water and marine resources

The activity complies with the criteria set out in Appendix B to this Annex.

(4)	Transition to a circular economy

N/A

(5)	Pollution prevention and control

The activity complies with the criteria set out in Appendix C to this Annex.

No significant cross-media effects occur.

(6)	Protection and restoration of biodiversity and ecosystems

The activity complies with the criteria set out in Appendix D to this Annex.

4.31. Production of heat/cool from fossil gaseous fuels in an efficient district heating and cooling system

Description of the activity

Construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels connected to efficient district heating and cooling within the meaning of Article 2(41) of Directive 2012/27/EUthat meet the criteria in point 1(a) of Section 4.31 of Annex I. This activity does not include production of heat/cool from in an efficient district heating from the exclusive use of renewable non-fossil gaseous and liquid fuels referred to in Section 4.23 of Annex I and biogas and bio-liquid fuels referred to in Section 4.24 of Annex I.

The activity is classified under NACE code D35.30 in accordance with the statistical classification of economic activities established by Regulation (EC) No 1893/2006.

Technical screening criteria

Substantial contribution to climate change adaptation

1.	The economic activity has implemented physical and non-physical solutions (‘adaptation solutions’) that substantially reduce the most important physical climate risks that are material to that activity.

(a)	screening of the activity to identify which physical climate risks from the list in Appendix A to this Annex may affect the performance of the economic activity during its expected lifetime;

(b)	where the activity is assessed to be at risk from one or more of the physical climate risks listed in Appendix A to this Annex, a climate risk and vulnerability assessment to assess the materiality of the physical climate risks on the economic activity;

(c)	an assessment of adaptation solutions that can reduce the identified physical climate risk.

The climate risk and vulnerability assessment is proportionate to the scale of the activity and its expected lifespan, such that:

(a)	for activities with an expected lifespan of less than 10 years, the assessment is performed, at least by using climate projections at the smallest appropriate scale;

(b)

for all other activities, the assessment is performed using the highest available resolution, state-of-the-art climate projections across the existing range of future scenarios (26) consistent with the expected lifetime of the activity, including, at least, 10 to 30 year climate projections scenarios for major investments.

The climate projections and assessment of impacts are based on best practice and available guidance and take into account the state-of-the-art science for vulnerability and risk analysis and related methodologies in line with the most recent Intergovernmental Panel on Climate Change reports (27), scientific peer-reviewed publications and open source (28) or paying models.

The adaptation solutions implemented:

(a)	do not adversely affect the adaptation efforts or the level of resilience to physical climate risks of other people, of nature, of cultural heritage, of assets and of other economic activities;

(b)	favour nature-based solutions (29) or rely on blue or green infrastructure (30) to the extent possible;

(c)	are consistent with local, sectoral, regional or national adaptation plans and strategies;

(d)	are monitored and measured against pre-defined indicators and remedial action is considered where those indicators are not met;

(e)	where the solution implemented is physical and consists in an activity for which technical screening criteria have been specified in this Annex, the solution complies with the do no significant harm technical screening criteria for that activity.

Do no significant harm (‘DNSH’)

(1)	Climate change mitigation

The direct GHG emissions of the activity are lower than 270 g CO2e/kWh.

(3)	Sustainable use and protection of water and marine resources

The activity complies with the criteria set out in Appendix B to this Annex.

(4)	Transition to a circular economy

N/A

(5)	Pollution prevention and control

The activity complies with the criteria set out in Appendix C to this Annex.

No significant cross-media effects occur.

(6)	Protection and restoration of biodiversity and ecosystems

The activity complies with the criteria set out in Appendix D to this Annex.”

(1) Future scenarios include Intergovernmental Panel on Climate Change representative concentration pathways RCP2.6, RCP4.5, RCP6.0 and RCP8.5.

(2) Assessments Reports on Climate Change: Impacts, Adaptation and Vulnerability, published periodically by the Intergovernmental Panel on Climate Change (IPCC), the United Nations body for assessing the science related to climate change produces, https://www.ipcc.ch/reports/.

(3) Such as Copernicus services managed by the European Commission.

(4) Nature-based solutions are defined as ‘solutions that are inspired and supported by nature, which are cost-effective, simultaneously provide environmental, social and economic benefits and help build resilience. Such solutions bring more, and more diverse, nature and natural features and processes into cities, landscapes and seascapes, through locally adapted, resource-efficient and systemic interventions’. Therefore, nature-based solutions benefit biodiversity and support the delivery of a range of ecosystem services (version of [adoption date]: https://ec.europa.eu/info/research-and-innovation/research-area/environment/nature-based-solutions_en/).

(5) See Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Green Infrastructure (GI) – Enhancing Europe’s Natural Capital, COM/2013/249 final.

(6) Future scenarios include Intergovernmental Panel on Climate Change representative concentration pathways RCP2.6, RCP4.5, RCP6.0 and RCP8.5.

(7) Assessments Reports on Climate Change: Impacts, Adaptation and Vulnerability, published periodically by the Intergovernmental Panel on Climate Change (IPCC), the United Nations body for assessing the science related to climate change produces, https://www.ipcc.ch/reports/.

(8) Such as Copernicus services managed by the European Commission.

(9) Nature-based solutions are defined as ‘solutions that are inspired and supported by nature, which are cost-effective, simultaneously provide environmental, social and economic benefits and help build resilience. Such solutions bring more, and more diverse, nature and natural features and processes into cities, landscapes and seascapes, through locally adapted, resource-efficient and systemic interventions’. Therefore, nature-based solutions benefit biodiversity and support the delivery of a range of ecosystem services (version of [adoption date]: https://ec.europa.eu/info/research-and-innovation/research-area/environment/nature-based-solutions_en/).

(10) See Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Green Infrastructure (GI) – Enhancing Europe’s Natural Capital, COM/2013/249 final.

(11) Future scenarios include Intergovernmental Panel on Climate Change representative concentration pathways RCP2.6, RCP4.5, RCP6.0 and RCP8.5.

(12) Assessments Reports on Climate Change: Impacts, Adaptation and Vulnerability, published periodically by the Intergovernmental Panel on Climate Change (IPCC), the United Nations body for assessing the science related to climate change produces, https://www.ipcc.ch/reports/.

(13) Such as Copernicus services managed by the European Commission.

(14) Nature-based solutions are defined as ‘solutions that are inspired and supported by nature, which are cost-effective, simultaneously provide environmental, social and economic benefits and help build resilience. Such solutions bring more, and more diverse, nature and natural features and processes into cities, landscapes and seascapes, through locally adapted, resource-efficient and systemic interventions’. Therefore, nature-based solutions benefit biodiversity and support the delivery of a range of ecosystem services (version of [adoption date]: https://ec.europa.eu/info/research-and-innovation/research-area/environment/nature-based-solutions_en/).

(15) See Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Green Infrastructure (GI) – Enhancing Europe’s Natural Capital, COM/2013/249 final.

(16) Future scenarios include Intergovernmental Panel on Climate Change representative concentration pathways RCP2.6, RCP4.5, RCP6.0 and RCP8.5.

(17) Assessments Reports on Climate Change: Impacts, Adaptation and Vulnerability, published periodically by the Intergovernmental Panel on Climate Change (IPCC), the United Nations body for assessing the science related to climate change produces, https://www.ipcc.ch/reports/.

(18) Such as Copernicus services managed by the European Commission.

(19) Nature-based solutions are defined as ‘solutions that are inspired and supported by nature, which are cost-effective, simultaneously provide environmental, social and economic benefits and help build resilience. Such solutions bring more, and more diverse, nature and natural features and processes into cities, landscapes and seascapes, through locally adapted, resource-efficient and systemic interventions’. Therefore, nature-based solutions benefit biodiversity and support the delivery of a range of ecosystem services (version of [adoption date]: https://ec.europa.eu/info/research-and-innovation/research-area/environment/nature-based-solutions_en/).

(20) See Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Green Infrastructure (GI) – Enhancing Europe’s Natural Capital, COM/2013/249 final.

(21) Future scenarios include Intergovernmental Panel on Climate Change representative concentration pathways RCP2.6, RCP4.5, RCP6.0 and RCP8.5.

(22) Assessments Reports on Climate Change: Impacts, Adaptation and Vulnerability, published periodically by the Intergovernmental Panel on Climate Change (IPCC), the United Nations body for assessing the science related to climate change produces, https://www.ipcc.ch/reports/.

(23) Such as Copernicus services managed by the European Commission.

(24) Nature-based solutions are defined as ‘solutions that are inspired and supported by nature, which are cost-effective, simultaneously provide environmental, social and economic benefits and help build resilience. Such solutions bring more, and more diverse, nature and natural features and processes into cities, landscapes and seascapes, through locally adapted, resource-efficient and systemic interventions’. Therefore, nature-based solutions benefit biodiversity and support the delivery of a range of ecosystem services (version of [adoption date]: https://ec.europa.eu/info/research-and-innovation/research-area/environment/nature-based-solutions_en/).

(25) See Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Green Infrastructure (GI) – Enhancing Europe’s Natural Capital, COM/2013/249 final.

(26) Future scenarios include Intergovernmental Panel on Climate Change representative concentration pathways RCP2.6, RCP4.5, RCP6.0 and RCP8.5.

(27) Assessments Reports on Climate Change: Impacts, Adaptation and Vulnerability, published periodically by the Intergovernmental Panel on Climate Change (IPCC), the United Nations body for assessing the science related to climate change produces, https://www.ipcc.ch/reports/.

(28) Such as Copernicus services managed by the European Commission.

(29) Nature-based solutions are defined as ‘solutions that are inspired and supported by nature, which are cost-effective, simultaneously provide environmental, social and economic benefits and help build resilience. Such solutions bring more, and more diverse, nature and natural features and processes into cities, landscapes and seascapes, through locally adapted, resource-efficient and systemic interventions’. Therefore, nature-based solutions benefit biodiversity and support the delivery of a range of ecosystem services (version of [adoption date]: https://ec.europa.eu/info/research-and-innovation/research-area/environment/nature-based-solutions_en/).

(30) See Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Green Infrastructure (GI) – Enhancing Europe’s Natural Capital, COM/2013/249 final.

ANNEX III

‘ANNEX XII

Standard templates for the disclosure referred to in Article 8(6) and (7)

The information referred to in Article 8(6) and (7) shall be presented as follows, for each applicable key performance indicator (KPI).

Template 1 Nuclear and fossil gas related activities

Row	Nuclear energy related activities
1.	The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle.	YES/NO
2.	The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies.	YES/NO
3.	The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades.	YES/NO
	Fossil gas related activities
4.	The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.	YES/NO
5.	The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels.	YES/NO
6.	The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.	YES/NO

Template 2 Taxonomy-aligned economic activities (denominator)

Row	Economic activities	Amount and proportion (the information is to be presented in monetary amounts and as percentages)
		CCM + CCA		Climate change mitigation (CCM)		Climate change adaptation (CCA)
		Amount	%	Amount	%	Amount	%
1.	Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
2.	Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
3.	Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
4.	Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
5.	Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
6.	Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
7.	Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
8.	Total applicable KPI

Template 3 Taxonomy-aligned economic activities (numerator)

Row	Economic activities	Amount and proportion (the information is to be presented in monetary amounts and as percentages)
		(CCM+CCA)		Climate change mitigation		Climate change adaptation
		Amount	%	Amount	%	Amount	%
1.	Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the numerator of the applicable KPI
2.	Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the numerator of the applicable KPI
3.	Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the numerator of the applicable KPI
4.	Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the numerator of the applicable KPI
5.	Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the numerator of the applicable KPI
6.	Amount and proportion of taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the numerator of the applicable KPI
7.	Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the numerator of the applicable KPI
8.	Total amount and proportion of taxonomy-aligned economic activities in the numerator of the applicable KPI		100 %

Template 4 Taxonomy-eligible but not taxonomy-aligned economic activities

Row	Economic activities	Proportion (the information is to be presented in monetary amounts and as percentages)
		(CCM+CCA)		Climate change mitigation		Climate change adaptation
		Amount	%	Amount	%	Amount	%
1.	Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
2.	Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
3.	Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
4.	Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
5.	Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
6.	Amount and proportion of taxonomy-eligible but not taxonomy-aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
7.	Amount and proportion of other taxonomy-eligible but not taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
8.	Total amount and proportion of taxonomy eligible but not taxonomy-aligned economic activities in the denominator of the applicable KPI

Template 5 Taxonomy non-eligible economic activities

Row	Economic activities	Amount	Percentage
1.	Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
2.	Amount and proportion of economic activity referred to in row 2 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
3.	Amount and proportion of economic activity referred to in row 3 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
4.	Amount and proportion of economic activity referred to in row 4 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
5.	Amount and proportion of economic activity referred to in row 5 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
6.	Amount and proportion of economic activity referred to in row 6 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI
7.	Amount and proportion of other taxonomy-non-eligible economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI
8.	Total amount and proportion of taxonomy-non-eligible economic activities in the denominator of the applicable KPI

’

15.7.2022

Official Journal of the European Union

L 188/49

COMMISSION IMPLEMENTING REGULATION (EU) 2022/1216

of 8 July 2022

derogating in respect of the year 2022 from Implementing Regulations (EU) No 809/2014, (EU) No 180/2014, (EU) No 181/2014, (EU) 2017/892, (EU) 2016/1150, (EU) 2018/274, (EU) No 615/2014 and (EU) 2015/1368 as regards certain administrative and on-the-spot checks applicable within the common agricultural policy and amending Implementing Regulation (EU) 2021/725

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) No 1306/2013 of the European Parliament and of the Council of 17 December 2013 on the financing, management and monitoring of the common agricultural policy and repealing Council Regulations (EEC) No 352/78, (EC) No 165/94, (EC) No 2799/98, (EC) No 814/2000, (EC) No 1290/2005 and (EC) No 485/2008 (1), and in particular Article 62(2) thereof,

Having regard to Regulation (EU) No 228/2013 of the European Parliament and of the Council of 13 March 2013 laying down specific measures for agriculture in the outermost regions of the Union and repealing Council Regulation (EC) No 247/2006 (2), and in particular Article 8 and Article 18(1), second subparagraph, thereof,

Having regard to Regulation (EU) No 229/2013 of the European Parliament and of the Council of 13 March 2013 laying down specific measures for agriculture in favour of the smaller Aegean islands and repealing Council Regulation (EC) No 1405/2006 (3), and in particular Article 7, Article 11(3) and Article 14(1), second subparagraph, thereof,

Whereas:

(1)

Due to the pandemic of COVID-19 and the measures put in place by the Member States to address it, administrative difficulties have been encountered in all Member States with the planning and execution of timely on-the-spot checks to the required number. Those difficulties risk delaying the performance of checks and the ensuing payment of aid. At the same time, farmers are vulnerable to the economic disruptions caused by the pandemic and experience financial difficulties and cash-flow problems.

(2)

In view of the unprecedented nature of those circumstances, the Commission adopted Commission Implementing Regulations (EU) 2020/532 (4) and (EU) 2021/725 (5) to alleviate those difficulties by derogating from different Implementing Regulations applicable in the area of the common agricultural policy as regards certain administrative and on-the-spot checks in terms of their timing and number. Considering the prolongation of the difficulties due to continuation of the pandemic of COVID-19 in 2022, it is appropriate to provide for similar measures also in year 2022.

(3)

Commission Implementing Regulation (EU) No 809/2014 (6) lays down rules on, inter alia, the timing of the on-the-spot checks and the control rates of certain on-the-spot checks within the integrated system, including for animal aid schemes. In addition, that Regulation contains rules on on-the-spot checks relating to the eligibility criteria, commitments and other obligations in respect of livestock aid applications and payment claims under animal-related support measures, control rates for non-area-related and non-animal-related rural development measures and minimum control rates relating to cross-compliance.

(4)

Articles 24(4), 48(5), 49(1), 52(1), 60(2) and 71(3) of Implementing Regulation (EU) No 809/2014 lay down certain rules that the competent authority is to observe to carry out administrative or on-the-spot checks. In view of the circumstances caused by the pandemic of COVID-19, it is appropriate to encourage the performance of these checks with remote sensing and the use of new technologies such as unmanned aircraft systems, geotagged photos, global navigation satellite system (GNSS) receivers combined with the European Geostationary Navigation Overlay Service (EGNOS) and Galileo, data captured by the Copernicus Sentinels satellites and other relevant documentary evidence to be used for checking compliance with eligibility criteria, commitments or other obligations for the aid scheme or support measure concerned, as well as compliance with the requirements and standards relevant for cross-compliance.

(5)

Articles 26(4) and 42(1) of Implementing Regulation (EU) No 809/2014 contain rules on on-the-spot checks to verify that all eligibility criteria, commitments and other obligations are fulfilled and cover all animals for which aid applications or payment claims have been submitted under the animal aid schemes or animal-related support measures to be checked. In view of the current situation, it is appropriate to provide that where Member States are not in a position to carry out those on-the-spot checks as required by those provisions and the alternative evidence is not available, Member States may decide to carry those checks in respect of claim year 2022 or calendar year 2022 at any time of the year, in so far that they still allow the checking of the eligibility conditions.

(6)

Several obligations pursuant to Regulation (EU) No 1306/2013 in relation to cross-compliance and Regulation (EU) No 1307/2013 of the European Parliament and of the Council (7) in relation to animal-related aid schemes and support measures rely on specific and differentiated time frames for their fulfilment and consequently require the on-the-spot checks to be carried out within those frameworks. The measures Member States put in place to address the pandemic of COVID-19 affect the feasibility of performing the required on-the-spot-checks accurately and within the time limit corresponding to those obligations. Some types of checks may also not be possible to be carried out with the use of new technologies, replacing the visits on the farm. It is therefore necessary, in relation to certain checks to be carried out in 2022, to derogate from Articles 30 to 33, 40a, 50, 52 and Article 68(1) of Implementing Regulation (EU) No 809/2014 and to reduce the minimum rate of the on-the-spot checks compared to the normal control rates for area and animal-related aid schemes and support measures, rural development measures other than those under the integrated administration and control system and cross-compliance obligations, respectively.

(7)

In order to maintain the preventive effect of checks, the obligation provided for under Article 35 and Articles 50(5) and 68(4) of Implementing Regulation (EU) No 809/2014 to increase the control rates due to significant non-compliances detected during the checks carried out the previous year needs to be maintained for claim year 2022. Significant non-compliances found during the on-the-spot checks in 2021 should require an increase in the level of the on-the-spot checks for year 2022. Therefore, Member States which, by application of Article 35 or Articles 50(5) or 68(4) of that Regulation, are under an obligation to increase the control rate in claim year 2022 and decide to apply the reduced control rates provided for in this Regulation, should apply those increases on top of the reduced control rates provided for in this Regulation.

(8)

Commission Implementing Regulations (EU) No 180/2014 (8) and (EU) No 181/2014 (9) provide for control rates for checks of specific measures for agriculture in the outermost regions of the Union and the smaller Aegean islands. Due to the measures put in place to address the pandemic of COVID-19 that affect as well the outermost regions of the Union and the smaller Aegean islands, it is appropriate to derogate from those Regulations by extending the possibility to use new technologies as alternative sources of evidence in relation to checks and adapting control rates of on-the-spot checks for the year 2022. Nevertheless, in order to maintain the preventive effect of checks under Implementing Regulations (EU) No 180/2014 and (EU) No 181/2014, the obligation to increase the control rate in accordance with Article 59(5) of Regulation (EU) No 1306/2013 should be maintained. Therefore, Member States which, by application of Article 59(5) of Regulation (EU) No 1306/2013, are under an obligation to increase the control rate in claim year 2022 and decide to the reduced control rates provided for in this Regulation, should apply those increases on top of those reduced control rates.

(9)

Article 24 of Commission Implementing Regulation (EU) 2017/892 (10) provides that Member States are to check, including on-the-spot, the recognition criteria of producer organisations or associations of producer organisations in the fruit and vegetables sector. Due to the measures put in place to address the pandemic of COVID-19, on-the-spot-checks regarding recognition criteria should not apply in the year 2022.

(10)

Article 27(2) of Implementing Regulation (EU) 2017/892 fixes the sample for annual on-the-spot checks at least 30 % of the total aid applied for. Due to the measures put in place to address the pandemic of COVID-19, Member States may not be able to meet these requirements and should therefore be allowed to carry out a lower percentage of those checks in the year 2022.

(11)

Article 27(7) of Implementing Regulation (EU) 2017/892 provides that actions implemented on individual holdings of members of producer organisations covered by the sample referred to in Article 27(2) of that Regulation are to be subject of at least one visit to verify their execution. Due to the measures put in place to address the pandemic of COVID-19, Member States may not be able to meet these requirements and should therefore not be subjected in the year 2022 to the requirements on frequency of visits on individual holdings of producer organisations.

(12)

Article 29(2) of Implementing Regulation (EU) 2017/892 provides that the first-level checks on withdrawal operations is to cover 100 % of the quantity of the products withdrawn from the market, with the exception of products intended for free distribution, for which pursuant to Article 29(3) of that Regulation Member States could check a smaller percentage, but not less than 10 % of the quantities concerned during the marketing year of any given producer organisation. Due to the measures put in place to address the pandemic of COVID-19, Member States may not be able to meet this requirement and should be allowed in the year 2022 to check a smaller percentage, but not less than 10 % of the quantities concerned during the marketing year of any given producer organisation also for all other withdrawn products, irrespective of their intended destination.

(13)

Article 30(3) of Implementing Regulation (EU) 2017/892 provides that each check is to include a sample representing at least 5 % of the quantities withdrawn by the producer organisation during the marketing year. Due to the measures put in place to address the pandemic of COVID-19, Member States may not be able to meet this requirement and should be allowed in the year 2022 to use samples representing at least 3 % of the quantities withdrawn by the producer organisation during the marketing year 2020.

(14)

Due to the measures put in place to address the pandemic of COVID-19, it will continue to be materially difficult for Member States to carry out in 2022 on-the-spot checks for annual aid applications, first and second level checks on withdrawal operations and checks on green harvesting and non-harvesting as set out in Articles 27(2) and (7), 29(2), 30(3) and 31(1) and (2) of Implementing Regulation (EU) 2017/892 respectively. Therefore, it should be allowed for Member States to define checks that are equivalent to on-the-spot checks, such as geotagged photos, dated photographs, dated drone surveillance reports, administrative checks or videoconferences with the beneficiaries.

(15)

Due to the measures put in place to address the pandemic of COVID-19, it will continue to be materially difficult for Member States to carry out in 2022 systematic and sample-based on-the-spot checks for operations supported under Articles 45 to 52 of Regulation (EU) No 1308/2013 of the European Parliament and of the Council (11). Therefore, a derogation from Articles 32(1) and 42(3) of Commission Implementing Regulation (EU) 2016/1150 (12), as already introduced for financial years 2020 and 2021, should be provided for also in respect of financial year 2022 to allow Member States to define controls that are equivalent to systematic on-the-spot checks, such as dated photographs, dated drone surveillance reports, administrative checks or videoconferences with the beneficiaries, and guarantee that the rules of the legislation relating to the support programmes in the wine sector are respected before payments are made.

(16)

It is also going to be materially difficult for Member States to carry out in respect of financial year 2022, within the deadline set by Article 43(3) of Implementing Regulation (EU) 2016/1150, systematic on-the-spot checks for green harvesting operations supported under Article 47 of Regulation (EU) No 1308/2013. Therefore, a derogation should be introduced to postpone the completion of the checks until 15 September 2022.

(17)

Article 27(3) of Commission Implementing Regulation (EU) 2018/274 (13) fixes the number of samples of fresh grapes to be taken from vineyards during the period when the plot in question is harvested for the establishment of the analytical databank of isotopic data referred to in Article 39 of Commission Delegated Regulation (EU) 2018/273 (14). In cases where the measures put in place to address the pandemic of COVID-19 continue to prevent Member States from carrying out such checks, Member States should be allowed to derogate from the minimum number of samples.

(18)

Article 31(2), point (b), of Implementing Regulation (EU) 2018/274 provides that Member States are to carry out yearly on-the-spot checks on at least 5 % of all wine growers identified in the vineyard register. As the measures put in place to address the pandemic of COVID-19 continue to render materially difficult the carrying out such checks in several wine producing Member States, this percentage should be reduced for the year 2022. For the same reason, Member States should be allowed to temporarily suspend in the year 2022 the systematic on-the-spot checks referred to in Article 31(2), point (c), of that Regulation which are to be carried out in areas planted with vines which are not included in any wine grower file.

(19)

Commission Implementing Regulation (EU) No 615/2014 (15) with regard to work programmes to support the olive oil and table olives sectors contains rules on on-the-spot checks to verify that the conditions for granting Union financing are met. The measures put in place to address the pandemic of COVID-19 may lead to difficulties in carrying out those checks as required by Article 6 of that Regulation. It is therefore appropriate to provide flexibility to the Member States by allowing the substitution of on-the-spot checks in calendar year 2022 by alternative checks.

(20)

Commission Implementing Regulation (EU) 2015/1368 (16) with regard to aid in the apiculture sector contains rules on the monitoring and checks in relation to the correct implementation of the national apiculture programmes, the actual expenditure incurred and the correct number of beehives reported by beekeepers. According to Article 8(3) of that Regulation, Member States are to ensure that at least 5 % of the applicants for aid within the framework of their apiculture programmes are subject to on-the-spot checks. The measures put in place to address the pandemic of COVID-19 may lead to difficulties in carrying out the number of on-the-spot checks needed to fulfil that threshold. It is therefore appropriate to provide flexibility to the Member States by allowing for a derogation from that requirement. Such derogation should however not result in an increase of the risk for undue payments. Therefore, any lowering of the number of on-the-spot checks should be replaced as much as possible by alternative controls.

(21)

Due to the previous flexibility options that have been offered to Member States in the last two years on the increase of the control rates, it is important to restore the original rule which has a significant deterrent effect and to clarify the year that should be taken into account for determining the increase in the control rate in accordance with Article 35 and Articles 50(5) and 68(4) of Implementing Regulation (EU) No 809/2014 and Article 59(5) of Regulation (EU) No 1306/2013. In view of possible changes implemented by the Member States in their control procedures following the detection of non-compliances, applying corrective mechanisms referring to non-compliances revealed during the controls relating to claim year 2019 is not considered appropriate and the most recent year should be taken into account. Therefore, it is necessary to amend Articles 3, 5 and 6 of Implementing Regulation (EU) 2021/725.

(22)

The derogations from Implementing Regulations (EU) No 809/2014, (EU) No 180/2014, (EU) No 181/2014, (EU) 2017/892, (EU) 2016/1150, (EU) 2018/274, (EU) No 615/2014 and (EU) 2015/1368 provided for in this Regulation should enable Member States to avoid delays in the control measures and processing of aid applications, and thus avoid delays of payments to beneficiaries for the year 2022. It is however imperative that those derogations do not impede the sound financial management and the requirement of a sufficient level of assurance. Accordingly, Member States making use of those derogations are responsible for taking all necessary measures to ensure that overpayments are avoided and that the recovery of undue amounts is instigated. Moreover, the use of these derogations should be covered by the management declaration referred to in Article 7(3), first subparagraph, point (b), of Regulation (EU) No 1306/2013 for financial years 2022 and 2023.

(23)

In order to ensure the smooth implementation of the measures provided for in this Regulation which are necessary for Member States to organise control campaigns while respecting the measures put in place to address the pandemic of the COVID-19, this Regulation should enter into force on the day of its publication in the Official Journal of the European Union and apply retroactively in order to enable Member States to implement the envisaged modifications from the beginning of the respective control campaigns: the measures in Chapters I and II and Chapter III, Sections 3 and 4, should apply from 1 January 2022, corresponding to claim year in the integrated administration and control system or to calendar year for non-area and non-animal related rural development support measures and measures in the wine sector; the measures in Chapter III, Sections 1 and 2, should apply from 16 October 2021, corresponding to the financial year and the measures in Chapter III, Section 5, should apply from 1 August 2021, corresponding to the apiculture year.

(24)	The measures provided for in this Regulation are in accordance with the opinion of the Committee on the Agricultural Funds, the Committee for Direct Payments, the Rural Development Committee and the Committee for the Common Organisation of the Agricultural Markets,

HAS ADOPTED THIS REGULATION:

CHAPTER I

DEROGATIONS FROM REGULATION (EU) NO 809/2014

Article 1

By way of derogation from Articles 24(4), 48(5), 49(1), 52(1), Article 60(2), third subparagraph, and Article 71(3) of Implementing Regulation (EU) No 809/2014, due to measures put in place to address the pandemic of COVID-19, for checks to be carried out in respect of claim year 2022 or calendar year 2022 respectively, Member States may decide to fully substitute the physical inspections to be carried out under that Regulation, in particular field visits and on-the-spot checks, by the use of photo-interpretation of satellite or aerial ortho-images or the use of new technologies such as geotagged photos or other relevant evidence including documentary evidence provided by the beneficiary at the request of the competent authority, which could permit definitive conclusions to be drawn to the satisfaction of the competent authority.

If the visits to the operation supported or the investment site referred to in Article 48(5) of Implementing Regulation (EU) No 809/2014 cannot be substituted by relevant documentary evidence, Member States shall carry out those visits after the final payment is effected.

Article 2

By way of derogation from Articles 26(4) and 42(1) of Implementing Regulation (EU) No 809/2014, where due to the measures put in place to address the pandemic of COVID-19 Member States are not in a position to carry out on-the-spot checks within the timeframe required by those provisions, and the alternative methods including use of new technologies cannot provide the necessary evidence, Member States may decide to carry those checks in respect of claim year 2022 or calendar year 2022 respectively at any time of the year, in so far that they still allow the checking of the eligibility conditions.

Article 3

1. Where due to the measures put in place to address the pandemic of COVID-19, Member States are not in a position to carry out on-the-spot checks in claim year 2022 or calendar year 2022 respectively, in accordance with the requirements set out in Articles 30 to 33, Article 40a(1), first subparagraph, point (c), Article 40a(2), point (b), Article 50(1), first subparagraph, Article 52(2), Article 60(2), third subparagraph, and Article 68(1), first subparagraph, of Implementing Regulation (EU) No 809/2014, Member States may decide to apply the rules set out in paragraphs 2 to 10 respectively of this Article.

2. By way of derogation from Article 30 of Implementing Regulation (EU) No 809/2014, in claim year 2022, the control rate shall be at least:

(a)	3 % of all beneficiaries applying for the basic payment scheme or the single area payment scheme;

(b)	3 % of all beneficiaries applying for the redistributive payment;

(c)	3 % of all beneficiaries applying for the payment for areas with natural constraints;

(d)	3 % of all beneficiaries applying for the payment for young farmers;

(e)	3 % of all beneficiaries applying for area-related payments under voluntary coupled support;

(f)	3 % of all beneficiaries applying for the payment under the small farmers scheme;

(g)	10 % of the areas declared for the production of hemp;

(h)	3 % of all beneficiaries applying for the crop specific payment for cotton.

Member States that have already decided to reduce the control rates for certain schemes to 3 % in accordance with Article 36 of Implementing Regulation (EU) No 809/2014, may further reduce the percentages set out for those schemes in this paragraph to 1 %. Member States having introduced a system of prior approval for the cultivation of hemp in accordance with Article 36(6) of that Regulation shall not further reduce the control rate below the 10 %.

3. By way of derogation from Article 31 of Implementing Regulation (EU) No 809/2014, in claim year 2022, the control rate shall be at least:

(a)	3 % of all beneficiaries required to observe the agricultural practices beneficial for the climate and the environment;

(b)

1 % of:

(i)

either all beneficiaries qualifying for the greening payment who are exempted from both the crop diversification and the ecological focus area obligations by not meeting the thresholds referred to in Articles 44 and 46 of Regulation (EU) No 1307/2013 and who are not concerned by the obligations referred to in Article 45 of that Regulation;

(ii)

or in the years where Article 44 of Commission Delegated Regulation (EU) No 639/2014 (17) does not apply in a Member State, the beneficiaries qualifying for the greening payment who are exempted from both the crop diversification and the ecological focus area obligations by not meeting the thresholds referred to in Articles 44 and 46 of Regulation (EU) No 1307/2013 and who are not concerned by the obligation referred to in Article 45(1) of that Regulation;

(c)	3 % of all beneficiaries required to observe the greening practices and using national or regional environmental certification schemes as referred to in Article 43(3), point (b), of Regulation (EU) No 1307/2013.

The control rate referred to in the first subparagraph, point (a), shall, at the same time, cover at least 3 % of all beneficiaries having areas covered with permanent grasslands that are environmentally sensitive in areas covered by Council Directive 92/43/EEC (18) or Directive 2009/147/EC of the European Parliament and of the Council (19) and further sensitive areas referred to in Article 45(1) of Regulation (EU) No 1307/2013.

4. By way of derogation from Article 32 of Implementing Regulation (EU) No 809/2014, in claim year 2022, the control rate shall be at least:

(a)	3 % of all beneficiaries applying for rural development measures;

(b)	3 % of all collectives submitting a collective claim.

The control rate referred to in the first subparagraph, point (a), for the measures provided for in Articles 28 and 29 of Regulation (EU) No 1305/2013 of the European Parliament and of the Council (20), the control rate of 3 % shall be achieved at the level of the individual measure.

5. By way of derogation from Article 33 of Implementing Regulation (EU) No 809/2014, in claim year 2022, the control rate shall be at least 3 % of all beneficiaries applying for animal aid schemes covering at least 3 % of animals.

6. By way of derogation from Article 40a(1), first subparagraph, point (c), first sentence, of Implementing Regulation (EU) No 809/2014, the relevant checks relating to the eligibility criteria, commitments and other obligations shall be carried out for at least 3 % of the beneficiaries concerned.

7. By way of derogation from Article 40a(2), point (b), of Implementing Regulation (EU) No 809/2014, the verifications of tetrahydrocannabinol content in hemp shall be made for at least 10 % of the area.

8. By way of derogation from Article 50(1), first subparagraph, and Article 60(2), third subparagraph, of Implementing Regulation (EU) No 809/2014, in calendar year 2022, the rate of checks shall be at least 3 %.

9. By way of derogation from Article 52(2) of Implementing Regulation (EU) No 809/2014, the control rate, in calendar year 2022, for ex post checks shall be at least 0,6 %.

10. By way of derogation from Article 68(1), first subparagraph, of Implementing Regulation (EU) No 809/2014, the minimum control rate, in claim year 2022, for cross-compliance shall be 0,5 %.

CHAPTER II

DEROGATIONS FROM THE SPECIFIC MEASURES IN FAVOUR OF THE OUTERMOST REGIONS OF THE UNION AND THE SMALLER AEGEAN ISLANDS

SECTION 1

Derogations from Implementing Regulation (EU) No 180/2014

Article 4

1. By way of derogation from Article 16(2) of Implementing Regulation (EU) No 180/2014, where due to the measures put in place to address the pandemic of COVID-19 Member States are not in a position to carry out physical checks in the outermost regions in accordance with the rules set out in that provision, in the year 2022 Member States may decide to organise physical checks in accordance with the rules set out in paragraph 2 of this Article.

2. The physical checks carried out in the outermost region concerned on the import, entry, export and dispatch of agricultural products shall involve a representative sample amounting to at least 3 % of the licences and certificates presented in accordance with Article 9 of Implementing Regulation (EU) No 180/2014.

3. By way of derogation from Article 22 of Implementing Regulation (EU) No 180/2014, where due to the measures put in place to address the pandemic of COVID-19 Member States are not in a position to carry out on-the-spot checks in the outermost regions in accordance with the rules set out in that Article, in the year 2022 Member States may decide to organise on-the-spot checks in accordance with the rules set out in paragraph 4 of this Article.

4. On the basis of a risk analysis carried out in accordance with Article 24(1) of Implementing Regulation (EU) No 180/2014, the competent authorities shall perform on-the-spot checks by sampling at least 3 % of aid applications. The sample shall also represent at least 3 % of the amounts covered by the aid for each action.

5. By way of derogation from Article 16(2) and Article 22 of Implementing Regulation (EU) No 180/2014, where due to the measures put in place to address the pandemic of COVID-19 Member States are not in a position to carry out on-the- spot checks in respect of the specific measures in favour of the outermost regions in accordance with the rules set out in those provisions for the year 2022, Member States may decide:

(a)

to substitute on-the-spot checks by the use of new technologies, including geotagged photos, dated photographs, dated drone surveillance reports, videoconferences with the beneficiaries or any relevant documentary evidence that could serve as support when verifying the correct implementation of the measures;

(b)	to carry those checks at any time of the year, in so far that they still allow the checking of the eligibility conditions, including after the final payment is effected.

SECTION 2

Derogations from Implementing Regulation (EU) No 181/2014

Article 5

1. By way of derogation from Article 13(2) of Implementing Regulation (EU) No 181/2014, where due to the measures put in place to address the pandemic of COVID-19 Greece is not in a position to carry out physical checks in accordance with the rules set out in that provision, in the year 2022 Greece may decide to organise physical checks in accordance with the rules set out in paragraph 2 of this Article.

2. The physical checks carried out in the smaller Aegean islands on the entry of agricultural products shall involve a representative sample amounting to at least 3 % of the certificates presented in accordance with Article 7 of Implementing Regulation (EU) No 181/2014. The physical checks carried out in the smaller Aegean islands on the export or dispatch provided for in Section 3 of that Regulation shall involve a representative sample of at least 3 % of the operations, based on the risk profiles established by Greece.

3. By way of derogation from Article 20 of Implementing Regulation (EU) No 181/2014, where due to the measures put in place to address the pandemic of COVID-19 Greece is not in a position to carry out on-the-spot checks in accordance with the rules set out in that Article, in the year 2022 Greece may decide to organise on-the-spot checks in accordance with the rules set out in paragraph 4 of this Article.

4. On the basis of a risk analysis in accordance with Article 22(1) of Implementing Regulation (EU) No 181/2014, the competent authorities shall perform on-the-spot checks by sampling, for each action, at least 3 % of aid applications. The sample shall also represent at least 3 % of the amounts covered by the aid for each action.

5. By way of derogation from Article 13(2) and Article 20 of Implementing Regulation (EU) No 181/2014, where due to the measures put in place to address the pandemic of COVID-19 Greece is not in a position to carry out on-the-spot checks in respect of the specific measures in favour of the smaller Aegean islands in accordance with the rules set out in those provisions for the year 2022, Greece may decide:

(a)

(b)	to carry those checks at any time of the year, in so far that they still allow the checking of the eligibility conditions, including after the final payment is effected.

CHAPTER III

DEROGATIONS FROM RULES IMPLEMENTING THE COMMON ORGANIZATION OF THE MARKETS

SECTION 1

Derogations from Implementing Regulation (EU) 2017/892

Article 6

1. By way of derogation from Article 24 of Implementing Regulation (EU) 2017/892, on-the-spot-checks regarding recognition criteria shall not apply for the year 2022.

2. By way of derogation from Article 27(2) of Implementing Regulation (EU) 2017/892, in the year 2022, the on-the-spot checks referred to in Article 27 of that Regulation shall relate to a sample representing at least 10 % of the total aid applied for the year 2021.

3. By way of derogation from Article 27(7) of Implementing Regulation (EU) 2017/892, the rule that actions on individual holdings of members of producer organisations covered by the sample referred to in Article 27(2) of that Regulation shall be subject of at least one visit to the place where the action is implemented to verify its execution shall not apply for the on-the-spot-checks conducted in the year 2022.

4. By way of derogation from Article 29(2) of Implementing Regulation (EU) 2017/892, in the year 2022, Member States may check for all withdrawn products, irrespective of their intended destination, a smaller percentage than that laid down in that provision, provided it is not less than 10 % of the quantities concerned during the marketing year of any given producer organisation.

5. By way of derogation from Article 30(3) of Implementing Regulation (EU) 2017/892, in the year 2022, each check shall include a sample representing at least 3 % of the quantities withdrawn by the producer organisation during the marketing year 2021.

6. By way of derogation from Articles 27(2) and (7), 29(2), 30(3) and 31(1) and (2) of Implementing Regulation (EU) 2017/892, in the year 2022, where the measures put in place to address the pandemic of COVID-19 prevent Member States from carrying out on-the-spot-checks in accordance with those provisions, the on-the-spot-checks may be replaced by other types of checks to be defined by Member States, such as geotagged photos, dated photographs, dated drone surveillance reports, administrative checks or videoconferences with the beneficiaries.

SECTION 2

Derogations from Implementing Regulation (EU) 2016/1150

Article 7

1. By way of derogation from Articles 32(1) and 42(3) of Implementing Regulation (EU) 2016/1150, during the financial year 2022, where the measures put in place to address the pandemic of COVID-19 prevent Member States from carrying out on–the-spot checks in accordance with those provisions, such checks may be replaced by other types of controls to be defined by Member States, such as dated photographs, dated drone surveillance reports, administrative checks or videoconferences with the beneficiaries, guaranteeing that the rules relating to the support programmes in the wine sector are respected.

2. By way of derogation from Article 43(3) of Implementing Regulation (EU) 2016/1150, during the financial year 2022, where the measures put in place to address the pandemic of COVID-19 prevent Member States from carrying out on–the-spot checks in accordance with that provision, such checks on green harvesting operations shall take place by 15 September 2022.

SECTION 3

Derogations from Implementing Regulation (EU) 2018/274

Article 8

1. By way of derogation from Article 27(3) of Implementing Regulation (EU) 2018/274, where the measures put in place to address the pandemic of COVID-19 prevent Member States during the period of the grape harvest in the year 2022 from collecting and processing fresh grapes to the extent of the number of samples set out in Part II of Annex III to that Regulation, Member States may derogate from that number of samples.

2. By way of derogation from Article 31(2), point (b), of Implementing Regulation (EU) 2018/274, where the measures put in place to address the pandemic of COVID-19 prevent Member States from carrying out on-the-spot checks in the year 2022 in accordance with that provision, Member States shall carry out such checks on at least 3 % of all wine growers identified in the vineyard register.

3. By way of derogation from Article 31(2), point (c), of Implementing Regulation (EU) 2018/274, Member States may in the year 2022 temporarily suspend systematic on-the-spot checks carried out in areas planted with vines which are not included in any wine grower file, in cases where the measures put in place to address the pandemic of COVID-19 prevent Member States from carrying out such checks.

SECTION 4

Derogations from Implementing Regulation (EU) No 615/2014

Article 9

By way of derogation from Article 6 of Implementing Regulation (EU) No 615/2014, where the measures put in place to address the pandemic of COVID-19 prevent Member States to carry out in due time the on-the-spot checks in calendar year 2022, Member States may decide to partially or fully substitute on-the-spot checks by administrative checks or by the use of relevant evidence including geotagged photos, video conversations or other evidence in electronic format.

SECTION 5

Derogations from Implementing Regulation (EU) 2015/1368

Article 10

By way of derogation from Article 8(3) of Implementing Regulation (EU) 2015/1368, during apiculture year 2022 Member States may decide to deviate from the 5 % threshold regarding on-the-spot checks of applicants for aid within the framework of their apiculture programme provided that they replace the planned on-the-spot checks by alternative checks via requesting photographs, via video conversations or through any other means that could serve as support when verifying the correct implementation of the measures included in the apiculture programme.

CHAPTER IV

AMENDMENTS TO IMPLEMENTING REGULATION (EU) 2021/725

Article 11

Implementing Regulation (EU) 2021/725 is amended as follows:

(1)

Article 3 is amended as follows:

(a)

paragraph 6 is replaced by the following:

‘6. By way of derogation from Article 35 of Implementing Regulation (EU) No 809/2014, Member States may decide not to apply the increase of the control rate that should have been applied in claim year 2021 for the aid schemes and support measures referred to in paragraphs 2 to 5 of this Article.’;

(b)

paragraph 10 is replaced by the following:

‘10. By way of derogation from Article 50(5) of Implementing Regulation (EU) No 809/2014, Member States may decide not to apply the increase of the control rate that should have been applied in calendar year 2021 for the aid schemes and support measures referred to in paragraphs 2 to 5 of this Article.’;

(c)	paragraph 13 is replaced by the following: ‘13. By way of derogation from Article 68(4) of Implementing Regulation (EU) No 809/2014, Member States may decide not to apply the increase in control rates that should have been applied in claim year 2021.’;

(2)

in Article 5, paragraph 6, is replaced by the following:

‘6. By way of derogation from Article 59(5) of Regulation (EU) No 1306/2013, Member States may decide not to apply the increase of the control rate that should have been applied in claim year 2021 for the aid schemes and support measures referred to in paragraphs 1 to 5 of this Article.’;

(3)

in Article 6, paragraph 6 is replaced by the following:

‘6. By way of derogation from Article 59(5) of Regulation (EU) No 1306/2013, Greece may decide not to apply the increase of the control rate that should have been applied in claim year 2021 for the aid schemes and support measures referred to in paragraphs 1 to 5 of this Article.’.

CHAPTER V

GENERAL PROVISIONS

Article 12

For Member States applying the provisions under Chapters I, II and III, the management declaration to be drawn up pursuant to Article 7(3), first subparagraph, point (b), of Regulation (EU) No 1306/2013 shall include for financial years 2022 and 2023 a confirmation that overpayments to beneficiaries were prevented and the recovery of undue amounts has been instigated based on the verification of all necessary information.

CHAPTER VI

FINAL PROVISIONS

Article 13

This Regulation shall enter into force on the day of its publication in the Official Journal of the European Union.

Chapters I and II, Chapter III, Sections 3 and 4, and Chapter IV shall apply from 1 January 2022.

Chapter III, Sections 1 and 2, shall apply from 16 October 2021.

Chapter III, Section 5, shall apply from 1 August 2021.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 8 July 2022.

For the Commission

The President

Ursula VON DER LEYEN

(1) OJ L 347, 20.12.2013, p. 549.

(2) OJ L 78, 20.3.2013, p. 23.

(3) OJ L 78, 20.3.2013, p. 41.

(4) Commission Implementing Regulation (EU) 2020/532 of 16 April 2020 derogating in respect of the year 2020 from Implementing Regulations (EU) No 809/2014, (EU) No 180/2014, (EU) No 181/2014, (EU) 2017/892, (EU) 2016/1150, (EU) 2018/274, (EU) 2017/39, (EU) 2015/1368 and (EU) 2016/1240 as regards certain administrative and on-the-spot checks applicable within the common agricultural policy (OJ L 119, 17.4.2020, p. 3).

(5) Commission Implementing Regulation (EU) 2021/725 of 4 May 2021 derogating in respect of the year 2021 from Implementing Regulations (EU) No 809/2014, (EU) No 180/2014, (EU) No 181/2014, (EU) 2017/892, (EU) 2016/1150, (EU) 2018/274, (EU) No 615/2014 and (EU) 2015/1368 as regards certain administrative and on-the-spot checks applicable within the common agricultural policy (OJ L 155, 5.5.2021, p. 8).

(6) Commission Implementing Regulation (EU) No 809/2014 of 17 July 2014 laying down rules for the application of Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to the integrated administration and control system, rural development measures and cross compliance (OJ L 227, 31.7.2014, p. 69).

(7) Regulation (EU) No 1307/2013 of the European Parliament and of the Council of 17 December 2013 establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy and repealing Council Regulation (EC) No 637/2008 and Council Regulation (EC) No 73/2009 (OJ L 347, 20.12.2013, p. 608).

(8) Commission Implementing Regulation (EU) No 180/2014 of 20 February 2014 laying down rules for the application of Regulation (EU) No 228/2013 of the European Parliament and of the Council laying down specific measures for agriculture in the outermost regions of the Union (OJ L 63, 4.3.2014, p. 13).

(9) Commission Implementing Regulation (EU) No 181/2014 of 20 February 2014 laying down rules for the application of Regulation (EU) No 229/2013 of the European Parliament and of the Council laying down specific measures for agriculture in favour of the smaller Aegean islands (OJ L 63, 4.3.2014, p. 53).

(10) Commission Implementing Regulation (EU) 2017/892 of 13 March 2017 laying down rules for the application of Regulation (EU) No 1308/2013 of the European Parliament and of the Council with regard to the fruit and vegetables and processed fruit and vegetables sectors (OJ L 138, 25.5.2017, p. 57).

(11) Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007 (OJ L 347, 20.12.2013, p. 671).

(12) Commission Implementing Regulation (EU) 2016/1150 of 15 April 2016 laying down rules for the application of Regulation (EU) No 1308/2013 of the European Parliament and of the Council as regards the national support programmes in the wine sector (OJ L 190, 15.7.2016, p. 23).

(13) Commission Implementing Regulation (EU) 2018/274 of 11 December 2017 laying down rules for the application of Regulation (EU) No 1308/2013 of the European Parliament and of the Council as regards the scheme of authorisations for vine plantings, certification, the inward and outward register, compulsory declarations and notifications, and of Regulation (EU) No 1306/2013 of the European Parliament and of the Council as regards the relevant checks, and repealing Commission Implementing Regulation (EU) 2015/561 (OJ L 58, 28.2.2018, p. 60).

(14) Commission Delegated Regulation (EU) 2018/273 of 11 December 2017 supplementing Regulation (EU) No 1308/2013 of the European Parliament and of the Council as regards the scheme of authorisations for vine plantings, the vineyard register, accompanying documents and certification, the inward and outward register, compulsory declarations, notifications and publication of notified information, and supplementing Regulation (EU) No 1306/2013 of the European Parliament and of the Council as regards the relevant checks and penalties, amending Commission Regulations (EC) No 555/2008, (EC) No 606/2009 and (EC) No 607/2009 and repealing Commission Regulation (EC) No 436/2009 and Commission Delegated Regulation (EU) 2015/560 (OJ L 58, 28.2.2018, p. 1).

(15) Commission Implementing Regulation (EU) No 615/2014 of 6 June 2014 laying down detailed rules for the application of Regulation (EU) No 1306/2013 of the European Parliament and of the Council and Regulation (EU) No 1308/2013 of the European Parliament and of the Council in respect of work programmes to support the olive oil and table olives sectors (OJ L 168, 7.6.2014, p. 95).

(16) Commission Implementing Regulation (EU) 2015/1368 of 6 August 2015 laying down rules for the application of Regulation (EU) No 1308/2013 of the European Parliament and of the Council with regard to aid in the apiculture sector (OJ L 211, 8.8.2015, p. 9).

(17) Commission Delegated Regulation (EU) No 639/2014 of 11 March 2014 supplementing Regulation (EU) No 1307/2013 of the European Parliament and of the Council establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy and amending Annex X to that Regulation (OJ L 181, 20.6.2014, p. 1).

(18) Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (OJ L 206, 22.7.1992, p. 7).

(19) Directive 2009/147/EC of the European Parliament and of the Council of 30 November 2009 on the conservation of wild birds (OJ L 20, 26.1.2010, p. 7).

(20) Regulation (EU) No 1305/2013 of the European Parliament and of the Council of 17 December 2013 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) and repealing Council Regulation (EC) No 1698/2005 (OJ L 347, 20.12.2013, p. 487).

15.7.2022

Official Journal of the European Union

L 188/98

COMMISSION IMPLEMENTING REGULATION (EU) 2022/1220

of 14 July 2022

laying down implementing technical standards for the application of Directive 2014/65/EU of the European Parliament and of the Council with regard to the format in which branches of third-country firms and competent authorities have to report the information referred to in Article 41(3) and (4) of that Directive

(Text with EEA relevance)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (1), and in particular Article 41(6) thereof,

Whereas:

(1)

It is necessary to ensure that the European Securities and Markets Authority (ESMA) and the competent authorities concerned receive all information necessary to supervise branches of third-country firms, and to ensure that such information is processed in an efficient and swift manner. The information referred to in Article 41(3) and (4) of Directive 2014/65/EU should therefore be submitted in a language that is customary in the sphere of international finance.

(2)

Article 39(2) of Directive 2014/65/EU requires that branches of third-country firms that wish to provide investment services or to perform investment activities in the territory of a Member State, acquire prior authorisation of the competent authority of that Member State. Such branches are not allowed to provide investment services or perform investment activities in other Member States than the Member State where those branches received their authorisation. The European Commission can, however, adopt an equivalence decision in accordance with Article 47(1) of Regulation (EU) No 600/2014 of the European Parliament and of the Council (2) stating that the legal and supervisory arrangements of that third country with regard to investment firms are equivalent to those that apply in the Union. In such a case, the authorised branches of investment firms that fall under the scope of such an equivalence decision would continue to be supervised by the competent authority of the Member State in which those branches are established, irrespective of whether they provide cross border services or performs cross border activities. It is therefore necessary to ensure that the format for the reporting of the information referred to in Article 41(3) of Directive 2014/65/EU is also apt for the reporting on such cross-border services and activities of those branches.

(3)

According to Article 41(3) of Directive 2014/65/EU, branches of third-country firms that have been authorised in accordance with Article 41(1) of that Directive are to report to the competent authority of the Member State where that authorisation was granted, on an annual basis, the information laid down in that Article 41(3). In order to harmonise not only the format, but also the timing of reporting, it is necessary to include a timeframe when that information is to be provided to competent authorities.

(4)	This Regulation is based on the draft implementing technical standards submitted to the Commission by ESMA.

(5)

ESMA has conducted open public consultations on the draft implementing technical standards on which this Regulation is based, analysed the potential related costs and benefits and requested the advice of the Securities and Markets Stakeholder Group established in accordance with Article 37 of Regulation (EU) No 1095/2010 of the European Parliament and of the Council (3),

HAS ADOPTED THIS REGULATION:

Article 1

Format of the information to be reported annually to competent authorities by branches of third-country firms

1. The branch of a third-country firm authorised in accordance with Article 41(1) of Directive 2014/65/EU shall use the format set out in Annex I to report the information referred to in Article 41(3) of that Directive. However, where the third-country firm is subject to an equivalence decision as referred to in Article 47(1) of Regulation (EU) No 600/2014, the branch of such third-country firm shall use the format set out in Annex II for those services and activities that are covered by such equivalence decision.

2. The information referred to in paragraph 1 shall be submitted in a language customary in the sphere of international finance.

3. The information referred to in paragraph 1 shall be submitted by 30 April of each year and shall cover the period from 1 January to 31 December of the preceding calendar year. The information provided shall be accurate as of 31 December of the preceding year.

Article 2

Format of the information to be reported to the European Securities and Markets Authority (ESMA) on request by competent authorities

For the purpose of Article 41(4) of Directive 2014/65/EU, competent authorities shall report the following fields from Annex I and II to ESMA:

1.	Reporting Period: 1a and 1b and, where applicable, 19a and 19b;

2.	Name of the third-country firm and the branch: 2a and 2d and, where applicable, 20a and 20d;

3.	Investment services, investment activities and ancillary services provided by the branch: 3a, 3b, 3c, 3d, 3e, 3f, 3g and 3h and, where applicable, 21a, 21b, 21c, 21d, 21e, 21f, 21g and 21h;

4.	Number of clients and counterparties and number of staff of the branch: 4a, 4b, 4c, 4d and, where applicable, 22a, 22b and 22c;

5.	Turnover and aggregated value of the assets of the branch: 5a, 5b, 5c and, where applicable, 23a, 23b and 23c.

Article 3

Entry into force

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 14 July 2022.

For the Commission

The President

Ursula VON DER LEYEN

(1) OJ L 173, 12.6.2014, p. 349.

(2) Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012 (OJ L 173, 12.6.2014, p. 84).

(3) Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 15.12.2010, p. 84).

ANNEX I

Format for submitting the information referred to in Article 41(3) and 41(4) of Directive 2014/65/EU (1)

Field

Sub-fields

Reporting period

The reporting start date for the calendar year

(YYYY-MM-DD)

The reporting end date for the calendar year

(YYYY-MM-DD)

Name and contact details of the third-country firm, including the details of the branch, of the person in charge of submitting the information, and of the authorities of the third country responsible for the supervision of the third-country firm

Full corporate name of the branch and the Legal Entity Identifier code (LEI)

Address of the branch

(to be provided in case of any change to the information previously reported to the competent authority)

Contact details of the branch including email address, phone number and website details

Full legal name of the third-country firm and, where available, the Legal Entity Identifier (LEI)

(to be provided in case of any change to the information previously reported to the competent authority)

Registered address for the head office of the third-country firm

(to be provided in case of any change to the information previously reported to the competent authority)

Contact details of the third-country firm including email address, phone number, and website details

Country of the head office of the third-country firm

(to be provided in case of any change to the information previously reported to the competent authority)

Name, address and country of the authority responsible for the supervision of the third-country firm in the third country. When more than one authority is responsible for the supervision of the third-country firm, the details and the respective areas of competence per authority shall be provided

(to be provided in case of any change to the information previously reported to the competent authority)

Contact person full name

Contact person address

Contact person phone number

Contact person email address

Contact person function/title

Investment services, investment activities and ancillary services provided by the branch in the Member State where the branch is established, during the reporting period

The list of investment services, investment activities and ancillary services (as specified in Sections A and B of Annex I to Directive 2014/65/EU) provided by the branch in the Member State where it is established

The list of categories of financial instruments (as specified in Section C of Annex I to Directive 2014/65/EU) in relation to which such services and activities have been performed

Where the branch provides portfolio management, the total value of the assets under management for clients in the Member State where the branch is established at the end of the reporting period

Where the branch provides portfolio management, the average value of the assets under management for clients in the Member State where the branch is established over the reporting period

Where the branch provides investment advice, the total value of the assets in relation to which investment advice has been provided to clients in the Member State where the branch is established at the end of the reporting period

Where the branch provides investment advice, the average value of the assets in relation to which investment advice has been provided to clients in the Member State where the branch is established during the reporting period

Where the branch provides the ancillary service of safekeeping and administration on financial instruments for the account of clients or is holding client funds, the total value of the assets (including cash) held by the branch for clients in the Member State where the branch is established at the end of the reporting period

Where the branch provides the ancillary service of safekeeping and administration on financial instruments for the account of clients or is holding client funds, the average value of the assets (including cash) held by the branch for clients in the Member State where the branch is established during the reporting period

Number of clients and counterparties and number of staff of the branch in the Member State where the branch is established, during the reporting period

The total number of clients and counterparties of the branch in the Member State where it is established

The breakdown of the total number of clients and counterparties of the branch in the Member State where it is established per investment service, investment activity or ancillary service provided in that Member State

The numbers of retail clients, professional clients and eligible counterparties (as set out in Directive 2014/65/EU) to whom the branch is providing investment services, investment activities or ancillary services in the Member State where it is established.

The breakdown of the number of staff of the branch in the Member State where it is established per investment service, investment activity or ancillary service provided in the Member State.

Turnover and aggregated value of the assets of the branch in the Member State where the branch is established, during the reporting period

The turnover generated by the branch and the aggregated value of the assets corresponding to the investment services, investment activities and ancillary services provided in the Member State where the branch is established

The breakdown of the turnover of the branch in the Member State where it is established per investment service, investment activity and ancillary service provided in that Member State

The breakdown of the turnover of the branch in the Member State where it is established per category of client as set out in Directive 2014/65/EU

Where the branch deals on own account, information on the exposure of the third-country firm during the reporting period to counterparties in the Member State where the branch is established

The monthly minimum, average and maximum exposure to counterparties in the Member State where the branch is established

Where the branch underwrites financial instruments and/or places financial instruments on a firm commitment basis, information about the value of the financial instruments originating from counterparties in the Member State where the branch is established and is underwritten or placed on a firm commitment basis, during the reporting period

The total value and number of financial instruments originating from counterparties in the Member State where the branch is established and underwritten or placed on a firm commitment basis by the branch

Composition of the management body of the third-country firm

The list of members of the management body of the third-country firm

For each member of the management body, the member’s full name, country of domicile and contact details

The position at which each member of the management body is appointed

Key function holders for the activities of the branch

The list of key function holders for the activities of the branch

For each key function holder, the person’s full name, country of domicile and contact details

The position at which each key function holder is appointed

The reporting lines between the key function holders and the third-country firm’s management body

Information about complaints received by the branch or by the third-country firm in relation to the activities of the branch in the Member State where the branch is established and during the reporting period

The number of complaints received by the branch or by the third-country firm in relation to the activities of the branch in the Member State where it is established, together with:

—	a breakdown for the five financial instruments generating the highest number of complaints;

—	a breakdown for the five most frequent topics of the complaints;

—	the number of complaints handled over the reporting period

—	the arrangements in place to diligently treat the complaints

11a

Description of the marketing activities of the branch or of the third-country firm in relation to the activities of the branch in the Member State where the branch is established and during the reporting period

A description of the marketing strategy of the branch or of the third-country firm used in the Member State where the branch is established in relation to the activities of the branch, including details about its geographical scope and the marketing means the third-country firm used (such as any agents, roadshows, telephone calls, websites)

11b

The list of trading names used by the branch of the third-country firm in the Member State where the branch is established, together with, for each trading name:

—	the categories of financial instruments in relation to which it is used; and

—	the categories of clients in relation to which it is used

11c

For any agents or similar entities used by the branch of the third-country firm in that Member State, the name of the individual or entity together with the address and contact details

11d

The list of websites used by the branch in the Member State where the branch is established, together with, for each website, its URL

12a

Description of the investor protection arrangements of the third-country firm available to the clients of the branch in the Member State where the branch is established, including the rights of those clients resulting from the investor-compensation scheme referred to in Article 39(2), point (f), of Directive 2014/65/EU

(to be provided in case of any change to the information previously reported to the competent authority)

Information and reporting to clients

Description of the arrangements set up by the third-country firm as regards its information and reporting obligations to clients and implementing measures for the operations of the branch in the Member State where it is established

12b

The language(s) the branch will use with its clients in the Member State where the branch is established

12c

Suitability and appropriateness

Description of the arrangements of the third-country firm to assess suitability or appropriateness, as the case may be, when the branch provides services to clients in the Member State where it is established

12d

Best execution

Where the branch executes orders for its clients in the Member State where it is established, description of the arrangements set up to execute client orders on terms most favourable to the clients

12e

Client order handling rules

Where the branch handles client orders, description of the arrangements set up by the branch for the prompt, fair and expeditious execution of client orders with a focus on the operations of the branch in the Member State where the branch is established

12f

Product governance arrangements

Where the third-country firm manufactures and/or distributes, via its branch, financial instruments, description of the product governance arrangements set up by the third-country firm for the operations of the branch in the Member State where the branch is established

12g

The arrangements of the third-country firm to identify, prevent and manage conflicts of interest

Description of the measures set up by the third-country firm, acting through its branch, to identify and to prevent or manage conflicts of interest that arise in the course of providing investment and ancillary services, including those arising from the remuneration policy of the persons involved in the provision of investment services, investment activities and ancillary services provided in the Member State where the branch is established

12h

The arrangements of the third-country firm to handle complaints

Description of the procedure set up by the third-country firm acting through its branch, and to be followed by clients of the branch for lodging a complaint

12i

The department responsible for handling the complaints of clients of the branch

12j

The language(s) clients must lodge their complaints

12k

The relevant courts (in case of litigation) referred to in any contractual arrangements between the third-country firm acting through its branch and its clients in the Member State where the branch is established

12l

The alternative dispute resolution entity/ies competent to deal with disputes involving clients in the Member State where the branch is established and the third-country firm

12m

The third-country firm’s membership of an investor compensation scheme

The description of the third-country firm’s membership of an investor compensation scheme including whether clients and counterparties of the branch will be eligible to such scheme, its scope, a description of the eligibility conditions and the amounts and financial instruments covered by the scheme

12n

The arrangements of the third-country firm to protect and manage client funds and assets

The description of any client fund or client asset safeguarding arrangements (in particular, where financial instruments and funds are held in a custodian, the name of the custodian, and related contracts) put in place in the Member State where the branch is established

12o

Other arrangements

The description of any other arrangements that the third-country firm may deem relevant to the provision of services and performance of the activities of the branch in the Member State where the branch is established in an honest, fair and professional manner that promotes the interests of clients

13a

Information on the outsourcing arrangements of the third-country firm applicable to the operations of the branch

(to be provided in case of any change to the information previously reported to the competent authority)

The list and description of the outsourced functions (or those intended to be outsourced)

13b

The description of the resources (in particular, human and technical, and the internal control system) allocated to the control of the outsourced functions, services or activities insofar as they are related to the operations of the branch in the Member State where it is established

Information on the arrangements (including IT arrangements) set up by the third-country firm applicable to the activities of the branch for algorithmic trading, for high frequency trading and for direct electronic access

(to be provided in case of any change to the information previously reported to the competent authority)

Description of any arrangements and resources (in particular human and IT resources) that the third-country firm may have put in place and/or allocated for the activities of its branch in the Member State where the branch is established for algorithmic trading, high frequency trading and direct electronic access and for the control of such activities

15a

Information on the activities of the compliance function (or equivalent)

Regulatory changes

Description of the management and implementation of material changes and developments in regulatory requirements during the reporting period which impact the investor protection arrangements for the activities of the branch of the third-country firm

15b

Findings

The number of controls performed on-site and outsourced and a summary of major findings of the compliance function on the operations of the third-country firm insofar as they are relevant to the operations of the branch

15c

Actions taken or to be taken (including following complaints or deviation from compliance function’s recommendations addressed to senior management) to address identified failures or risks of failures by the third-country firm insofar as they relate to the operations of the branch

15d

Other

Any other information that the branch may find relevant to mention

16a

Information on the activities of the internal audit function (or equivalent)

Findings

A summary of major findings of the internal audit function on the operations of the third-country firm insofar as they are relevant to the operations of the branch

16b

Actions taken or to be taken globally (including timeline and organisational units of the third-country firm involved) to address identified failures or risks of failures by the third-country firm insofar as they relate to the operations of the branch

17a

Information on the activities of the risk management function (or equivalent) and the risk management policy of the third-country firm

Risk management policy

A summary of the risk management policy of the third-country firm insofar as it relates to the operations of the branch and the arrangements applied by the branch for the services and activities carried out by the branch

(to be provided in case of any change to the information previously reported to the competent authority)

17b

Findings

A summary of major findings of the risk management function on the operations of the third-country firm globally and actions taken or to be taken to address those findings

Any other information that the branch of a third-country firm may find relevant to communicate to the competent authority of the Member State where it is established.

(1) Any information with regard to the provision of cross-border services by branches of third-country firms is covered by Annex II.

ANNEX II

Format for submitting information referred to in Article 41(3) and 41(4) of Directive 2014/65/EU in case the Commission has taken an equivalence decision as referred to in Article 47(1) of Regulation (EU) No 600/2014

In addition to the information required under Annex I of the present Implementing Regulation, third-country firms that also provide investment services and activities in the European Union, in accordance with Article 47(3) of Regulation (EU) No 600/2014 through the third-country equivalence regime (if effectively recognised as such under Article 47(1) of Regulation (EU) No 600/2014), shall also include the following fields in their report to the competent authority, as required under Article 41(3) of Directive 2014/65/EU:

Field

Sub-fields

19a

Reporting period

The reporting start date for the calendar year

(YYYY-MM-DD)

19b

The reporting end date for the calendar year

(YYYY-MM-DD)

20a

Name and contact details of the third-country firm, including the details of the branch, of the person in charge of submitting the information, of the authorities of the third country responsible for the supervision of the third-country firm

Full corporate name of the branch and Legal Entity Identifier code (LEI) where available

20b

Address of the branch

(to be provided in case of any change to the information previously reported to the competent authority)

20c

Contact details of the branch including email address, phone number and website details

20d

Full legal name of the third-country firm and Legal Entity Identifier (LEI) where available

(to be provided in case of any change to the information previously reported to the competent authority)

20e

Registered address for the head office of the third-country firm

(to be provided in case of any change to the information previously reported to the competent authority)

20f

Contact details of the third-country firm including email address, phone number, and website details

20g

Country of the head office of the third-country firm

(to be provided in case of any change to the information previously reported to the competent authority)

20h

(to be provided in case of any change to the information previously reported to the competent authority)

20i

Contact person full name

20j

Contact person address

20k

Contact person phone number

20l

Contact person email address

20m

Contact person function/title

21a

Investment services, investment activities and ancillary services provided by the branch in each Member State other than the one where it is established, during the reporting period

The list of investment services, investment activities and ancillary services (as specified in Sections A and B of Annex I to Directive 2014/65/EU) provided to eligible counterparties and professional clients within the meaning of Section I of Annex II to Directive 2014/65/EU, in each Member State other than the one where the branch is established

21b

The list of categories of financial instruments (as specified in Section C of Annex I to Directive 2014/65/EU) in relation to which such services and activities have been performed

21c

For each Member State other than the one where the branch is established and in which the branch provides portfolio management, the total value of the assets under management for clients in the Member State at the end of the reporting period

21d

For each Member State other than the one where the branch is established and in which the branch provides portfolio management, the average value of the assets under management for clients in the Member State over the reporting period

21e

For each Member State other than the one where the branch is established and in which the branch provides investment advice, the total value of the assets in relation to which that service has been provided to clients in the Member State at the end of the reporting period

21f

For each Member State other than the one where the branch is established and in which the branch provides investment advice, the average value of the assets in relation to which that service has been provided to clients in the Member State over the reporting period

21g

For each Member State other than the one where the branch is established and in which the branch provides the ancillary service of safekeeping and administration on financial instruments for the account of clients or is holding client funds, the total value of the assets (including cash) held by the branch for clients in the Member State at the end of the reporting period

21h

For each Member State other than the one where the branch is established and in which the branch provides the ancillary service of safekeeping and administration on financial instruments for the account of clients or is holding client funds, the average value of the assets (including cash) held by the branch for clients in the Member State over the reporting period

22a

Number of clients and counterparties of the branch in Member States other than the one where the branch is established and globally, during the reporting period

The total number of clients and counterparties of the branch in the European Union (excluding the Member State where it is established).

22b

The total number of clients and counterparties of the third-country firm globally

22c

For each Member State other than the Member State where the branch is established and in which the branch provided any investment services, investment activities or ancillary services, the total number of clients and counterparties of the branch in that other Member State, together with:

—	a breakdown of this number per investment service, investment activity or ancillary service provided in each Member State; and

—	a breakdown per category of client as set out in Directive 2014/65/EU

23a

Turnover and aggregated value of the assets of the branch in Member States other than the one where the branch is established and of the third-country firm globally, during the reporting period

The turnover of the branch in the Union (not including the Member State where it is established) and the aggregated value of the assets corresponding to the services and activities provided by the third-country firm in the Union (not including the Member State where it is established)

23b

The global turnover of the third-country firm

23c

For each Member State other than the one where the branch is established and in which the branch provided any investment services, investment activities or ancillary services, the turnover and the aggregated value of the assets corresponding to such investment services, investment activities and ancillary services, together with:

—	a breakdown per investment service, investment activity or ancillary services provided in the Member State; and

—	a breakdown per category of client as set out in Directive 2014/65/EU

24a

Where the branch deals on own account, information on the exposure of the third-country firm to counterparties in the Union (not including the Member State where the branch is established), during the reporting period

For each Member State other than the one where the branch is established and in which the branch deals on own account, the monthly minimum, average and maximum exposure to counterparties in that Member State

24b

The monthly minimum, average and maximum exposure to counterparties in the Union (not including the Member State where the branch is established)

25a

Where the branch underwrites financial instruments and/or places financial instruments on a firm commitment basis, information about the value of the financial instruments originating from counterparties in the Union (other than in the Member State where the branch is established) and is underwritten or placed on a firm commitment basis during the reporting period

For each Member State other than the one where the branch is established and in which the branch provides underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis, the total value of financial instruments originating from counterparties in the Member State and underwritten or placed on a firm commitment basis by the branch

25b

The total value of financial instruments originating from counterparties in the Union (other than in the Member State where the branch is established) and underwritten or placed on a firm commitment basis by the branch

Information about complaints received by the branch and/or by the third-country firm in relation to the activities of the branch in the Union (other than in the Member State where the branch is established), during the reporting period

The number of complaints received by the branch and/or by the third-country firm in relation to the activities of the branch in Member States other than the one where the branch is established, together with:

—	a breakdown per Member State;

—	a breakdown for the five financial instruments generating the highest number of complaints;

—	a breakdown for the five most frequent topics of the complaints;

—	the number of complaints handled in the reporting period

—	the arrangements in place to diligently treat the complaints

27a

Description of the marketing activities of the branch or of the third-country firm in relation to the activities of the branch in the Union (other than in the Member State where the branch is established), during the reporting period

A description of the marketing strategy of the third-country firm used in the Union (other than in the Member State where the branch is established) in relation to the activities of the branch, including details about its geographical scope and the marketing means the third-country firm used (such as any agents, roadshows, telephone calls, websites)

27b

The list of trading names used by the third-country firm in the Union (other than in the Member State where the branch is established), together with, for each trading name:

—	the list of Member States in which it is used;

—	the categories of financial instruments in relation to which it is used; and

—	the categories of clients in relation to which it is used

27c

For any agents or similar entities used by the third-country firm in the Union (other than in the Member State where the branch is established) the name of the individual or entity together with the address and contact details

27d

The list of websites used by the third-country firm in the Union (other than in the Member State where the branch is established), together with, for each website, its URL

28a

Description of the investor protection arrangements of the third-country firm available to the clients of the branch in the Union (other than in the Member State where the branch is established), including the rights of those clients resulting from the investor-compensation scheme referred to in Article 39(2), point (f) of Directive 2014/65/EU

(to be provided in case of any change to the information previously reported to the competent authority)

Information and reporting to clients

The description of the arrangements of the third-country firm to ensure that it complies with its information and reporting obligations to clients under Articles 24 and 25 of Directive 2014/65/EU and implementing measures for the operations of the branch in the Union (other than in the Member State where the branch is established)

28b

The language(s) the branch will use with its clients in the Union (other than in the Member State where the branch is established)

28c

Suitability and appropriateness

The description of the arrangements of the third-country firm to ensure that it complies with its obligations to assess suitability or appropriateness, as the case may be, when the branch provides services to clients in the Union (other than in the Member State where the branch is established)

28d

Best execution

Where the branch executes orders for its clients in the Union (other than in the Member State where the branch is established), the description of the arrangements to ensure that it executes client orders on terms most favourable to the clients

28e

Client order handling rules

The description of the arrangements of the third-country firm which provide for the prompt, fair and expeditious execution of client orders with a focus on the operations of the branch in the Union (other than in the Member State where the branch is established)

28f

Product governance arrangements

Where the third-country firm manufactures and/or distributes financial instruments in the Union (other than in the Member State where the branch is established), description of the product governance arrangements set up by the third-country firm for its operations in the Union.

28g

The arrangements of the third-country firm to identify, prevent and manage conflicts of interest

The description of the measures the third-country firm has put in place to identify and to prevent or manage conflicts of interest that arise in the course of providing investment and ancillary services, including those arising from the remuneration policy of the persons involved in the provision of investment services, investment activities and ancillary services provided in the Union (other than in the Member State where the branch is established)

28h

The arrangements of the third-country firm to handle complaints

A description of the procedure that clients of the third-country firm in the Union (other than in the Member State where the branch is established) need to follow to lodge a complaint

28j

The department responsible for handling the complaints of clients of the branch

28k

The language(s) clients must lodge their complaints

28l

The relevant courts (in case of litigation) referred to in any contractual arrangements between the third-country firm and its clients in the Union (other than in the Member State where the branch is established)

28m

The alternative dispute resolution entity/ies competent to deal with cross-border disputes involving clients in the Union (other than in the Member State where the branch is established)

28n

The third-country firm’s membership of an investor compensation scheme

The description of the third-country firm’s membership of an investor compensation scheme including whether clients and counterparties of the branch in the Union (other than in the Member State where the branch is established) will be eligible to such scheme, its scope, a description of the eligibility conditions and the amounts and financial instruments covered by the scheme

28o

The arrangements of the third-country firm to protect and manage client funds and assets

The description of safeguarding arrangements for any client fund or client asset in the Union (other than in the Member State where the branch is established) (in particular, where financial instruments and funds are held in a custodian, the name of the custodian, and related contracts)

28p

Other arrangements

The description of any other arrangements that the third-country firm may deem relevant to the provision of services and performance of the activities of the branch in the Union (other than in the Member State where the branch is established) in an honest, fair and professional manner that promotes the interests of clients

29a

Information on the outsourcing arrangements of the third-country firm applicable to the operations of the branch

(to be provided in case of any change to the information previously reported to the competent authority)

The list and description of the outsourced functions (or those intended to be outsourced) for the provision of the branch’s investment services and performance of its activities in the Union (other than in the Member State where the branch is established)

29b

(to be provided in case of any change to the information previously reported to the competent authority)

Description of any arrangements and resources (in particular human and IT resources) that the third-country firm may have put in place and/or allocated for the activities of its branch in the Union (other than in the Member State where the branch is established) for algorithmic trading, high frequency trading and direct electronic access and for the control of such activities

Any other information considered by the competent authority necessary to enable comprehensive monitoring of the activities of the branch in the Union

15.7.2022

Official Journal of the European Union

L 188/114

COMMISSION IMPLEMENTING REGULATION (EU) 2022/1221

of 14 July 2022

imposing a provisional anti-dumping duty on imports of certain aluminium road wheels originating in Morocco

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (1) (‘the basic Regulation’), and in particular Article 7 thereof,

After consulting the Member States,

Whereas:

1. PROCEDURE

1.1. Initiation

(1)

On 17 November 2021, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports of certain aluminium road wheels (‘ARW’) originating in Morocco (‘the country concerned’) on the basis of Article 5 of the basic Regulation. It published a Notice of Initiation in the Official Journal of the European Union (2) (‘the Notice of Initiation’).

(2)

The Commission initiated the investigation following a complaint lodged on 4 October 2021 by the Association of European Wheel Manufacturers (‘the complainant’ or ‘EUWA’). The complaint was made on behalf of the Union industry in the sense of Article 5(4) of the basic Regulation. The complaint contained evidence of dumping and of resulting material injury that was sufficient to justify the initiation of the investigation.

1.2. Registration

(3)	The Commission made imports of the product concerned subject to registration by Commission Implementing Regulation (EU) 2022/934 (3) (‘the registration Regulation’).

1.3. Interested parties and request for anonymity

(4)

In the Notice of Initiation, the Commission invited interested parties to contact it in order to participate in the investigation. The Commission specifically informed the complainant and known Union producers, the known exporting producers and the authorities of Morocco, known importers, users and associations known to be concerned, about the initiation of the investigation and invited them to participate.

(5)

The complainants and two cooperating users requested that their names be kept confidential for fear that they could face retaliation by customers. The Commission took the view that there was indeed a serious risk of retaliation and accepted that the names of the complainants and the two cooperating users should not be disclosed. In order to effectively grant anonymity, the names of the other Union producers were also kept confidential, as to avoid that by deduction the names of the complainants could be identified.

1.4. Comments on Initiation

(6)	Interested parties had an opportunity to comment on the initiation of the investigation and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings.

(7)	Four parties requested a hearing with the Commission services and were heard: the European Automobile Manufacturers’ Association (‘ACEA’), EUWA, Dika Morocco Africa S.A.R.L (‘Dika’) and Hands 8 S.A. (‘Hands’).

(8)

Dika and the Moroccan authorities claimed that the figures reported in the complaint were outdated, as there was a gap of almost 8 months between its investigation period and the date of initiation of the investigation. Moreover, the investigation period selected by the complainant precisely coincided with the peak of the COVID-19 pandemic. Furthermore, the period considered by the complainant exceeded by one year the usual Commission’s practice, as described in the relevant Guide (4). Dika considered that this decision could be considered unfair and partial and the use of outdated figures cannot constitute prima facie evidence of dumping, injury or causality as required under Article 5(4) of the basic Regulation.

(9)

The Commission first noted that the Guide referred to by Dika explicitly indicates that it is meant to provide general advice but it is not a legally binding document and its contents are not compulsory (5). Furthermore, Article 5 of the basic Regulation does not contain any specific provision regarding the time lapsed between the complaint and the data provided. In any case, the investigation period of the complaint ended on 31 March 2021, while the complaint was lodged on 4 October 2021. Furthermore, the complainant also submitted additional injury data until 30 June 2021 (6). Consequently, the data provided by the complainant was up to date and as close as possible to the date of lodging of the complaint. Regarding the claim for the period considered and the investigation period, it is the Commission practice to select an investigation period of one year and previous three calendar years in order to examine the trends relevant for the assessment of injury covered. The fact that the complaint provided information for one additional year does not mean that outdated data was used which would render the assessment unfair or partial. Rather, it provided information regarding the most recent period available, that is until 31 March 2021. Consequently, the claim was rejected.

(10)

Dika claimed that the complaint did not provide evidence justifying the use of a constructed normal value as requested by Article 5(2) of the basic Regulation. Moreover, the party claimed that constructed normal value calculation were flawed. Therefore, the Commission should have concluded that the complaint did not contain sufficient evidence of dumping and should have been rejected in accordance with Article 5 of the basic Regulation.

(11)

Dika stated that the complainant did not use the Moroccan domestic sales price of ARW, although it could have known such prices in light of the fact that the Union industry itself exports ARW to Morocco. In addition, Dika alleged that the complainant used the exporting producers’ financial accounts from 2018 and 2019 to conclude that there were no sales in the ordinary course of trade, while these accounts were from a period before the investigation period selected in the complaint.

(12)

The Commission disagreed. The complainant in this investigation is the EUWA and not its individual members. Since the complainant is not a producer nor an exporter, it had no access to such data. In addition, invoices are generally considered business confidential data. The complainant thus had to rely on public information regarding domestic sales prices in Morocco, which was not available at the time of the complaint. As for the use of the financial accounts of 2018 and 2019 for the Moroccan exporting producers, these were the only accounts available to the complainant at the time of lodging the complaint. The complainant could therefore only conclude that based on the information reasonably available, there were no domestic sales in the ordinary course of trade by the known Moroccan exporting producers. It was therefore justified in constructing the normal value. Accordingly, the claim was rejected.

(13)

Dika also provided arguments concerning alleged fundamental flaws in the determination of the normal value. These arguments concern the choice of wheel size, the use of prices for aluminium ingots based on imports from China, the use of the Union producer cost structure, the exclusion of certain cost factors in the calculation and the application of a 6 % profit rate.

(14)

The Commission disagreed with these arguments. The assumptions which the complainant made in order to construct the normal value were based on the market experience and knowledge of the complainant as well as publicly available information. The fact that the interested party disagrees with such assumptions does not invalidate them for the purpose of constructing the normal value in the complaint. The figures on which the normal value was based were supported by sufficient evidence and confirmed by the Commission’s analysis of that evidence. Even when making certain adjustments as suggested by the interested party, which the Commission did when assessing the complaint, there remained sufficient evidence of dumping.

(15)	Dika and the Moroccan Authorities claimed that the complainant omitted from its injury analysis that the market is segmented between Original Equipment Manufacturers (‘OEM’) and aftermarkets (‘AM’), and within each market the different types of wheels, i.e. lower and higher-end segments.

(16)	The Commission observed that whilst OEM and AM aluminium wheels have different distribution sales channels they share the same physical and technical characteristics and are interchangeable. OEM and AM should therefore be considered as different sales channels rather than different segments.

(17)

As far as the two sales channels are concerned, the complainant estimated that Moroccan exports were probably almost exclusively delivered to OEM’s clients. The subsequent analysis by the Commission of the information at its disposal confirmed this. This was also the case of the sampled Union producers who almost exclusively sold to OEM clients (around 99,6 %).

(18)	Regarding the different types of wheels, the Commission noted that while the complaint did not contain a full injury analysis per different type of ARW, it provided undercutting and underselling calculations for ten representative types of wheels.

(19)	Consequently, the claim was rejected.

(20)

Dika, Hands and the Moroccan authorities claimed that the evolution of Moroccan imports cannot cause or threaten to cause injury to the Union industry as they represented only 2,8 % of the Union market during the period from 1 April 2020 to 31 March 2021 and do not cause price depression or price suppression.

(21)

The specific injury analysis of the complaint showed that there was sufficient evidence pointing to increased penetration of the Union market (both in absolute and relative terms) by imports from Morocco at prices which undercut and substantially undersell the Union industry’s own prices. This appears to have caused material injury to the Union industry, shown for example by the decrease of its sales and market share, by a deterioration of financial results or by the level of prices charged by the Union industry. Consequently, the claim was rejected.

(22)

Dika claimed that certain injury indicators, such as production capacity, Union prices and Union consumption, contained in the complaint did not support a finding of injury during the investigation period. Moreover, the full capacity utilization is not an option for ARW producer, given the ‘just-in-time’ supply chain models implemented by car manufacturers in the European Union, which requires ARW producers to be flexible and to have capacities available to respond to last-minute needs.

(23)

The Commission recalls that the finding of material injury necessary for the initiation of an investigation requires an examination, inter alia, of the relevant factors as described in the basic Regulation. However, it is not specifically required by Article 5 of the basic Regulation that all injury factors mentioned in Article 3(5) show deterioration in order for material injury to be sufficiently substantiated for the purpose of the initiation of an investigation. Indeed, the wording of Article 5(2) of the basic Regulation states that the complaint shall contain the information on changes in the quantity of the allegedly dumped imports, the effect of those imports on prices of the like product on the Union market and the consequent impact of the imports on the Union industry, as demonstrated by relevant (not necessarily all) factors. The complaint contained this information, which pointed to the existence of injury. Accordingly, the Commission considered that the complaint contained sufficient evidence of injury and rejected the claim.

(24)	Dika and Hands argued that the imposition of anti-dumping measures cannot be in the Union interest.

(25)

Regarding the latter, Union interest is not a relevant criterion for assessing whether a complaint justifies the initiation of an anti-dumping proceeding under Article 5 of the basic Regulation. Therefore, those comments were not considered in relation to claims regarding the initiation of the proceedings.

(26)	Dika, Hands and the Moroccan authorities claimed that the complainant did not consider other factors as the alleged lack of competition between Union ARW and Moroccan ARW due to markets segmentation; imports from third countries; the consequences caused by the COVID-19 pandemic.

(27)

The Commission’s analysis of the complaint confirmed that the elements mentioned, were either unsubstantiated, factually incorrect or insufficient to call into question the conclusion that the complaint contained sufficient evidence tending to show that imports of the product concerned were entering the Union at dumped prices and appeared to be causing material injury to the Union producers. These aspects had been established on the basis of the best evidence available to the complainant at the time and were sufficiently representative and reliable. Furthermore, the claims put forward by Dika, the Moroccan authorities and ACEA were examined in detail in the course of the investigation and are further addressed below.

(28)	On the basis of the above, the Commission confirmed that the complainant provided sufficient evidence of dumping, injury and a causal link, thereby satisfying the requirements set out in Article 5(2) of the basic Regulation.

1.5. Sampling

(29)	In the Notice of Initiation, the Commission stated that it might sample the interested parties in accordance with Article 17 of the basic Regulation.

1.5.1. Sampling of Union producers

(30)

In its Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission selected a definitive sample of three Union producers. Pursuant to Article 17 of the basic Regulation, the criterion used for the selection of the sample was the largest representative quantities of production of the like product in the Union during the investigation period, i.e. 1 October 2020 – 30 September 2021. This provisional sample consisted of three Union producers, located in three different Member States. The sample accounted for almost 20 % of the total production quantity in the Union of the like product, and it ensures a good geographical spread. The Commission invited interested parties to comment on the provisional sample and no comments were received.

1.5.2. Sampling of importers

(31)	To decide whether sampling is necessary and, if so, to select a sample, the Commission asked unrelated importers to provide the information specified in the Notice of Initiation.

(32)	None of the known unrelated importers provided the requested information and agreed to be included in the sample.

1.5.3. Sampling of exporting producers Morocco

(33)

To decide whether sampling is necessary and, if so, to select a sample, the Commission asked all exporting producers in Morocco to provide the information specified in the Notice of Initiation. In addition, the Commission asked the Mission of the Kingdom of Morocco to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

(34)	Only two exporting producers in the country concerned, accounting for virtually all imports of ARW from Morocco, provided the requested information. The Commission therefore decided that sampling was not necessary.

1.6. Questionnaire replies and verification visits

(35)	The Commission sent questionnaires to three Union producers, the complainant, and two known users, and two exporting producers in the country concerned. The same questionnaires were made available online (7) on the day of initiation.

(36)

The Commission sought and verified all the information deemed necessary for a provisional determination of dumping, injury and Union interest. In view of the outbreak of COVID-19 pandemic and the confinement measures put in place by various countries, the Commission could not carry out all verification visits pursuant to Article 16 of the basic Regulation.

—	Verification visits pursuant to Article 16 of the basic Regulation were carried out at the premises of two sampled Union producers, one user (8), and at the premises of the following exporting producers in Morocco: HANDS 8 S.A. (‘Hands’)

—	DIKA MOROCCO AFRIKA S.A.R.L (‘Dika’)

(37)	In addition, in line with its Notice on the consequences of the COVID-19 outbreak on anti-dumping and anti-subsidy investigations (9), the Commission carried out remote cross-checks in respect of Dika’s related company CITIC Dicastal Co., Ltd (‘CITIC’) and one Union producer.

1.7. Investigation period and period considered

(38)	The investigation of dumping and injury covered the period from 1 October 2020 to 30 September 2021 (‘the investigation period’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2018 to the end of the investigation period (‘the period considered’).

2. PRODUCT CONCERNED AND LIKE PRODUCT

2.1. Product concerned

(39)

The product concerned is aluminium road wheels of the motor vehicles of HS headings 8701 to 8705 whether or not with their accessories and whether or not fitted with tyres, originating in Morocco, currently falling under CN codes ex 8708 70 10 and ex 8708 70 50 (TARIC codes: 8708701015, 8708701050, 8708705015 and 8708705050) (‘the product concerned’).

(40)

Aluminium road wheels are traditionally sold in the Union via two distribution sales channels: to the OEM, which are mainly car manufacturers, and to the aftermarket, which includes for example distributors, retailers, repair shops, etcetera. The product concerned from Morocco was exclusively sold through the OEM channel during the period considered. In the OEM distribution channel, car manufacturers organise tender procedures for ARW and are often involved in the process of developing a new wheel, which is associated with their brand. Both Union producers and Moroccan exporters can compete in the same tenders.

2.2. Like product

(41)

The investigation showed that the following products have the same basic physical, chemical and technical characteristics as well as the same basic uses:

—	the product concerned;

—	the product produced and sold on the domestic market of Morocco; and

—	the product produced and sold in the Union by the Union industry.

(42)	The Commission decided at this stage that those products are therefore like products within the meaning of Article 1(4) of the basic Regulation.

3. DUMPING

3.1. Morocco

3.1.1. Cooperation of exporting producers

(43)

As set out in recital 34 above, two Moroccan exporting producers, Dika and Hands, came forward in the investigation and provided questionnaire replies. Dika has a related company, CITIC, which is a Chinese ARW producer. CITIC buys ARW from Dika and sells it to the Union, Morocco and other third countries. During the RCC with CITIC, a number of errors were discovered which cast serious doubts on the reliability of the domestic and EU sales listings. These errors mainly concerned differences between the prices recorded in the sales listings, the prices on the invoices and the amounts actually paid.

(44)

On 1 April 2022, during the on-spot verification at Dika, after the RCC with CITIC had been concluded, the company provided a revised version of the sales listings, including an explanation for the discrepancies that had been found. At that point in time there remained no opportunity to verify or cross-check the revised sales listings. In addition, a preliminary check of the newly submitted data revealed that the revisions made by the company did not rectify all discrepancies mentioned during the RCC, while the total number of revisions was much higher than expected based on the RCC. The nature and number of the mistakes, some of which persisted following the revision, was such that the Commission could not rely on the accuracy of the sales listings. Therefore, the Commission was unable to verify the information necessary to establish a dumping margin for the company.

(45)

In accordance with Article 18(4) of the basic Regulation, by letter of 5 May 2022, Dika and its related company were informed of the reasons of the Commission’s intention to disregard the information provided and they were granted the opportunity to provide further explanations (‘the Article 18 letter’).

(46)

The company replied to the Commission’s letter on 12 May 2022. In its reply the company explained that it had recorded its sales in the sales listings in accordance with its accounting principles. The company therefore maintained, in contrast to statements made during the RCC and the on-spot verification visit, that the original sales listings, the total values of which could be reconciled with the company’s SAP accounting system, were complete and accurate, contained no errors and required no revisions. In fact, the revisions that the company had done post RCC, were allegedly only provided to the Commission to show CITIC’s full cooperation in the investigation. The company therefore stated that the Commission should use the original non-revised version of the sales listings. In the alternative, the company stated that the Commission could use the revised sales listings, provided with the letter, since the deficiencies were allegedly not such as to cause undue difficulty in arriving at a reasonably accurate finding. These sales listings were similar to those provided during the on-spot verification, to which previously missing data was added, some errors were corrected and additional explanations were provided. However, several errors still remained, for a number of transactions the actual received amount was still not provided and the Commission was not in the position to cross-check or verify the revised sales listings provided with the company’s reply to the Article 18 letter. The company also stated that, in case the Commission would insist on the application of Article 18 of the basic Regulation, it should use CITIC’s financial statements as partial facts available.

(47)

The Commission disagreed with the arguments provided by the company in its reply to the Article 18 letter. The anti-dumping questionnaire for exporting producers clearly requested to provide the sales listings on a transaction-by-transaction basis. The templates of the tables provided with the questionnaire unequivocally request the data as recorded on the invoice (invoice quantity, invoice value, related credit notes etc.). The company itself acknowledged that they did not complete the sales listings on an invoice basis. Rather, they completed it based on their own accounting practices. In addition, the company argued that any difference between the invoice value and the price actually received is normally recorded in the sales listings either as a discount, a rebate, a credit note or in another way. However, it was found that these differences were not systematically reflected in the company’s sales listings.

(48)

As mentioned above in recital 44, the revised sales listings could not be cross-checked or verified in a timely manner. As explained to the company in the pre-RCC and pre-verification letter sent on 11 March 2022 and in line with the Notice on the consequences of the COVID-19 outbreak on anti-dumping and anti-subsidy investigations (10), the purpose of the RCC was to gain assurances with regard to the information submitted by the company in its questionnaire response. Such assurances were not obtained during the RCC with regard to the sales listings. An additional RCC with CITIC, as proposed by the company in its reply to the Article 18 letter, should not be used as a way to remedy the lack of timeliness or errors established during the RCC that already took place within the set time limits.

(49)

In addition, some changes that were discussed during the RCC were not taken into account in the revised tables. With its reply to the Article 18 letter, the company had provided a new revised sales listing where additional changes were made which could not be cross-checked or verified either. The Commission therefore considered that the company did not provide the requested information within the time limits of the investigation. The alternative proposed by the company, to use CITIC’s financial statements as partial facts available, was not acceptable. The use of the financial statements would not enable the Commission to establish a normal value and an export price at the level of detail and accuracy required by the basic Regulation, since they would not allow for an analysis on a product or transaction basis.

(50)

Since Dika and its related company CITIC did not provide information that would have enabled the Commission to arrive at a reasonably accurate finding, and verifiable information that could have enabled such finding was not submitted, the Commission decided to disregard the information submitted by the company with regard to the domestic and EU sales listings. As that information is crucial to the determination of a normal value and an export price, the Commission was not in a position to calculate an individual dumping margin for the company.

(51)	Accordingly, the Commission provisionally disregarded the information provided by this exporting producer and confirmed the use of facts available with regard to this exporting producer on the basis of Article 18(1) of the basic Regulation.

3.1.2. Normal Value

(52)	Due to the application of Article 18(1) of the basic Regulation as described in Section 3.1.1 above, the description of the dumping margin calculation below only applied to the remaining Moroccan exporting producer, Hands.

(53)

Article 2(1) of the basic Regulation states that the normal value shall be based on the prices paid or payable in the ordinary course of trade by independent customers in the exporting country. However, the Commission determined that the cooperating exporting producer had made no domestic sales. The small number of sales of ARW to customers in Morocco during the investigation period were made to one car manufacturer located in an economic duty-free zone (‘zone d’accélération industrielle’, previously also called ‘zone franche’ or ‘zone franche d’exportation’), similar to the economic zone in which the cooperating producer was located. That car manufacturer purchased the ARW for use in the assembly of a car. Subsequently, the car and not the ARW would be shipped from the duty-free zone either to be sold domestically, or to be exported. The final destination of the car was most likely not the domestic market though. A study in 2020 showed that 90 % of all cars manufactured in Morocco are destined for the export market (11), which was also corroborated by information from Moroccan car manufacturers (12). In addition, under Law 19-94 governing free trade zones, companies located in such zones must make at least 70 % of their turnover from exports (13).

(54)

As explained above, the sale of ARW by the cooperating exporting producer to that customer in Morocco was a sale from one economic zone to another. Companies located in such economic zones in Morocco are exempt from the customs laws and regulations which normally apply in the Moroccan territory, and goods entering the economic zone are considered as exports (14). As the ARW were produced in an economic zone, and subsequently sold and shipped to another economic zone, the ARW never entered the customs territory of Morocco, and could therefore not be considered a domestic sale.

(55)	In any event, even if the sales to the economic duty-free zone in Morocco were considered domestic sales, they were not representative nor done in the ordinary course of trade as required by Article 2(1) of the basic Regulation.

(56)

In this respect the Commission first examined whether the total quantity of domestic sales for the cooperating exporting producer was representative, in accordance with Article 2(2) of the basic Regulation. The domestic sales are representative if the total domestic sales quantity of the like product to independent customers on the domestic market represented at least 5 % of its total export sales quantity of the product concerned to the Union during the investigation period. On this basis, the sales of the cooperating exporting producer made in Morocco were not representative.

(57)

The Commission next defined the proportion of profitable sales to independent customers on the domestic market for each product type during the investigation period in order to decide whether to use actual domestic sales for the calculation of the normal value, in accordance with Article 2(4) of the basic Regulation. The analysis of domestic sales showed that none of the domestic sales were profitable and thus not in the ordinary course of trade.

(58)	As there were no sales of the like product in the ordinary course of trade on the domestic market, the Commission constructed the normal value in accordance with Article 2(3) and (6) of the basic Regulation.

(59)

Article 2(3) of the basic Regulation states that when there are no domestic sales in the ordinary course of trade, the normal value of the like product shall be calculated on the basis of the cost of production in the country of origin plus a reasonable amount for selling, general and administrative costs (‘SG&A’) and for profit. Article 2(6) of the basic Regulation states that the SG&A and profit shall be based on actual data pertaining to production and sales, in the ordinary course of trade, of the like product by the exporter or producer under investigation. However, as there are no sales of the like product in the ordinary course of trade for Hands, as explained above, Article 2(6) of the basic Regulation provides for three alternative methods:

(a)	the weighted average of the actual amounts determined for other exporters or producers subject to investigation in respect of production and sales of the like product in the domestic market of the country of origin;

(b)	the actual amounts applicable to production and sales, in the ordinary course of trade, of the same general category of products for the exporter or producer in question in the domestic market of the country of origin;

(c)	any other reasonable method, provided that the amount for profit so established shall not exceed the profit normally realised by other exporters or producers on sales of products of the same general category in the domestic market of the country of origin.

(60)

With regard to Article 2(6)(a), there was only one other exporting producer of ARW in Morocco, Dika. Dika also sold all of its ARW in Morocco to car manufacturers located in economic zones. As explained above in recitals 53 and 54, such sales were not considered domestic sales. In addition, the average referred to in Article 2(6)(a) must be a weighted average of at least two exporting producers (15). Therefore, Dika’s data could not be used, even if their sales would have been considered reliable. Article 2(6)(a) could therefore not be applied.

(61)

Article 2(6)(b) requires production and sales, in the ordinary course of trade, of the same general category of products for the exporter or producer in question in the domestic market. Hands, however, produced only ARW, and none of their sales were made in the ordinary course of trade. Article (2)(6)(b) could therefore not be applied either.

(62)

Article 2(6)(c) refers to “any other reasonable method” to establish SG&A and profit. In the absence of other ARW producers in Morocco, the Commission considered it reasonable to apply the SG&A and profit found for ARW producers in Brazil. Brazil was proposed as a suitable representative country in the request for review which was the basis for the ongoing expiry review investigation concerning ARW from China (16). The weighted average SG&A found was 11,49 % and a weighted average profit was 4,89 %.

(63)

Article 2(6)(c) also obliges the application of a cap to the profit used under this methodology to ensure that the profit used does not exceed the profit normally realised by other exporters or producers on sales of products of the same general category in the domestic market of the country of origin. There were no other Moroccan ARW producers than Dika and Hands, whose profit could not be used as they had no sales on the domestic Moroccan market. In addition, there was no information available to the Commission regarding the profit realized by possible producers or exporters of aluminium car parts or any car-industry related aluminium products in Morocco.

(64)

The Commission considered ARW to be in the same general category as other aluminium products such as aluminium extrusions or aluminium profiles. Such products use the same main raw material (aluminium), which accounts for the main part of the cost of production of such products. In addition, the different production processes involve the melting or heating of the aluminium to shape it in a desired form. The weighted average profit achieved by the seven Moroccan producers of such aluminium products, for whom financial data for 2020 was available, was 4,16 %. This percentage was used as a cap for the profit the Brazilian ARW producers.

(65)	Normal value was then constructed by adding to Hands’ cost of production the Brazilian SG&A and profit mentioned in recital 62, but capped at 4,16 %.

3.1.3. Export price

(66)	The cooperating exporting producer exported to the Union either directly to independent customers or through a related company acting as an importer.

(67)	For the sales made directly to independent customers in the Union, the export price was the price actually paid or payable for the product concerned when sold for export to the Union, in accordance with Article 2(8) of the basic Regulation.

(68)

For the sales exported to the Union through a related company acting as an importer, the export price was established on the basis of the price at which the imported product was first resold to independent customers in the Union, in accordance with Article 2(9) of the basic Regulation. In this case, adjustments to the price were made for all costs incurred between importation and resale, including SG&A expenses, and for profits accruing. The profits were based on those normally achieved by unrelated importers, since the actual profit of the related importer was not considered reliable because of the relationship between the cooperating exporting producer and the related importer. Given that no unrelated importer cooperated with the Commission in this investigation, the Commission used the profit established in the last expiry review investigation concerning ARW from China (17).

3.1.4. Comparison

(69)	The Commission compared the normal value and the export price of the cooperating exporting producer on an ex-works basis.

(70)

Where justified by the need to ensure a fair comparison, the Commission adjusted the normal value and/or the export price for differences affecting prices and price comparability, in accordance with Article 2(10) of the basic Regulation. Adjustments were made for transport, insurance, handling and loading, packing expenses, credit costs, rebates and other allowances.

3.1.5. Dumping margin

(71)	For the cooperating exporting producer, the Commission compared the weighted average normal value of each type of the like product with the weighted average export price of the corresponding type of the product concerned, in accordance with Article 2(11) and (12) of the basic Regulation.

(72)

For all other exporting producers in Morocco, the Commission established the dumping margin on the basis of the facts available, in accordance with Article 18 of the basic Regulation. To this end, the Commission determined the level of cooperation of the exporting producers. The level of cooperation is the quantity of exports of the cooperating exporting producers to the Union expressed as proportion of the total imports from the country concerned to the Union in the investigation period, that were established on the basis of the Eurostat Comext database.

(73)

As explained in section 3.1.1 above, there was only one cooperating Moroccan exporting producer. Since this company’s exports of ARW constituted less than 50 % of the total Union imports of ARW during the investigation period, the level of cooperation in this case was considered low. On this basis, the Commission decided that it was appropriate to establish the residual dumping margin at the level of the highest dumping margin found for product types sold in representative quantities by the cooperating exporting producer. The export sales of these product types represented around 50 % of all exports to the Union by the cooperating exporting producer.

(74)

The provisional dumping margins, expressed as a percentage of the CIF Union frontier price, duty unpaid, are as follows:

Company	Provisional dumping margin
HANDS 8 S.A.	8,0 %
All other companies	16,5 %

4. INJURY

4.1. Definition of the Union industry and Union production

(75)	The like product was manufactured by around thirty producers in the Union during the investigation period. They constitute the ‘Union industry’ within the meaning of Article 4(1) of the basic Regulation.

(76)

The total Union production during the investigation period was estimated at around 64,3 million items. The Commission established the figure on the basis of all the available information concerning the Union industry, such as the reply to the macroeconomic questionnaire provided by the complainant. As indicated in recital 30, the sampled Union producers represented almost 20 % of the total production quantity of the known Union producers of the like product.

4.2. Union consumption

(77)

Union consumption developed as follows:

Table 1

Union consumption (items)

	2018	2019	2020	Investigation period
Total consumption (in 000 items)	77 873	73 797	59 530	64 311
Index (2018 = 100)	100	95	76	83
Source: Eurostat Comext database, EUWA and the verified questionnaire replies

(78)

The Commission established the Union consumption based on the total Union industry’s sales in the Union, plus total imports from third countries to the Union. Sales of the Union industry on the Union market were obtained from the complaint and adjusted on the basis of data provided in the replies of the sampled Union producers for the investigation period. For imports, the Commission relied on Eurostat Comext database. However, as Eurostat Comext database provides only the weight of the imports and not the number of ARW items imported, it was necessary to convert the weight into items. In the complaint, the complainant applied the conversion ratio used in the last investigation on the same product (18) (i.e. 10,9 kg per item). The validity of this conversion ratio was verified based on the questionnaires replies of the Moroccan and the sampled Union producers. The investigation revealed that the weighted average weight per item currently applicable is 11,3 kg per item as the market trend is going towards larger wheel diameter resulting in an increase of the weight per wheel. Therefore, this ratio was used when establishing the Union consumption per item.

(79)

As mentioned above recital 16 above, the Union market is unequally divided between two distribution channels, i.e. OEM and AM. The bulk of the sales concerns the OEM channel with 90 % of market share. Thus, the AM channel with around 10 % of sales has a limited impact on the overall assessment of the Union market. Its impact is further limited due to the fact that the Moroccan producers were exclusively selling through the OEM channel, which was also the case for the three sampled Union producers. The latter sold almost exclusively through the OEM channel (around 99,6 % of their sales). As a result, this had no impact on price comparison analysis in the case at hand which is carried out on microeconomic level on the basis of the data provided by the exporting producers and the sampled Union producers. Consequently, the Commission provisionally decided not to split the consumption between the two sales channels for the purpose of this investigation.

(80)

The Union consumption decreased by 5 % between 2018 and 2019, by 19 % between 2019 and 2020. In 2020, the car industry production went down by around 4,2 million vehicles due to the COVID-19 pandemic and thus with a direct impact on upstream suppliers as the sales of the ARW decreased by 14 million in 2020 compared with 2019. The drop in production was particularly significant in the 2nd quarter of 2020 but the market rebounded in the following months. The market recovered 5 million wheels: from 59 in 2020 to 64 million during the investigation period. The consumption did, however, not reach the level of 2019 due to the shortage of semi-conductors used by car makers.

4.3. Imports from the country concerned

4.3.1. Quantity and market share of the imports from the country concerned

(81)	The Commission established the quantity of imports on the basis of Eurostat Comext database. The market share of the imports was established on the basis of the share these imports represented of the total Union consumption.

(82)

Imports into the Union from the country concerned developed as follows:

Table 2

Import quantity (items) and market share

	2018	2019	2020	Investigation period
Quantity of imports from Morocco (in 000 items)	0	15,7	1 038	2 516
Index (2019 = 100)	-	100	6 611	16 025
Market share (%)	-	0,0	1,7	3,9
Index (2019 = 100)	-	100	8 196	18 389
Source: Eurostat Comext database

(83)

While in 2019, Morocco exported few thousand items, the exports accelerated through 2020 and the investigation period, from 1 million to 2,5 million items. The registration Regulation pointed that in the months following the end of the investigation period, growth maintained at the same rate as in the investigation period. As mentioned in recital 79 above, these sales concerned exclusively the OEM sales channel.

4.3.2. Prices of the imports from the country concerned: price undercutting and price suppression

(84)	The Commission established the prices of imports on the basis of Eurostat Comext database. Price undercutting of the imports was established on the basis of data from the cooperating exporting producers and the cooperating Union producers.

(85)

The weighted average price of imports into the Union from the country concerned developed as follows:

Table 3

Average import prices from Morocco

	2018	2019	2020	Investigation period
In EUR/item	-	39,2	42,6	44,7
Index (2019 = 100)	-	100	109	114
Source: Eurostat Comext Database

(86)	The average import price from Morocco increased by around 2 EUR per item between 2020 and the investigation period. However, part of the selling price is indexed to the aluminium price on the London Metal Exchange (‘LME’), which increased significantly that is by around 25 %, during this period.

(87)	The Commission determined price undercutting during the investigation period by comparing:

(88)	the weighted average sales prices per product type of the sampled Union producers directly charged to unrelated customers on the Union market, adjusted to an ex-works factory; and

(89)	the corresponding weighted average prices per product type of the imports only from Hands to the first independent customer on the Union market, established on a Cost, Insurance, Freight (CIF) basis, with appropriate adjustments for customs duties and post-importation costs.

(90)

The price comparison was made on a type-by-type basis for transactions at the same level of trade, duly adjusted where necessary, and after deduction of rebates and discounts. The result of the comparison was expressed as a percentage of the sampled Union producers’ theoretical turnover during the investigation period. It showed a weighted average undercutting margin of 26,9 % by the imports on the Union market.

(91)

In addition, the Commission established the existence of price suppression. Indeed, as shown in table 7, the Union industry was selling at costs in 2020 and below costs of production during the investigation period. Those are the years with major penetration of the dumped imports and when the Union industry lost market share. Thus, the low import prices of the dumped imports prevented the Union industry from increasing its sales prices, resulting in losses during the investigation period.

4.4. Economic situation of the Union industry

4.4.1. General remarks

(92)	In accordance with Article 3(5) of the basic Regulation, the examination of the impact of the dumped imports on the Union industry included an evaluation of all economic indicators having a bearing on the state of the Union industry during the period considered.

(93)	As mentioned in recital 30, sampling was used for the determination of possible injury suffered by the Union industry.

(94)

For the injury determination, the Commission distinguished between macroeconomic and microeconomic injury indicators. The Commission evaluated the macroeconomic indicators on the basis of data contained in the reply to the macroeconomic questionnaire. The data related to all Union producers. The Commission evaluated the microeconomic indicators on the basis of data contained in the questionnaire replies from the sampled Union producers. The data related to the sampled Union producers. Both sets of data were found to be representative of the economic situation of the Union industry.

(95)	The macroeconomic indicators are: production, production capacity, capacity utilisation, sales quantity, market share, growth, employment, productivity, magnitude of the dumping margin, and recovery from past dumping.

(96)	The microeconomic indicators are: average item prices, item cost, labour costs, inventories, profitability, cash flow, investments, return on investments, and ability to raise capital.

4.4.2. Macroeconomic indicators

4.4.2.1. Production, production capacity and capacity utilisation

(97)

The total Union production, production capacity and capacity utilisation developed over the period considered as follows:

Table 4

Production, production capacity and capacity utilisation

	2018	2019	2020	Investigation period
Production quantity (in 000 items)	59 182	57 097	44 718	48 752
Index (2018 = 100)	100	96	76	82
Production capacity (in 000 items)	62 614	62 475	61 619	61 294
Index (2018 = 100)	100	100	98	98
Capacity utilisation (%)	95	91	73	80
Index (2018 = 100)	100	97	77	84
Source: EUWA and sampled Union producers

(98)	Overall, the production quantity of Union industry decreased by 18 % during the period considered. It slightly decreased by 4 % between 2018 and 2019. With the COVID-19 pandemic, the production decreased by 12,3 million items in 2020 and rebounded in the investigation period by 4 million items.

(99)	While the production capacity of the Union industry decreased by 2 %, the capacity utilisation followed the same negative trend as production and decreased by 15 % during the period considered.

4.4.2.2. Sales quantity and market share

(100)

The Union industry’s sales quantity and market share developed over the period considered as follows:

Table 5

Sales quantity and market share

	2018	2019	2020	Investigation period
Sales quantity on the Union market (in 000 items)	57 501	55 502	43 110	45 391
Index (2018 = 100)	100	97	75	79
Market share (%)	73,8	75,2	72,4	70,6
Index (2018 = 100)	100	102	98	96
Source: EUWA and sampled Union producers

(101)

The sales quantity of the Union industry on the Union market decreased by 21 % during the period considered. It decreased by 3 % between 2018 and 2019 and then dropped by 12 million items in 2020. During the investigation period, the sales recovered by 2,2 million items.

(102)

The market share of the Union industry slightly increased between 2018-2019 and declined in 2020 and further in the investigation period.

4.4.2.3. Employment and productivity

(103)

Employment and productivity developed over the period considered as follows:

Table 6

Employment and productivity

	2018	2019	2020	Investigation period
Number of employees	17 816	17 866	16 963	16 790
Index (2018 = 100)	100	100	95	94
Productivity (item/employee)	3 322	3 196	2 636	2 904
Index (2018 = 100)	100	96	79	87
Source: EUWA and the sampled Union producers

(104)

While the number of employees decreased by 6 % during the period considered, productivity decreased by 13 %. The decline in productivity is mainly due to the decrease in the production quantity over the period considered. A declining productivity points to increased labour costs per item of ARW produced.

4.4.2.4. Growth

(105)

As explained in Sections 4.4.2.1 to 4.4.2.3 above, the production quantity and the capacity utilisation of the Union industry decreased by 18 % and 16 %, respectively during the period considered, which resulted in higher fixed costs per item of production and in lower productivity. Total costs of the industry have increased by 1,7 €/item (+ 3,4 %) over the period considered. However, the average selling price of the Union industry decreased by 3,3 €/item (-6,1 %).

(106)

Furthermore, the sales quantity on the Union market dropped by 21 % and the market share by 5 %, between 2018 and the investigation period. Thus, the Union industry experienced a deterioration of its financial performance. As explained in Section 4.4.3.1 below, it faced higher cost of production while being unable to adjust its sales prices accordingly.

(107)

Therefore, the growth perspectives of the Union industry have been jeopardised.

4.4.2.5. Magnitude of the dumping margin and recovery from past dumping

(108)

All dumping margins were significantly above the de minimis level. The impact of the magnitude of the actual margins of dumping on the Union industry was substantial, given the quantity and prices of imports from the country concerned.

(109)

ARW are subject to anti-dumping measures against China which were imposed in 2010 (19). In the last expiry review (20) the Commission concluded that the Union industry no longer suffered material injury and thus it had recovered from the past dumping. This is confirmed in 2018 and 2019, before the imports from Morocco started coming and subsequently increased substantially, when the financial situation of the Union industry improved substantially.

(110)

Consequently, the Commission confirmed that the Union industry has recovered from the past dumping by imports from China before the dumped imports from Morocco entered into the Union market.

4.4.3. Microeconomic indicators

4.4.3.1. Prices and factors affecting prices

(111)

The weighted average sales prices per item of the sampled Union producers to unrelated customers in the Union developed over the period considered as follows:

Table 7

Sales prices in the Union

	2018	2019	2020	Investigation period
Average sales price per item in the Union market (EUR/item)	53,9	52,3	49,3	50,6
Index (2018 = 100)	100	97	92	94
Cost of production per item (EUR/item)	49,9	48,2	49,3	51,6
Index (2018 = 100)	100	97	99	104
Source: Sampled Union producers

(112)

The average Union industry’s sales prices decreased by 6 % during the period considered although the average cost of production increased by 4 % between 2018 and the investigation period. Union industry was not able to increase sales prices to cover the increased cost of production.

(113)

The sales of the Union industry of the like product in the Union market were based on multi-year contracts with car manufacturer’s customers that fixed the quantities and prices. Car manufacturers organize a fierce competition between suppliers by means of tenders and will select the two suppliers offering the best conditions, after several rounds of competition, during which EU producers must align themselves with, amongst others, Moroccan producers offering low prices. As a result, the Union industry could not pass on the increase in the costs of production. While the Union industry has a minimal margin to increase sales prices in the context of increasing raw material prices during the application of the yearly contract, in principle it should be able to increase its sales prices when it negotiates the contracts for the following year. However, the Union industry did not manage to do so during the period considered because of price pressure by imports. This led to a decrease of the profitability of Union industry, as explained in Section 4.4.3.4 below.

4.4.3.2. Labour costs

(114)

The average labour costs of the sampled Union producers developed over the period considered as follows:

Table 8

Average labour costs per employee

	2018	2019	2020	Investigation period
Average labour costs per employee (EUR)	35 216	35 700	33 084	35 951
Index (2018 = 100)	100	101	94	102
Source: Sampled Union producers

(115)

The average labour cost per employee of the Union industry slightly increased by 2 % during the period considered with a small increase in 2019 and a decrease by 6 % in 2020, mainly because of production shutdowns due to the COVID-19 pandemic.

4.4.3.3. Inventories

(116)

Stock levels of the sampled Union producers developed over the period considered as follows:

Table 9

Inventories

	2018	2019	2020	Investigation period
Closing stocks (in 000 items)	556	439	492	776
Index (2018 = 100)	100	79	88	140
Closing stocks as a percentage of production (%)	0,9	0,8	1,1	1,6
Index (2018 = 100)	100	89	122	177
Source: Sampled Union producers

(117)

Inventories increased by 40 % over the period considered. They decreased by 21 % in 2019, by 12 % in 2020 and rebounded during the investigation period by +57 %. As explained in recital 113, the ARW industry in the Union is characterised by multi-years framework contracts between producers and customers that fix the quantities and prices. These framework contracts are implemented through purchasing orders according to customer’s needs. As a result, the Union industry can plan its production and inventories. Therefore, inventories are not a main indicator for the assessment of the Union industry’s performance.

4.4.3.4. Profitability, cash flow, investments, return on investments and ability to raise capital

(118)

Profitability, cash flow, investments and return on investments of the sampled Union producers developed over the period considered as follows:

Table 10

Profitability, cash flow, investments and return on investments

	2018	2019	2020	Investigation period
Profitability of sales in the Union to unrelated customers (% of sales turnover)	7,5	8,2	0,4	-1,6
Index (2018 = 100)	100	109	5	-21
Cash flow (in 000 EUR)	81 153	82 495	31 805	22 956
Index (2018 = 100)	100	102	39	28
Investments (in 000 EUR)	37 788	30 757	19 848	21 845
Index (2018 = 100)	100	81	53	58
Return on investments	12,0	9,1	0,3	-0,5
Index (2018 = 100)	100	76	3	-4
Source: Sampled Union producers

(119)

The Commission established the profitability of the sampled Union producers by expressing the pre-tax net profit of the sales of the like product to unrelated customers in the Union as a percentage of the turnover of those sales.

(120)

The profitability of the Union industry increased between 2018-2019 from 7,5 % to 8,2 % but then it declined sharply in 2020- investigation period where losses were reported (-1,6 %). The Union industry was not able to increase sales prices to cover the increased cost of production and therefore became loss making.

(121)

The net cash flow is the ability of the Union producers to self-finance their activities. The trend in net cash flow developed downwards with a significant decrease by 72 % over the period considered. Therefore, the Union industry experienced difficulties to self-finance its activities, which is a further indication of its deteriorated financial situation.

(122)

The return on investments is the profit in percentage of the net book value of investments. It followed a similar negative trend as profitability and net cash flow. The return on investment decreased significantly between 2018 and the investigation period and turned negative in the investigation period. Therefore, the Union industry was not able to generate enough profits in order to cover its investments. Indeed, the Union industry maintained its investments during the period considered, mostly due to the necessity to comply with legal requirements and the needs of the market and it was not able to have a return on these investments. The negative development of the return on investment during the period considered further indicated that the overall financial situation of the Union industry worsened to a significant extent.

(123)

The sampled Union producers’ ability to raise capital was affected by their deteriorated financial situation. The considerable decrease of the profitability and the net cash flow pointed to serious concerns as regards the liquidity situation of Union industry and its ability to raise capital to finance its operating activity and needed investments.

4.4.4. Conclusion on injury

(124)

Economic indicators at both macro and micro level generally deteriorated during the period considered.

(125)

While the Union industry’s production capacity remained stable, the capacity utilisation decreased by 16 % between 2018 and the investigation period, which resulted in higher fixed cost per tonne of ARW. Following the same trend, the Union industry’s sales quantity and market share in the period considered declined.

(126)

The financial situation of the Union industry deteriorated mainly due to the increased cost of production, which could not be covered by a corresponding increase of its sales prices.

(127)

The average Union industry’s sales prices decreased by 6 % during the period considered although the average cost of production increased by 9 % in the same period. The price pressure from the dumped imports at lower prices led to losses as from 2020, which further increased in the investigation period. While net investments decreased by 42 %, the return on investment became negative during the period considered. The trend of the cash flow was also negative, which affected the ability of the Union industry to self-finance its operations. The number of employees decreased during the same period by 6 %; however, the productivity decreased by 13 %, resulting in a higher labour cost per item of ARW.

(128)

As set out above, economic indicators such as profitability, cash flow and return on investment deteriorated significantly during the period considered. This negatively affected the ability of the Union industry to self-finance operations, to make necessary investments and to raise capital, thus impeding its growth and even threatening its survival.

(129)

On the basis of the above, the Commission provisionally concluded that the Union industry suffered material injury within the meaning of Article 3(5) of the basic Regulation

5. CAUSATION

(130)

In accordance with Article 3(6) of the basic Regulation, the Commission examined whether the dumped imports from the country concerned caused material injury to the Union industry. In accordance with Article 3(7) of the basic Regulation, the Commission also examined whether other known factors could at the same time have injured the Union industry. The Commission ensured that any possible injury caused by factors other than the dumped imports from the country concerned was not attributed to the dumped imports. These factors are: imports from other third countries, the COVID-19 pandemic, the evolution of the cost of production, the export performance of the Union industry and effect of multi-years contracts.

5.1. Effects of the dumped imports

5.1.1. Quantity and market share of the dumped imports from the country concerned

(131)

The Commission examined the evolution of the quantity of imports from the country concerned and their impact on the Union industry as required by Article 3(2) of the basic Regulation.

(132)

The import quantities from the country concerned continued to increase during the period considered, quantities from 16 376 items in 2019 to 1 million items in 2020 and to 2,5 million items in the investigation period. This significant increase even continued during the COVID-19 pandemic.

(133)

The market share of imports from Morocco increased from 0,0 % in 2018 to 3,9 % in the investigation period. Consequently, there has been a significant increase in dumped imports within the meaning of Article 3(3) of the basic Regulation.

5.1.2. Price of the dumped imports from the country concerned and price effects

(134)

The average import price of the imports from Morocco increased by 14 % between 2019 and the investigation period. However, this increase may reflect only partially the increase of the LME aluminium price over the same period, which is the main raw material of ARW. As explained in recital 90, the imports from Morocco undercut the Union industry’s prices by 8,0 %. In any event, the significant import quantities at low prices also depressed the Union industry’s prices as they were forced to lower their prices in order to remain competitive, as explained in recital 113, to the extent that prices no longer covered the costs of production.

5.1.3. Causal link between the dumped imports from Morocco and the material injury of the Union industry

(135)

The increased import quantities from Morocco combined with their low average sales prices had a negative impact on the Union industry’s financial situation. Moreover, the participation of the Moroccan producers to the tenders organized by the car manufacturers pushed downward the overall market prices. The Union industry was not able to increase their sales prices in order to pass on to customers the increasing cost of raw materials because it faced unfair competition from imports of the product concerned. The Union industry’s strategy was to maintain production quantities and market share to cover the fixed costs to the detriment of its profitability. Therefore, the low-priced imports from Morocco prevented price increases by the Union industry within the meaning of Article 3(3) of the basic Regulation and thus caused price suppression.

(136)

In view of the above considerations, the Commission provisionally established the material injury suffered by the Union industry was caused by the dumped imports from the country concerned within the meaning of Article 3(6) of the basic Regulation.

5.2. Effects of other factors

5.2.1. Imports from third countries

(137)

The quantity of imports from other third countries developed over the period considered as follows:

Table 11

Imports from third countries

Country		2018	2019	2020	Investigation period
Turkey	Quantity (in 000 items)	7 983	7 632	7 010	8 364
	Index (2018 = 100)	100	96	88	105
	Market share (%)	10,3	10,3	11,8	13,0
	Index (2018 = 100)	100	101	115	126
	Average price (EUR/item)	53,6	51,9	49,7	51,1
	Index (2018 = 100)	100	97	93	95
China	Quantity (in 000 items)	3 734	3 493	2 230	2 205
	Index (2018 = 100)	100	94	60	59
	Market share (%)	4,8	4,7	3,7	3,4
	Index (2018 = 100)	100	98	77	71
	Average price (EUR/item)	50,1	50,3	49,3	53,9
	Index (2018 = 100)	100	100	98	108
Thailand	Quantity (in 000 items)	2 228	1 911	1 527	1 487
	Index (2018 = 100)	100	86	69	67
	Market share (%)	2,9	2,6	2,6	2,3
	Index (2018 = 100)	100	90	90	79
	Average price (EUR/item)	52,3	50,8	49,0	50,3
	Index (2018 = 100)	100	97	94	96
South Korea	Quantity (in 000 items)	1 813	1 577	1 460	1 065
	Index (2018 = 100)	100	87	81	59
	Market share (%)	2,3	2,1	2,5	1,7
	Index (2018 = 100)	100	91	109	74
	Average price (EUR/item)	52,2	52,9	50,9	53,5
	Index (2018 = 100)	100	101	97	102
Other third countries	Quantity (in 000 items)	4 612	3 663	3 151	3 279
	Index (2018 = 100)	100	79	68	71
	Market share (%)	5,9	5,0	5,3	5,1
	Index (2018 = 100)	100	85	90	86
	Average price (EUR/item)	69,1	74,9	71,1	75,9
	Index (2018 = 100)	100	108	103	110
Total of all third countries except Morocco	Quantity (in 000 items)	20 372	18 278	15 380	16 402
	Index (2018 = 100)	100	90	75	81
	Market share (%)	26,2	24,8	25,8	25,5
	Index (2018 = 100)	100	95	98	97
	Average price (EUR/item)	56,2	56,1	54,1	56,5
	Index (2018 = 100)	100	100	96	101
Source: Eurostat Comext database

(138)

Import quantities from other third countries held a market share of 26,2 % in 2018 and 25,5 % in the investigation period. The quantity of these imports decreased during the period considered by 19 % and their market share followed partially the same trend with a decrease of 3 %. The average import price of these imports increased by 1 % and was higher compared to the Union industry’s average price (+ 12 %) and significantly higher compared with the average import price from the country concerned (+ 26 %). The sole country that increased its market share in the period considered from 10,3 % to 13,0 % was Turkey. However, Turkish average prices were slightly higher compared to the Union industry’s (+ 1,0 %) and significantly higher compared with import prices from the country concerned (+ 14 %).

(139)

Therefore, the Commission provisionally concluded that imports from other third countries have not contributed to the injury suffered by the Union industry.

5.2.2. The COVID-19 pandemic

(140)

In 2020, the car industry production went down by around 4,2 million vehicles due to the COVID-19 pandemic and thus with a direct impact on upstream suppliers. Accordingly, the sales of the ARW decreased by 14 million in 2020 compared with 2019. The drop in production was particularly significant in the 2nd quarter 2020, but the market rebounded in the following months. The market recovered 5 million wheels: from 60 million in 2020 to 65 million during the investigation period. The consumption however, did, not reach the level of 2019, mainly due to the shortage of semi-conductors used by car makers. The increase of demand in the investigation period did not benefit the Union industry, but mostly the Moroccan imports (2,6 million of imports in the investigation period and 4 % of market share). Aside of taking over sales quantities, Moroccan imports exerted downward pressure on prices and impeded the Union producers from passing on the increase of their costs to their customers, leading to a substantially reduced turn-over and even more losses compared with 2020.

(141)

In this respect, indeed, the COVID-19 pandemic had a negative impact on Union industry, especially in 2020 when production sites of the Union industry had to close temporarily. However, when the market rebounded post-COVID, the Union industry did not benefit due to the increased imports from the country concerned at dumped prices.

(142)

Therefore, the Commission provisionally concluded that the COVID-19 pandemic did not attenuate the causal link between the dumped imports from the country concerned and the material injury suffered by the Union industry.

5.2.3. Export performance of the Union industry

(143)

The quantity of exports of the sampled Union producers developed over the period considered as follows:

Table 12

Export performance of the sampled Union producers

	2018	2019	2020	Investigation period
Export quantity (in 000 items)	3 454	2 892	2 138	2 719
Index (2018 = 100)	100	84	62	79
Average price (EUR/item)	67,3	68,7	60,6	66,5
Index (2018 = 100)	100	102	90	99
Source: EUWA for export quantities and average price from verified questionnaire replies

(144)

Export sales to unrelated customers represented 5,6 % of the total Union industry production in the investigation period. During the period considered, the export quantities fluctuated – they first decreased between 2018 and 2020 by 38 % and then increased in the investigation period. Overall, export sales decreased in the period considered by 21 %. The export price per item was significantly higher compared with the Union prices over the period considered.

(145)

In the investigation period, the Union industry sold more than 95 % of its production on the Union market. Therefore, although the decline in export performance could have contributed to the injury suffered by the Union industry, the Commission provisionally concluded that, considering the high share of Union sales compared to export sales, this evolution did not attenuate the causal link between the dumped imports from the country concerned and the injury suffered by the Union industry.

5.2.4. Effect of multi-year contracts and evolution of the cost of production

(146)

Sales of the Union industry of the like product in the Union market were based on multi-year contracts with car manufacturer’s customers that fix the prices for the duration of the production of a certain type of car. The Union industry has a minimal margin to increase sales prices in the context of increasing raw material prices during the application of the yearly contract. In principle, the Union industry should however be able to increase its sales prices when it negotiates the contracts for the following year. As explained in Section 4.4.3.1 above, while the average cost of production of the Union industry increased by 9 % between 2018 and the investigation period the average sales price of the Union industry on the Union market remained stable.

(147)

As illustrated in table 7 above, the Union industry did not have difficulties, despite the yearly contracts, to sell at prices which covered its cost of production in 2018 and 2019 when imports from Morocco were not existing. However, when imports started coming in in 2020 and increased significantly in the investigation period, due to price pressure they exercised, the Union industry was no longer able to sufficiently adapt its sales prices in the latest yearly contracts in order to cover the increasing costs of production. As a result, the Union industry only achieved very low profits in 2020 and became loss making during the investigation period.

(148)

Consequently, the time lag between the increase of raw materials cost and the increase of the sales prices due to the yearly contracts did not appear to prevent the Union industry from adapting its sales prices to the increasing cost of production over the period considered. As a result, the Commission provisionally concluded that fixing the sales prices in yearly contracts did not attenuate the causal link between the dumped imports and the injury found.

5.2.5. Consumption

(149)

Users claimed that the contraction of the Union ARW market caused injury to the Union industry.

(150)

As mentioned in recital 139, the Union consumption decreased by 13 million items, that is by 17 %, the period considered. Union sales figures reflected the trend of the Union consumption. However, when consumption rebounded in the investigation period and increased by 8 % compared to 2020, the Union industry could not benefit from it due to the imports from Morocco. Indeed, the market share of the Union industry decreased by 2,9 percentage points, from 71,7 % in 2020 to 68,8 % in the investigation period, while the market share of the imports from Morocco increased by 129 %, from 1,7 % in 2020 to 3,9 % in the investigation period. It was thus the price suppression exerted by the low-priced dumped imports rather than a loss of quantities due to falling consumption that was the cause of injury to the Union industry.

(151)

Therefore, the Commission provisionally concluded that the contraction of the market demand by 17 % could not be considered as a cause of injury attenuating the causal link between the dumped imports and the injury found.

5.3. Conclusion on causation

(152)

The deterioration of the Union industry’s financial situation coincided in time with increasing quantities of imports of ARWs from the country concerned, which were made at dumped prices.

(153)

The Commission distinguished and separated the effects of all known factors on the situation of the Union industry from the injurious effects of the dumped imports. The effect of imports from other third countries, the COVID-19 pandemic and the decrease of demand, the evolution of the cost of production, the export performance of the Union industry and multi-year contracts were considered.

(154)

On the basis of the above, the Commission provisionally concluded that the dumped imports from the country concerned caused material injury to the Union industry and that the other factors, either individually or collectively, did not attenuate the causal link between the dumped imports and the material injury.

6. LEVEL OF MEASURES

(155)

To determine the level of the measures, the Commission examined whether a duty lower than the margin of dumping would be sufficient to remove the injury caused by dumped imports to the Union industry.

6.1. Injury margin

(156)

The injury would be removed if the Union Industry were able to obtain a target profit by selling at a target price in the sense of Articles 7(2c) and 7(2d) of the basic regulation.

(157)

In accordance with Article 7(2c) of the basic Regulation, for establishing the target profit, the Commission took into account the following factors: the level of profitability before the increase of imports from the country concerned, the level of profitability needed to cover full costs and investments, research and development (R & D) and innovation, and the level of profitability to be expected under normal conditions of competition. Such profit margin should not be lower than 6 %.

(158)

As a first step, the Commission established a basic profit covering full costs under normal conditions of competition. The Commission took the profits achieved by the sampled Union producers before unfair imports from Morocco accelerated and started injuring the Union industry. Such profit margin was established at 7,9 % which corresponds to the average of the profit achieved by the Union industry in the years 2018-2019.

(159)

The Union industry provided evidence that its level of investments, research and development (R & D) and innovation during the period considered would have been higher under normal conditions of competition. Indeed, the claims of the Union industry were found to be warranted. To reflect this in the target profit, the Commission calculated the difference between investments, R & D and innovation (‘IRI’) expenses under normal conditions of competition as provided by the Union industry and verified by the Commission with actual IRI expenses over the period considered. Such difference, expressed as a percentage of turnover, was 0,4 %.

(160)

Such percentage of 0,4 % was added to the basic profit of 7,9 % mentioned in the recital 158, leading to a target profit of 8,3 %.

(161)

In accordance with article 7(2d) of the basic Regulation, as a final step, the Commission assessed the future costs resulting from Multilateral Environmental Agreements, and protocols thereunder, to which the Union is a party, and of ILO Conventions listed in Annex Ia that the Union industry will incur during the period of the application of the measure pursuant to Article 11(2). Based on the evidence available, the Commission established an additional cost of 0,5 EUR/item. This additional cost was added to the non-injurious price mentioned in the above recital.

(162)

On this basis, the Commission calculated a weighted average non-injurious price of 55,9 EUR/item for the like product of the Union industry by applying the above-mentioned target profit margin to the cost of production of the sampled Union producers during the investigation period and then adding the adjustments under Article 7(2d) on a type-by-type basis.

(163)

The Commission then determined the injury margin level on the basis of a comparison of the weighted average import price of the sampled cooperating exporting producers in Morocco, as established for the price undercutting calculations, with the weighted average non-injurious price of the like product sold by the sampled Union producers on the Union market during the investigation period. Any difference resulting from this comparison was expressed as a percentage of the weighted average import CIF value.

(164)

The injury elimination level for ‘all other companies’ is defined in the same manner as the dumping margin for these companies (see recital 73).

Country	Company	Dumping margin (%)	Injury margin (%)
Morocco	Hands	8,0	44,0
	All other companies	16,5	51,6

7. UNION INTEREST

7.1. Interest of the Union industry

(165)

The effect of anti-dumping measures will be positive for the Union producers, as measures will allow the Union industry to adapt its sales prices to cover the increased cost of production. Therefore, the Union industry would return to a sustainable situation, allowing it to make future investments, in particular to comply with environmental and social requirements.

(166)

In the absence of measures, the Union industry will continue suffering from material injury and its financial situation, in particular in terms of profitability, return on investments and cash flow, is expected to worsen further, in particular in view of the increase of dumped imports from the country concerned which continued after the investigation period, thus threatening its viability.

7.2. Interest of unrelated importers and users

(167)

Upon initiation, importers were contacted. However, none cooperated with the investigation.

(168)

Regarding the users, two car manufacturers and their association, i.e. the car manufacturers (‘ACEA’) cooperated.

(169)

The car manufacturers are the customers of the Union ARW industry. They already source approximately 70 % of their ARW needs from the Union industry. Imports from the country concerned had a 3,9 % market share on the Union market in the investigation period and imports from other third countries held a market share of 25,5 % with higher price levels of those of the Union industry. Accordingly, car manufacturers have, in addition to the Union industry and Morocco, also other sources of supply. This was also confirmed by the fact that the purchases of ARW from Morocco represented around 30 % of the two users’ total ARW purchases during the investigation period. Moreover, based on the data of the two users which provided questionnaire replies, ARW represented approximately 0,5 % of their cost of production. Consequently, the Commission provisionally concluded that the impact of measures on ARW is limited for car manufacturers.

(170)

ACEA claimed that imports from Morocco addressed the strategic needs of the Union car manufacturers that the Union ARW producers cannot satisfy as the latter deliberately choose not to increase their production capacities. Therefore, the car manufacturers have no choice but to diversify their supply, including relying on various sources of imports.

(171)

As mentioned in recital 40, the Union ARW industry is a supplier of the car manufacturers and their activity depends on the tenders granted by these large companies. The nomination of the ARW suppliers and thus the actual deliveries of wheels takes place years in advance of the car production which should give time to the ARW industry to adjust its industrial output. If needed, the Union ARW industry could increase its capacity at relatively short notice as the requested investment does not concern the furnaces or the painting booths, but rather casting machines which can be installed easily. Therefore, if the Union ARW producers did not invest in additional production capacity, it was rather due to a lack of sufficient future contracts from the car manufacturers. Thus, the Union industry did not have sufficient incentive to invest in additional capacity in the absence of foreseeable increase in demand of its production. In addition, the Union consumption was 64,31 million items in the investigation period. The total Union industry capacity was 61,29 million items, while the total Union production was 48,75 million items in the investigation period and exports of the Union industry were 2,71 million items. Consequently, the Union industry has already sufficient production capacity to cover almost the total Union demand of ARW. Consequently, the claim was rejected.

(172)

ACEA claimed that the Union ARW industry did not satisfy the requirements of spare capacity set by the car manufacturers (the Union industry reported a high level of capacity utilization above 95 %) and obliged the car manufacturers to diversify its sourcing, in particular from Morocco.

(173)

The Commission noted that no evidence was provided demonstrating that the Union ARW industry lost tenders due to an issue regarding its production capacity or that the Union ARW industry failed to deliver ARW following car manufacturers commercial orders. In addition, the capacity utilisation established for the investigation period was 80 %. Therefore, the claim was rejected.

(174)

ACEA claimed that the effects of the COVID-19 pandemic have disrupted the supply chains and the car manufacturers were fully hit by the COVID-19 pandemic with a total loss of 4,2 million vehicles, representing 22,9 % of the Union production in 2019. The profitability of car manufacturers was pushed down. This affected similarly the automotive suppliers.

(175)

The Commission noted that most of car manufacturers reported profits for the financial year 2021 which exceeded the usual percentage reported during the previous years (21).

(176)

There is no other information on file showing that measures would have a significant negative impact on the users outweighing the positive impact of the measures on the Union industry.

7.3. Conclusion on Union interest

(177)

On the basis of the above, the Commission provisionally concluded that there were no compelling reasons that it was not in the Union interest to impose measures on imports of aluminium road wheels originating in Morocco at this stage of the investigation.

8. PROVISIONAL ANTI-DUMPING MEASURES

(178)

On the basis of the conclusions reached by the Commission on dumping, injury, causation, level of measures and Union interest, provisional measures should be imposed to prevent further injury being caused to the Union industry by the dumped imports.

(179)

On the basis of the above, the provisional anti-dumping duty rates, expressed on the CIF Union border price, customs duty unpaid, should be as follows:

Country	Company	Provisional anti-dumping duty
Morocco	HANDS 8 S.A.	8,0 %
Morocco	All other companies	16,5 %

(180)

The individual company anti-dumping duty rate specified in this Regulation was established on the basis of the findings of this investigation. Therefore, it reflects the situation found during this investigation with respect to this company. This duty rate is exclusively applicable to imports of the product concerned originating in the country concerned and produced by the named legal entity. Imports of the product concerned produced by any other company not specifically mentioned in the operative part of this Regulation, including entities related to that specifically mentioned, should be subject to the duty rate applicable to ‘all other companies’. They should not be subject to any of the individual anti-dumping duty rates.

(181)

To ensure a proper enforcement of the anti-dumping duties, the anti-dumping duty for all other companies should apply not only to the non-cooperating exporting producers in this investigation, but to the producers which did not have exports to the Union during the investigation period.

(182)

To minimise the risks of circumvention due to the difference in duty rates, special measures are needed to ensure the application of the individual anti-dumping duties. The companies with individual anti-dumping duties must present a valid commercial invoice to the customs authorities of the Member States. The invoice must conform to the requirements set out in Article 1(3) of this regulation. Imports not accompanied by that invoice should be subject to the anti-dumping duty applicable to ‘all other companies’.

(183)

While presentation of this invoice is necessary for the customs authorities of the Member States to apply the individual rates of anti-dumping duty to imports, it is not the only element to be taken into account by the customs authorities. Indeed, even if presented with an invoice meeting all the requirements set out in Article 1(3) of this regulation, the customs authorities of Member States must carry out their usual checks and may, like in all other cases, require additional documents (shipping documents, etc.) for the purpose of verifying the accuracy of the particulars contained in the declaration and ensure that the subsequent application of the lower rate of duty is justified, in compliance with customs law.

(184)

Should the exports by one of the companies benefiting from lower individual duty rates increase significantly in quantity after the imposition of the measures concerned, such an increase in quantity could be considered as constituting in itself a change in the pattern of trade due to the imposition of measures within the meaning of Article 13(1) of the basic Regulation. In such circumstances and provided the conditions are met an anti-circumvention investigation may be initiated. This investigation may, inter alia, examine the need for the removal of individual duty rate(s) and the consequent imposition of a country-wide duty.

(185)

Statistics of aluminium road wheels are frequently expressed in number of items. However, no such supplementary unit is defined for aluminium road wheels in the Combined Nomenclature laid down in Annex I to Council Regulation (EEC) No 2658/87 (22) on the tariff and statistical nomenclature and on the Common Customs Tariff. It is therefore necessary to provide that not only the weight in kilogram or tonnes but also the number of items for the imports of the product concerned must be entered in the declaration for release for free circulation.

9. REGISTRATION

(186)

As mentioned in recital 3, the Commission made imports of the product concerned subject to registration. Registration took place with a view to possibly collecting duties retroactively under Article 10(4) of the basic Regulation.

(187)

In view of the findings at provisional stage, the registration of imports should be discontinued.

(188)

No decision on a possible retroactive application of anti-dumping measures has been taken at this stage of the proceeding.

10. INFORMATION AT PROVISIONAL STAGE

(189)

In accordance with Article 19a of the basic Regulation, the Commission informed interested parties about the planned imposition of provisional duties. This information was also made available to the general public via DG TRADE’s website. Interested parties were given three working days to provide comments on the accuracy of the calculations specifically disclosed to them. No such comments were received. Comments following pre-disclosure with respect to other aspects of the investigation, not related to the accuracy of the calculations, will be considered at the definitive stage of the investigation.

11. FINAL PROVISION

(190)

In the interests of sound administration, the Commission will invite the interested parties to submit written comments and/or to request a hearing with the Commission within a fixed deadline. Interested parties may also request a hearing with the Hearing Officer in trade proceedings.

(191)

The findings concerning the imposition of provisional duties are provisional and may be amended at the definitive stage of the investigation,

HAS ADOPTED THIS REGULATION:

Article 1

1. A provisional anti-dumping duty is imposed on imports of aluminium road wheels of the motor vehicles of headings 8701 to 8705 whether or not with their accessories and whether or not fitted with tyres, currently falling under CN codes ex 8708 70 10 and ex 8708 70 50 (TARIC codes: 8708701015, 8708701050, 8708705015 and 8708705050) and originating in Morocco.

2. The rates of the provisional anti-dumping duty applicable to the net, free-at-Union-frontier price, before duty, of the product described in paragraph 1 and produced by the companies listed below shall be as follows:

Country	Company	Provisional anti-dumping duty	TARIC additional code
Morocco	HANDS 8 S.A.	8,0 %	C873
Morocco	All other companies	16,5 %	C999

3. The application of the individual duty rate specified for the company mentioned in paragraph 2 shall be conditional upon presentation to the Member States’ customs authorities of a valid commercial invoice, on which shall appear a declaration dated and signed by an official of the entity issuing such invoice, identified by his/her name and function, drafted as follows: ‘I, the undersigned, certify that the (volume) of (product concerned) sold for export to the European Union covered by this invoice was manufactured by (company name and address) (TARIC additional code) in Morocco. I declare that the information provided in this invoice is complete and correct.’ If no such invoice is presented, the duty applicable to all other companies shall apply.

4. The release for free circulation in the Union of the product referred to in paragraph 1 shall be subject to the provision of a security deposit equivalent to the amount of the provisional duty.

5. Where a declaration for release for free circulation is presented in respect of the product referred to in paragraph 1, the number of items of the products imported shall be entered in the relevant field of that declaration, without prejudice to the supplementary unit defined in the Combined Nomenclature.

6. Unless otherwise specified, the provisions in force concerning customs duties shall apply.

Article 2

1. Interested parties shall submit their written comments on this regulation to the Commission within 15 calendar days of the date of entry into force of this Regulation.

2. Interested parties wishing to request a hearing with the Commission shall do so within 5 calendar days of the date of entry into force of this Regulation.

3. Interested parties wishing to request a hearing with the Hearing Officer in trade proceedings shall do so within 5 calendar days of the date of entry into force of this Regulation. The Hearing Officer shall examine requests submitted outside this time limit and may decide whether to accept to such requests if appropriate.

Article 3

1. Customs authorities are hereby directed to discontinue the registration of imports established in accordance with Article 1 of Implementing Regulation (EU) 2022/934.

2. Data collected regarding products which entered the EU for consumption not more than 90 days prior to the date of the entry into force of this regulation shall be kept until the entry into force of possible definitive measures, or the termination of this proceeding.

Article 4

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.

Article 1 shall apply for a period of six months.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 14 July 2022.

For the Commission

The President

Ursula VON DER LEYEN

(1) OJ L 176, 30.6.2016, p. 21.

(2) Notice of initiation of an anti-dumping proceeding concerning imports of certain aluminium road wheels originating in Morocco (OJ C 464, 17.11.2021, p. 19).

(3) Commission Implementing Regulation (EU) 2022/934 of 16 June 2022 making imports of certain aluminium road wheels originating in Morocco subject to registration (OJ L 162, 17.6.2022, p. 27).

(4) Commission, How to Make an Anti-Dumping Complaint, A Guide, p. 7-8, but also p. 13, p. 27, p. 29, p. 52, p. 59 and p. 67 available at: https://trade.ec.europa.eu/doclib/docs/2006/december/tradoc_112295.pdf.

(5) Idem, p. 3.

(6) See paragraph 108 of the complaint and Annex D2 thereof.

(7) https://trade.ec.europa.eu/tdi/case_details.cfm?id=2563.

(8) As explained in recital 5, the names of the Union producers and two users are not disclosed for confidentiality reasons.

(9) OJ C 86, 16.3.2020, p. 6.

(10) OJ C 86, 16.3.2020, p. 6.

(11) Henri-Louis Vedie, ‘L’automobile: une filière marocaine stratégique, leader du secteur en Afrique’, Policy Center for the New South, Policy Paper 20/34, November 2020 (available at https://www.policycenter.ma/sites/default/files/2021-01/PP%20-%2020-34%20%28Henri-louis%20Vedie%29_0.pdf).

(12) The Renault Group, for example, exported more than 95 % of its production at its Tangier location (see https://www.tac.ma/news/english-1m-vehicles-exported-from-tangermed/).

(13) See ‘LA LOI No 19-94 RELATIVE AUX ZONES FRANCHES D’EXPORTATION’, Bulletin Officiel, 1995-02-15, no 4294, pp. 117-121.

(14) See ‘LA LOI No 19-94 RELATIVE AUX ZONES FRANCHES D’EXPORTATION’, Bulletin Officiel, 1995-02-15, no 4294, pp. 117-121, subsequently amended by law 14.21 to change the term ‘zone franche’ to ‘zone d’accélération industrielle’. See also ‘Code des douanes et impôts indirects relevant de l’administration des douanes et impôts indirects approuvé par le dahir portant loi n° 1-77-339 du 25 chaoual 1397 (9 octobre 1977), tel. qu’il a été modifié et complete’.

(15) EC – Anti-dumping duties on imports of cotton-type bed linen from India (WT/DS141/R, 30.10.2000, paragraphs 74 to 77).

(16) Notice of initiation of an expiry review of the anti-dumping measures applicable to imports of certain aluminium road wheels originating in the People’s Republic of China (OJ C 29, 20.1.2022, p. 34).

(17) Commission Implementing Regulation (EU) 2017/109 of 23 January 2017 imposing a definitive anti-dumping duty on imports of certain aluminium road wheels originating in the People’s Republic of China following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council (OJ L 18, 24.1.2017, p. 1).

(18) Implementing Regulation (EU) 2017/109.

(19) Council Implementing Regulation (EU) No 964/2010 of 25 October 2010 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain aluminium road wheels originating in the People’s Republic of China (OJ L 282, 28.10.2010, p. 1).

(20) Implementing Regulation (EU) 2017/109, recital 169.

(21) Note for the file on annual reports for the year 2021 published by some car manufacturers.

(22) Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ L 256, 7.9.1987, p. 1).

		ISSN 1977-0677
Official Journal of the European Union		L 188

English edition	Legislation	Volume 65 15 July 2022

Contents		II Non-legislative acts	page
		REGULATIONS
	*	Commission Delegated Regulation (EU) 2022/1214 of 9 March 2022 amending Delegated Regulation (EU) 2021/2139 as regards economic activities in certain energy sectors and Delegated Regulation (EU) 2021/2178 as regards specific public disclosures for those economic activities ( 1 )	1
	*	Commission Regulation (EU) 2022/1215 of 7 July 2022 establishing a fisheries closure for Greenland halibut in Norwegian waters of 1 and 2 for vessels flying the flag of a Member State of the European Union	46
	*	Commission Implementing Regulation (EU) 2022/1216 of 8 July 2022 derogating in respect of the year 2022 from Implementing Regulations (EU) No 809/2014, (EU) No 180/2014, (EU) No 181/2014, (EU) 2017/892, (EU) 2016/1150, (EU) 2018/274, (EU) No 615/2014 and (EU) 2015/1368 as regards certain administrative and on-the-spot checks applicable within the common agricultural policy and amending Implementing Regulation (EU) 2021/725	49
	*	Commission Implementing Regulation (EU) 2022/1217 of 14 July 2022 amending Implementing Regulation (EU) No 185/2013 as regards deductions from fishing quotas allocated to Spain for 2021, 2022 and 2023	62
	*	Commission Implementing Regulation (EU) 2022/1218 of 14 July 2022 amending certain Annexes to Implementing Regulation (EU) 2021/620 as regards the approval of the disease-free status of certain Member States or zones thereof as regards certain listed diseases and the approval of eradication programmes for certain listed diseases ( 1 )	65
	*	Commission Implementing Regulation (EU) 2022/1219 of 14 July 2022 amending Annex III to Implementing Regulation (EU) 2020/2235 as regards model certificates for the entry into and transit through the Union of consignments of certain composite products ( 1 )	75
	*	Commission Implementing Regulation (EU) 2022/1220 of 14 July 2022 laying down implementing technical standards for the application of Directive 2014/65/EU of the European Parliament and of the Council with regard to the format in which branches of third-country firms and competent authorities have to report the information referred to in Article 41(3) and (4) of that Directive ( 1 )	98
	*	Commission Implementing Regulation (EU) 2022/1221 of 14 July 2022 imposing a provisional anti-dumping duty on imports of certain aluminium road wheels originating in Morocco	114
		DECISIONS
	*	Council Decision (EU) 2022/1222 of 12 July 2022 on the position to be taken on behalf of the European Union in the Assembly of the Lisbon Special Union	142
	*	Council Decision (EU) 2022/1223 of 12 July 2022 concerning the allocation of funds de-committed from projects under the 10th and 11th European Development Funds for the purpose of financing actions addressing the food security crisis and economic shock in African, Caribbean and Pacific (ACP) countries following Russia’s war of aggression against Ukraine	147
	*	Political and Security Committee Decision (CFSP) 2022/1224 of 13 July 2022 on the appointment of the EU Force Commander for the European Union military operation to contribute to the deterrence, prevention and repression of acts of piracy and armed robbery off the Somali coast (Atalanta), and repealing Decision (CFSP) 2022/1179 (ATALANTA/5/2022)	150

No	03/TQ109
Member State	European Union (All Member States)
Stock	GHL/1N2AB.
Species	Greenland halibut (Reinhardtius hippoglossoides)
Zone	Norwegian waters of 1 and 2
Closing date	20 June 2022

Stock	Initial quota 2009	Adapted quota 2009	Established catches 2009	Difference quota-catches (over-fishing)	Deduction 2013	Deduction 2014	Deduction 2015	Deduction 2016	Deduction 2017	Deduction 2018	Deduction 2019	Deduction 2020	Deduction 2021	Deduction 2022	Deduction 2023
MAC8C 3411	29 529	25 525	90 954	-65 429	100	100	100	5 544	6 283	4 805	7 762	3 328	8 944	2 411	0
ANE08 (1)								3 696	4 539	2 853	3 696	3 696	3 696	3 696	180

‘6	Ethiopia (ET)	Pepper of the genus Piper; dried or crushed or ground fruit of the genus Capsicum or of the genus Pimenta	0904		Aflatoxins	50
		Ginger, saffron, turmeric (curcuma), thyme, bay leaves, curry and other spices (Food – dried spices)	0910
		Sesamum seeds (Food)	1207 40 90		Salmonella (6)	50’
			ex 2008 19 19	40
			ex 2008 19 99	40

		Corrigenda
	*	Corrigendum to Commission Implementing Regulation (EU) 2022/913 of 30 May 2022 amending Implementing Regulation (EU) 2019/1793 on the temporary increase of official controls and emergency measures governing the entry into the Union of certain goods from certain third countries implementing Regulations (EU) 2017/625 and (EC) No 178/2002 of the European Parliament and of the Council ( OJ L 158, 13.6.2022 )	152

‘10	India (IN)	Betel leaves (Piper betle L.) (Food)	ex 1404 90 00	10	Salmonella (2)	10
		Peppers of the genus Capsicum (sweet or other than sweet) (Food – dried, roasted, crushed or ground)	0904 21 10 ;		Aflatoxins	20
			ex 0904 22 00 ;	11; 19
			ex 0904 21 90 ;	20
			ex 2005 99 10 ;	10; 90
			ex 2005 99 80	94
		Groundnuts (peanuts), in shell	1202 41 00
		Groundnuts (peanuts), shelled	1202 42 00
		Peanut butter	2008 11 10
		Groundnuts (peanuts), otherwise prepared or preserved, including mixtures	2008 11 91 ; 2008 11 96 ; 2008 11 98 ;		Aflatoxins	50
			ex 2008 19 12 ;	40
			ex 2008 19 19 ;	50
			ex 2008 19 92 ;	40
			ex 2008 19 95 ;	40
			ex 2008 19 99	50
		Oilcake and other solid residues, whether or not ground or in the form of pellets, resulting from the extraction of groundnut oil	2305 00 00


		Groundnut flours and meals	ex 1208 90 00	20
		Groundnuts paste ( Food and feed )	ex 2007 10 10	80
			ex 2007 10 99	50
			ex 2007 99 39	07; 08
		Peppers of the genus Capsicum (other than sweet) (Food – fresh, chilled or frozen)	ex 0709 60 99 ;	20	Pesticide residues (4) (5)	20
			ex 0710 80 59	20	Pesticide residues (4) (5)	20
		Sesamum seeds (Food and feed)	1207 40 90		Salmonella (6)	20
			ex 2008 19 19	40	- Pesticide residues (11)	50
			ex 2008 19 99	40	- Pesticide residues (11)	50
		Locust beans (carob)	1212 92 00		Pesticide residues (11)	20
		Locust beans seeds, not decorticated, crushed or ground	1212 99 41
		Mucilages and thickeners, whether or not modified, derived from locust beans or locust bean seeds (Food and feed)	1302 32 10
		Guar gum (Food and feed)	ex 1302 32 90		Pesticide residues (11)	20
		Guar gum (Food and feed)	ex 1302 32 90		Pentachlorophenol and dioxins (3)	5
		Mixtures of food additives containing locust bean gum or guar gum (Food)	ex 2106 90 92 ex 2106 90 98 ex 3824 99 93 ex 3824 99 96		Pesticide residues (11)	20
		Pepper of the genus Piper; dried or crushed or ground fruit of the genus Capsicum or of the genus Pimenta	0904
		Vanilla	0905
		Cinnamon and cinnamon-tree flowers	0906		Pesticide residues (11)	20
		Cloves (whole fruit, cloves and stems)	0907
		Nutmeg, mace and cardamoms	0908
		Seeds of anise, badian, fennel, coriander, cumin or caraway; juniper berries	0909
		Ginger, saffron, turmeric (curcuma), thyme, bay leaves, curry and other spices (Food – dried spices)	0910
		Sauces and preparations thereof; mixed condiments and mixed seasonings; mustard flours and meals and prepared mustard (Food)	2103		Pesticide residues (11)	20
		Calcium carbonate (Food and feed)	ex 2106 90 92/98 ex 2530 90 00 ex 2836 50 00		Pesticide residues (11)	20
		Food supplements containing botanicals (Food)	ex 1302 ex 2106		Pesticide residues (11)	20’

‘13	Sri Lanka (LK)	Peppers of the genus Capsicum (sweet or other than sweet) (Food – dried, roasted, crushed or ground)	0904 21 10 ;		Aflatoxins	50’
			ex 0904 21 90 ;	20
			ex 0904 22 00 ;	11; 19
			ex 2005 99 10 ;	10; 90
			ex 2005 99 80	94