In Strasbourg, yesterday was not a holiday, work continued as usual. A major topic of the day: the protection of European know-how from China. The Commission has presented a list of ten critical technologies that should not fall into the wrong hands. Amelie Richter analyzes whether the plan can work.
No further progress was made on whether Parliament would approve the appointment of Wopke Hoekstra as Climate Commissioner and Maroš Šefčovič as Green Deal Commissioner. After questioning both men intensively over the past few days, MEPs on the Environment Committee concluded: it was not enough. They want more answers – and they want them by 7 a.m. today. You can read in my analysis why the subsequent questions are not only about content but also about party politics.
Today at 8:30 a.m., the coordinators will meet again to discuss the answers. If at least four political groups vote in favor of a candidate, Parliament’s approval is considered certain and the Environment Committee’s recommendation will be forwarded to the EU Presidents’ Conference – the so-called COP. The COP passes this recommendation on to the plenum and would vote on it on Thursday.
If one or both candidates do not get a majority, the decision will be postponed again, leaving more time for further questions and answers. The process would probably last until the second October plenum in ten days.
Of course, you can read about the outcome in the Europe.Table newsletter.
Have a pleasant rest of the week!
On Monday night, it was said that the decision on Wopke Hoekstra would wait until after the hearing of Maroš Šefčovič. On Tuesday afternoon, after the hearing of Šefčovič, the decision was postponed once again. By Wednesday, both are to answer written questions, then, the coordinators of the political groups in the Environment Committee (ENVI) will meet again to evaluate them. The plan to vote on both appointments in plenary on Thursday still stands.
So why the extra round? Greens and Social Democrats were pleasantly surprised by climate commissioner-designate Hoekstra’s announcements Monday night. The Dutchman resolved environmentalists’ worst concerns in principle, clearly backing the Nature Restoration Law, a 2040 climate target of at least minus 90 percent and a fund for countries most affected by climate change (Loss & Damage).
However, the climate policy spokesman of the Green Party, Michael Bloss, emphasizes that Hoekstra still lacks credibility as a former Shell employee and thrifty Frugal Finance Minister. This trust deficit, he said, must be made up for by more precise answers about how he intends to achieve what he has promised.
Šefčovič was much less specific on Tuesday. Only when asked several times by Green MEP Bas Eickhout, did he back a 2040 target of at least 90 percent. He did not give any information on whether he was also aiming for new projects as Green Deal Commissioner. He stressed several times he wanted to continue the Commission’s previous ambitions. The only thing he wants to do is to launch a “green social dialogue.”
He also gave no satisfactory answer to the MEPs about the Commission’s pending legislative proposals. Among them is the revision of the chemicals regulation REACH, as well as proposals on animal health, forest monitoring, microplastics and sustainable food systems. Which dossiers are still to come and when? They are being worked on, Šefčovič replied.
Now both have sent a letter with further questions to be answered by 7 a.m. on Wednesday. Parliamentarians want an unequivocal commitment from both to the EU’s 2040 climate target and concrete details of what carbon reductions they are aiming for by then. Hoekstra is also to disclose the projects he worked on as a McKinsey consultant. He had promised to do so on Monday evening.
Since EPP deputies were particularly unhappy about Šefčovič’s statements on Russia and his past as an ally of left-wing populist and avowed friend of Russia Robert Fico, they are calling for a renewed commitment here as well.
Fico – election winner in Slovakia over the weekend – wants to stop arms deliveries to Ukraine and return to a more Russia-friendly path in foreign policy. In previous terms as head of government, he had ensured several times that Šefčovič went to Brussels as a commissioner. Will he defend the energy embargo against Russia in all EU capitals – especially in Bratislava? That is a key question for parliamentarians.
They also want a detailed timetable from Šefčovič on whether and when which of the outstanding dossiers will be presented. For some MPs, this information is crucial, as they consider the proposals imperative to fulfill the Green Deal. Others would have certainty that no more regulatory measures are coming for the industry rather sooner than later.
Pascal Canfin, Renew Deputy and ENVI Chairman, clarified that work on the proposals had long been completed. It is known that the texts are ready. What is needed now is the political decision to present them. Canfin also clarified that some of the subsequent questions were specifically addressed to Commission President Ursula von der Leyen. In any case, he said, he assumed that she was overseeing the answering of the questions.
Behind the renewed postponement of the decision is also the party-political power struggle over the EU’s further line on environmental and climate policy. On one side are the Christian Democrats of the EPP, on the other the social democratic S&D as well as the Greens. Both sides had recently driven the price of their approval for one of the candidates ever higher.
The EPP repeatedly emphasized its problems with a Fico man, although it has already elected him to the Commission several times. The Greens and S&D made high demands on the climate policy integrity of Hoekstra and were positively surprised when he made clear concessions. Especially the EPP man’s commitment to the Nature Restoration Law, which the Christian Democrats had tried to block in Parliament, was probably decisive for their support.
Nevertheless, in the end, no one wanted to give in and clear the way for their appointment. After Šefčovič’s poor performance at the hearing S&D and the Greens had few arguments for waving him through but standing firm on Hoekstra. Their skepticism for the Slovak may be greater than ever. The EPP, already clearly in favor of Hoekstra’s nomination, thus had an easy time delaying its endorsement of Šefčovič. The only way out: another round of questions.
The EU Commission has drafted a list of critical technologies the European Union wants to protect from rivals. Digital Commissioner Věra Jourová and EU Internal Market Commissioner Thierry Breton presented the list in Strasbourg on Tuesday. The list contains a total of ten technologies. However, four of them are designated as particularly dangerous should they fall into the wrong hands:
In addition to these four areas, the list also includes issues such as cybersecurity, sensors, energy, nuclear and fusion technology, robotics and also materials such as nano and smart materials. “Europe is adapting to the new geopolitical realities, putting an end to the era of naivety and acting as a real geopolitical power,” said Commissioner Breton at the presentation.
The list, like the list on critical raw materials, is an element of the economic security strategy first presented by the EU Commission in June. This is the first time Brussels has given its economic policy a security aspect – a fundamental change for the EU, previously based on the concept of free trade.
The EU Commission considers three criteria decisive for the selection of the technologies on these lists. Firstly, the “transformative character” of the technology. By this, the EU Commission means the potential for “radical changes for sectors” by the technology. The second criterion is the risk of dual use, i.e., for civilian and military purposes. The third characteristic is the potential for human rights violations.
However, the question remains about how exactly these technologies will be protected. The EU Commission has not yet specified whether its aim is, for example, to prevent access from third countries to European technology or to better screen European investments in these areas abroad through outbound investment screening. A cross-section has now been found with the list, said Breton. Now, however, he added that it is necessary to take a closer look to fight dependencies.
To this end, a joint risk assessment will be conducted with the 27 member states. “To be a player, we need a united EU position, based on a common assessment of the risks,” said EU Commissioner Jourová.
The lack of a common position became visible, for example, when the Netherlands independently agreed with the US earlier this year to ban the export of advanced chip manufacturing equipment to China. There was subsequent criticism from Brussels and other European capitals that this should have been an EU-wide decision.
While the EU Commission presented its plans, the EU Parliament on Tuesday put its money where its mouth is on another matter: MEPs waved through the Anti Coercion Tool (ACI) with a large majority of votes. “Today we deliver. We’ve filled our toolbox with one additional defensive instrument,” wrote SPD European politician Bernd Lange on X, formerly Twitter. According to Lange, who chairs the parliament’s trade committee, the ACI will come into force in a few weeks.
The background to the new trade instrument was, among other things, Chinese trade restrictions against Lithuania after the government in Vilnius allowed the opening of a “Taiwan office” in Taipei. In such cases, the EU will be able to restrict access to public tenders for companies from the respective countries or block the sale of certain products from Europe. Such steps, however, are meant to be a last resort, when other options, especially diplomatic ones, have been exhausted.
EU Trade Commissioner Valdis Dombrovskis welcomed the strong support for the new trade tool. On Tuesday, he answered questions from EU parliamentarians on China trade policy and his recent trip to the People’s Republic. On the latter and the trade dialogue that took place there, Dombrovskis said that there had been no breakthrough, but meaningful steps.
While the trilogue to decide on the final version of the CSDDD is still underway, it should already be clear to most companies that the requirements for their supply chains will increase. This is because the draft for the directive goes significantly beyond the requirements of the National Supply Chain Sourcing Obligations Act (LkSG).
The deviations already start with the scope of application: while the LkSG currently only applies to companies with at least 3,000 employees, the CSDD already applies to companies with 250 or more employees and a global net turnover of at least €40 million. At the same time, the EU wants to introduce civil liability and expand the sanctions framework.
The extended responsibility in particular could become a challenge for companies with widely ramified supplier networks. This is because, in addition to indirect and direct suppliers, it also affects distribution, for example (upstream and downstream). Companies must therefore examine their value chains much more comprehensively than before. The problem is that the capacities for this additional work are often not available. On the contrary – many companies already lack the resources to meet only the national requirements.
In addition, the CSDD applies not only to companies from the EU but also to non-EU companies if they achieve sales of €150 million within the EU. Here, too, additional work may be required for the risk analysis depending on the supplier network. Incidentally, in contrast to the LkSG, this must be carried out on an ongoing basis instead of at fixed intervals, so there will also be more to do in terms of reporting.
The good news: in many other respects the CSDD is based on the LkSG. This results in synergies. This is particularly valuable in the area of technology because here new acquisitions usually mean high investments and lengthy implementations. But those who already have software that makes supply chain risks visible only need to make adjustments in the best case. Existing systems for supply chain management, analytics or reporting can remain in operation. Nevertheless, those responsible should check in advance whether upgrades, new modules or other adjustments may be necessary.
There are also strong synergies in reporting – the processes and automatisms established for the annual report can be used in their basic features for CSDD reporting. Important: Because the EU requires continuous reporting, companies must adapt their documentation processes accordingly. In addition, new dimensions must be taken into account, for example, the protection of biodiversity as well as suppliers that were not previously included.
Both the reporting intervals and the extended content of the reports have a direct impact on how companies need to collect and manage data. This means that automated solutions that process KPIs in real-time and create individualized reports at the push of a button are more in demand than ever before. New KPI dimensions, in turn, must be incorporated into risk analysis to create valid reports. And existing supplier management processes help not least to ensure compliance with the requirements of the law.
To use existing systems and processes for the implementation of CSDD requirements, companies must thoroughly review their existing compliance and risk management systems. A classic target/actual analysis that compares the status quo with the target picture can help. The gaps identified in the process must then be prioritized so that problematic backlogs can be made up quickly. In this way, companies avoid having to rebuild extensive structures from scratch and losing a lot of time and money in the process.
As a final step, managers should communicate any changes in systems and processes transparently and comprehensibly. This is the only way to ensure all suppliers are aware of their role and responsibility. Employees can also be introduced to new processes through training or continuing education measures. What counts in the end is that everyone involved pulls together for the sake of more sustainable supply chains.
In Strasbourg, yesterday was not a holiday, work continued as usual. A major topic of the day: the protection of European know-how from China. The Commission has presented a list of ten critical technologies that should not fall into the wrong hands. Amelie Richter analyzes whether the plan can work.
No further progress was made on whether Parliament would approve the appointment of Wopke Hoekstra as Climate Commissioner and Maroš Šefčovič as Green Deal Commissioner. After questioning both men intensively over the past few days, MEPs on the Environment Committee concluded: it was not enough. They want more answers – and they want them by 7 a.m. today. You can read in my analysis why the subsequent questions are not only about content but also about party politics.
Today at 8:30 a.m., the coordinators will meet again to discuss the answers. If at least four political groups vote in favor of a candidate, Parliament’s approval is considered certain and the Environment Committee’s recommendation will be forwarded to the EU Presidents’ Conference – the so-called COP. The COP passes this recommendation on to the plenum and would vote on it on Thursday.
If one or both candidates do not get a majority, the decision will be postponed again, leaving more time for further questions and answers. The process would probably last until the second October plenum in ten days.
Of course, you can read about the outcome in the Europe.Table newsletter.
Have a pleasant rest of the week!
On Monday night, it was said that the decision on Wopke Hoekstra would wait until after the hearing of Maroš Šefčovič. On Tuesday afternoon, after the hearing of Šefčovič, the decision was postponed once again. By Wednesday, both are to answer written questions, then, the coordinators of the political groups in the Environment Committee (ENVI) will meet again to evaluate them. The plan to vote on both appointments in plenary on Thursday still stands.
So why the extra round? Greens and Social Democrats were pleasantly surprised by climate commissioner-designate Hoekstra’s announcements Monday night. The Dutchman resolved environmentalists’ worst concerns in principle, clearly backing the Nature Restoration Law, a 2040 climate target of at least minus 90 percent and a fund for countries most affected by climate change (Loss & Damage).
However, the climate policy spokesman of the Green Party, Michael Bloss, emphasizes that Hoekstra still lacks credibility as a former Shell employee and thrifty Frugal Finance Minister. This trust deficit, he said, must be made up for by more precise answers about how he intends to achieve what he has promised.
Šefčovič was much less specific on Tuesday. Only when asked several times by Green MEP Bas Eickhout, did he back a 2040 target of at least 90 percent. He did not give any information on whether he was also aiming for new projects as Green Deal Commissioner. He stressed several times he wanted to continue the Commission’s previous ambitions. The only thing he wants to do is to launch a “green social dialogue.”
He also gave no satisfactory answer to the MEPs about the Commission’s pending legislative proposals. Among them is the revision of the chemicals regulation REACH, as well as proposals on animal health, forest monitoring, microplastics and sustainable food systems. Which dossiers are still to come and when? They are being worked on, Šefčovič replied.
Now both have sent a letter with further questions to be answered by 7 a.m. on Wednesday. Parliamentarians want an unequivocal commitment from both to the EU’s 2040 climate target and concrete details of what carbon reductions they are aiming for by then. Hoekstra is also to disclose the projects he worked on as a McKinsey consultant. He had promised to do so on Monday evening.
Since EPP deputies were particularly unhappy about Šefčovič’s statements on Russia and his past as an ally of left-wing populist and avowed friend of Russia Robert Fico, they are calling for a renewed commitment here as well.
Fico – election winner in Slovakia over the weekend – wants to stop arms deliveries to Ukraine and return to a more Russia-friendly path in foreign policy. In previous terms as head of government, he had ensured several times that Šefčovič went to Brussels as a commissioner. Will he defend the energy embargo against Russia in all EU capitals – especially in Bratislava? That is a key question for parliamentarians.
They also want a detailed timetable from Šefčovič on whether and when which of the outstanding dossiers will be presented. For some MPs, this information is crucial, as they consider the proposals imperative to fulfill the Green Deal. Others would have certainty that no more regulatory measures are coming for the industry rather sooner than later.
Pascal Canfin, Renew Deputy and ENVI Chairman, clarified that work on the proposals had long been completed. It is known that the texts are ready. What is needed now is the political decision to present them. Canfin also clarified that some of the subsequent questions were specifically addressed to Commission President Ursula von der Leyen. In any case, he said, he assumed that she was overseeing the answering of the questions.
Behind the renewed postponement of the decision is also the party-political power struggle over the EU’s further line on environmental and climate policy. On one side are the Christian Democrats of the EPP, on the other the social democratic S&D as well as the Greens. Both sides had recently driven the price of their approval for one of the candidates ever higher.
The EPP repeatedly emphasized its problems with a Fico man, although it has already elected him to the Commission several times. The Greens and S&D made high demands on the climate policy integrity of Hoekstra and were positively surprised when he made clear concessions. Especially the EPP man’s commitment to the Nature Restoration Law, which the Christian Democrats had tried to block in Parliament, was probably decisive for their support.
Nevertheless, in the end, no one wanted to give in and clear the way for their appointment. After Šefčovič’s poor performance at the hearing S&D and the Greens had few arguments for waving him through but standing firm on Hoekstra. Their skepticism for the Slovak may be greater than ever. The EPP, already clearly in favor of Hoekstra’s nomination, thus had an easy time delaying its endorsement of Šefčovič. The only way out: another round of questions.
The EU Commission has drafted a list of critical technologies the European Union wants to protect from rivals. Digital Commissioner Věra Jourová and EU Internal Market Commissioner Thierry Breton presented the list in Strasbourg on Tuesday. The list contains a total of ten technologies. However, four of them are designated as particularly dangerous should they fall into the wrong hands:
In addition to these four areas, the list also includes issues such as cybersecurity, sensors, energy, nuclear and fusion technology, robotics and also materials such as nano and smart materials. “Europe is adapting to the new geopolitical realities, putting an end to the era of naivety and acting as a real geopolitical power,” said Commissioner Breton at the presentation.
The list, like the list on critical raw materials, is an element of the economic security strategy first presented by the EU Commission in June. This is the first time Brussels has given its economic policy a security aspect – a fundamental change for the EU, previously based on the concept of free trade.
The EU Commission considers three criteria decisive for the selection of the technologies on these lists. Firstly, the “transformative character” of the technology. By this, the EU Commission means the potential for “radical changes for sectors” by the technology. The second criterion is the risk of dual use, i.e., for civilian and military purposes. The third characteristic is the potential for human rights violations.
However, the question remains about how exactly these technologies will be protected. The EU Commission has not yet specified whether its aim is, for example, to prevent access from third countries to European technology or to better screen European investments in these areas abroad through outbound investment screening. A cross-section has now been found with the list, said Breton. Now, however, he added that it is necessary to take a closer look to fight dependencies.
To this end, a joint risk assessment will be conducted with the 27 member states. “To be a player, we need a united EU position, based on a common assessment of the risks,” said EU Commissioner Jourová.
The lack of a common position became visible, for example, when the Netherlands independently agreed with the US earlier this year to ban the export of advanced chip manufacturing equipment to China. There was subsequent criticism from Brussels and other European capitals that this should have been an EU-wide decision.
While the EU Commission presented its plans, the EU Parliament on Tuesday put its money where its mouth is on another matter: MEPs waved through the Anti Coercion Tool (ACI) with a large majority of votes. “Today we deliver. We’ve filled our toolbox with one additional defensive instrument,” wrote SPD European politician Bernd Lange on X, formerly Twitter. According to Lange, who chairs the parliament’s trade committee, the ACI will come into force in a few weeks.
The background to the new trade instrument was, among other things, Chinese trade restrictions against Lithuania after the government in Vilnius allowed the opening of a “Taiwan office” in Taipei. In such cases, the EU will be able to restrict access to public tenders for companies from the respective countries or block the sale of certain products from Europe. Such steps, however, are meant to be a last resort, when other options, especially diplomatic ones, have been exhausted.
EU Trade Commissioner Valdis Dombrovskis welcomed the strong support for the new trade tool. On Tuesday, he answered questions from EU parliamentarians on China trade policy and his recent trip to the People’s Republic. On the latter and the trade dialogue that took place there, Dombrovskis said that there had been no breakthrough, but meaningful steps.
While the trilogue to decide on the final version of the CSDDD is still underway, it should already be clear to most companies that the requirements for their supply chains will increase. This is because the draft for the directive goes significantly beyond the requirements of the National Supply Chain Sourcing Obligations Act (LkSG).
The deviations already start with the scope of application: while the LkSG currently only applies to companies with at least 3,000 employees, the CSDD already applies to companies with 250 or more employees and a global net turnover of at least €40 million. At the same time, the EU wants to introduce civil liability and expand the sanctions framework.
The extended responsibility in particular could become a challenge for companies with widely ramified supplier networks. This is because, in addition to indirect and direct suppliers, it also affects distribution, for example (upstream and downstream). Companies must therefore examine their value chains much more comprehensively than before. The problem is that the capacities for this additional work are often not available. On the contrary – many companies already lack the resources to meet only the national requirements.
In addition, the CSDD applies not only to companies from the EU but also to non-EU companies if they achieve sales of €150 million within the EU. Here, too, additional work may be required for the risk analysis depending on the supplier network. Incidentally, in contrast to the LkSG, this must be carried out on an ongoing basis instead of at fixed intervals, so there will also be more to do in terms of reporting.
The good news: in many other respects the CSDD is based on the LkSG. This results in synergies. This is particularly valuable in the area of technology because here new acquisitions usually mean high investments and lengthy implementations. But those who already have software that makes supply chain risks visible only need to make adjustments in the best case. Existing systems for supply chain management, analytics or reporting can remain in operation. Nevertheless, those responsible should check in advance whether upgrades, new modules or other adjustments may be necessary.
There are also strong synergies in reporting – the processes and automatisms established for the annual report can be used in their basic features for CSDD reporting. Important: Because the EU requires continuous reporting, companies must adapt their documentation processes accordingly. In addition, new dimensions must be taken into account, for example, the protection of biodiversity as well as suppliers that were not previously included.
Both the reporting intervals and the extended content of the reports have a direct impact on how companies need to collect and manage data. This means that automated solutions that process KPIs in real-time and create individualized reports at the push of a button are more in demand than ever before. New KPI dimensions, in turn, must be incorporated into risk analysis to create valid reports. And existing supplier management processes help not least to ensure compliance with the requirements of the law.
To use existing systems and processes for the implementation of CSDD requirements, companies must thoroughly review their existing compliance and risk management systems. A classic target/actual analysis that compares the status quo with the target picture can help. The gaps identified in the process must then be prioritized so that problematic backlogs can be made up quickly. In this way, companies avoid having to rebuild extensive structures from scratch and losing a lot of time and money in the process.
As a final step, managers should communicate any changes in systems and processes transparently and comprehensibly. This is the only way to ensure all suppliers are aware of their role and responsibility. Employees can also be introduced to new processes through training or continuing education measures. What counts in the end is that everyone involved pulls together for the sake of more sustainable supply chains.
