In 2013, the Rana Plaza textile factory collapsed in Dhaka, burying 1000 workers in the debris. The tragedy was the impetus for the National Assembly in France to devise and win the world’s first supply chain law. In an interview with Charlotte Wirth, the socialist Dominique Potier, who played a key role in drafting the law, explains that the French original is ingeniously simple, that lobbying battles over the EU version are currently being fought in Brussels and why the German legislator’s regulatory frenzy has produced a bad law.
It is clear that trucks with fuel cells will be necessary in long-distance transport from 2030 onwards in order to achieve the climate targets. But even six and a half years before that, it is still not clear whether the trucks of the future will run on liquid or gaseous hydrogen. And there is still no internationally recognized standard for the nozzle at the hydrogen filling station. A study by the Baden-Württemberg state agency e-mobil, which will be presented today at noon, puts its finger on the problem.
In the News section you will find out that Ursula von der Leyen spoke to the Ukraine President before her departure for China and what the raid on the Brussels headquarters of the Christian Democrat EPP is all about.
Mr. Potier, in 2017, a corporate due diligence law was passed in France for the first time, the so-called “Rana Plaza Law”. Was the building collapse in Bangladesh four years earlier the impetus?
No. The law is nicknamed “Rana Plaza”, but the impulse came from French civil society. In the 2012 presidential elections, NGOs made twelve proposals for a solidary planet. Due diligence was one of these demands. Rana Plaza brought the issue to the fore, people in Europe showed a lot of solidarity with the victims in Bangladesh. They started to look at supply chains and the consequences of their consumption. Rana Plaza thus became synonymous with the negative impact of globalization on the environment and human rights.
French companies probably saw the move differently.
It is difficult for the business community to explicitly denounce such a law: No one wants to defend child labor and environmental crimes. But of course, French companies have opposed such a law and continue to do so. They put enormous pressure on the government, predicting relocations, weakening the French economy and France’s competitiveness. They also said that such a law would be legally impossible to implement. Five years passed between the first draft of the law and its adoption. The original version was much stricter than the text we eventually agreed on in 2017.
In what way?
The law has some shortcomings, and they were apparent from the beginning: The law is not covering enough companies, we could not reverse the burden of proof, and we also had to drop the criminal prosecution. There was no political majority for these points. That was the price we had to pay to reach a compromise.
But you now have a law. How do you rate its success?
We have achieved something extraordinary. The law is ingenious in many respects, for example, it covers the entire value chain, no matter at which level problems occur. The law applies to all established business relationships, meaning all formalized relationships between companies, subcontractors and suppliers. It can also apply to suppliers at the hundredth level of the chain.
Is the fight for clean supply chains now continuing on the European stage?
We started advocating a European law right after the French one was passed. It is a long fight. If all goes well, the European directive will be negotiated this year between the Commission, the Council and the Parliament. Until the negotiations are concluded and even the last member state has implemented the directive, it will take another several years. In the end, there will be at least ten years between the adoption of the French law and the EU law. That is far too slow. But there is a positive way of looking at it: With a view to the responsibility that companies will have to assume for their value chains in the future, we are looking at a small revolution.
The law has only three articles, it is very short. The Commission’s proposal and also the German Supply Chain Act, on the other hand, fill dozens of pages. Why is that?
There are two schools of jurisprudence. French law is built on large principles. It relies on the work of judges to determine the legal scope. Jurisprudence determines the interpretation of the law. Through its global and holistic character, French due diligence law relies on the initiative and commitment of companies.
The German law as well as the EU directive belong to a different school. They are very precise and read like a catalog of prohibitions and permissions. This may make sense at first glance, but it can also be a cause for concern. After all, this kind of drafting tempts companies to merely tick boxes but not to look more deeply at the impact of their own activities in the value chain. Given the complexity of supply chains, contracting, production stages and branching of companies, I see a risk that important challenges will be overlooked by “box ticking”.
The biggest mistake in implementing the directive would be for companies to focus their energy on legally protecting themselves against economic risks and possible damage to their reputation, but not making an effort to look for good solutions that have a positive impact on the entire value chain.
Has French lobbying pressure also shifted to Brussels?
Absolutely. The fight against the law is now taking place in the EU bubble, especially through Business Europe. French business representatives are hoping for a directive that will weaken the French law.
There seems to be some truth to the argument that supply chain laws are difficult to enforce legally: Recently, the lawsuit filed by French NGOs against TotalEnergies failed. The Paris court dismissed it because of procedural errors.
I don’t think the lawsuit has failed. There have been some legal developments around the law in the last five years, mainly thanks to this lawsuit. The Paris court has specialized in due diligence lawsuits. It now has sole jurisdiction. And not the commercial court or any local courts. I am convinced that jurisprudence will slowly establish itself. Of course, we all dream of a precedent that defines the interpretation of the law. But we are dealing with a completely new legal situation here, it takes time.
How does the French law affect target countries?
We have analyzed the textile and cocoa sectors. And indeed there is a paradox: Sometimes French companies want to set positive incentives, but they are thwarted by a supplier who has a monopoly in a region or on a raw material. If this supplier is not interested in human rights and environmental issues, then we have a problem. Because of his monopoly position, he can afford to concentrate on other markets and continue to focus on low-cost standards at the expense of the environment and human rights. So what can we do? Our companies can hardly stop their production. So they are at an impasse.
And then?
In these cases, the affected companies point to the responsibility of the state. A due diligence law cannot change the world on its own. Countries must work simultaneously on international and intergovernmental solutions: For example, within the framework of trade agreements or at the United Nations level – as with the recently adopted Treaty of the High Seas.
The decision is still open in which form heavy commercial vehicles with fuel cells will refuel hydrogen in series production. These vehicles, which are only on the road in small numbers and as prototypes, still operate with gaseous compressed hydrogen, which is refueled at 350 bar (35 megapascals, MPa). In this form, however, only ranges of up to 400 kilometers are possible because only about 35 to 40 kilograms of hydrogen can be stored in their carbon fiber tanks. The study “H₂-Nutzfahrzeuge im Fernverkehr” (H₂-commercial vehicles in long-distance transport), published by the H₂-Platform of the Baden-Wuerttemberg state agency E-Mobil, discusses the alternatives. The study will be presented on Wednesday, Table. Media was able to see it in advance.
The authors from Ludwig-Bölkow-Systemtechnik GmbH and the German Aerospace Center compare three H₂ fuel options and their respective development status: The three alternative H₂ fuel options with higher energy densities for long-distance transport are:
These technologies are supposed to achieve ranges of up to 1000 kilometers with one tank of hydrogen.
The authors of the study urge that there is still much to be done for a uniform refueling process and refueling infrastructure. There are still no internationally standardized refueling couplings and fuelling nozzles on vehicles for the examined H₂ fuel options and for the required refueling quantities.
Currently, hydrogen fuel at the pump, excluding taxes, costs 10 to 15 euros per kilogram. In the medium term, the costs could be reduced to four to six euros. For economies of scale to occur, it is necessary to ensure proper utilization of the refueling infrastructure. A comparison of the kilometer-based fuel costs of trucks with H₂ fuel cells and trucks with diesel engines clearly shows that price parity can be achieved in the medium term under suitable conditions.
Taking today’s diesel filling stations as a benchmark, the capacity for future H₂ filling stations would be in the range of one to eight tonnes of hydrogen per day. This would be roughly ten times the capacity of today’s hydrogen filling stations.
The authors stress that there is an urgent need for action: “All in all, the sectoral targets defined for 2030 on the one hand and the current technology maturity and standardization on the other hand result in a temporal tension.” In order to have relevant numbers of fuel cell trucks on the road by 2030, the market introduction must start several years earlier. Before that, however, technology validation, testing and demonstration must take place, the corresponding infrastructure must be built and the standardization of components and refueling processes needs to happen.
To ensure safe, fast and complete refueling at all times, the refueling process is defined in so-called refueling protocols. There are no standardized refueling protocols yet for any of the three fuel alternatives. Work on this is underway, and, likely, internationally standardized and thus interoperable refueling protocols will not be available before 2024. However, it is expected that trucks will be able to refuel within 10 to 15 minutes for a range of up to 1000 kilometers with all three H₂ fuel options.
According to the German Climate Change Act, emissions from road transport must be halved by 2030. 35 percent of emissions from the transport sector are caused by commercial vehicles. Heavy trucks over 16 tonnes, which are often used in long-distance transport, only make up ten percent of commercial vehicles, but they cause well over half of the commercial vehicle emissions.
The Commission has proposed reducing CO2 fleet limits for heavy-duty vehicles by 45 percent from 2030, 65 percent from 2035 and 90 percent from 2040. Daimler Truck wants to begin series production of heavy commercial vehicles with fuel cells in 2027, Hyundai has announced plans to build 1600 vehicles for the Swiss market by 2025. MAN plans to enter series production in 2024. Iveco/Nikola wants to start series production already this year.
Few people know Europe’s energy market as well as Jaume Loffredo. “I have worked for the industry, for consultancies in the energy sector, as well as for members of the European Parliament, and I have worked on energy issues,” he says. As Energy Team Leader at the European Consumers’ Organisation (BEUC), Loffredo wants to use this knowledge to make the energy market fairer. Together with his team, he collects evidence of where consumers are not adequately protected and then communicates these problems with EU policymakers.
“For example, we are currently focused on the issue that energy suppliers can sign a contract with their customers in Europe at a fixed price, but are allowed to adjust those prices at will later,” Loffredo says. That is unfair, he says. The 36-year-old and his team have gathered evidence that this is common practice in many European countries; the consumer advocates have shared their findings with the European Commission. “Also based on our evidence, the Commission will soon decide whether this practice by energy companies will be banned in the future.”
However, the European Consumer Organisation is not limiting its work in this case to gathering evidence. The organization also makes concrete policy recommendations to ensure a fairer energy market. “We also see ourselves as advisors to decision-makers in Europe, with consumers’ interests clearly in mind.”
Loffredo can draw on a wealth of experience in his consulting work: He studied political science in Sardinia and international studies in the United Kingdom, after which he first worked as an advisor to an Italian EU parliamentarian. Later, he took a position as a policymaker for an association of energy companies. He also advised energy companies and associations on how best to engage with policymakers.
“By getting to know all sides of the energy business in Europe so thoroughly, I am particularly good at assessing which demands are realistic for consumers and which are not,” Loffredo says. For instance, he believes the idea that energy prices will return to pre-energy crisis levels without major spending and investment by the EU is unrealistic at present. “Europe has to put money in its hands to change things for consumers in the European energy market, there’s no way around that.”
However, even Jaume Loffredo cannot predict what exactly the future of Europe’s energy supply will look like: “There are promising concepts, such as energy cooperatives or our own balcony power plants, which make consumers altogether less dependent on energy companies.” But regardless of whether it’s the present or the future – the fundamental prerequisite for a fair energy market is one thing above all: transparency.
“What we see time and again at the moment is that consumers receive insufficient or unclear information about what options are available to them on the energy market,” Loffredo emphasizes. Only consumers who know their options can take advantage of them, he adds. “We want to close this information gap for consumers. By being a fact-based association, not an ideological one.” Gregor Scheu
In 2013, the Rana Plaza textile factory collapsed in Dhaka, burying 1000 workers in the debris. The tragedy was the impetus for the National Assembly in France to devise and win the world’s first supply chain law. In an interview with Charlotte Wirth, the socialist Dominique Potier, who played a key role in drafting the law, explains that the French original is ingeniously simple, that lobbying battles over the EU version are currently being fought in Brussels and why the German legislator’s regulatory frenzy has produced a bad law.
It is clear that trucks with fuel cells will be necessary in long-distance transport from 2030 onwards in order to achieve the climate targets. But even six and a half years before that, it is still not clear whether the trucks of the future will run on liquid or gaseous hydrogen. And there is still no internationally recognized standard for the nozzle at the hydrogen filling station. A study by the Baden-Württemberg state agency e-mobil, which will be presented today at noon, puts its finger on the problem.
In the News section you will find out that Ursula von der Leyen spoke to the Ukraine President before her departure for China and what the raid on the Brussels headquarters of the Christian Democrat EPP is all about.
Mr. Potier, in 2017, a corporate due diligence law was passed in France for the first time, the so-called “Rana Plaza Law”. Was the building collapse in Bangladesh four years earlier the impetus?
No. The law is nicknamed “Rana Plaza”, but the impulse came from French civil society. In the 2012 presidential elections, NGOs made twelve proposals for a solidary planet. Due diligence was one of these demands. Rana Plaza brought the issue to the fore, people in Europe showed a lot of solidarity with the victims in Bangladesh. They started to look at supply chains and the consequences of their consumption. Rana Plaza thus became synonymous with the negative impact of globalization on the environment and human rights.
French companies probably saw the move differently.
It is difficult for the business community to explicitly denounce such a law: No one wants to defend child labor and environmental crimes. But of course, French companies have opposed such a law and continue to do so. They put enormous pressure on the government, predicting relocations, weakening the French economy and France’s competitiveness. They also said that such a law would be legally impossible to implement. Five years passed between the first draft of the law and its adoption. The original version was much stricter than the text we eventually agreed on in 2017.
In what way?
The law has some shortcomings, and they were apparent from the beginning: The law is not covering enough companies, we could not reverse the burden of proof, and we also had to drop the criminal prosecution. There was no political majority for these points. That was the price we had to pay to reach a compromise.
But you now have a law. How do you rate its success?
We have achieved something extraordinary. The law is ingenious in many respects, for example, it covers the entire value chain, no matter at which level problems occur. The law applies to all established business relationships, meaning all formalized relationships between companies, subcontractors and suppliers. It can also apply to suppliers at the hundredth level of the chain.
Is the fight for clean supply chains now continuing on the European stage?
We started advocating a European law right after the French one was passed. It is a long fight. If all goes well, the European directive will be negotiated this year between the Commission, the Council and the Parliament. Until the negotiations are concluded and even the last member state has implemented the directive, it will take another several years. In the end, there will be at least ten years between the adoption of the French law and the EU law. That is far too slow. But there is a positive way of looking at it: With a view to the responsibility that companies will have to assume for their value chains in the future, we are looking at a small revolution.
The law has only three articles, it is very short. The Commission’s proposal and also the German Supply Chain Act, on the other hand, fill dozens of pages. Why is that?
There are two schools of jurisprudence. French law is built on large principles. It relies on the work of judges to determine the legal scope. Jurisprudence determines the interpretation of the law. Through its global and holistic character, French due diligence law relies on the initiative and commitment of companies.
The German law as well as the EU directive belong to a different school. They are very precise and read like a catalog of prohibitions and permissions. This may make sense at first glance, but it can also be a cause for concern. After all, this kind of drafting tempts companies to merely tick boxes but not to look more deeply at the impact of their own activities in the value chain. Given the complexity of supply chains, contracting, production stages and branching of companies, I see a risk that important challenges will be overlooked by “box ticking”.
The biggest mistake in implementing the directive would be for companies to focus their energy on legally protecting themselves against economic risks and possible damage to their reputation, but not making an effort to look for good solutions that have a positive impact on the entire value chain.
Has French lobbying pressure also shifted to Brussels?
Absolutely. The fight against the law is now taking place in the EU bubble, especially through Business Europe. French business representatives are hoping for a directive that will weaken the French law.
There seems to be some truth to the argument that supply chain laws are difficult to enforce legally: Recently, the lawsuit filed by French NGOs against TotalEnergies failed. The Paris court dismissed it because of procedural errors.
I don’t think the lawsuit has failed. There have been some legal developments around the law in the last five years, mainly thanks to this lawsuit. The Paris court has specialized in due diligence lawsuits. It now has sole jurisdiction. And not the commercial court or any local courts. I am convinced that jurisprudence will slowly establish itself. Of course, we all dream of a precedent that defines the interpretation of the law. But we are dealing with a completely new legal situation here, it takes time.
How does the French law affect target countries?
We have analyzed the textile and cocoa sectors. And indeed there is a paradox: Sometimes French companies want to set positive incentives, but they are thwarted by a supplier who has a monopoly in a region or on a raw material. If this supplier is not interested in human rights and environmental issues, then we have a problem. Because of his monopoly position, he can afford to concentrate on other markets and continue to focus on low-cost standards at the expense of the environment and human rights. So what can we do? Our companies can hardly stop their production. So they are at an impasse.
And then?
In these cases, the affected companies point to the responsibility of the state. A due diligence law cannot change the world on its own. Countries must work simultaneously on international and intergovernmental solutions: For example, within the framework of trade agreements or at the United Nations level – as with the recently adopted Treaty of the High Seas.
The decision is still open in which form heavy commercial vehicles with fuel cells will refuel hydrogen in series production. These vehicles, which are only on the road in small numbers and as prototypes, still operate with gaseous compressed hydrogen, which is refueled at 350 bar (35 megapascals, MPa). In this form, however, only ranges of up to 400 kilometers are possible because only about 35 to 40 kilograms of hydrogen can be stored in their carbon fiber tanks. The study “H₂-Nutzfahrzeuge im Fernverkehr” (H₂-commercial vehicles in long-distance transport), published by the H₂-Platform of the Baden-Wuerttemberg state agency E-Mobil, discusses the alternatives. The study will be presented on Wednesday, Table. Media was able to see it in advance.
The authors from Ludwig-Bölkow-Systemtechnik GmbH and the German Aerospace Center compare three H₂ fuel options and their respective development status: The three alternative H₂ fuel options with higher energy densities for long-distance transport are:
These technologies are supposed to achieve ranges of up to 1000 kilometers with one tank of hydrogen.
The authors of the study urge that there is still much to be done for a uniform refueling process and refueling infrastructure. There are still no internationally standardized refueling couplings and fuelling nozzles on vehicles for the examined H₂ fuel options and for the required refueling quantities.
Currently, hydrogen fuel at the pump, excluding taxes, costs 10 to 15 euros per kilogram. In the medium term, the costs could be reduced to four to six euros. For economies of scale to occur, it is necessary to ensure proper utilization of the refueling infrastructure. A comparison of the kilometer-based fuel costs of trucks with H₂ fuel cells and trucks with diesel engines clearly shows that price parity can be achieved in the medium term under suitable conditions.
Taking today’s diesel filling stations as a benchmark, the capacity for future H₂ filling stations would be in the range of one to eight tonnes of hydrogen per day. This would be roughly ten times the capacity of today’s hydrogen filling stations.
The authors stress that there is an urgent need for action: “All in all, the sectoral targets defined for 2030 on the one hand and the current technology maturity and standardization on the other hand result in a temporal tension.” In order to have relevant numbers of fuel cell trucks on the road by 2030, the market introduction must start several years earlier. Before that, however, technology validation, testing and demonstration must take place, the corresponding infrastructure must be built and the standardization of components and refueling processes needs to happen.
To ensure safe, fast and complete refueling at all times, the refueling process is defined in so-called refueling protocols. There are no standardized refueling protocols yet for any of the three fuel alternatives. Work on this is underway, and, likely, internationally standardized and thus interoperable refueling protocols will not be available before 2024. However, it is expected that trucks will be able to refuel within 10 to 15 minutes for a range of up to 1000 kilometers with all three H₂ fuel options.
According to the German Climate Change Act, emissions from road transport must be halved by 2030. 35 percent of emissions from the transport sector are caused by commercial vehicles. Heavy trucks over 16 tonnes, which are often used in long-distance transport, only make up ten percent of commercial vehicles, but they cause well over half of the commercial vehicle emissions.
The Commission has proposed reducing CO2 fleet limits for heavy-duty vehicles by 45 percent from 2030, 65 percent from 2035 and 90 percent from 2040. Daimler Truck wants to begin series production of heavy commercial vehicles with fuel cells in 2027, Hyundai has announced plans to build 1600 vehicles for the Swiss market by 2025. MAN plans to enter series production in 2024. Iveco/Nikola wants to start series production already this year.
Few people know Europe’s energy market as well as Jaume Loffredo. “I have worked for the industry, for consultancies in the energy sector, as well as for members of the European Parliament, and I have worked on energy issues,” he says. As Energy Team Leader at the European Consumers’ Organisation (BEUC), Loffredo wants to use this knowledge to make the energy market fairer. Together with his team, he collects evidence of where consumers are not adequately protected and then communicates these problems with EU policymakers.
“For example, we are currently focused on the issue that energy suppliers can sign a contract with their customers in Europe at a fixed price, but are allowed to adjust those prices at will later,” Loffredo says. That is unfair, he says. The 36-year-old and his team have gathered evidence that this is common practice in many European countries; the consumer advocates have shared their findings with the European Commission. “Also based on our evidence, the Commission will soon decide whether this practice by energy companies will be banned in the future.”
However, the European Consumer Organisation is not limiting its work in this case to gathering evidence. The organization also makes concrete policy recommendations to ensure a fairer energy market. “We also see ourselves as advisors to decision-makers in Europe, with consumers’ interests clearly in mind.”
Loffredo can draw on a wealth of experience in his consulting work: He studied political science in Sardinia and international studies in the United Kingdom, after which he first worked as an advisor to an Italian EU parliamentarian. Later, he took a position as a policymaker for an association of energy companies. He also advised energy companies and associations on how best to engage with policymakers.
“By getting to know all sides of the energy business in Europe so thoroughly, I am particularly good at assessing which demands are realistic for consumers and which are not,” Loffredo says. For instance, he believes the idea that energy prices will return to pre-energy crisis levels without major spending and investment by the EU is unrealistic at present. “Europe has to put money in its hands to change things for consumers in the European energy market, there’s no way around that.”
However, even Jaume Loffredo cannot predict what exactly the future of Europe’s energy supply will look like: “There are promising concepts, such as energy cooperatives or our own balcony power plants, which make consumers altogether less dependent on energy companies.” But regardless of whether it’s the present or the future – the fundamental prerequisite for a fair energy market is one thing above all: transparency.
“What we see time and again at the moment is that consumers receive insufficient or unclear information about what options are available to them on the energy market,” Loffredo emphasizes. Only consumers who know their options can take advantage of them, he adds. “We want to close this information gap for consumers. By being a fact-based association, not an ideological one.” Gregor Scheu
