EU Launches Green Team Initiative, Prolongs State Aid Framework
The European Union has launched a Green Team Europe Initiative in partnership with the Association of Southeast Asian Nations (ASEAN)/South East Asia. This initiative is expected to strengthen the EU partnership with the region in the areas of climate action, environmental and biodiversity protection, and clean energy transition. The initiative provides the framework for coordinated green action between participating Team Europe partners (Austria, Denmark, France, Germany, Romania, and the European Investment Bank) and ASEAN and its member states, seeking synergies between their respective political frameworks: in particular the European Green Deal and the ASEAN Community Vision 2025. In addition, the European Commission (EC) has decided to prolong the State aid Temporary Framework until June 30, 2022.
EC also introduced a number of targeted adjustments, including two new tools to support the ongoing recovery of the European economy in a sustainable way:
- Investment support measures to help member states address the investment gap left behind by the crisis. Member states may create incentives for investments undertaken by companies and use this tool to accelerate the green and digital transitions. The measure includes safeguards to avoid undue distortions to competition, such as the fact that they should target a wide group of beneficiaries and the aid amounts should be limited in size. This instrument is available to member states until December 31, 2022
- Solvency support measures to leverage private funds and make them available for investments in small and medium-sized enterprises (SMEs), including start-ups, and small midcaps. Member states may grant guarantees to private intermediaries, creating incentives to invest in these types of companies and provide them with easier access to such equity financing that is often difficult for them to attract individually. This instrument is available to member states until December 31, 2023.
In another development, EC adopted a communication on a competition policy fit for new challenges, which frames the important role of competition policy for Europe's path toward recovery, the green and digital transitions, and a resilient single market. The communication highlights the in-built ability of competition policy to adapt to new market circumstances, policy priorities, and customer needs. Additionally, the European Council approved the 2020 climate finance figure of EUR 23.39 billion. This figure was committed by the European Union and its 27 member states to support developing countries in reducing their greenhouse gas emissions and adapting to the impacts of climate change. In 2020, close to 50% of the funding for developing countries was dedicated to either climate adaptation or cross-cutting action and close to half of the total funding was committed in the form of grants. The EU and its member states are determined to continue scaling up their international climate finance toward the developed countries' collective goal of mobilizing USD 100 billion per year, applicable through to 2025. They have recently made concrete pledges to enhance their contributions in the coming years as part of a climate finance delivery plan, which was published in October 2021.
Related Links
- Press Release on Green Team Europe Initiative
- Press Release on Extension of Temporary Framework
- Press Release on Competition Policy
- Communication on Competition Policy
- Press Release on Climate Finance Figure
Keywords: Europe, Asia Pacific, EU, Banking, COVID-19, Climate Change Risk, ESG, Green Team Initiative, State Aid Rules, State Aid Temporary Framework, Green Finance, ASEAN, EC, European Council
Featured Experts
Michael Denton, PhD, PE
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
Previous Article
ESMA Publishes Preliminary Report on Carbon Market in EURelated Articles
EBA Launches Stress Tests for Banks, Issues Other Updates
The European Banking Authority (EBA) launched the 2023 European Union (EU)-wide stress test, published annual reports on minimum requirement for own funds and eligible liabilities (MREL) and high earners with data as of December 2021.
EBA Proposes Standards for IRRBB Reporting Under Basel Framework
The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.
FED Issues Further Details on Pilot Climate Scenario Analysis Exercise
The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
CBIRC Revises Measures on Corporate Governance Supervision
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
