With the EU’s freshly adopted 2021-2027 budget making more than €1tn available to implement its post-covid recovery, centred around the European Green Deal and the slogan “build back better”, you could be forgiven for having great expectations for environment policy over the next EU semester. Especially with Portugal – a recognised leader in climate ambition and the integration of renewable energy – assuming the EU Council presidency.
However, when Portugal’s minister for the environment and climate action, João Pedro Matos Fernandes, talks to ENDS ahead of the handover, he downplays the prospects of major breakthroughs or announcements, preferring to stress the need for hard graft to get negotiations over the line.
Among the toughest could be trilogue talks with the European Parliament over the proposed Climate Law. Asked whether he thought the council could be persuaded to accept the 60% target for emissions reductions target by 2030 that MEPs are demanding, Matos Fernandes says: “We will do all we have to in order to achieve agreement in the Portuguese semester.” But “the consensus on at least 55% in the council was hard to achieve”, he warns.
“We have to remember that about six years ago the proposal was to reduce emissions by 40% and it was perhaps harder to reach that agreement than the 55% now,” the Portuguese minister says. “So things are going in the right direction.”
On climate, apart from bringing the trilogue negotiations to a successful conclusion, the priority will be ensuring that national recovery and resilience plans, due to be approved during Portugal’s presidency, earmark 37% of the budget for climate action. According to Matos Fernandes, the sustainability taxonomy will be a key tool for ensuring that “investment does not include fossil fuels”.
“The other very important mission for us is around adaptation, which will be the subject of an informal council in Evora in April,” Matos Fernandes says. “Adaptation is key for the south of Europe and we have to focus on nature-based solutions.” He adds, however, that it was “too soon to say whether any paper or other document will come out of the informal council”.
Portugal will also have a particular interest in achieving approval of the revised trans-European energy networks (TEN-E) policy, given the importance of upgraded electricity and gas interconnections for Portugal’s ambitions to become an exporter of renewable electricity and gas.
Another big energy-related file to be discussed during the Portuguese semester is the Renovation Wave designed to direct recovery funding into energy efficiency and the incorporation of renewables during building improvements. According to Matos Fernandes “it’s really important that we reach good conclusions on it because, up to now, we have only had discussions on a strategic level and we need to go deeper”.
In addition to a February high-level conference on climate change, Matos Fernandes will host separate summits on green mining and green hydrogen, both major elements of Portugal’s economic recovery strategy.
These topics also chime with the post-covid agenda for the 18-month period of the German, Portuguese and Slovenian presidency trio which prioritises developing the EU’s “economic base” and “promoting Europe’s interests”.
“We only have 9% of the raw materials we need for our economic development so we have to have a discussion about them and we have to find a way to explore them with all the environmental precautions,” he says.
Portugal has Europe’s largest reserves of lithium, a key raw material for rechargeable battery production, which Matos Fernandes notes was “essential for decarbonisation and digitalisation”. But “we have to reduce the impact of future mines on water and biodiversity, and we have to use everything we take out of the ground without producing waste”.
Obtaining an EU imprimatur for prioritising the exploitation of strategic raw materials would be helpful for the government since there has been widespread opposition to the expansion of lithium mining near protected areas in the north of Portugal.
For Matos Fernandes, the future success of Portugal’s plans for green hydrogen “depends a lot on the financial support that will be available as there are cheaper ways of producing hydrogen. Decarbonisation is not synonymous with electrification and there are some processes which cannot live without gas,” he says.
Unlike Norway or the UK “Portugal doesn’t have any natural gas so we have to produce renewable gases to ensure that our industry stays here”.
The priority topic in the circular economy dossier will be negotiating a council position on the Battery Regulation proposed by the European commission last month. The issue is, again, of considerable interest to Portugal given that it has ambitions both to process its lithium reserves and manufacture batteries domestically to power the transition to electric mobility.
“We will promote an exchange of views on the environment council in March, in order to try to achieve a general approach at the June environment council,” the minister says.
‘Lots of work’ ahead
The Portuguese presidency has been tasked with presenting a report on the Zero Pollution action plan in June and to “have a good discussion in the council around chemicals”, Matos Fernandes says. “The German presidency has passed us a very well-organised dossier. They did an amazing job.”
The Portuguese presidency will also have to handle a number of broader, or “horizontal” policy files “We will proceed with the negotiation of the Aarhus Regulation in trilogues with the European Parliament and the Commission,” Matos Fernades says. “We are also working on the 8th Environmental Action Programme in order to obtain a general approach at the Environment Council in March.”
The environment minister rules out the prospect of Portugal launching headline-grabbing commitments during its presidency, claiming that the country already leads by example. “We were the first country in the world to say we are going carbon neutral” and, “as the European commission said two or three weeks ago, Portugal is the European country closest to achieving the goal of carbon neutrality”.
“So there will be no big announcements, what we have to do is lots of work,” Matos Fernandes says.