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The Green New Deal is the flagship of the new European Commission (2020-2025), which has recently shed light on the likely substance of the initiative in a new Communication.

The main ‘headline’ is that the EU Member States have agreed (by unanimity minus one, Poland) to put into law a formal commitment that the EU will be carbon neutral by 2050. Whilst such a legislative commitment can be reversed in future (if, for example, non-EU countries fail to follow the EU’s lead and the final stages of decarbonisation hit European competitiveness too hard), it does mean that all EU policy and legislation moving forwards will be predicated on putting the EU in a place to meet this 2050 commitment. The effect of this should not be underestimated.

The measures that will follow in the short term to realise this ambition will, in themselves, already create very significant challenges and opportunities for a wide range of the EU’s economy. Regulation will drive the changes to these markets; mastering this complicated framework will be vital.

The key initiatives announced in the Communication, and explained in more detail below are:

  • Increasing to 50-55% the EU’s existing commitment to cut CO2 by 40% by 2030 (compared to 1990 levels).
  • The ETS will be revised in line with the 50-55% objective, and will be extended or its impact strengthened to other sectors (candidates include air, maritime and road transport, energyintensive industry…). In parallel the Commission will propose a carbon border tax to protect EU industry at risk of ‘carbon leakage’ from imports; the Commission recognising that the EU cannot solve climate change on its own and that international action remains the highest priority.
  • Member States are expected to increase their existing renewable energy and energy efficiency objectives. To meet the current 2030 renewable energy target, the EU will already need to invest in between 150-200% of the wind and PV capacity that it installed between 2009 and 2020. Under the Green New Deal, the (already ambitious) renewable targets at Member States level are therefore set to further increase. The opportunities for large scale offshore wind and PV, with the consequent grid development, will dwarf the admittedly enormous changes that have taken place over the last decade.
  • (Close to) Zero-carbon Hydrogen will be an essential part of the EU’s energy mix as it moves towards a carbon-free future. The next Commission will signal the kick-start of this industry, in much the same way that the EU catalysed the exponential growth of the wind and PV markets in 2009.
  • The state aid rules will be revised to reflect the Green New Deal objectives.
  • Emissions standards for vehicles will be significantly strengthened.
  • The Sustainable Finance Initiative will be reinforced, and the Commission will develop an EU green bond standard.
  • The ‘circular economy’ will become a central pillar of the EU’s industrial policy, presenting new challenges in particular for the plastics industry.

These are just a selection of the measures that will be tabled over the coming months; the Green New Deal goes far beyond impacting only on energy markets, the aim is to ‘green’ the entire economy. There is ‘something for everyone’ in the Green New Deal and industry needs to understand the extent of the changes that will now develop, and develop a proactive strategy to benefit from them.

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Christopher Jones is a Principal for Energy, regulatory and Antitrust in the European Competition Law Practice Group in the Brussels office. He joined Baker McKenzie in 2018. Christopher's career has spanned more than 30 years at the European Commission. He was previously Deputy Head of Cabinet for the Energy Commissioner and spent 18 years designing and implementing Europe's energy policy. Christopher has significant experience in competition policy, having spent 11 years in the field including responsibility for antitrust and mergers in the Cabinet of the Energy Commissioner, and as personal Policy Assistant to two Directors' General. He is also a leading academic in the competition and energy areas, editing and co-authoring the standard text books on Competition Law and Energy Markets, the Internal Energy Market, and EU Renewable Law and Policy, as well as books on merger control and the standard competition law reference work, the EU Competition Law Handbook.

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Michael is a finance partner in the London office and has deep experience of the international financial markets. Michael has extensive experience across the developed, emerging and frontier markets. His clients include private equity/credit funds, investment banks, multinational corporations, sovereign governments, state-owned entities, state agencies, supranational banks and sovereign wealth funds

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Ilona Millar is a partner in the Environmental Markets team at Baker McKenzie's Sydney office. Ilona is an environmental and projects lawyer with a diverse range of experience in domestic and international climate change, carbon markets, environmental law and policy, and a strong background in all aspects of water management, planning and projects. She joined the Firm in 2008 from the Foundation for International Environmental Law and Development, and International Institute for Environment and Development, in London. Ilona regularly writes, teaches and presents on environmental topics — she has lectured on environmental law, environmental markets and international climate change law at UNSW, Sydney University and University College London and for the past six years has co-coordinated the international climate change law course at ANU where she is a visiting fellow at the College of Law. Ilona's extensive pro bono work includes advising a number of developing country governments and non-government organizations on international climate change negotiations, and advising the Wentworth Group of Concerned Scientists on water and natural resource management law. She is listed among the best lawyers for Climate Change by Best Lawyers Australia 2016.

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Andy is a partner in the Baker McKenzie Dispute Resolution team based in London. He advises clients on international, commercial and investment treaty arbitration as well as in complex, often multijurisdictional litigation, mediations and expert determinations. He also advises clients on issues pertaining to private and public international law. Andy is recommended in Who's Who Legal: Arbitration 2018 and individually ranked in the field of International Arbitration by Chambers UK, who describe him as "a 'superb' practitioner," and "very commercial" and also recognized by Legal 500, who call him "an arbitration doyen."

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Kathy Honeywood joined Baker McKenzie in May 2018 as a partner in the London Corporate Group. Kathy is a member of Baker McKenzie's Global Energy, Mining and Infrastructure Industry Group. She focuses on M&A, corporate finance and joint ventures and has significant Asia Pacific experience, including secondments to China and Singapore and advising on a number of high-profile Asia outbound M&A matters.

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Andrew is a partner and Head of Baker McKenzie Habib Al Mulla's Arbitration and Construction practice. He has been based in Dubai since 2009. He is a solicitor advocate and arbitration law specialist. He works extensively across the Middle East, Africa and Asia, acting for governments and international corporations on complex commercial disputes under a variety of civil and common law systems. He is ranked in Chambers Global, Legal 500 and is listed in Who’s Who Legal as one of the world’s leading construction lawyers. Andrew has a commercial focus and is particularly adept at partnering with his clients and understanding their business. Clients state that he “impresses with his command of potential issues” and he has "relentless tenacity and absolute client focus" (Chambers Global). Who's Who Legal says: "Rising star" Andrew Mackenzie has "an exceptional knowledge" and "a strong commitment to his clients."

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Dr. Thomas Dörmer is corporate / M&A partner in Baker McKenzie's Berlin office and a member of the Firm's Energy & Infrastructure group. Prior to joining the Firm, Thomas practiced in an international law firm's M&A/corporate department from 2005 to 2012, focusing on regulated industries, particularly on energy and infrastructure. From 2013 to 2016, he was a partner in the corporate/M&A and energy and infrastructure groups of another leading international law firm. Thomas has published several articles related to his practice.

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Richard Blunt is a partner in Baker McKenzie London's Corporate Department, where he leads the Energy, Mining and Infrastructure Group.

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Maxim Kuznechenkov is a partner in Baker McKenzie's Moscow office. He is the recipient of the Client Choice Award 2014 and 2015 for commercial property in Russia. He is also recommended by Chambers and Legal 500 where he is described as “very pragmatic and focused on the matter at hand, and has excellent insight into political implications and other issues that might be of importance”. Before joining Baker McKenzie in 2008, he worked as a consultant at PwC, as a real estate senior associate at PwC Legal.