Nature Restoration Regulation generates storm in European Parliament

In 2022, the European Commission put forward proposals for two new regulations intended to better protect ecosystems and address species loss within the EU. Both are key pillars of the EU’s Green Deal to tackle climate change and environmental degradation which we covered in our blog last year. The first of those proposals, the Nature Restoration Regulation, reached a critical point in its legislative process this summer, with the European Parliament narrowly voting in favour of an amended draft following months of intense debate.

Original regulatory proposal

By way of reminder, the EU Nature Restoration Regulation’s stated aims were:

• to contribute to the continuous, long-term and sustained recovery of nature across the EU’s land and sea areas through the restoration of ecosystems;
• to use such restoration to help achieve the EU’s net-zero by 2050 objectives; and
• to ensure the EU meets its international commitments with respect to biodiversity.

At the time, the proposal included a mandatory target for at least 20% of the EU’s land and sea areas to be subject to effective ecosystem restoration measures by 2030, and Member States were expected to develop National Restoration Plans that set out measures to meet ecosystem specific targets.

The debate that followed - political divides

Debate about the Regulation became increasingly polarised in Brussels after it was originally proposed, with opposition led by the conservative European People’s Party. Earlier this year, the EPP withdrew from negotiations in the European Parliament’s environmental committee’s draft proposals. They claimed the Regulation’s wide-reaching restoration goals would harm Europe’s farmers, reduce food production and hinder hydroelectric and hydrogen green energy development at a time when Europe is trying to decouple its energy and supply chains from the rest of the world, against the backdrop of the war in Ukraine.  

Unsurprisingly, climate campaigners led the other side of the debate, arguing that Europe has no time to waste in the face of a global climate emergency. They are joined by green and left-leaning politicians who are continuing to back Ursula Von der Leyen’s Green Deal and the commitments made by the EU at COP15 in Montreal last year, of which the Regulation forms a key tenet. On the economic side, they also suggested that restoration could in fact increase the economic value and independence of EU land in the long-term. Major food production companies have also entered the debate on this point, noting that their companies’ bottom lines depend on nature and its well-being, especially in the procurement of their agricultural raw materials.

Legislative passage and compromise 

The Commission proposal was put to a vote of all 705 MEPs in a plenary session of Parliament on 12 July 2023, with MEPs narrowly voting in favour, despite considerable lobbying by conservatives and even protests by farmers outside the Parliament’s voting chamber. The end result is considerably weaker than the original proposal. While the final text is awaiting consolidation, we understand that the following compromise positions have now been reached:

• Renewable energy infrastructure: a new article has been added to the proposal underlining that new renewable energy infrastructure is overwhelmingly in the public interest and confirming that the Regulation will not block any new developments of such infrastructure.
• Restoration measures: MEPs showed their support for the Commission’s original proposal to put restoration measures in place covering at least 20% of all land and sea areas (as opposed to the 30% target proposed by the Parliament’s rapporteur). The latest draft also confirms that there will be no imposition of new special ‘protected areas’ for conservation, although Member States have the possibility to designate certain areas as such. The Commission has said it will consider the impact of these targets, in particular on rural areas and on agricultural and forestry industries, with a view to ensuring it does not shift production outside the EU.
• Food security: clearly heeding vocal concerns from the EPP about food security, Parliament has suggested delaying the enactment of the Regulation so that it will only apply once the Commission has provided data on the necessary conditions to guarantee long-term food security and when EU countries have quantified the area that needs to be restored to reach the restoration targets for each habitat type. Additionally, under the compromise text, restoration targets can be postponed in exceptional socioeconomic circumstances, like for example where the average food price has gone up by 10% over a period of one year.
• Peatlands: the Regulation specifically notes that the restoration and rewetting of organic soils in agricultural use constituting drained peatlands has biodiversity benefits and is important for the reduction of greenhouse gas emissions. However, a middle-ground has been reached on peatland restoration targets: where duly justified (eg due to considerable negative impacts on buildings, infrastructure or public interests), the extent of restoration may be set lower by individual Member States.
• Financials: within 12 months of the Regulation entering into force, the Commission would have to assess any gap between restoration financial needs and available EU funding and look into solutions to bridge such a gap, eg through a dedicated EU instrument.

Next steps

The file is now subject to trilogue negotiations between the three EU institutions (Council, Parliament, and Commission). The Council adopted its position in June this year, deciding to give countries more flexibility to reach the Commission’s proposed targets and adopt similar clauses to the Parliament’s position on renewables. These trilogues are likely to echo the same tense political battles seen in Parliament, so it remains to be seen if a deal can be reached on the Regulation before the EU elections in June 2024.

The ultimate shape of the Regulation, if passed, will have a significant impact on industries as varied as agricultural, infrastructure, transport and chemicals, ie those that rely heavily on land and water use. We will continue to track its legislative progress closely over the coming weeks and months.