San Francisco Frontiers - EU seeks to balance business needs, climate goals

The European Union's focus has pivoted to competitivity due to concerns over sluggish economic growth -- in a sharp move away from EU chief Ursula von der Leyen's first mandate that focused on tackling climate change.

The issue has taken on acute urgency with US President Donald Trump pushing an America First strategy that risks a trade war with the EU.

The bloc's industry chief Stephane Sejourne said Europe was "simplifying" green business rules to make its companies more competitive -- without resorting to the "chainsaw".

"Europe knows how to reform itself. Without a chainsaw but with competent men and women who listen to economic players," Sejourne said -- in a nod to America's Elon Musk or Argentina's Javier Milei who have made the saw a symbol of reforming zeal.

"It does not undermine any of the green goals," the EU's vice president for the clean transition, Teresa Ribera, told a press conference.

Exasperated companies -- as well as key powers France and Germany -- have been urging Brussels to make it easier to do business and bring down energy costs, which are higher than in the United States.

As Trump rejects his predecessor's push to bolster clean tech investment, Brussels also sees an opportunity for Europe.

With all that in mind, the European Commission unveiled a package of measures to pare back red tape, cut energy costs and strengthen its clean tech sector through a "Clean Industrial Deal".

For starters, the EU executive told member states to cut taxes on electricity bills to help consumers and firms.

And it intends to trim back several new rules on environmental and human rights supply chain standards -- adopted with fanfare barely months ago but since attacked as too burdensome for businesses.

- Smaller businesses -

Two major texts are in the EU's firing line: the Corporate Sustainability Reporting Directive (CSRD), which requires large firms to give investors and other "stakeholders" information on their climate impacts and emissions, and steps taken to limit them.

The other is the Corporate Sustainability Due Diligence Directive (CSDDD) -- passed last year -- which demands large companies fix the "adverse human rights and environmental impacts" of their supply chains worldwide.

In a draft document seen by AFP, the EU says companies must report on supply chains every five years rather than annually, which will "significantly reduce burdens".

It added the commission would make larger companies -- with more than 1,000 employees -- comply.

Today, the rules apply to firms with over 250 employees and a 40-million-euro ($42-million) turnover.

The proposals will need approval from EU states and the European Parliament.

- Past 'mistakes' -

In unveiling the new measures, the commission reiterated its target to make its economy carbon-neutral by 2050 and promised to "stay the course" on objectives such as cutting greenhouse gas emissions by 55 percent by 2030.

But the changes will likely be hotly debated in the EU parliament, with centrists, left-wing and green lawmakers opposed to weakening environmental rules.

Some liberals have indicated openness to changes however, such as French centrist Marie-Pierre Vedrenne who now considers the rules to have been a "mistake", despite previously voting for them.

"The world is completely changing," she said. "I think we need to say at the European Parliament, 'OK, sometimes we make mistakes'."

The parliament's socialist grouping, however, urged Brussels to "revisit" its approach in a letter last week.

Climate groups oppose paring back the rules.

"Changing the course now would be very detrimental to leading companies who are committed to sustainability and started investing money and resources in complying with legislation," Amandine Van Den Berghe of environmental law NGO ClientEarth said.

"If the race is a race to the bottom, we won't win," she said.

S.Jackson--SFF