Explanatory Memorandum to COM(2022)329 - Amendment of Regulation (EU) No 691/2011 as regards introducing new environmental economic accounts modules - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2022)329 - Amendment of Regulation (EU) No 691/2011 as regards introducing new environmental economic accounts modules. |
|---|---|
| source | COM(2022)329  |
| date | 11-07-2022 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
Regulation (EU) No 691/2011 of the European Parliament and of the Council of 6 July 2011 on European environmental economic accounts 1 sets out a common framework for collecting, compiling, transmitting and evaluating European environmental economic accounts. It was amended by Regulation (EU) No 538/2014 2 . The Regulation covers six modules: air emissions accounts, environmentally related taxes by economic activity, economy-wide material flow accounts, environmental protection expenditure accounts, environmental goods and services sector accounts, and physical energy flow accounts.
Article 10 of the Regulation lists potential new modules to be introduced later based on Commission proposals. This proposal introduces three new environmental account modules already provided for under Article 10: forest accounts, ecosystem accounts, and environmental subsidies and similar transfers accounts.
The main objective of the proposal is to extend the scope of the European environmental economic accounts to provide better information for the European Green Deal, a growth strategy that aims to transform the EU into a fair and prosperous society, with a modern, resource-efficient and competitive economy. 3
Environmental economic accounts are a multipurpose statistical framework bringing together economic and environmental information. They measure the contribution of the environment to the economy and the impact of the economy on the environment in a consistent and compatible way with macroeconomic statistics (national accounts).
Users analyse and use environmental economic accounts in modelling and outlooks and for preparing policy proposals and reporting on policy implementation and impact. The new modules will make more integrated datasets available for such purposes.
Ecosystem accounts integrate biodiversity and natural capital considerations with mainstream economic questions on resource allocation and sustainability. Forest accounts specifically measure forest area and its available share for timber extraction and trace their changes over time. Environmental subsidies and similar transfers accounts identify and quantify domestic fiscal policy measures and non-EU resources that support the Green Deal through economic activities and products, protecting the environment and safeguarding natural resources.
The three proposed modules respond to and are underpinned by international statistical standards: the System of Environmental Economic Accounts (SEEA) Central Framework and SEEA Ecosystem Accounts. 4 The United Nations Statistical Commission adopted the SEEA Central Framework as an international statistical standard at its 43rd session in February 2012 and the SEEA Ecosystem Accounts at its 52nd session in March 2021. The new modules are fully in line with the SEEA.
For several years, many Member States have gained experience in compiling and reporting on forest accounts and environmental subsidies and similar transfers data. This has happened through regular voluntary data collections of the Commission (Eurostat) and pilot studies that helped test the feasibility of introducing ecosystem accounts into the EU. This experience was shared with all other Member States.
For environmental subsidies and similar transfers accounts, some of the requirements have already been covered through mandatory reporting of environmental protection expenditure accounts. A more comprehensive and streamlined reporting on environmental subsidies and similar transfers will draw upon this experience and – once in place – provide the data on transfers required for environmental protection expenditure accounts.
This proposal complements changes set out in Commission Delegated Regulation (EU) 2022/125 5 . The changes to the scope and deadlines for reporting data for the current modules of European environmental economic accounts ensure that the data better respond to users’ needs.
The proposal also updates references to the 1995 edition of the European System of Accounts (ESA95). They are replaced by references to the 2010 edition of the European System of Accounts (ESA2010) set out in Regulation (EU) No 549/2013 of the European Parliament and of the Council 6 .
This initiative is not part of the regulatory fitness and performance programme (REFIT).
• Consistency with existing policy provisions in the policy area
Regulation (EU) No 691/2011 sets out a common framework for collecting, compiling, transmitting and evaluating environmental economic accounts in the EU to set up satellite accounts to complement the European System of Accounts (ESA 2010).
Recital 16 of the Regulation states the different sets of environmental economic accounts are under development and at different stages of maturity and stresses the need for a modular structure, providing sufficient flexibility, for example, to introduce additional modules.
Article 3 of the Regulation sets out a list of modules of the environmental economic accounts to be compiled within the common framework. For each module, a separate annex to the Regulation describes the objectives, coverage, characteristics for data compilation and reporting, the first reference year, frequency and transmission deadlines, and reporting tables. Commission Delegated Regulation (EU) 2022/125 updated the annexes for the existing six modules of European environmental economic accounts to shorten the time between which some of the data are reported, add more characteristics to the list, and streamline the reporting tables. 7
Article 10 of the Regulation lists new environmental economic account modules that could be introduced based on Commission proposals, including the three new modules in this proposal. The three modules are also listed as development areas in the European strategy for environmental economic accounts for 2019-2023, which was endorsed by the European Statistical System Committee 8 .
Article 4 of the Regulation sets out that the Commission must test the feasibility of introducing new environmental economic account modules through voluntary pilot studies by Member States. For this reason, several pilot studies have been carried out for the three proposed modules, testing the feasibility of compiling the data. For forest accounts and environmental subsidies and similar transfers, some Member States already compile and report annual data to the Commission (Eurostat) on a voluntary basis.
Environmental accounting uses existing data for compiling the accounts. Better use will be made of information from existing data collections.
• Consistency with other EU policies
Environmental economic accounts bring together economic and environmental information, measuring the contribution of the environment to the economy and the impact of the economy on the environment. This proposal provides information for the European Green Deal by integrating environmental sustainability considerations for economic policy purposes. The data produced under this Regulation will also contribute to European Semester greening initiatives, mainstreaming sustainability in all EU policies, and monitoring the UN’s 2030 Agenda on Sustainable Development.
The proposal for the forest accounts module is in line with climate and forest resource policies. As part of the European Green Deal, the Commission presented the new EU forest strategy for 2030 9 as one of its flagship initiatives. The strategy recognises the central and multifunctional role of forests and the contribution of forestry (and the entire forest-based value chain) to achieving a sustainable and climate-neutral economy by 2050 and preserving lively and prosperous rural communities. It also announced for 2023 a legislative initiative on forest monitoring and strategic plans. The forest accounts module supports the EU forest strategy for 2030 and the future forest monitoring initiative and connects forest policies with policies on climate, energy and the bio-economy.
The ecosystem accounts module provides data to describe progress in one of the six priority objectives of the environment action programme to 2030 10 : protecting, preserving and restoring biodiversity and enhancing natural capital. This module also contributes to monitoring implementation of the EU nature restoration plan, part of the EU biodiversity strategy for 2030.
Economic instruments for pollution control and natural resource management, such as environmental subsidies, are increasingly important EU environmental policy tools, and there is considerable interest in obtaining more information about their use and effectiveness. The environmental subsidies and similar transfers module contributes to monitoring implementation of the European Green Deal. This includes greening national budgets, informing of the real price for the environment, supporting the EU’s energy transition and climate targets for 2030, and carrying out renewable energy, biodiversity, waste management and circular economy policies.
Regulation (EU) No 549/2013 set out the current version of the European System of Accounts (ESA 2010), and the European environmental economic accounts should refer to this version.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
The legal basis for this proposal is Article 338(1) of the Treaty on the Functioning of the European Union (TFEU). In line with the ordinary legislative procedure, Parliament and the Council adopt measures to ensure that statistics are produced to enable the EU perform its role. The statistics must meet certain standards of impartiality, reliability, objectivity, scientific independence, cost-effectiveness and statistical confidentiality without putting an excessive burden on businesses, authorities and citizens.
The objective of this proposal is to ensure international comparability of environmental economic accounts by extending the scope of Regulation (EU) No 691/2011 to additional modules listed under Article 10. This article explicitly provides for adding new modules and provides a candidate list. The first three modules on this list were already added under Regulation (EU) No 538/2014.
• Subsidiarity (for non-exclusive competence)
The subsidiarity principle applies to the extent that the proposal does not fall within the EU’s exclusive competence.
Action at EU level is justified. First, European statistics must be comparable across Member States and in order to derive EU totals calculated from Member State totals. Second, the environment has a transnational scale and nature. And third, some uses of the environmental economic accounts go beyond the EU, such as the Sustainable Development Goals, and so the EU must apply global standards.
The proposed act concerns a European Economic Area matter and should therefore extend to the Area.
• Proportionality
The proposal complies with the proportionality principle.
Member States must produce the new environmental economic accounts using common specifications, based on the international SEEA standards and then transmit the data to the Commission (Eurostat) for validation and dissemination.
In line with the principle of proportionality, the proposed regulation does not go beyond what is necessary to achieve its objective.
• Choice of the instrument
A regulation is the most appropriate instrument given the objective and content of the proposal and the fact that it amends an existing regulation.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Ex-post evaluations/fitness checks of existing legislation
Based on Commission standards, Eurostat’s system for evaluating existing legislation, including the European statistical programme’s evaluation 11 , was followed and formed a central part of the whole process. In addition, surveys are carried out every year to find out more about users, their needs and how satisfied they are with Eurostat services. Eurostat uses evaluation results to improve processes for producing statistical information and output. The results feed into different strategic plans, such as the Eurostat work programme and management plan.
• Stakeholder consultations
The proposal has been discussed with the European Statistical System, and the technical details with data producers and users through written consultations. It was also discussed in task forces and in the working groups on environmental economic accounts and on monetary environmental statistics and accounts in May 2020 and May 2021. In addition, the underlying issues were discussed in meetings of the directors for sectoral and environmental statistics and accounts in July and October 2021. The same group was also consulted in writing in December 2021. All these consultations led to technical improvements and simplifications.
• Collection and use of expertise
The Commission (Eurostat) consulted the European Statistical System Committee because the national statistical institutes (NSIs) are responsible for coordinating all national activities on European statistics.
• Impact assessment
An impact assessment was deemed unnecessary for the following reasons. First, Regulation (EU) No 691/2011 already exists as a policy tool for the initiative. In particular, Article 10 explicitly provides for the possibility of adding new thematic accounts and lists potential modules. Second, around 30 pilot studies on the new topics have been carried out by Member States with the Commission’s (Eurostat) financial support (in line with Article 4). Lastly, experience has been gained over the last 5 years from voluntary data collection on forest and environmental subsidies accounts. In conclusion, there is a sound evidence base and experience has been built up over the years.
• Regulatory fitness and simplification
The Commission is strongly committed to simplify or reduce burden whenever it amends any legislation. Environmental accounting produces high-quality statistics by reusing available data and limiting the administrative burden on businesses and the public. This is achieved by integrating existing source data and combining them into robust estimates and indicators based on international standards.
• Fundamental rights
Not applicable.
4. BUDGETARY IMPLICATIONS
The proposal does not change the implications of Regulation (EU) No 691/2011 for the EU budget, in particular from Article 4.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
Article 7 of Regulation (EU) No 691/2011 requires Member States to produce quality reports and transmit them to the Commission (Eurostat). Eurostat uses the quality reports, among other inputs, to validate the quality of the transmitted data. The quality report rules will also apply to the three new modules.
Under Article 10 of Regulation (EU) No 691/2011, the Commission submits to Parliament and the Council a report on the implementation of the Regulation every 3 years.
• Detailed explanation of the specific provisions of the proposal
This proposal contains three articles and one annex.
Article 1 specifies the amendments to be introduced to Regulation (EU) No 691/2011. The amendments are described below.
– Article 2 – Definitions
Article 2(7) to (9) defines forest accounts, environmental subsidies and similar transfers and ecosystem accounts.
– Article 3(1) – Modules
Three new modules are added to the list of modules of European environmental economic accounts in subparagraphs (g) to (i), with references to the Annexes specifying their objectives, coverage, and reporting obligations.
– Article 3(4a) – Delegated powers
A new sub-paragraph 3(4a) empowers the Commission to adopt a delegated act to decide on which of the ecosystem services, already included in the reporting tables in Section 5 of Annex IX monetary values, will be reported. The provisions in Annex IX set ecosystem services in physical and monetary units. The ecosystem services in monetary units will be a subset of the ecosystem services in physical units.
– Article 5(2) – Data collection
Member States can use innovative approaches other than those already set out in Article 5(2).
– Article 8 – Derogations
Includes the possibility to request a derogation from reporting data for the three new modules.
–Article 9 – Delegation procedure
Extends the delegated powers by adding a reference to the new Article 3(4a).
– Article 10 – Report and review
Updates areas to include in the implementation report of this Regulation to Parliament and the Council.
–Annex IV – Environmental protection expenditure accounts
Deletes ‘environmental protection transfers (received/paid)’ characteristic from Annex IV because it will be collected under the new Annex VIII.
–New annexes
Three new annexes are added to the Regulation: Annex VII for forest accounts, Annex VIII for environmental subsidies and similar transfers accounts, and Annex IX for ecosystem accounts.
–References to EU-27 and ESA2010
Replaces all references of ‘EU-28’ by ‘EU-27’ and ‘ESA95’ by ‘ESA2010’.
Article 2 of the proposal repeals Member States’ obligation to report data on environmental protection transfers (set out in the existing Annex IV on environmental protection expenditure accounts) as soon as the more comprehensive and streamlined set of data on environmental subsidies and similar transfers is delivered under Annex VIII. This ensures that double reporting is avoided.
Article 3 sets the date of entry into force and direct applicability of this Regulation. Article 1(7) must exceptionally apply from 2025, as the collection of the ‘environmental protection transfers (received/paid)’ characteristic in Annex VIII only starts in 2025 (see Section 4 in Annex VIII).