Finance

Halfway through the first 100 days for the UK’s new government: With everything we are seeing right now, this appears to mark a critical period for the UK’s energy transition. Let’s take a look at what is already happening and its impact on the UK reaching clean power by 2030.    It was a strong start, immediately lifting the 2015 de-facto ban on new onshore wind in England, quickly followed by increasing the budget for the next renewable energy auction to £1.5 billion. A more than 50% increase in comparison with previous budgets. Much needed given the UK’s now even more ambitious climate goals: quadrupling offshore wind capacity to 60 gigawatts, tripling solar to 45 gigawatts and doubling onshore wind to 30 gigawatts. All by 2030.    But even with these measures, those targets are still a long way off. Ongoing challenges must be overcome to continue accelerating investment and deployment.     Most notable is the need to accelerate planning approval for energy projects – this calls for more resources to enable more timely decisions. This same principle must also be applied to expanding grid infrastructure to ensure timely grid connections for new projects. Regarding drumming up further investment, here, the publicly owned company ‘Great British Energy’ could help unlock more private investment, but the current commitment to work in partnership with the private sector must be upheld.   In summary: These first days have shown that the potential is there, and good progress has been made. A lot still needs to happen, but the UK seems to be determined to give the energy transition a massive boost, and we at RWE are ready to do our part. In fact, we are planning to invest 8 billion euros net in the UK as one of our core markets from 2024 to 2030. I am excited to see how this market will continue to develop.

Public attention has centred on the first #Omnibus package (CSRD/CSDDD), but the EU has since rolled out five more packages - four of these weaken sustainability standards (and this often escapes our attention). Here is an overview: 🔵 Omnibus III - Agriculture  Simplifies conditionality and controls related to the EU's Common Agricultural Policy (CAP). Fewer inspections and less frequent checks will make it harder to ensure agricultural practices meet environmental conditionality. 🟢 Omnibus IV - Digitalisation (incl. Batteries) Two-year “stop-the-clock” on battery due-diligence (now 08/2027). This slows down safeguards against environmental and human-rights harms in minerals extraction, precisely as EU battery demand scales. 🟤 Omnibus V - Defence Defence needs allow broader use of chemicals that would otherwise be more strictly regulated; existing rules (like REACH) can be applied less strictly for the defence sector under exceptions. 🔴 Omnibus VI - Chemicals Streamlines labelling, cosmetics, and fertiliser rules; but reduced on-pack information, longer transition periods, and narrower bans (e.g. certain CMRs in cosmetics) weaken transparency and environmental safeguards. Further planned sustainability simplifications in 2025: (1) review of #SFDR in Q4 2025 (likely to be delayed to Q1 2026), (2) an "Environmental Omnibus" focused on emissions, circularity and waste management. 👉 Cutting red tape and streamlining regulations is not inherently negative. But the EU is pursuing this at high speed and with far-reaching consequences for nature and society. These impacts must be carefully assessed and weighed against the potential cost savings.

🚨 Regulatory certainty vs. political expediency: The EU’s ESG battle heats up. A coalition of investors managing $6.8 trillion is sending a clear message to the EU: do not backtrack on sustainability regulations. As Bloomberg News reports, the EU’s largest economies—France and Germany—are pushing to delay, dilute, or pause key ESG rules, citing concerns about economic competitiveness. Meanwhile, investors argue that regulatory certainty is essential for capital allocation and long-term sustainability progress. At the center of this debate is the Omnibus process, the EU’s effort to streamline ESG regulations like the CSRD, the EU Taxonomy, and the CSDDD. The idea? Reduce complexity and improve implementation. But in reality, this process has become a battleground: will it enhance clarity or dismantle ambition? 🔹 The danger of backtracking Sustainability is not an experiment that can be paused when politically inconvenient. It is an irreversible market shift, and investors need stable, high-quality ESG data to make informed decisions. Companies, too, require consistency—not political flip-flopping—to embed sustainability into strategy and operations. Reopening established frameworks under the guise of “simplification” risks introducing uncertainty, weakening accountability, and undermining Europe’s credibility as a leader in sustainable finance. 💡 My take? The EU must not backtrack. This is not about fine-tuning or removing unnecessary complexity—it is about ensuring that sustainability regulations remain strong, enforceable, and fit for purpose. Watering them down now would send the worst possible signal to markets: that Europe is not serious about the very future it has legislated for. Investors understand this, and their warning should not be ignored. 🔍 What do you think? 👉 Should the EU prioritize simplifying ESG rules—even if it risks weakening them? 👉 How can investors, businesses, and policymakers ensure that ESG regulations remain effective rather than becoming mere political bargaining chips? #Sustainability #ESG #Regulation #CorporateGovernance #SustainableFinance #EU #Omnibus #ClimateAction https://lnkd.in/eQBfA-b2

🌍⚓ Proactive Adaptation: How Non-EU Shipping Companies Can Lead Amid Decarbonisation Regulation The shipping industry is sailing into a new era of transformative regulations. 🌱 The EU ETS and FuelEU Maritime regulations, along with the IMO’s net-zero target by 2050 and likely financial mechanisms being discussed at the next MEPC in April, are reshaping global trade and operations. For non-EU shipping companies, these aren’t just challenges—they’re opportunities to lead. 🔍 1. The Global Reach of EU Regulation The EU ETS will soon cover 100% of intra-EU voyages and 50% of trips to/from the EU, impacting even non-EU operators. 📉 The FuelEU Maritime rules add fuel intensity limits, effectively making the EU a global benchmark. 🌐 The question isn’t if these rules will affect you but how you prepare to minimize costs and disruption. 🤝 2. Beyond Compliance: Understanding Customer Impacts Carbon costs ripple through the supply chain. 🛳️ Cargo owners will increasingly demand transparency on emissions and look for partners who align with their sustainability goals. 🌟 Key questions to ask: • Who bears the cost of carbon? • Can green shipping become a differentiator? 🚀 By providing sustainable solutions and collaborating with customers, non-EU companies can strengthen relationships and build trust. ⚡ 3. Proactive Strategies: Shaping the Future Waiting to react leaves you vulnerable—proactive companies are already shaping their own future. 🌟 Here’s how: • 🌍 Engage globally: Join IMO and regulatory discussions to influence policies. • 🛢️ Secure green fuels: Lock in supply contracts now for a cost advantage. • 🚢 Invest in tech: Adopt future proofed vessels and retrofits to stay ahead. 📊 4. Navigating Complexity Across the Business The regulatory landscape is multilayered. 🌐 Shipping companies must align responses across all departments: • 📦 Procurement: Embed carbon costs into sourcing and contracts. • ⚙️ Operations: Optimize fleets for emissions limits. • 💰 Finance: Forecast carbon costs and align investments with decarbonisation goals. • 💬 Customer engagement: Share emissions data transparently and co-create sustainable solutions. 🌟 5. Unlocking Opportunities Amid Challenges The regulatory environment offers opportunities for those who adapt early: • 🤝 Win customers willing to pay for green shipping. • 💡 Cut costs with energy-efficient technologies and fuels. • 🏆 Build a reputation as a leader in decarbonisation. 💡 The time to act is now. Waiting for regulations to force your hand isn’t an option. Be proactive, engage with stakeholders, and lead the transition. Those who embrace the challenge will not only comply—they’ll thrive. #Decarbonisation #Shipping #EUETS #FuelEUMaritime #Sustainability #GreenShipping #ClimateAction #MaritimeIndustry #NetZero2050  🌍⚓

🔵🚀 Brussels Effect or Draghi Effect? The battle to regulate US Bigtech. My latest for EUobserver 📜 Over the past legislative cycle, the EU has passed major digital regulations—DMA, DSA, AI Act, Data Act—assuming the Brussels Effect would once again extend EU standards globally. But is this still the case? The real impact of the Brussels Effect is increasingly questionable, leaving room for the Draghi Effect—the idea that EU regulations are hindering innovation and creating compliance burdens for European firms. Overlapping rules and consistency problems between different pieces of legislation are already making operations more difficult in the EU. ⚠️ Geopolitical risks are also increasing. The DMA and DSA, which specifically target US Big Tech, could put the EU in a very difficult position now that Donald Trump is back in the White House. Their effective enforcement will be one of the biggest challenges in the coming months. 💻 Beyond regulation, Europe’s digital decline is structural. Germany and the EU bet on hardware industries (chemicals, engineering) while neglecting software. 🔬 Not all is lost. The EU still holds strategic assets—companies like ASML, which dominate EUV lithography, essential for semiconductor production. In quantum technologies, there is still time to compete. But regulation alone will not close the gap. 📊 The next five years will be decisive. The Competitiveness Compass attempts to translate the Draghi and Letta reports into policy, but new proposals like the AI Application Act and Quantum Act suggest the Commission is still prioritising new rules which could even endanger the principle of technological neutrality. 💡 What should the EU do? ✅ Pause new regulation: This cycle should focus on implementation, with an ex-post review of existing laws. The only justified new regulation is the Digital Networks Act, which is essential to strengthen EU telecom firms so they can invest in 5G, fiber, and next-gen infrastructure. ✅ Smarter enforcement: Given the geopolitical stakes, the DMA and DSA need careful enforcement. Instead of aggressive infringement actions, the Commission should engage in regulatory dialogue, using tools like specification proceedings, like with #Apple, to avoid legal and diplomatic pitfalls. ✅ Reassess priorities: Arbitrary targets like increasing the EU’s microchip production share to 20% by 2030 will not reduce dependencies. Instead, the EU should protect its strategic assets, like its leadership in EUV machines and monitor competition in other jurisdictions. ✅ Make targeted bets: The EU does not need to lead in every technology. It should identify where it can win, rather than spreading resources too thin. In other areas, the priority should be ensuring access to talent and entrepreneurial capacity. ⚠️ The Brussels Effect is fading. If we do not want the Draghi Effect to prevail, we must act now. https://lnkd.in/dDWjMhfS

📢 The European Commission continues to deliver meaningful impact for businesses across Europe. 🚀 The announcement of a new Single Market Strategy focused on building a “more simple, seamless and strong EU home market” is a significant step forward in reducing red tape and accelerating digital transformation. As someone who has spent over 35 years navigating innovation and entrepreneurship across the EU, I know firsthand how much administrative burden can hinder growth, especially for startups and SMEs. That’s why I welcome this initiative with great enthusiasm. 💥 The new omnibus simplification package will remove €400 million in unnecessary annual costs. It will also make digital the default, allowing companies to submit documents and product instructions electronically under harmonized EU legislation. This is smart regulation at its best: simplifying processes, embracing digitalisation, and empowering businesses to focus on what they do best: innovating and scaling. 📄 Press release: https://lnkd.in/gfdnXy8m 💬 Q&A: https://lnkd.in/g9-RBqW8 🔗 More details: https://lnkd.in/gnGxMYqf 👏 Kudos to the European Commission for listening to businesses and acting decisively. As a Digital EU Ambassador, I am proud to support these efforts toward a truly digital, efficient and competitive Single Market. 🇪🇺

Is the One Big Beautiful Bill good for the economy? Here are the highlights: 1) Tax cuts from the 2017 Tax Cuts & Jobs Act set to expire after this year have been made permanent. That means: ✅ Permanent tax bracket changes >> Lower taxes for the highest earners >> Higher or lower taxes for everyone else, depending on income ✅ Permanent lower corporate taxes (21%) ✅ Permanent 20% Qualified Business Income (QBI) deduction >> Lower tax bill for small businesses, contractors, freelancers, etc. ✅ Permanent R&D business deduction >> Lower taxes for businesses building in the US ✅ Permanent & higher child tax credit ($2,200) >> Lower taxes/refund for families with children ✅ Permanent estate tax exemption per person to $15 million >> More money passed on to heirs tax-free ✅ Higher State & Local Tax (SALT) Deduction ($40K+ until 2030) >> Lower federal taxes for people in high-tax states ✅ Higher Standard Deduction ($15,750 – single; $31,500 – joint) >> Lower tax bill for people who don't itemize their deductions (most) ✅ Higher deductions for tips and overtime pay ($25K & $12.5K) >> Lower tax bill for hourly and service workers ✅ Senior "bonus" tax deduction ($6,000)  >> Lower tax bill for retirees 2) To pay for the lost tax income (in addition to tariff income), the government cut spending in other areas: 🔻 Reduced Medicaid funding, affecting millions 🔻 Reduced food stamps funding, affecting millions 🔻 Stricter borrowing limits on federal student loans, particularly for graduates and parents 🔻 Elimination of tax incentives for environmentally-friendly choices like electric vehicles, solar, etc. This isn't an exhaustive list, but it hits the highlights. What does it mean for the economy? You'll hear mixed projections. Tax cuts are typically a boost to the economy, but much of this is just avoiding a reversion to higher taxes than lowering them further. So, the uplift might not be as big.  Reducing healthcare, food assistance, student loan access, and other services for millions of Americans isn't great for an economy that runs on consumer spending and faces a growing labor shortage. 👉 What do you think? Will this hurt or benefit you? Your business? Action steps to consider: 1️⃣ Review your expected tax deductions. There might be new savings. 2️⃣ Seniors: Check your eligibility for the new Social Security tax deduction. 3️⃣ Students and families: Plan for upcoming changes to federal loan limits. Review your payment plan options before 2026. 4️⃣ Medicaid recipients: Stay informed on new eligibility guidelines. Want more simple money talk? 🔔 Follow me. Want to create financial content like me for your clients? 📩 Subscribe to my newsletter.

Simplification is not only about changing rules and procedures. It is fundamentally about changing the mindset of all those involved in building the regulatory framework.  In the past 15 years, we have seen an increase in ever-more demanding regulation in response to the great financial crisis. This has now led to a discussion on whether these rules have gone too far, holding back growth and competitiveness. As an economist, I see the legitimacy of that debate – but as a veteran of the crisis, I believe we need to move forward carefully. No one wants deregulation of the financial sector, as stimulating growth at the expense of financial stability has always ended up badly.  That said, there is definitely room to simplify EU financial regulation to make it as growth friendly as possible without weakening resilience and the trust in our financial system. Since the great financial crisis, our regulation – often derived from international standards – has become more complex and demanding, erring on the side of caution. In the EU, this complexity was further compounded by the special nature of our regulatory process, where our Level 1 legislation must be agreed with a majority of Members of Parliament and 27 Member States, all with their own specificities and limited appetite to change domestic arrangements. The result is often a compendium of many national preferences and other interests that together makes our rulebook more complicated than needed and less effective than it should be. The Commission is not primarily to blame for these outcomes at Level 1. However, we are complicit as we often reject simple solutions from the beginning because we anticipate that such solutions will not attract sufficient support from the EU co-legislators. As a result, our own initial proposals are at times too complex even before they go into the legislative process.  Once agreed, Level 1 legislation requires vast amounts of detailed rules at Level 2, often based on standards prepared by the European Supervisory Authorities. These Authorities are governed by representatives from 27 Member States and thus again influenced by national preferences. As a result, Level 2 rules are often longer and more complicated than needed. Then, at Level 3, even more guidance is required just to explain how to apply them.  While our rulebook is a reflection of the EU decision-making, there is room to make it simpler than it is now. But the Commission cannot deliver on this simplification alone. Moving towards a more growth-friendly framework will require the buy-in from everyone involved in the legislative process as well as from the European Supervisory Authorities. And, not least, it will require a mindset change away from long-established national preferences. Our first omnibus proposal on sustainable finance is a test of how the co-legislators will embrace the simplification agenda. 

Back in 2008, two years before I was elected as an MP, I debated on a radio phone-in with David Bellamy the merits of onshore wind. To my surprise, Bellamy was against, while I was very much in favour. Roll forward to today and we learn that no plans have been submitted since the supposed end of the ban on onshore wind announced by Michael Gove in September. This follows a 6 year period during which the pace at which new onshore wind capacity has been built has slowed to a trickle. Household energy bills are £182 a year more on average than they would have been had building continued at the same rate it was at in 2017. So why no new onshore wind applications since the change of rules in September? Onshore wind used to be part of the Nationally Significant Infrastructure Projects process, which encouraged applications. The trouble with the government's changes in September was that onshore wind still faces higher barriers than every other form of infrastructure, including waste incinerators. As Doug Parr from Greenpeace says, “Onshore wind is the cheapest, quickest and greenest way to produce energy. Ramping up production would lower energy bills, slash emissions and bolster the UK’s energy security." In my roads brief, cheap electricity will make a massive difference in giving consumers the confidence to switch to electric. It will help freight transport operators too and massively boost the case for investment in the industry and technologies which will extend the battery range and indeed encourage domestic battery production. The same applies right across the economy of course and across the country. The Labour Party will remove the barriers to onshore wind and end the effective ban, which David Cameron introduced in 2015 as Prime Minister. Energy bills have been inflated completely unnecessarily. Onshore wind is a big part of how we can turn round our fortunes and I look forward to a proper change in policy that makes the most of the opportunity available from it. And as for David Bellamy all those years ago, I'm glad I challenged him but I still have no idea why he was against onshore wind. RenewableUK

We are two weeks into the new Government and we already had a raft of announcements through the King's Speech and the Secretary of State's Statement in the Commons today. What does it all mean and how does it fit together? ✉ Short version: Driven by the 2030 mission and recognising that making the UK a renewables superpower will spur economic growth, we are seeing a strong focus on deploying more renewable technologies faster - including by lifting the de facto ban on onshore wind in England and ensuring AR6 enables us to build as much homegrown renewable energy as possible. An AR6 that clears most of the sizeable pipeline of eligible projects will be the first test for the Government. These announcements build on the Climate Change Committee's Progress Report to Parliament yesterday, telling us that we're currently not on track to reduce UK emissions by 68% to 2030 - only a third of those emissions reductions are currently covered by credible plans. We are also seeing the institutional governance take shape through the introduction of the GB Energy Bill, the National Wealth Fund Bill and The Crown Estate Bill, all of which will be aimed at crowding in private capital to support the energy transition. The Planning and Infrastructure Bill will also aim to reduce planning delays and ensure that infrastructure buildout is at the heart of the Government's programme. What else has been announced? 🍃 The de facto ban on onshore wind in England has been lifted and an Onshore Wind Industry Taskforce has been announced, to rebuild the pipeline of onshore wind projects after a hiatus of nearly a decade. 🏦 GB Energy has been placed on a statutory footing, with £8.3bn of capitalisation. The institution will work with the private sector to finance deployment of key technologies and support community ownership of energy infrastructure through local power plans. 💷 The National Wealth Fund has been placed on a statutory footing. It will allocate £7.3bn through the UK Infrastructure Bank to crowd in private investment into the transition. Ensuring the NWF delivers through UKIB is welcome, as it could consolidate the financial support and capital deployment across the energy space. 🌊 The Crown Estate Bill will enhance TCE's borrowing and investment powers to accelerate offshore wind deployment. 🏭 The Planning and Infrastructure Bill will accelerate deployment of key infrastructure, including in the energy and housing sectors. It will also bring forward new National Policy Statements and simplify consenting. 🌳 A land use framework from Defra that will go with the Strategic Spatial Energy Plan, providing greater clarity on the location of our generation assets, sources of demand, and the network we need to build to support our evolving energy system. 👥 Communities will benefit from hosting energy infrastructure, but this will not come at the expense of building generation and transmission assets in a timely way. RenewableUK