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Source: Government of the Netherlands

News item | 13-05-2024 | 12:00

Chaired by Rob Jetten, Minister for Climate and Energy Policy and Deputy Prime Minister of The Netherlands, Co-Chair of IHTF, the roundtable brought together nearly two dozen Ministerial officials of the IHTF supporting countries, representing prospective hydrogen importing and exporting countries, as well as the delegation of 15 Hydrogen Council executives led by the Hydrogen Council Co-Chair Yoshinori Kanehana, Chairman of the Board, Kawasaki Heavy Industries, Ltd..

The roundtable featured Ministerial-Executive dialogues on global, cross-border trade corridors in hydrogen and its derivatives from the Middle East, Africa and the Americas, to Europe and Asia, considering the status and outlook for the deployment of diverse hydrogen carriers, the enabling infrastructure, and the demand from end use sectors.

Rob Jetten, Minister for Climate and Energy Policy and Deputy Prime Minister said: “We see a critical need for better alignment between decision-makers in the public and private sector to advance the development of cross-border supply chains for hydrogen and its derivatives. That is why the Netherlands took the initiative to co-host the second IHTF-Hydrogen Council Ministerial-Executive Roundtable. Hydrogen supply chains will play a crucial role in accelerating decarbonisation, boosting security of supply and unlocking socio-economic gains globally. Together with our partners, The Netherlands is committed to open the gateway into the European hydrogen market, driving decarbonisation of our industries and sustainable growth.”

Sharif Al Olama, Undersecretary, Ministry of Energy & Infrastructure said: “Today’s Ministerial-Executive dialogue is an important milestone in public-private cooperation paving the way for the development of the global hydrogen market. The analysis carried out by the IHTF and the Hydrogen Council shows how alongside the vital climate benefits, cross-border supply chains in hydrogen can deliver cost-efficiency gains helping save some USD 3.7 trillion in energy system costs by 2050, providing good quality jobs across geographies. UAE remains committed to continued collaboration with our partners in Europe and Asia and to deliver on our goal to become one of the world’s leading producers of low-carbon hydrogen by 2031.”

The roundtable discussion was informed by the analysis of the emerging trade routes plus import and export hubs, carried out by the IHTF and the Hydrogen Council, highlighting the following three key unlocks required to kick-start the scaling of a global, cross-border trade in hydrogen:

1. Greater clarity, certainty and support for demand drivers is critical at this stage of market development. Accelerating the implementation of the announced demand-pull measures remains key to secure the first 3-7 Mtpa of mandated demand to kick-start the market.

2. Infrastructure development for interregional corridors, allowing technologies to compete without ‘picking winners’ to allow the most cost-effective and sustainable solutions to thrive.

3. Aligned and consistent global market rules, industry standards and mutually recognized certification schemes will constitute the backbone for the development of an international hydrogen market.

Hydrogen Council Co-Chair Yoshinori Kanehana, Chairman of the Board, Kawasaki Heavy Industries, Ltd., said: “The Hydrogen Council is pleased to co-host the second Ministerial-Executive Roundtable putting the spotlight on the progress being made in line with our COP28 Action Statement, bottlenecks and enabling measures for accelerating the development of cross-border value chains for hydrogen and its derivatives to stay on track with our net zero targets. Continued international cooperation on standards and certification solutions enabling market interoperability remains critical as we seek to create a truly global market.”

Hydrogen Council Co-Chair Sanjiv Lamba, CEO of Linde, said: “This is a critical time for public-private collaboration in hydrogen. While hydrogen production projects are maturing with many of them being announced and moving into FEED phase or beyond, demand-side uncertainty is causing delays in final investment decisions. The Hydrogen Council remains committed to advancing the deployment of the global supply chains with IHTF. By ensuring close collaboration between governments and industry to implement robust demand-side incentives coupled with strong industry partnerships, we can build investor confidence to get projects over the line.”

“Energy is the key driver for development. We have the technology and the knowledge to make low carbon economic and industrial development possible. That is why UNIDO prioritizes building hydrogen supply chains, which are so important for emerging markets and developing economies as they enter global hydrogen partnerships. The latest IHTF analysis shows how a truly global hydrogen economy has the potential to create up to 25 million jobs by 2050 in the sector. UNIDO as IHTF Secretariat fully supports public-private collaboration in the creation of cross-border trade corridors to drive a just transition to a green hydrogen economy that leaves no one behind” said UNIDO Director General, Gerd Müller.

Source: European Banking Authority

The European Banking Authority (EBA) today published three sets of final draft regulatory technical standards (RTS) and one set of final draft implementing technical standards (ITS) relating to the authorisation as issuer of asset-referenced tokens (ARTs), to the information for the assessment of acquisition of qualifying holdings in issuers of ARTs and to the procedure for the approval of white papers for ARTs issued by credit institutions under the Markets in Crypto-assets Regulation (MiCAR). These technical standards are key to regulate access to the EU market by applicant issuers of ARTs and persons intending to exercise significant influence on these undertakings via the acquisition of qualifying holdings.

The RTS on authorisation lay down the information requirements to be included when applying for authorisation to offer to the public or seek admission to trading of an ART, so to enable the comprehensive assessment of the application by the competent authority. Following the public consultation, the scope of the authorisation has been amended to clarify that: a) the applicant issuer may only be a legal person or undertaking established in the EU, and b) whilst the issuance is not subject to authorisation, which only covers the public offer or the admission to trading, an application may only be submitted by an applicant issuer, therefore only an issuer may be granted authorisation. 

The ITS  on authorisation set out the standard application letter and the application template and clarify the process relating to the assessment of completeness of the application by the competent authority. As credit institutions are only required to receive approval to publish a white paper, the RTS and ITS on authorisation do not apply to credit institutions.  

The RTS on the detailed content of the information to be included in the notification for of the proposed acquisition of direct or indirect qualifying holdings lay down the information requirements that are necessary to the competent authority to carry out the prudential assessment in case of proposed acquisitions in issuers of ARTs that are not credit institutions.

This information covers five criteria relating to (a) the reputation of the proposed acquirer, (b) the suitability of any person who will direct the target undertaking, (c) the financial soundness of the proposed acquirer, (d) the sound and prudent management of the target undertaking following the acquisition and (e) suspicion that money laundering of terrorist financing is committed or attempted or that it may increase following the acquisition.

Following public consultation, and considering the request of personal data in case of the application for authorisation and of notification of proposed acquisition of qualifying holdings, some recitals reminding the obligation to comply with the privacy regime have been added both in the RTS on information for authorisation and in the RTS on information for notification of proposed acquisition of qualifying holdings. Credit institutions, unlike other issuers of ARTs, do not require authorisation to issue ARTs but must notify its competent authority, and the white paper must be submitted to the competent authority for approval. 

The RTS on the procedure for the approval of white papers for ARTs issued by credit institutions sets out the timeframes that credit institutions, competent authorities and the European Central Bank (ECB) or other central banks must follow during the procedure for the approval of a crypto-asset white paper.

Legal basis

The EBA has developed the RTS on information for authorisation in accordance with Article 18(6) of MiCAR and in close cooperation with the European Securities and Markets Authority (ESMA) and the ECB. The draft ITS on standard forms, templates and procedures for the information to be included in the application have been developed in accordance with Article 18(7) of MiCAR and in close cooperation with ESMA. 

The RTS on the detailed content of the information that is necessary to carry out the assessment for the acquisitions of qualifying holdings in ART issuers has been developed in accordance with Article 42(4) of MiCAR and in close cooperation with ESMA. 

The RTS on the procedure for the approval of white papers for ARTs issued by credit institutions has been developed in accordance with Article 17(8) of MiCAR and in close cooperation with ESMA and the ECB.

Background

Regulation (EU) 2023/1114 on Markets in Crypto-assets establishes a regime for the regulation and supervision of crypto-asset issuance and crypto-asset service provision in the European Union (EU). It came into force on 29 June 2023, and the provisions relating to ARTs will be applicable from 30 June 2024.

Within the scope of MiCAR are the activities of offering to the public or seeking admission to trading of ARTs and electronic money tokens (EMTs) and issuing such tokens. Supervision tasks are conferred on the EBA for ARTs and EMTs that are determined by the EBA to be significant.

Source: European Banking Authority

The European Banking Authority (EBA) today published the first part of its 2023 Annual Report presenting the main achievements and activities of the organisation in fulfilling its mandates under its Work Programme over the last 12 months. 

The year 2023 was an eventful and productive year, with the Agency delivering on over 95% of the tasks under its remit. These achievements came despite several macroeconomic and geopolitical developments and challenges, such as the impact of the US banking turmoil on the European Union , the ongoing war in Ukraine, and the resulting high inflation and interest rates.

On the regulatory front, the EBA continued its work aimed at strengthening the EU financial sector, in particular by finalising the implementation of the Basel III framework in the EU, implementing the ESG roadmap, and delivering on its digital finance mandates under the Markets in Crypto-Assets Regulation (MiCAR) and the Digital Operational Resilience Act (DORA). 

In 2023, the EBA performed an enhanced EU-wide stress test and further rolled out its data strategy, aiming to improve the way regulatory data is acquired, compiled, used and disseminated to relevant stakeholders.

In 2023, the EBA continued to lead, coordinate and monitor the EU financial sector’s fight against money laundering/terrorist financing (ML/TF) and enhanced its capacity in this area.

The Authority also remained active and made progress in areas such as recovery and resolution, payment services, consumer and depositor protection, equivalence, and supervisory convergence and independence.

Note to the editors 

By mid-June, the EBA will publish a consolidated version of the Annual Report that will provide a comprehensive account of the activities carried out by the Authority in the implementation of its mandate and work programme during 2023. 

Part 1, published today, provides an overview of the annual key achievements, while Parts 2-5, will include comprehensive information on the implementation of the EBA’s work programme, budget, staff policy plan, its management and internal control systems.

Source: European Banking Authority

Starting from May 2024, supervisors across the European Union (EU) will be able to report names of natural persons to EuReCA, the EU central database on anti-money laundering (AML) and countering the financing of terrorism (CFT) of the European Banking Authority (EBA). Through EuReCA, the EBA has been able to contribute to making supervision more informed, targeted and effective. With this step, the EBA will contribute to further strengthening the fight against money laundering (ML) and terrorist financing (TF) in the EU.

EuReCA contains information on serious AML/CFT deficiencies in individual financial institutions that have been identified by EU supervisors. It also contains information on the measures taken by supervisors to address those deficiencies.

If a serious deficiency or a measure is linked to a natural person, for example a customer or a beneficial owner, supervisors will be able to report this information to EuReCA. Supervisors can also report the name of a member of the management body or a key function holder in a financial institution, if necessary, because a lack of honesty or integrity can cause or lead to serious problems in a financial institution’s governance arrangements, business model or activities and ultimately, weaken the institution’s AML/CFT defences.

Since its launch on 31 January 2022, 41 authorities have made more than 1400 reports to EuReCA.

Legal basis and background

EuReCA has been established based on provisions in article 9a (1) and (3) of the EBA Regulation and in Regulation (EU) No 1093/2010 of 9 November 2023. With the publication of the Regulation in the Official Journal on 16 February 2024, EuReCA is enabled to start collecting personal data. The factsheet on EuReCA explains further what is EuReCA, who reports to it and what is in it.

The EBA has updated the Data Protection Impact Assessment (DPIA) it had performed in accordance with Article 39 of Regulation (EU) 2018/1725 (EUDPR). A summary of this updated DPIA is published on the EBA’s website along a notice explaining how the personal data are processed.

The EBA, together with the authorities reporting to EuReCA, as well as ESMA and EIOPA, has also put in place joint controllership arrangements with regard to the processing of personal data in EuReCA in accordance with Article 26 of Regulation (EU) 2016/679 and Article 86 of Regulation (EU) 2018/1725.

Only the data related to significant failures in the compliance with AML/CFT-related requirements can be reported. This ensures that the processing of data remains limited in scope and hence limited to what is necessary and proportionate.

Source: European Banking Authority

The three European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) today issued their Spring 2024 Joint Committee update on risks and vulnerabilities in the EU financial system. The risk update shows that risks remain elevated in a context of slowing growth, an uncertain interest rate environment and ongoing geopolitical tensions.

In recent months, financial markets have performed strongly in anticipation of potential interest rate cuts in 2024 in both the EU and the US, despite the significant uncertainty surrounding these. This strong performance entails elevated risks of market corrections linked to unexpected events.​ Credit risk is also expected to continue to increase as refinancing needs grow, particularly for high-yield debt and real estate. While asset quality has remained robust in the banking sector, it is expected to deteriorate as economic growth slows further.​ The real estate slowdown could also drive impairments at banks.

The insurance sector maintained solid capitalisation in 2023, with solvency ratios well above 200%.  Defined benefit occupational pension schemes improved their financial position. The liquidity positions of insurers diminished slightly but remain ample. Challenges stemming from subdued growth and the potential repricing of risk premia  nevertheless persist.

In the banking sector, capital and liquidity positions are solid with CET1 ratio of 15.8% and a liquidity coverage ratio above 160% amid high profitability in 2023. However, the outlook is more challenging, as banks face the repricing of liabilities and assets with prospects of lower interest income, slower loan growth, high costs and the challenging macro environment.

Fund performance and flows have been volatile as the interest rate environment has changed. While funds have managed the transition to higher interest rates, concerns remain regarding the valuation of real-estate fund assets, and liquidity risks in these funds could have wider spillover effects.​

Heightened geopolitical instability and increased reliance on digital solutions are raising the stakes linked to cyber security. The number of attacks and cyber threats is increasing, and while the impact of these attacks so far has been limited, cyber-related insurance claims keep increasing, and the (re)insurance industry is further strengthening pricing techniques and risk-transfer mechanisms. In the banking sector, the findings from the cyber resilience testing currently underway will be important.

Notes to Editors

This Spring 2024 Joint Committee update on Risks and Vulnerabilities was presented to the EFC FST meeting on 29 April as input from the ESAs to the meeting.

Source: European Banking Authority

The European Banking Authority (EBA) published today an Opinion, in which it assesses payment fraud data that has recently become available to the EBA, identifies new types and patterns of payment fraud, and develops proposals to mitigate them. This Opinion aims at further strengthening the forthcoming legislative framework under the Third Payment Services Directive (PSD3) and Payment Services Regulation (PSR), as it will enshrine anti-fraud requirements for several years to come and needs to be as future-proof as possible.

In the Opinion, the EBA confirms that regulatory measures such as the Strong Customer Authentication (SCA) that the revised Payment Service Directive (PSD2) and the EBA’s Technical Standards have imposed on the payments industry have been successful in achieving the aim of significantly reducing fraud that involves the stealing of customers’ credentials. However, fraudsters have adapted their techniques and are using more complex types of fraud, such as those based on what is commonly referred to as ‘social engineering’.

To mitigate these dynamic new fraud types, the Opinion is proposing that new security measures are prescribed that are in addition to those articulated in the EU Commission’s welcome proposals for the PSD3 and a PSR as well as the provisions that recently entered into force through the Instant Payments Regulation (IPR). 

Legal basis

The competence of the EBA to deliver this opinion is based on Articles 1(5), 8(2)(g), 9(4) and 16a(1) of Regulation (EU) No 1093/2010, which mandate the EBA to ‘achiev[e] a coordinated approach to the regulatory and supervisory treatment of new or innovative financial activities’ and ‘upon a request from the European Parliament, from the Council or from the Commission, or on its own initiative, provide opinions to the European Parliament, to the Council and to the Commission on all issues related to its area of competence’. 
 

Source: European Banking Authority

The European Banking Authority (EBA) published today its Report on high earners for 2022. The analysis reveals an increase of the number of individuals working for EU banks and investment firms who have received a remuneration of more than EUR 1 million. This increase is linked to the overall good performance of institutions, expansion of business and salaries adjusted for inflation.

In 2022, the number of high earners receiving a remuneration of more than EUR 1 million increased by 19.7%, from 1 957 in 2021 to 2 342 in 2022. The EBA’s analysis also includes data on the gender distribution among high earners, highlighting a persistent gender imbalance within the financial sector, and particularly the highest paid positions. 

The weighted average ratio of variable to fixed remuneration for all high earners of credit institutions stood at 85.3%, while it reached 489% for high earners of investment firms, for which the ratio between the variable and the fixed remuneration no longer applies as of 2021. 

Legal basis and next steps

This Report has been developed in accordance with Article 75(3) of Directive 2013/36/EU and Article 34 (4) of Directive (EU) 2019/2034, which mandates the EBA to collect information on the number of individuals per institution that are remunerated EUR one million or more per financial year (high earners) in pay brackets EUR one million, including the business area involved and the main elements of salary, bonus, long-term award and pension contribution.

The EBA collected data for 2022 based on revised Guidelines on the data collection exercises regarding high earners under Directive 2013/36/EU and Directive (EU) 2019/2034, which prolonged the period for the data collection compared to future years to allow for the implementation of the revised framework at institutions, investment firms and competent authorities.

The EBA will continue to publish data on high earners annually, to closely monitor and evaluate developments in this area. 

Notes to editors

Key figures have been visualised in a dynamic way. To facilitate the navigation, please find below the full list of key figures that you can find in the graphs:

Slide 1: Evolution in the number of high earners in EU27/EEA Member States

Slide 2: Number of high earners (data for 2022) by Member State (EU and EEA) and payment bracket  of one million Euro (e.g. EUR 1 mn to EUR 2 mn)

Slide 3: Number of high earners (data for 2022) by Member State (EU and EEA) and gender for institutions and investment firms

Slide 4: Percentage of female high earners for institutions and investment firms (data for 2022)

Slide 5: Ratio between variable and fixed remuneration of high earners by Member State

Source: European Banking Authority

The European Banking Authority (EBA) today launched a public consultation on its draft Regulatory Technical Standards (RTS) on the method for identifying the main risk driver and determining whether a transaction represents a long or a short position. These RTS are part of the Phase 1 deliverables of the EBA roadmap on the implementation of the EU banking package in the area of market risk. The consultation runs until 24 July 2024.

The Capital Requirements Regulation (CRR) includes some derogations for the calculation of the capital requirements for market and counterparty credit risks, for small trading book business, derivative business or business subject to market risk. The CRR3 specifies that the size of the business shall be equal to the absolute value of the aggregated long position, summed with the absolute value of the aggregated short position. A position can be considered as long or short depending on how movements in its main risk driver affect the market value.

The proposed general method to identify the main risk driver hinges on sensitivities defined under the market risk standardised approach (FRTB-SA) or on add-ons defined under the standardised approach for counterparty credit risk (SA-CCR). For the determination of the direction of the positions, the methodology is aligned with the one set out in the RTS on SA-CCR.

Considering that small banks are, and have always been, exempted from using the FRTB SA or SA-CCR, a simplified method has also been included. The simplified method covers relatively simple instruments which are normally traded by small banks (fixed-rate bonds, floating-rate notes, stocks, forwards, futures, simple swaps and plain vanilla options).

Consultation process

Comments to this consultation can be sent to the EBA by clicking on the “send your comments” button on the consultation page. Please note that the deadline for the submission of comments is 24 July 2024.

The public hearing on these draft RTS will take place via conference call on 2 July 2024 from 15.30 to 17.00 CEST. The EBA invites interested stakeholders to register using this link by 28 June 2024 at 16:00 CEST.

Legal basis and background

The draft RTS on the specification of long and short positions have been developed according to Article 94(10) of Regulation (EU) No 575/2013 (CRR), as amended by the revised Capital Requirements Regulation (CRR3), which mandates the EBA to specify the method for identifying the main risk driver of a position and for determining whether a transaction represents a long or a short position as referred to in Art. 94(3), 273a(3) and 325a(2). In developing these draft RTS, the EBA shall take into consideration the method for determining whether a transaction is a long or short position in the primary risk driver or in the most material risk driver, developed for the RTS on SA-CCR in accordance with Art. 279a(3), point (b), of the CRR. 

Source: European Banking Authority

The European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) launched today a public consultation on the draft Regulatory Technical Standards (RTS) on the conduct of oversight activities in relation to the joint examination teams under the Digital Operational Resilience Act (DORA).

The primary goal of the draft RTS is to lay out the criteria for determining the composition of the joint examination teams – ensuring a balanced participation of staff members from the ESAs and from the relevant competent authorities – as well as the designation of the members, their tasks, and working arrangements.

These draft RTS aim at ensuring maximum efficiency and effectiveness regarding the functioning of the joint examination teams, given their central role in the daily oversight of critical ICT third-party service providers (CTPPs). The proposed technical standards take into account the high technical complexity of the oversight activities and the scarce availability of the expertise needed to perform them.

Consultation process

The ESAs invite stakeholders to submit their comments on the draft RTS by 18 May 2024 using the links available on the consultation page.

All contributions received will be published following the end of the consultation, unless requested otherwise.

The Digital Operational Resilience Act (DORA) and the related RTS will apply from 17 January 2025.

Legal basis, background and next steps

These draft technical standards have been developed in accordance with Article 41(1) point (c) of DORA (Regulation (EU) 2022/2554). The ESAs expect to submit these draft technical standards to the European Commission by 17 July 2024.

These draft RTS complement those on which the ESAs consulted on 8 December 2023 (the consultation ended on 4 March 2024) aimed at harmonising the conditions enabling the conduct of oversight activities, in accordance with points (a), (b), and (d) of Article 41 of DORA. 

Source: Government of the Netherlands

News item | 16-04-2024 | 13:00

The chemical industry is a supplier of components for essential products such as medicines, plastics, paint, mattresses and batteries. At the moment, these products mainly consist of fossil raw materials, such as oil and natural gas. For circular and climate-neutral production by 2050, a switch to sustainable raw materials is needed. These raw materials are reusable or renewable and have less impact on the planet.

Examples of reusable and renewable raw materials are recycled plastics, sugar beets, gas from gasified waste streams or wood chips as a basis for new plastic and other products. These raw materials can replace fossil raw materials and drastically reduce CO2 emissions and boost the circular economy. In this way, the Dutch and European chemical industry can become a world leader in the field of green chemistry.

Need for EU policy

We now use far more raw materials than the Earth can handle. That is why we want to move towards a circular economy. This means that we use raw materials over and over again and that virtually no waste remains. The Netherlands also wants to be climate neutral by 2050.

Minister Heijnen: “With a switch from fossil to sustainable raw materials, we can make great steps towards these two goals. But we don’t want to and can’t do that alone as a country. By tackling this at the European level, we are stronger and achieve two aims at once, in terms of circularity and CO2 emissions. That is why today, together with France, the Czech Republic and Ireland, we are advocating for European policies that effectively stimulate the use of sustainable carbon sources in the chemical industry.”

Minister Micky Adriaansens (Economic Affairs and Climate Policy): “The chemical industry is indispensable for our medicines, paint, but also for our food and construction. We would therefore like to preserve this industry in the Netherlands and Europe. In fact, we want the chemical industry to become a global leader in green chemistry. I therefore think it is important that we work hard to make this sector more sustainable and at the same time strengthen its competitive position by working together in a European context.”

Competitiveness

An overarching European policy framework is also essential to ensure the long-term competitiveness of the European chemical industry and to reduce our dependence on (fossil) raw materials from abroad.

An EU policy package should help to create markets, the availability of sustainable carbon and tools to strengthen the competitiveness of the chemical industry.