The most recent legislative development in the framework of the ‘Fit for 55’ package (part of the European Green Deal) is the revised Energy Performance of Buildings Directive, which has recently received formal approval from the Council of the European Union, the representative of the EU Member States. This Directive sets ambitious emission reduction targets for residential and non-residential buildings in order to reach the overall goal of making the EU’s housing stock net-zero by 2050.

Hong Kong traders should be informed that EU Directive 2024/825 empowering consumers for the green transition has entered into force, and will become applicable in just over two years from now, i.e., on 27 September 2026. The Directive amends the existing legislation on unfair commercial practices, by protecting consumers against misleading environmental claims and by ensuring that they are provided with better information.

On 9 April 2024, the European Commission (“Commission”) announced that it is initiating an inquiry into Chinese wind turbine suppliers under the EU’s Foreign Subsidies Regulation. This move comes in response to what are perceived by the Commission as being overly aggressive tactics employed by Chinese manufacturers, including the offering of cheap turbines and favourable financing terms, which have been thought to distort market dynamics, undercutting European competitors.

The European Commission (the Commission) has opened two in-depth investigations into public procurement bids made by economic operators from the Chinese mainland for a new solar photovoltaic park in Romania. This represents the second and third use of the new tools made available under the Foreign Subsidies Regulation (FSR). In applying this new legislative framework, the EU is seeking to protect the key sector of solar panels from the potentially market distortive effect of foreign subsidies, but the consecutive investigation of economic operators from the Chinese mainland has received some negative backlash.

Environmentally friendly construction, travel and design topped the agenda at the inaugural edition of China Trade Week Saudi Arabia.

While the prospects for residential US solar installations are somewhat clouded at present, new legislation could brighten them considerably.

With borrowing to install solar systems currently prohibitively expensive, the industry is having to find new ways to woo consumers.

On 20 February 2024, Indonesia’s Ministry of Finance announced that the luxury tax on electric vehicles (EV) will be removed throughout the 2024 fiscal year, and import tax will be waived until the end of 2025. Consumers will also only pay value-added tax (VAT) of 1% instead of 11%, according to Finance Ministry Regulation (PMK) No. 8 of 2024, effective from 15 February 2024. The VAT rate reduction will only apply if 40% of the EV’s components are made locally. Electric buses made with between 20% and 40% local components will also be entitled to a 5% VAT subsidy, with purchasers only paying 6% VAT.

The European Parliament (the Parliament) and Council of the EU (the Council) have reached a provisional agreement on the Net Zero Industry Act to boost the development and manufacturing of clean technologies in the European Union. This deal is part of the European Green Deal Industrial Plan and foresees investments and projects to enhance clean technologies, thus hoping to contribute to the competitiveness and resilience of the European Industry.

On 14 February 2024, the European Parliament’s Internal Market and Environment Committees adopted their respective positions on a new legal text regarding how companies would need to validate their environmental marketing claims. The new rules will allow companies making valid green claims (e.g., to better market their products) to comply with the EU’s new ban on the greenwashing of products. A breach of the rules could lead to penalties including exclusion from procurements, confiscation of revenues, and a fine of 4% of the annual turnover of the company concerned.