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At its mini-plenary session in Brussels on 22/06/2022, the European Parliament adopted its opinion on the EU Carbon Border Adjustment Mechanism (CBAM) and the European Emissions Trading Scheme (EU ETS). Both opinions were returned to the COMENVI Committee for failure after a failed vote in early June 2022. Regarding CBAM, the European Parliament called for stronger ambitions beyond the European Commission's proposal. According to Parliament, the proposal should apply to all organic chemicals, plastics, hydrogen and ammonia, not just iron, steel, refineries, cement, basic organic chemicals and fertilizers, as proposed by the Commission. Indirect emissions, such as those related to the use of electricity by producers, should also be included in the scheme.
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Last week, the European Commission adopted a proposal to allocate €600 million from the European Development Fund reserve to deal with the current food security crisis. The funding will be used to help African, Caribbean and Pacific countries cope with the desperate situation through humanitarian aid (€150 million), sustainable production and resilience of food systems (€350 million) and macroeconomic support (€100 million).
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The German Ministry of Agriculture said last week that it planned to reconsider its national strategic objectives for the CAP in light of the ongoing war in Ukraine. Germany is thus likely to take advantage of the European Commission's call to strengthen the resilience and sustainability of the CAP in the context of the new geopolitical situation. According to the German Ministry of Agriculture, the war in Ukraine and the sharp rise in commodity and input prices are a major challenge to be faced, so some instruments and regulations of the strategic plan should be reviewed.
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The European Union will provide €100 million in immediate financial humanitarian aid to the agricultural sector in Egypt to expand grain stocks and help farmers and businesses in rural areas, European Commission President Ursula von der Leyen said on 15/05/2022. Egypt is 80% dependent on grain imports from Ukraine and Russia, making it one of the most vulnerable countries to the food crisis. In the long term, the European Union will assist Egypt in renovating and supporting local food production. On 14/05/2022, financial support of €25 million was also promised for Palestine.
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The latest analysis of the Dutch bank Rabobank predicts a year-on-year decline in milk production in the "Big-7" export regions (US, EU, New Zealand, Australia, Brazil, Argentina and Uruguay) in Q2 2022 by 1.1% after in the 1st quarter of 2022 it decreased by 1.9%. Milk production is thus likely to fall for the fourth consecutive quarter, which has not happened since 2012-2013. This is due to weakening demand and the current slowdown in global milk production. The decline is also related to higher production costs and weather events, creating a scenario for a slight decline in dairy commodity prices during the second half of 2022. Positive year-on-year output growth is expected in the second half of 2022 with an estimated loss of 0.5% for 2022. Preliminary forecasts for 2023 indicate a profit of 0.5%.
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