The bloc’s largest member has said it won’t support the green supply-chains law, causing jitters in Brussels and Berlin.
Reports that Germany will abstain on EU green supply chain rules are putting the law’s future in doubt – and causing chaos for the country’s ruling coalition.
The EU corporate sustainability due diligence directive (CSDDD) was agreed in principle in December, when MEPs and governments struck a political deal.
The law requires businesses to check supply chains for carbon emissions or human rights abuses – but business lobbies have warned it could harm competitiveness.
Earlier this week Germany’s labour minister signalled his intention to abstain at tomorrow’s (9 February) meeting of EU ambassadors, set to rubber stamp the December deal.
Hubertus Heil, a socialist, told Reuters he wanted to approve the law, but faced opposition from the liberal FDP wing of Germany’s coalition, which includes finance minister Christian Lindner.
Germany can’t block the law alone, but may find support from known sceptics such as Austria, Finland and Sweden.
“The current draft directive is not workable, and has a major negative impact on companies both in the EU and in the countries of the global South,” Austrian Labour and Economy Minister Martin Hocher said in a statement released to media yesterday, calling for negotiators to return to the drawing board.
But the vote is still on Friday’s agenda – suggesting a level of optimism by Belgium, which is currently chairing legislative talks, that no other major member state will oppose, meaning the vote will carry under the bloc’s qualified-majority laws.
Whatever happens in Brussels, Germany’s move is causing havoc in Berlin.
German Foreign Minister Annelena Baerbock, from the Green Party, yesterday publicly denounced Lindner’s position.
“The fact that Germany may now abstain at the last minute despite having already given our backing to the directive will damage our reliability as a partner and our clout in Europe,” Baerbock said in a statement, adding that consistent EU rules were in the interests of German business.
She was joined by Green Party colleague, Environment Minister Steffi Lemke, who said the directive’s failure would send a “bad signal for global environmental and human rights protection”.
Allegations over dodgy supply chains have plagued many German companies. Human Rights Watch recently said Chinese factories supplying Volkswagen may be using forced labour.
The company has said it investigates any allegations of forced labour, and that an audit commissioned last year found no evidence of occurrence at its plant in Xinjiang.
But it’s not the first time that pro-business concerns have led the bloc’s largest member to put a spanner in the Brussels works.
Last year, Germany attempted to block a legislative deal that sought to outlaw internal combustion engine-powered cars from 2035 – albeit Berlin eventually reached a compromise allowing the use of carbon-neutral e-fuels.
A U-turn by Germany could now also jeopardise agreement on new EU emissions standards for trucks, where a vote has been delayed until Friday while concerns are worked out.
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