EU adopts first of its kind Nature Restoration Law

In a surprising turn of events, the Council of EU Environment Ministers formally adopted on 17 June 2024, the much-contested EU Nature Restoration Law.

Twenty countries, including last-minute and unexpectedly Austria, representing 66% of the EU’s population voted in favour, just over the 65% threshold required for a qualified majority in the Council.

The new Law sets specific, legally binding, targets and obligations for restoring diverse ecosystems, ranging from terrestrial landscapes to marine, freshwater, and urban environments. For the first time ever, it lays down measures not only to preserve but to restore nature. With over 80% of European habitats in poor shape according to a 2020 European Commission report¹, it sets binding targets and obligations across a broad range of ecosystems on land and at sea to combat climate change, enhance biodiversity, and improve ecosystem health across the EU, while balancing environmental goals with food security concerns.

The Regulation will also help the EU reach its international commitments under the Kunming-Montréal Global Biodiversity Framework agreed at the 2022 UN Biodiversity Conference (COP15) which calls for effective conservation and management of at least 30% of the world’s lands, inland waters, coastal areas, and oceans.

Background

The European Commission put forward its proposal for a Regulation on nature restoration in June 2022 under the EU biodiversity strategy for 2030, and as part of the European Green Deal.

The proposal became quickly entangled, particularly in the lead-up to the European elections, in a green policy backlash from farmers and conservative politicians. The European Parliament approved the draft measure in plenary with a narrow majority last February, after it had been watered down to address concerns raised by some EU countries. However, with the political landscape shifting dramatically, resulting in a surge in right-wing parties and a significant decline for the Greens following the June European elections, adoption in the lead-up to this week’s Council vote was all but certain. There was significant tension between EU Member States, with Finland and Sweden remaining undecided, Italy, Hungary, the Netherlands, and Poland opposing the proposal due to concerns over costs and increased red tape for farmers and businesses, and Belgium planning to abstain. The decision, last-minute, by Austria’s Environment Minister to vote in favour of the reforms, against the wishes of her conservative coalition partners in Austria (and sparking a major political row domestically) enabled the adoption of the draft measure with a narrow majority.

So, what was agreed?

The Regulation has several key objectives:

Restoring land and sea ecosystems

The Regulation mandates measures to restore at least 20% of the EU’s terrestrial, coastal and freshwater ecosystem habitats covered by the Regulation, including forests, grasslands and wetlands, rivers, lakes, and coral beds.

Until 2030, EU Member states will prioritize Natura 2000 sites when creating national restoration plans to meet these targets and preventing deterioration in restored areas.

Member States should take measures to restore habitats from poor to good condition in incremental steps: at least 30% by 2030, at least 60% by 2040, and at least 90% by 2050. Strict conditions apply to any derogations granted to these targets.

The text also includes an effort-based non-deterioration requirement to prevent significant deterioration of areas subject to restoration that have reached good condition.

To address the decline of pollinator populations such as butterflies, beetles, bees, hoverflies, moths, and wasps, that are crucial for ensuring that crops can grow, the regulation introduces specific requirements for measures to reverse this trend and increase populations by 2030 at the latest.

Ecosystem-specific measures

The regulation sets out specific requirements for different types of ecosystems.

• • Agricultural land: the Regulation targets improvements in grassland butterflies’ populations, soil organic carbon, and agricultural land diversity, with a focus on restoring drained peatlands as one of the most cost-effective ways to reduce emissions in the agricultural sector.

Interesting to note that with respect to food security, as pushed for by the European Parliament, the Regulation provides for a so-called “emergency brake” to ensure that targets for agricultural ecosystems can be suspended under exceptional circumstances if they severely reduce the land needed for sufficient food production for EU consumption.

• • Forests: Member states must improve forest health using indicators such as standing and lying deadwood and bird species diversity, as well as contribute to planting at least three billion additional trees by 2030.
  • Urban areas: The regulation introduces measures to increase green spaces in cities, towns and suburbs.  The targets will ensure no net loss (as compared to 2024) in the total of national urban green areas and tree canopy cover.  They also require EU Member States to ensure an increasing trend in urban green space, including through the integration of urban green space into buildings and infrastructure, from 2031 onwards.

To achieve the above objectives, EU member states must plan ahead and submit national restoration plans to the Commission, providing details on how they will deliver on the targets laid down. They must also monitor and report on their progress, based on EU-wide biodiversity indicators.

Why it matters

The adoption of this Regulation holds significance for the following reasons:

Firstly, it reaffirms that environmental sustainability and nature-focused policies remain top priorities for the EU. As companies navigate the implementation of these measures, they are compelled to adopt sustainable business practices that minimize their environmental footprint and contribute positively to ecosystem health. This further adds to the heightened accountability companies now face, including taken from the perspective of financial disclosures on nature-related risks.

Secondly, the approach to food security reveals a clear dichotomy: while restoration measures are put forward as crucial for safeguarding long-term food production through enhanced biodiversity and sustainable agriculture practices — such as natural pest control and reduced chemical fertilizer use — the Regulation includes a safeguard in the form of an emergency brake. This emergency brake allows for the suspension of agricultural ecosystem targets in cases where they threaten adequate land for food production within the EU.

Thirdly, the implementation of these measures across EU Member States will impact business operations significantly. Companies must prepare for a coordinated approach to align their activities with evolving national regulations, which may entail the need for adjustments to current practices to comply with forthcoming standards. This regulatory landscape signals a pivotal moment for businesses to adapt and innovate within a more stringent environmental framework.

Next steps

While the Austrian Government has announced that it will seek the annulment of this Regulation before the Court of Justice of the EU following the vote in favour by the Austrian Environment Minister, this is unlikely to stop publication of the EU Nature Restoration Law. The Regulation will enter into force on the twentieth day following that of its publication in the Official Journal of the European Union and become directly applicable in all EU Member States. It remains to be seen how the Law will be implemented in practice and whether Member States will be able to meet the targets laid down, in time. In light of its divisive nature, it will be important to monitor closely developments at national level. Faced with potential shifts in national politics, pressure from certain stakeholders such as farmers, and the possible favouring of economic interests over environmental concerns, there is no guarantee that the road ahead will be a smooth ride.

The Law provides that the European Commission will review, by 2033, the application of the Regulation and its impacts on the agricultural, fisheries and forestry sectors, as well as its wider socio-economic effects.

Together with other key pillars of the European Green Deal such as the EU Deforestation Regulation, the Fit for 55 Package, the REPowerEU Plan, the Ecodesign for Sustainable Products Regulation (ESPR) and the Corporate Sustainability Reporting Directive (CSRD), the EU Nature Restoration Law aims to provide a clear framework for driving more ambitious and transparent business action for achieving the EU’s climate and energy objectives while promoting environmental conservation and restoration efforts

Authored by Jacqueline Mailly and Grégoire Paquet.

References

The state of nature in the European Union - eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52020DC0635