This Week in the Single Market — Brussels (#17, 2026)
German €5bn decarbonisation aid approved; EU-Japan deepen digital, trade ties; Deforestation Regulation simplification review; Adipic acid anti-dumping duty imposed; Securitisation rules amended.
May 03, 2026 to May 09, 2026
German €5bn decarbonisation aid approved; EU-Japan deepen digital, trade ties; Deforestation Regulation simplification review; Adipic acid anti-dumping duty imposed; Securitisation rules amended.
📋 In This Week's Newsletter
• 🇪🇺 European Commission
• ⚖️ EU Legislation
• 🤝 EU Council
• ✒️ EP Committee Work
• 📚 What We're Reading This Week
European Commission
Commission approves €5 billion German State aid scheme to support decarbonisation of industry
On 6 May 2026, the European Commission approved a €5 billion German State aid scheme under Article 107(3)(c) TFEU and the Guidelines on State aid for climate, environmental protection and energy (CEEAG). The scheme is designed to incentivise decarbonisation in sectors covered by the EU Emissions Trading System (ETS), including steel, glass, paper, cement, lime, and chemicals. Projects will be selected via competitive bidding based on cost efficiency per tonne of CO2 avoided and must achieve at least 50% emissions reduction within four years, and 85% by the end of the 15-year contract period. Aid will be delivered through two-way carbon contracts for difference, covering only the additional costs of cleaner production processes. Germany committed to ensure that reductions are not offset by indirect emissions, and hydrogen used must comply with EU renewables legislation. This scheme replaces an earlier version approved in March 2025 but not implemented.
EU and Japan accelerate cooperation on AI, data, quantum and chips
At the fourth meeting of the EU-Japan Digital Partnership Council in Brussels, the EU and Japan agreed new regulatory, research and industry initiatives covering data spaces, interoperable digital identities, frontier AI, quantum research, semiconductors, and platform regulation. The parties launched a Data Strategy Working Group and advanced joint projects including Q-Neko (quantum research) and 6G network technology. Japan will associate with Horizon Europe for digital research. Collaboration includes supply chain resilience, critical minerals, and regulatory dialogue on platform transparency. The next Partnership Council will convene in Tokyo in 2027.
Commission publishes simplification review of EU Deforestation Regulation
On 3 May 2026, the Commission published its simplification review of the revised EU Deforestation Regulation (EUDR), following the December 2025 agreement by Parliament and Council. The package includes a report, updated guidance, FAQs, and a draft delegated act on product scope. Measures are expected to reduce annual compliance costs by approximately 75% for companies subject to EUDR. The draft delegated act proposes updated commodity coverage and exemptions, such as leather and retreaded tyres. The implementing act for the Information System will be submitted to Member States, introducing new features for micro and small operators, and trade facilitation tools. The Regulation applies from 30 December 2026 for large and medium companies and from 30 June 2027 for other micro and small enterprises.
Commission approves over €800 million in State aid to Lithuanian development bank
On 4 May 2026, the Commission approved capital injections of €813 million and €15 million per year in tax and dividend exemptions for Lithuanian development bank Investicijos į Lietuvos ekonomiką (ILTE) under Article 107(3)(c) TFEU. The scheme targets sectors facing market failures, such as agriculture, renewable energy, district heating, transport, defence, and digital infrastructure. Lithuania committed to limit financial activities to relevant market gaps, avoiding crowding out private institutions.
Joint press statement on the 7th EU–Japan High-Level Economic Dialogue
On 7 May 2026, EU and Japanese ministers met in Brussels for the 7th High-Level Economic Dialogue. The reinforced format expanded focus to trade, industrial policy, and economic security. Co-chairs Stéphane Séjourné and Maroš Šefčovič represented the EU; Japanese counterparts included Akazawa Ryosei and Horii Iwao. Discussions covered WTO reform, energy security, export controls, and joint supply chain efforts for critical minerals and batteries. Both sides reaffirmed commitment to the EU-Japan Competitiveness Alliance and advanced cooperation on economic security, technology transfer risk assessment, and strategic industrial sectors.
Commission Decision (EU) 2026/994: Portuguese derogation for Berlenga island electricity system
On 4 May 2026, the Commission granted Portugal a derogation from Articles 4, 5, 6, 35, and 36 of Directive (EU) 2019/944 for Berlenga island's isolated electricity system, valid until 29 July 2040. The exemption supports the Sustainable Berlenga project, which replaces diesel generators with solar PV and battery storage. E-REDES remains the sole provider under extended concession contracts, with requirements for accounting unbundling and regulatory oversight. The derogation may end if the system is interconnected or if major developments occur.
EU Legislation (Official Journal)
Directive (EU) 2026/1024 amending Directive (EU) 2015/2302 on package travel
Published 8 May 2026, Directive (EU) 2026/1024 amends Directive (EU) 2015/2302 to strengthen traveller protection and clarify package definitions. The update removes provisions on linked travel arrangements, revises refund and voucher rules, and enhances insolvency protection. Member States must transpose by 29 September 2028, applying from 29 March 2029. The Directive requires clearer information for travellers and streamlines complaint handling and dispute resolution.
Commission Recommendation (EU) 2026/1008 on energy supply contract terms
On 8 May 2026, the Commission issued Recommendation (EU) 2026/1008, calling for standardised summaries of key contractual terms in energy supply contracts. The Recommendation addresses transparency, accessibility, and comparability for consumers, referencing Directive (EU) 2019/944 and Directive (EU) 2024/1788. Member States are encouraged to adopt templates and plain-language glossaries to facilitate supplier switching and ensure clear information across energy markets.
Commission Delegated Decision (EU) 2026/429: exemption for pallet wrappings and straps
Delegated Decision (EU) 2026/429, published 6 May 2026, exempts economic operators using pallet wrappings and straps for transport from the 100% reuse requirements in Article 29(2) and (3) of Regulation (EU) 2025/40 on packaging and packaging waste. The exemption addresses disproportionate adaptation costs for operators due to the lack of sufficiently developed automated solutions for reusable packaging.
Commission Implementing Regulation (EU) 2026/913: definitive anti-dumping duty on adipic acid
On 5 May 2026, the Commission imposed definitive anti-dumping duties on imports of adipic acid from China, following Regulation (EU) 2016/1036. Duty rates range from 29.1% to 42.3% depending on the producer. The investigation confirmed dumping and material injury to EU producers, with detailed analysis of benchmarks and market impact. Provisional duties are definitively collected at these rates.
Commission Implementing Regulation (EU) 2026/977: quality management requirements for notified bodies
Published 5 May 2026, Implementing Regulation (EU) 2026/977 sets uniform quality management and procedural requirements for notified bodies under Regulations (EU) 2017/745 and 2017/746 on medical devices and in vitro diagnostics. The Regulation specifies timelines for conformity assessments, transparency in quotations, and harmonised re-certification processes, with annual reporting obligations commencing from 1 January 2028.
EU Council
Economic and Financial Affairs Council agrees new VAT fraud rules
On 5 May 2026, ECOFIN ministers agreed on new rules targeting VAT fraud in the EU. The Council also held a policy debate on market integration and supervision, part of the EU’s saving and investment union initiative.
EP Committee Work
IMCO Committee: Amendments to Single Market and Customs Programme 2028–2034
On 6 May 2026, IMCO considered amendments to the proposal COM(2025)0590 for establishing the Single Market and Customs Programme for 2028–2034, with Adnan Dibrani (S&D) as rapporteur. Opinions were provided by BUDG (Danuše Nerudová, PPE), CONT, and ECON, and amendments were discussed ahead of the deadline.
IMCO Committee: Exchange on safety and cybersecurity risks from advanced AI systems
On 6 May 2026, IMCO held an exchange of views on safety and cybersecurity risks posed by advanced AI systems such as Anthropic's Mythos. The committee discussed the application of the EU AI Act and European digital rules in managing these risks.
INTA Committee: Draft motion and oral question on EU-Africa trade and investment relations
On 6 May 2026, INTA reviewed a draft motion for a resolution and oral question on advancing EU-Africa trade and investment relations. Bernd Lange (S&D) is the author, and amendments are due by 3 June 2026.
ECON Committee: Report on amended securitisation framework
On 8 May 2026, ECON published a report by rapporteur Ralf Seekatz (EPP) on the proposal to amend Regulation (EU) 2017/2402 for simple, transparent, and standardised securitisation. The report addresses transparency, investor protection, and cost reductions.
What We're Reading This Week
- Carbon Border Adjustment Mechanism: How to make decarbonisation efforts pay off: Policymakers explore carbon border taxes to protect domestic industries and incentivize global emissions reductions.
- The EU wants to unshackle its economy. For real this time: EU leaders propose sweeping reforms to boost economic growth and reduce regulatory barriers amid sluggish performance and global competition.
- Digital Sovereignty as a Geopolitical Strategy: Nations increasingly assert control over digital infrastructure and data to bolster security, economic independence, and global influence.
- EUROPEAN COMMISSION Brussels, 8.5.2026 C(2026) 3172 final COMMISSION NOTICE Guidance clarifying certain EU rules applicable to: New Commission guidance clarifies how specific EU regulations should be interpreted and applied across member states.
