Os associados da Associação dos Hotéis e Empreendimentos Turísticos do Algarve (AHETA) aprovaram, por unanimidade, a fusão com a Associação da Hotelaria e Restauração do Algarve (AIHSA), durante uma Assembleia Geral realizada na passada quinta-feira, 8 de outubro.Estudo da EY-Parthenon revela que a prova no Autódromo Internacional do Algarve atraiu cerca de 166 mil entradas, com espectadores de 70 países. Os visitantes estrangeiros representaram 40% do público e contribuíram para o aumento da procura turística na região.Relatório alerta para a vulnerabilidade das ligações aéreas de menor dimensão e destaca o papel da aviação regional na ligação a comunidades remotas, como as pequenas ilhas Shetland, na Escócia.Cerimónia decorre esta terça-feira, 13 de outubro, no Goethe-Institut Lisboa, e assinala a aprovação das três primeiras candidaturas à linha de apoio à criação e qualificação de Refúgios Climáticos.Leia o artigo de opinião de Miguel Estorninho, cofundador da Agência Digital Natives.A Relais & Châteaux lançou o MyImpact, uma plataforma digital que permite à sua rede de 580 hotéis e restaurantes independentes medir a pegada de carbono, identificar prioridades e definir medidas de redução de emissões adaptadas à realidade de cada propriedade.O grupo assinou um acordo com a Bloom Holding para desenvolver o Anantara Retreat Rabat, uma unidade de 38 quartos, suites e villas, cuja abertura está prevista para o início de 2030.
O encontro, que decorre até 14 de outubro, coincide com a divulgação de um relatório que estima em 57 mil milhões de libras anuais o contributo das viagens internacionais para a economia do Reino Unido, sustentando 865 mil empregos.A Agência Europeia para a Segurança da Aviação (EASA) anunciou na sexta-feira, dia 9, que tinha alargado a área do espaço aéreo da Arábia Saudita onde recomendava às companhias aéreas que não operassem, após os houthis do Iémen, alinhados com o Irão, terem atacado o aeroporto de Riade.A companhia aérea vai lançar duas novas rotas a partir de Paris-Charles de Gaulle, em maio de 2027, com três voos semanais para cada destino, operados em Airbus A350-900. Os bilhetes estarão disponíveis a partir de 14 de outubro de 2026Sob o lema “Uma APAVT onde todos contam”, a candidatura reúne representantes de diferentes regiões e segmentos da distribuição turística, incluindo responsáveis da Newtour, W2M, Pinto Lopes Viagens, Globalis e Travelstore.Duarte Nobre Guedes, presidente do Conselho Diretor da Associação Nacional dos Locadores de Veículos (ARAC), alertou para o "aumento de situações de criminalidade associadas ao roubo e ao uso indevido das viaturas de aluguer, com enormes prejuízos para o setor e para a sociedade" na sessão de abertura da VII Convenção Nacional da ARAC, que decorre esta sexta-feira, 9 de outubro, em Óbidos.O presidente da Turismo Centro de Portugal, Rui Ventura, alertou que as dificuldades de mobilidade e acessibilidade podem comprometer a promoção turística dos territórios e a distribuição dos benefícios económicos do turismo.Keeping up with developments across the European Union can be a challenge. EU Reporter’s live EU institutions news feed makes it easier to stay informed and in touch with what is happening across Brussels and beyond.
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On Wednesday (16 September) Canadian Prime Minister Mark Carney had a good day at the EU Parliament in Strasbourg. Commission President Ursula von der Leyen indicated that she would like to work with Mr Carney “on opening the door for Canada to be the first associate member of the European Union", writes Dick Roche.
Prime Minister Carney was given a standing ovation by the Parliament’s Members. While it is not clear what ‘associate EU Membership’ means, the offer from the Commission President and the welcome by MEPs was a plus, of sorts, for Mr Carney in his battle with President Trump.
The relationship between Prime Minister Carney and President Trump was always destined to be a bumpy one. Days before President Trump was sworn in for his second term Justin Trudeau stepped down as Prime Minister of Canada. As Trudeau was leaving office the president-elect repeated comments that he had made during the 2024 US elections about Canada becoming the 51st US State.
On 1 February 2025, as the contest to replace Mr Trudeau as the Liberal Party leader was getting underway President Trump, announced a 25% tariff on imports from Canada, Mexico and Canada: Canadian energy exports were subject to a 10% tariff. Trump explained the tariffs were intended to address the emergency related to fentanyl trafficking and illegal immigration.
Nine days later Trump announced a blanket 25% tariff on all imported steel and aluminium to “protect US industry and national security.” This hit Canada the biggest foreign supplier of steel and aluminium into the US market badly.
The pain for Canada did not stop there, on 26th March Trump announced his 25% tariff on all automobile imports into the US. Again, another bad hit on - most Canadian vehicle production is destined for the US market. The impact on Canadian auto producers was somewhat ameliorated by the fact that the tariff applied only to non-US content vehicle imports from Canada.
The stream of tariff announcements from the US while hurting Canada played to Mark Carney’s advantage in the race for leadership of Canada’s Liberal Party. While a "political ingénue" never having held political office or been a Member of a Member of Canada’s Parliament Mr Carney brought deep economic experience to the contest. He won almost 87% of the votes cast in the leadership election.
Mr Carney was sworn in as Prime Minister of Canada on 14th March 2025 - seven weeks into President Trump’s second term. Six weeks after his swearing in Mark Carney was elected to the Canadian House of Commons in the General Election of 28th April 2025.
From the outset Prime Minister Mark Carney invested considerable effort in improving relations with President Trump. The two leaders met in the White House on 6th May. The meeting, reportedly, went well.
Asked at the press briefing after the meeting about Trump’s suggestions that Canada should become the 51st US state, Carney responded humorously. He recalled that during the recent elections he had met the owners of Canada. They were not he said interested in ‘selling the property’, something that Mr Trump as a property man would understand. Smiling President Trump responded ‘never say never.’
At the G7 meeting held in Kananaskis, Alberta, in June President Trump and Mr Carney had another cordial meeting.
The cordiality did not last long. At the end of June the first payments on Canada’s Digital Services Tax (DST) were due to be made. The DST legislation enacted during the Trudeau Government, hit US tech companies causing fury in the White House. Trump called the tax a "direct and blatant attack on our country" and announced all trade talks with Canada would cease immediately.
Within days Carney announced that his administration would rescind the DST and halt the collection of the tax to advance negotiations with the US.
There was another flashpoint in January when President Trump reacted to reports that Canada and China were pursuing a comprehensive free trade deal. Prime Minister Carney defused the situation by explaining the talks with China were focused on adjusting existing arrangements.
While Carney faced criticism for ‘climbing down’ on the DST issue and for being too eager to placate the White House on China, his approach got US-Canada trade talks back underway.
By August 2025 there was some optimism that a breakthrough trade talks was close. On August 18th President Trump announced that a tentative understanding had been reached and as a result he was prepared to push back on the late August deadline for US tariff increases.
The talks came to an abrupt halt three days later when Carney instructed Canada’s negotiating team to return to Ottawa.
That decision came as a surprise. Walking away risked incurring the wrath of President Trump. That was a risk that the Canadian PM had clearly calibrated.
When the US Trade Representative Jamieson Greer sought to blame Canada for the breakdown Carney responded that it was the US United States that made last-minute demands which Canada considered unacceptable, including efforts to introduce provisions that would impact Canada's trade autonomy and sovereignty.
President Trump reacted immediately to Canada’s decision. Using a section of the Tariff Act 1930 that had never been used previously Trump imposed 50% tariffs across US$20 billion worth of Canadian products exported to the US.
Carney announced that Canada would hit US exports to Canada with “dollar for dollar” retaliatory measures. These would come into effect immediately after Labour Day 7th September –the day when the starting gun for US mid-term elections is ‘fired’ to get into full swing.
Asked at the press conference whether Canada was starting a trade war with the United States, Mr. Carney responded: “you’re at war when you get attacked—we got attacked.”
In a televised address, Carney acknowledged that the steps he was taking would come at a cost but argued that U.S. actions had left him with little alternative. He characterized the measures being taken by the United States as an attempt to hurt and divide Canadians. That, he suggested, was a miscalculation. Rather than weakening Canada, U.S. pressure would, he said, bring Canadians closer together.
All of indications suggest that Prime Minister Carney was correct in his assessment.
The leader of the Conservative Party Canada, Pierre Poilievre who previously accused Carney of being too willing to concede to Trump, strongly supported the decision to walk away from those trade talks.
Mr Poilievre was not alone, with one exception the Premiers of Canadian Provinces publicly supported Prime Minister Carney’s stance.
The Premier of Ontario Canada’s most populous province, Doug Ford, an open critic of the US President, encouraged PM Carney to respond to Trump “tariff for tariff, dollar for dollar.”
The Quebec Premier, Christine Fréchette, was particularly supportive of Carney’s refusal to make concessions to Trump on Quebec’s cultural protections.
Other Premiers have encouraged Carney to “fight back,” praised “team Canada,” criticised US tariff threats as unjustified, promised “full support,” and urged that Canada not accept a ‘subordinate economic relationship’ to the US.
The Premier of Alberta where a referendum on a range of questions including Alberta’s future within Canada is to be held on 19th October was the lone outrider, cautioning against celebrating retaliatory tariffs and expressed the hope that negotiations be resumed.
Public support in Canada for the position taken by Carney has been positive. Reuters referred to the tariff dispute encouraging a ‘rally around Canada’ effect that will likely dampen support for Alberta separation from Canada.
Ten days after the Canadian negotiating team abandoned the trade talks in Washington Carney’s Liberal Party received a very tangible indication of voter support when it won three by-elections for seats in the Canadian House of Commons including a seat in Quebec that had previously been held by a Conservative Party Member.
Opinion polls since the Canadian team walked away from the negotiations also show strong support for the position taken the Carney government.
An Ipsos poll taken on August 26-27 indicates support across party lines for Canada standing up to the US - even if it resulted in higher costs and job losses: 63% of those surveyed felt Canada was right to stand firm in the negotiations. Just 18 per cent said Canada should have made additional sacrifices to get a deal.
An Angus Reid Institute poll taken on 22 and 23 August immediately after the talks were ended found that 76% supported the line taken by the Canadian government.
A third poll by Abacus Data one of Canada’s most cited polling firms found that 60% approved of how the Carney government had handled the dispute while 18% disapproved.
In the US, unsurprisingly, positions on the trade war with Canada splits along party lines. Democrats overwhelmingly oppose the Trump’s position arguing that tariffs cost consumers and businesses.
On 9th September a group of nine Democrat Senators from states with close business ties with Canada issued a joint statement attacking President Trump’s “senseless trade war” with a key trading partner, primary export market and most enduring defence partner, pointing out that the President’s actions would force Canada to “diversify away from the US and deepen trade ties with other countries including China.”
Republicans generally, but not universally, support Trump’s position, arguing that Trump’s tariff stance is ‘putting America first.’ Concerns have been flagged in the Republican ranks that the tariffs will be an issue in the November mid-terms, particularly in competitive Senate and House races.
Senator Susan Collins of Maine, the US state most exposed to the tariff dispute with Canada, who is facing a tough re-election contest in November has labelled the tariffs on Canada ‘a mistake’ pointing out that Canadian retaliation could cost Maine up to $170 million in export losses. The Republican governor of Vermont has also been openly critical.
The position for President Trump is considerably less positive than that of Prime Minister Carney. The Canadian Prime Minister enjoys the public and political support that President Trump conspicuously lacks. As this week's appearance in the European Parliament demonstrated Mr Carney’s support is not confined to Canada; he has international support which, President Trump again conspicuously lacks.
At the moment there is no obvious ‘off ramp’ to facilitate a return to the negotiating table. Politically and temperamentally it will be harder for President Trump to pull back from the position he has taken in the tariff war than it will be for Mark Carney. Mr Carney has more political support for his position, at home and internationally than President Trump. He has also played an infinitely better game than Mr Trump. For the moment the ball is very much in Mark Carney’s court.
Dick Roche is a former Irish Minister for European Affairs and former Minister for the Environment.
A new report titled “The Hidden Cost of EU Regulation: Why Policy Design Matters for Growth, Competitiveness, and Investment,” published on 14 September, estimates that EU regulations could reduce GDP by €159 billion per year and threaten 419,000 jobs between 2026 and 2030.
Published by the European Policy Innovation Council (EPIC), the report examines the “hidden” costs of European policies. These include not only bureaucratic burdens but also regulatory uncertainty, poorly planned transitions, and overlapping obligations. According to the report, these factors can slow investment, limit innovation, and ultimately undermine the policies’ intended goals.
Europe risks imposing substantial economic costs on itself if a new generation of EU regulation is introduced without greater attention to competitiveness, proportionality and the cumulative burden on businesses, according to a new study from the Brussels-based European Policy Innovation Council (EPIC).
The report, estimates that five major areas of regulation currently facing European policymakers could, under its more restrictive scenarios, be associated with €159 billion in foregone EU GDP each year between 2026 and 2030.
It estimates an accompanying annual investment shortfall of approximately €36 billion, with around 419,000 jobs potentially at risk.
But the report's central argument is not that regulation itself is economically damaging. Rather, it contends that poorly sequenced, insufficiently differentiated or unpredictable regulation can impose costs which more carefully designed policies could avoid.
EPIC calculates that what it calls a "better regulation" approach could make a difference of approximately €125 billion in GDP each year, while supporting around €28 billion more annual investment and improving the projected employment outcome by some 241,000 jobs.
The analysis comes at a particularly sensitive moment for the EU, where improving competitiveness has moved rapidly up the political agenda following Mario Draghi's landmark report on the future of European competitiveness.
EPIC examined artificial intelligence regulation, the Packaging and Packaging Waste Regulation, the Carbon Border Adjustment Mechanism, biotechnology and novel food, and the forthcoming revision of the EU's Tobacco Products Directive (TPD).
The study identifies the TPD revision as potentially the biggest avoidable economic shock, but says smarter regulation could protect growth, investment and public health
EPIC estimates that a highly restrictive approach to the forthcoming TPD revision could be associated with an annual GDP loss of approximately €48 billion, including around €24 billion in lost tax revenues.
The same scenario would put roughly 120,000 jobs at risk and produce an estimated annual investment shortfall of about €11 billion.
By contrast, under EPIC's alternative scenario — based on a more differentiated regulatory treatment of products according to risk and greater emphasis on maintaining legal-market innovation — the organisation calculates an annual GDP gain of €32 billion.
The difference between the two regulatory approaches is therefore almost €80 billion in GDP each year, according to the modelling, alongside an improvement of more than 182,000 jobs and approximately €18 billion in investment.
These are significant numbers, but they require an important qualification.
They are scenario-based projections rather than forecasts of losses which have already occurred or inevitably will occur. EPIC itself stresses that its prospective figures are estimates based on alternative regulatory assumptions and should not be interpreted as guaranteed outcomes.
In the tobacco case in particular, the restrictive scenario assumes a major relocation of manufacturing outside the EU, with only part of wholesale and retail activity retained and some demand migrating into illicit channels. That is a substantial modelling assumption and is central to the scale of the estimated economic impact.
Nevertheless, the study raises a broader policy question which Brussels may find harder to dismiss: whether the economic consequences of the next TPD are being examined with the same intensity as its health objectives.
EPIC bases part of its TPD scenario on measures discussed in connection with the World Health Organization Framework Convention on Tobacco Control's COP11, held in 2025.
The report identifies proposals including flavour restrictions across tobacco and nicotine products, tighter sanctions, additional restrictions affecting newer nicotine and heated tobacco products and possible limitations on particular product components, including filters.
That debate exposed significant disagreements among EU member states.
According to the report, countries including Italy, Greece, Poland, Romania, Lithuania, Portugal and Czechia raised concerns about applying broadly similar restrictions to combustible cigarettes and alternative nicotine products despite differences between product categories.
Those disagreements became sufficiently pronounced that the EU was unable to maintain a common position during important parts of COP11, according to the EPIC analysis.
The significance for Brussels is that decisions taken at an FCTC Conference of the Parties do not automatically become EU law.
However, EPIC argues that COP priorities have historically influenced European tobacco policy and could feed into the Commission's forthcoming revision of the TPD.
The report points in particular to EU-funded tobacco-control initiatives which incorporate FCTC and COP priorities into their work and to a 2025 Council working document which raised a possible cigarette-filter ban.
EPIC therefore warns against what it sees as the potential importation of an international tobacco-control agenda into EU legislation without first undertaking sufficiently detailed economic, enforcement and proportionality assessments.
Another significant element in the study is illicit trade.
EPIC argues that restrictions which significantly reduce the availability of products for which consumer demand continues to exist can transfer trade away from regulated businesses rather than eliminate consumption.
The EC and EU agencies are simultaneously attempting to combat illegal tobacco and nicotine markets, yet, according to EPIC, some regulatory measures could make illegal supply comparatively more attractive.
According to the report, younger consumers are not necessarily insulated from such markets merely because products disappear from legal retail channels, pointing to concerns surrounding illicit e-cigarette distribution and sales through social media.
This is an issue with implications beyond the tobacco industry. Lost legal sales can mean lost VAT and excise revenues, while enforcement costs increase and legitimate retailers face competition from operators which pay neither tax nor compliance costs.
Importantly, EPIC does not present its report as a case for abandoning European health, environmental or consumer-protection objectives. Instead, it advocates what it describes as "Stability-by-Design".
The principle is relatively straightforward: policymakers should analyse economic effects, implementation capacity and differences between sectors and technologies before regulatory choices become politically fixed.
It calls for predictable rules, earlier stakeholder involvement, differentiated regulation where risks differ and implementation schedules which take account of infrastructure, supply chains and enforcement capabilities.
It also argues that regulations should increasingly be assessed collectively rather than individually.
Businesses do not experience the TPD, taxation measures, packaging requirements, environmental legislation and other compliance obligations separately. They experience their accumulated cost simultaneously.
For tobacco, this is particularly relevant because the TPD revision is taking place against the backdrop of parallel debates over tobacco excise taxation, packaging and sustainability rules.
The combined economic impact could therefore be greater than examining each initiative separately would suggest.
For the next regulatory wave, it calculates annual GDP impacts of around €48 billion from its restrictive TPD scenario, €24 billion from the AI framework, €42 billion from packaging regulation, €44 billion from CBAM and €1.6 billion from slower biotechnology and novel-food approvals.
The figures will inevitably be debated, particularly because economic models depend heavily on the assumptions placed into them.
But the policy issue raised by the report is harder to reduce to a dispute over individual numbers.
At a time when European leaders are repeatedly warning that the Union must close its productivity and investment gap with the US and China, EPIC is effectively asking whether Brussels subjects the economic consequences of regulation to the same level of scrutiny as the objectives regulation is intended to achieve.
Concerns about the water and energy demands of data centers have become prolific in recent weeks. But debates about their impact often overlook the rapid advances in cooling technology and cleaner energy that are already having an impact.
However, data centers’ resource consumption should be front and center of the AI conversion, as it is set to grow rapidly. By 2030, data centers’ water and energy consumption will double as AI demand leads to rapid construction of the infrastructure.
But data centers will not cause the world to run out of water or energy. Water- and energy-saving technologies already in use are reducing their impact, while Shanghai’s groundbreaking underwater data center demonstrates how innovative design can limit water, energy and land use.
Data centers have underpinned the internet since its founding. Apps, email, file storage and cloud services all run through them.
Modern AI workloads, however, have transformed their power demands beyond recognition. Today a single AI data center can match the electricity consumption of 100,000 homes, making them a significant drain on local energy grids, especially if a region is susceptible to shortages.
Data centers’ energy consumption is only rising as more are built across the world. In the US, data centers could increase from 4.4% to 12% of national electricity usage by 2028 — that is equivalent to adding eight New York Cities to the American grid.
Data centers also consume large amounts of water in two main ways. Water is used directly to cool servers and storage systems, which generate considerable heat, and indirectly to produce electricity at fossil fuel power plants where it is heated into steam to drive turbines.
In the UK, data centers have been estimated to use up to eight times as much water as average on hot summer days, underlining how their impact can rise when local resources are already under strain.
As the effects of climate change intensify, the location of data centers, and methods to reduce their water and energy consumption, are becoming ever more important.
Fortunately, resource-saving measures are already being implemented. Data centers on land use closed-loop cooling systems that recycle water rather than continually evaporating it. This can reduce freshwater use by up to 70% compared to traditional open evaporative methods.
China has also pioneered a revolutionary new type of data center in Shanghai: wind-powered, and underwater. The facility, which began full commercial operations in May 2026, uses seawater as a coolant instead of using refrigerated fresh water as land-based data centers do, reducing the electricity required to cool the computers.
It uses at least 30% less electricity than traditional data centers, and offshore wind turbines reduce reliance on fossil fuels and cut the data center’s carbon emissions. Innovative solutions such as these will go a long way to reducing data centers’ resource consumption.
AI is also part of the solution to data centers’ draw on resources. AI can optimise electricity grids and shift computing workloads towards periods when cleaner energy is more efficient, making energy use more effective overall. AI can also anticipate fluctuations in demand and adjust energy consumption accordingly, reducing waste.
It might sound obvious, but some areas are just better equipped to accommodate a data center than others. For example, facilities in hot or water-stressed regions will impose a heavier burden on resources than those supplied by cleaner energy with plentiful water and located in cooler climates.
AI’s growing demand for data centers will increase electricity and water consumption, that is true. But it does not mean the technology will exhaust regional or global supplies of either resource.
The AI boom and the infrastructure buildout accompanying it are well underway. To manage its impact, the industry needs to plan ahead. Cleaner energy, efficient cooling, and sites that have significant water and energy supplies will all limit the infrastructure’s drain on resources.
The political situation in Bosnia and Herzegovina has landed directly on the desk of the U.S. Department of the Treasury. Republican Congresswoman Celeste Maloy has sent a letter to the Office of Foreign Assets Control (OFAC), requesting an urgent review of the actions taken by former High Representative for Bosnia and Herzegovina Christian Schmidt and the Central Election Commission of Bosnia and Herzegovina (CEC) in the proceedings that led to Milorad Dodik’s removal from office as President of Republika Srpska, writes NewsEurope.
At the time, that removal was also supported by the United States under the Biden administration, although it remains unclear what external influences may have been at play and who actually made the decision. Dodik has long faced strong opposition from Bosnian movements close to the Muslim Brotherhood, in part because of his close ties with Israel.
The letter, dated 31 August 2026, and addressed to OFAC Director Bradley Smith, carries particular political significance because Maloy goes beyond simply asking for clarification. The congresswoman explicitly brings to the Treasury agency’s attention the possibility that the actions attributed to Schmidt and the CEC could fall within the scope of conduct subject to U.S. sanctions authorities.
In the letter, Maloy states that she understands that OFAC has received materials alleging that the actions of Schmidt and the Election Commission may constitute “interference with a democratic process” within the scope of existing U.S. sanctions authorities applicable to the Western Balkans. The congresswoman also makes a particularly significant reference to the Global Magnitsky sanctions program, noting that the alleged conduct could alternatively constitute sanctionable activity under that framework.
In formal terms, therefore, Maloy is directly calling on President Donald Trump’s administration to sanction Schmidt. The letter is addressed to OFAC and requests an expedited review of the materials already submitted to the agency. Politically, however, the significance of the initiative is clear: a Republican member of Congress is asking the U.S. administration to determine whether there are legal grounds for imposing U.S. sanctions on Schmidt and, potentially, on other officials involved. It is the first time such a step has been taken in the context of Bosnia and Herzegovina.
Maloy concludes by stating that she appreciates OFAC’s “expeditious review” of the matter and looks forward to learning the results of its investigation. This is therefore more than a simple political statement on Bosnia: it is a request to activate the administrative mechanism that can precede a decision on sanctions.
The initiative stems from the proceedings that ultimately led to Milorad Dodik losing his position. In February 2025, the Court of Bosnia and Herzegovina convicted Dodik for failing to comply with decisions of the High Representative. The ruling was subsequently upheld on appeal, resulting in a one-year prison sentence and a six-year ban on serving as President of Republika Srpska.
It is precisely the nature of this political and institutional process that Maloy is now indirectly calling into question. In her letter, she refers to Dodik as the “democratically elected President of Republika Srpska” and presents Schmidt’s actions as the subject of allegations of interference with the democratic process.
The development is politically significant because it reverses the perspective that for years characterized relations between Washington and the Bosnian Serb leadership: this time, it is not the actions of the Republika Srpska authorities that are being scrutinized. Instead, a U.S. government agency is being asked to examine the conduct of the former international High Representative and the institutions involved in the process that led to Dodik’s removal from office.
The decision on how to proceed now rests with the Trump administration.
A European Parliament compromise on reforming the EU’s Sustainable Finance Disclosure Regulation (SFDR) has opened a politically sensitive dispute over whether entire industries should be excluded from sustainable investment — with fossil fuels offered a conditional transition route while tobacco remains outside.
The revision of the Sustainable Finance Disclosure Regulation, better known as SFDR, is emerging as a key political battleground over the future boundaries of sustainable finance in the European Union.
Although formally concerned with disclosure requirements and the categorisation of financial products, the dispute now goes considerably further. At stake is a fundamental question: should entire sectors be excluded from sustainable and transition finance because of the nature of their business, or should companies be judged primarily on their actual environmental performance, investment plans and capacity to transition?
That distinction has potentially significant consequences for companies, investors and access to capital.
The file is currently under consideration in the European Parliament’s Economic and Monetary Affairs Committee, ECON, where a compromise has been reached between political groups ahead of the committee vote.
Under the emerging agreement, sectoral exclusions remain within the proposed framework. Tobacco cultivation and production, as well as controversial weapons, remain outside the relevant sustainable investment categories.
Fossil-fuel companies, however, have been given a potential route into the proposed transition category where specified conditions are met.
An oil or gas company may potentially demonstrate that it is directing sufficient capital towards sustainable activities and implementing a credible emissions transition. A tobacco business, however substantial its environmental improvements, would remain excluded because of the sector in which it operates.
Crucially, however, the EPP’s decision not to challenge the tobacco exclusion should not be read as an endorsement of blanket sectoral exclusions.
Markus Ferber, the EPP’s ECON coordinator, has told EU Reporter that the decision was driven by parliamentary arithmetic and the need to assemble a stable majority for the overall compromise.
In other words, the EPP did not abandon its reservations about blanket exclusions because it had become convinced that such exclusions were the right policy. It accepted the compromise because, in Ferber’s assessment, there was no realistic parliamentary majority for an alternative amendment that would have created a performance-based pathway for tobacco.
It means the tobacco exclusion survives not because the EPP has embraced the principle behind it, but because the group concluded that challenging it would jeopardise the broader compromise.
Ferber made clear that his underlying policy position remains strongly performance-based.
“Per se, EPP does not like blanket sectoral exclusions, but unfortunately it is not only the EPP’s position that determines the final outcome of negotiations and we had to strike compromises with other political groups to achieve a stable majority,” he told EU Reporter.
Asked whether sustainable-finance rules should judge companies according to the sector in which they operate or according to their measurable environmental progress, Ferber was unequivocal.
“In my view, the objective should be to finance the transition,” he said. “Hence, environmental performance and credible transition plans should matter more than the sector.”
That comment goes to the heart of the controversy surrounding tobacco.
The sector remains excluded irrespective of whether individual companies reduce emissions, restructure production, invest in Taxonomy-aligned activities or adopt measurable transition plans.
Fossil-fuel companies, by contrast, are being offered a conditional route into the transition category.
Ferber’s most significant intervention concerns why the EPP did not attempt to overturn the tobacco exclusion through an alternative compromise amendment.
Asked directly why he was not tabling such an amendment, despite previously opposing blanket exclusions affecting tobacco, Ferber replied:
“We have assessed all options for a stable majority in the Parliament and were not convinced that tabling alternative compromises would yield such a majority.”
That answer makes the political calculus unusually clear.
The tobacco exclusion was not retained because Ferber or the EPP ECON leadership had positively embraced the underlying principle. It remained because the EPP judged that there were insufficient votes to replace it while preserving the wider agreement.
The distinction matters because it changes the interpretation of the compromise.
Rather than representing an ideological conversion by the EPP towards sector-based sustainable-finance rules, it represents a tactical concession made in the context of difficult parliamentary mathematics.
Ferber reinforced that point when discussing the wider negotiations.
“I am not enthusiastic about the compromise,” he said, “but it reflects what is politically possible in light of difficult majorities and a rapporteur that has pursued a hard-left line from the beginning.”
The Parliament’s lead rapporteur on the file is Dutch Renew Europe MEP Gerben-Jan Gerbrandy.
Ferber’s description of Gerbrandy’s approach as “hard-left” is his own political characterisation, but his remarks underline how far the SFDR revision has moved beyond a purely technical debate over disclosure rules.
The EPP has repeatedly positioned itself as an opponent of unnecessary blanket exclusions and an advocate of competitiveness, regulatory simplification and performance-based rules.
A number of centre-right amendments tabled during the ECON process sought to remove or narrow the exclusion provisions.
The material submitted to EU Reporter notes that among the amendments tabled in committee, several concerning exclusions were proposed by EPP, ECR and other centre-right lawmakers.
Asked whether significant numbers of EPP members would have preferred the exclusions to be removed or narrowed, Ferber acknowledged that different views existed within the group.
“In a large and diverse political group, you always have different positions to reconcile,” he said.
He added that EPP shadow rapporteur Luděk Niedermayer had “checked back frequently to ensure that he has sufficient backing within our group.
Luděk Niedermayer said "There were different priorities from different political groups and differences are even above different MEPs from same group. The current text reflects the agreement reached as a compromise.
Asked how much room did the EPP have to negotiate changes to Article 7, and what
concessions did the Group obtain in return for accepting the final package? he said :
"As with every file, each political group has its own priorities. For the EPP, one of the key
priorities was Article 7, where we managed to secure a text that is acceptable to the Group
and which, in my view, better reflects the nature and purpose of the transition category than
the Commission proposal."
Ferber therefore rejects the suggestion that the final compromise amounts to Niedermayer departing from an agreed EPP line.
Asked directly whether there had been a disagreement between the two men over the treatment of tobacco and sectoral exclusions, he replied:
“No, our shadow rapporteur has faithfully defended the line agreed within our group, but it has always been clear that in compromise negotiations the EPP would not get 100% of its wishes. That is the nature of a compromise.”
Niedermayer said " Maintaining a limited set of exclusions helps preserve the credibility of products marketed as sustainable without extending blanket exclusions more broadly. Furthermore, energy and utility companies are more likely to follow a credible transition pathway than the sectors mentioned above. Consistency between SFDR and Delegated Regulation (EU) 2020/1818 under the Benchmark Regulation is also a strong argument for such an approach.
The tobacco issue exposes the central philosophical question running through the SFDR revision.
Under a blanket exclusion, the decisive question is: what does this company produce?
Under a performance-based model, the question becomes: what is this company actually doing to transition?
The distinction matters because an automatic exclusion can remove the regulatory benefit of environmental improvement.
A company that reduces emissions, changes production methods, invests heavily in renewable energy or directs substantial capital expenditure towards EU Taxonomy-aligned activities may still receive exactly the same treatment as one making no transition effort at all.
That is the fundamental criticism of blanket exclusions contained in the material examined by EU Reporter.
If an oil or gas company can potentially qualify for the transition category by demonstrating credible investment and emissions reductions, opponents of the tobacco exclusion ask why businesses in another lawful sector should not at least be permitted to make the same case.
Ferber’s own words strengthen that argument: environmental performance and credible transition plans, he says, should matter more than the sector itself.
Ferber nevertheless argued that there is a rationale for distinguishing between some industries.
“One can make an argument that energy companies engaged in fossil fuel projects today are likely to ultimately change their business model towards more sustainable projects, while a controversial weapons manufacturer is likely to still manufacture deadly weapons in the future,” he said.
“So, the transition case is weaker.”
That explanation addresses controversial weapons more directly than tobacco, however.
For tobacco, the unresolved policy question remains whether environmental transition should be assessed separately from the social and health characteristics of the product being manufactured.
That is precisely where the SFDR debate is becoming politically significant.
The issue is no longer merely whether tobacco is socially desirable. It is whether a sustainable-finance regulation should use sector identity as an automatic barrier to recognising environmental transition.
The controversy also reaches into the EPP’s wider political argument that the EU needs to move away from parts of the regulatory philosophy associated with the previous Commission and the European Green Deal.
Asked whether retaining blanket exclusions amounted to accepting part of that earlier approach, Ferber was sharply critical of the sustainable-finance framework as a whole.
“The whole sustainable finance framework is a legacy product from the previous two terms,” he said.
“In my personal view, it contains some fundamental flaws, that are difficult to change with targeted reviews of individual files.”
“We have done the best we could to fix some mistakes within the SFDR. That does not mean it is perfect. If I was given a blank slate, I would design the framework differently.”
The EPP remains sceptical of the principle behind some sectoral exclusions, yet has accepted a compromise that preserves them.
The explanation, according to its ECON coordinator, is not policy conversion but political necessity.
That is likely to become one of the most important distinctions in the debate as the file moves towards its committee vote and later parliamentary stages.
The controversy also raises questions of regulatory coherence.
The EU Taxonomy measures environmental sustainability using economic indicators including turnover, capital expenditure and operational expenditure associated with qualifying activities.
The SFDR compromise can operate differently by establishing a sectoral gateway before a company’s environmental performance is assessed.
The material examined by EU Reporter argues that this risks creating two different regulatory philosophies: the Taxonomy assesses measurable activity, while SFDR can exclude by sector identity.
That matters at a time when Brussels has promised simpler and more coherent regulation.
If transition finance is supposed to encourage companies to change behaviour, critics argue that the system needs to explain why measurable transition is sufficient for one sector but irrelevant for another.
The impact is not confined to multinational tobacco manufacturers.
European tobacco growers and processors have warned MEPs that exclusion from sustainable-finance frameworks could have consequences for agricultural communities and smaller businesses.
Ten thousands of family farms would be potentially affected, alongside thousands of SMEs, many of them located in economically vulnerable agricultural regions.
The broader economic figures advanced by industry organisations should be treated as industry estimates, but the principle being argued by growers is more straightforward.
They are not asking for tobacco automatically to be labelled sustainable.
They are asking to be allowed to demonstrate transition against objective criteria.
In that respect, the fossil-fuel derogation has become politically significant.
If Europe is prepared to recognise transition in one of the world’s most carbon-intensive sectors, tobacco industry stakeholders ask why no equivalent environmental-performance test should exist for their own.
Despite his reservations, Ferber told EU Reporter that he does not expect the compromise to be altered before the ECON vote.
“I do not anticipate any changes to the text that was agreed ahead of the vote,” he said.
The immediate political battle may therefore already have been settled.
But the wider argument is unlikely to disappear.
The SFDR revision was intended to simplify sustainable finance and make it clearer for investors.
Instead, it has exposed a fundamental policy choice over whether sustainable finance should reward measurable transition or exclude entire sectors in advance.
And in the case of tobacco, the EPP’s position is now particularly clear: the exclusion remains not because its ECON leadership endorses blanket sectoral exclusions, but because it concluded that Parliament did not contain the votes necessary to remove it without jeopardising the wider SFDR compromise.
That distinction is now stated in the introduction, given its own section, and repeated in the conclusion, so it becomes the central political takeaway rather than being buried inside the Ferber interview.
The German government has announced plans to terminate the agreement governing the activities of the Russian House in Berlin and to close Russia’s Consulate General in Bonn by September 18. The German Foreign Office has cited security concerns as the reason for the decision.
The announcement follows the discovery of an unidentified drone carrying explosives near Leipzig Airport. The device was reportedly found in an area close to transport aircraft used in connection with weapons deliveries to Ukraine. Moscow has rejected the allegations, describing them as unsupported by evidence.
Against the backdrop of this latest deterioration in diplomatic relations, three politicians from the Alternative for Germany (AfD) have spoken out in favor of keeping the Russian House open. They argue that the institution should primarily be regarded as a venue for cultural exchange rather than as an arena for political confrontation.
Ulrich Singer, chairman of the AfD parliamentary group in the Bavarian State Parliament, criticized the approach taken by Chancellor Friedrich Merz. In Singer’s view, sanctions are placing an additional burden on the German economy. He also considers the proposed closure of both the Russian House and the consulate in Bonn to be based on allegations of suspected subversive activity that are being used as a pretext.
Singer stressed that for decades the Russian House has provided opportunities for people to learn about the Russian language, culture and history. Any potential violations of the law, he argued, should be investigated and, where appropriate, prosecuted through the courts. Suspicions, Singer said, “cannot replace proceedings conducted under the rule of law,” while assessments made by foreign intelligence agencies “must not lead to political prejudgment.”
Precisely because relations between Germany and Russia are strained, Singer believes there should be more dialogue rather than less. In his assessment, dismantling cultural bridges would only deepen the breakdown in communication.
He also called for sanctions to be reviewed, arguing that they should not become an end in themselves. According to Singer, they impose costs on German companies and, when directed against individuals, must comply with the principles of legality, transparency and proportionality.
Singer additionally warned of possible reciprocal measures. Closing the Russian House could have consequences for German cultural institutions operating in Russia, particularly the Goethe-Institut. Commentators cited by klamm.de have noted that the two institutions are connected through a longstanding reciprocal arrangement.
Singer concluded that “the true strength of a state” does not lie in constant escalation but in its ability to prevent wars. In his words, peace is achieved not by closing doors, but by keeping them open.
Andreas Jurca, another AfD member of the Bavarian State Parliament, expressed a similar position. He argues that during a period of worsening relations between Berlin and Moscow, channels for cultural, social and humanitarian exchange are particularly important and should be preserved.
“If such places of encounter disappear, the distance between the two societies will continue to grow,” Jurca said.
He also maintained that allegations concerning possible intelligence activities should be based on evidence that can be verified and publicly scrutinized rather than solely on political assessments. New-facts.eu notes that Jurca’s statements, like those made by Sahra Wagenknecht, represent political assessments rather than the findings of official investigations.
AfD Bundestag member Rainer Rothfuß, who has previously organized so-called “peace trips” to Moscow, also criticized the planned measures. He described the proposed closure of the Russian House and the consulate in Bad Godesberg as “disastrous.”
Rothfuß claimed that “the government is carrying out an agenda dictated by globalists” and is taking steps that, in his view, “were avoided even during the Cold War.”
“Good and peaceful relations between Germany and Russia are in Germany’s interest,” Rothfuß said.
According to him, the AfD has defended this position for years. He also criticized mainstream media outlets, accusing them of contributing to the further “destruction” of German-Russian relations.
Klamm.de and new-facts.eu have also reported criticism voiced by Sahra Wagenknecht. She argues that Merz is intensifying tensions with Russia while failing to demonstrate the same determination in his approach toward Ukraine. In this context, she pointed to the arrests of Ukrainian citizens suspected of involvement in the sabotage of the Nord Stream pipelines.
“Merz is bringing us ever closer to a war with Russia,” Wagenknecht wrote on her blog.
The future of the Russian House and the Russian consulate in Bonn now rests with the German government and the diplomatic process. Singer, Jurca and Rothfuß are calling for a clear distinction between suspected violations of the law—which, they argue, should be investigated and dealt with through the courts—and cultural channels, which they believe should remain open.
The German government, meanwhile, has linked the planned closures to national-security concerns following the incident near Leipzig. Moscow continues to reject the allegations.
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