December 30, 2021

CHAPTER 1 describes the most important trends in the digital sector and the evolution of the European regulatory framework on online platforms, data, 5G, AI and cybersecurity. Paragraph 1.1 focuses on the role of the digital platforms in the market and the Digital Markets Act (DMA) proposal. The growing importance of the digital market can be seen as one of the most significant changes of our era, as it is an enabling element for economic growth and a driving force for the transformation of daily activities. In recent years, e-commerce has boosted both sales and turnover, becoming a key element for global retail trade. In 2020, the volume of sales generated globally from online purchases amounted to $2.855 billion, while estimates attest to a total turnover growth of 47%, to reach $4.200 billion in 2025. A fundamental role in the impressive growth of the sector is played by the large digital marketplaces. These platforms have reached a global dimension and are used by a huge mass of consumers. A branch of the digital market that has become particularly important in recent years is the mobile sector. Based on some estimates made in January 2021 on a panel of Android users, the time spent on mobile devices exceeds an average of 4 hours a day, 44% of which is dedicated to sharing content, communication and social media, while 26% to entertainment and video apps and 9% to video game apps. By observing the data released by Airnow on the most downloaded apps from Apple and Android stores in the world in October 2021, it is possible to see how among the apps with the highest number of users there are all those that refer to social media. The apps of the Facebook group (Facebook, WhatsApp, Instagram, Messenger) are the most downloaded (75.42M), but also those of other social networks such as TikTok (27.44), Telegram (26.3) and Snapchat (21.1) record excellent performances. As regards the social network sector, it can be observed that it actually includes a wide range of services that sometimes have quite different characteristics. While most of these allow users to connect, communicate and share content of a different nature (texts, images, videos and even direct streaming), they differ in other aspects, such as the type and scope of the exchange, public or private (both text, voice or audio-visual) in real time, and the ability to create groups and communities online. Still others offer more specific services, for example by focusing on particular aspects (e.g., publishing and sharing images and / or videos). Consequently, the definition of these platforms tends to transcend the boundaries of such categories, complicating the analysis, making it difficult to provide a clear and comprehensive picture of the sector and its sub-categories. To regulate the new critical issues connected to the affirmation of large online intermediaries and platforms, on 15 December 2020, the European Commission submitted the Digital Markets Act (DMA), one of the most important milestones of the EU digital strategy. The proposal, which is triggering an enormous debate among stakeholders and numerous requests for change, defines the prerequisites for qualifying a provider as a gatekeeper, sets several obligations and prohibitions on gatekeepers and attributes the Commission very important powers to request information, conduct inspections, order interim measures, make binding commitments proposed by the gatekeeper, carry out monitoring activities regarding compliance with the obligations under the proposed regulation, adopt decisions certifying infringements by gatekeepers and impose penalties. Paragraph 1.2 also focuses on the new regulatory framework on platforms and, specifically, on the Digital Services Act (DSA) proposal. The DSA amends, while maintaining its key principles, the E-commerce Directive (Directive 2000/31/EC) ensuring the best conditions for the provision of innovative digital services in the Internal market, contributing to online safety and the protection of fundamental rights (above all, freedom of expression and information) and establishing a sound and sustainable governance model for the supervision of intermediary service providers. Specifically, the proposal is a horizontal instrument to create a safer and trusted online environment putting in place a framework of layered responsibilities targeted at different types of services (i.e., intermediary, hosting, online platform, and very large online platform services) and proposing a set of harmonised EU-wide asymmetric obligations to guarantee transparency, accountability and regulatory overseeing of the EU online space. The same proposal places specific obligations on the MSs to verify the compliance of these subjects operating in their respective territories relative to the provisions contained in the proposed regulation, also establishing new subjects (Coordinators for Digital Services) and defining mechanisms of enforcement and cooperation between the states. The debate over the DSA takes place in the context of a growing e-commerce market. The volume of activities and revenues linked to online shopping has been growing for years, but the pandemic has drastically accelerated this. Eurostat data shows that the percentage of individuals that bought online at least one good or service within the last three months rose in the EU-27 from 27% in 2010 to 49% in 2019, recording a 5 percentage point jump in 2020, up to 54%. One of the main issues linked to the thriving e-commerce concerns the increase in bad actors and fraudsters on the web. The spread of social networks is creating new opportunities, but also raising some critical issues. According to the EU institutions, European citizens are exposed to increasing risks and harm online, due to the spread of illegal activities, infringements of fundamental rights and other societal damage. According to the results of the survey conducted by Eurobarometer for the EU Commission, out of over 30,000 Internet users in all MSs, about 60% of respondents believe they had seen at least once some sort of illegal content online. Scams, frauds or other illegal commercial practices had been experienced by 41% of the interviewed people, while 30% had seen hate speech, 27% counterfeited products and 26% pirated content. Another major market that is developing on the web is advertising. Differently from the traditional advertising market, the digital one has experienced a continuous growth during the last 15 years with an average annual growth of about +20%, with display ad spending on the rise. While traditional display ad registered a -1.6% decrease in 2020, display ad spending using programmatic saw a 7.6% increase. Paragraph 1.3 describes the trends of data economy and enabling technologies in the EU and the evolution of data regulation. Nowadays, most economic activity depends on the sharing of and the use of data and, in the future, this trend will continue to increase with a huge economic impact. In 2020, the value of the data economy exceeded the threshold of €300 billion for the EU-27 and, in relative terms, the impact of the data economy on the EU-27 GDP is 2.8%, up by 0.8 percentage points compared to 2015. Considering that the digital revolution finds its lifeblood in data, the attention of European institutions has for years been on two different aspects – the protection of personal data and the creation of an ecosystem enabling data circulation and use. In February 2020, the Communication “A European Strategy for Data” outlined the European strategy, to make the EU the most attractive, secure and dynamic data-agile economy in the world – empowering Europe with data to improve decisions and better the lives of all of its citizens. The strategy is focused on four pillars and several key actions to encourage a cross-sectoral governance framework for data access and use, to strengthen Europe’s capabilities and infrastructures for hosting, processing and using data, interoperability to reinforce competences and skills and to create common European data spaces in strategic sectors and domains of public interest (specifically, manufacturing, the Green Deal, mobility, health, finance, energy, agriculture, public administrations and skills). In this context, the Commission will foster synergies between the work on a European cloud federation and MS initiatives, such as the “Gaia-X” cloud project, a federated data infrastructure to enable the management, access and control of data belonging to EU citizens and businesses. In addition to the commitment to creating the European federal cloud within the framework of the Gaia X project, on December 2020, the European Commission launched a European Alliance on Industrial Data, Edge and Cloud, made up of representatives from MSs, cloud computing providers and industrial cloud users. Implementing the strategy for data, on 25 November 2020, the Commission proposed a regulation on European data governance (Data Governance Act) which aims to foster the availability of data for use by increasing trust in data intermediaries and by strengthening data-sharing mechanisms across the EU. More dedicated proposals on data spaces are expected to follow in 2022, complemented by a Data Act to foster data sharing among businesses, and between business and governments. Paragraph 1.4 analyses the main trends of the AI market  and describes the European approach and initiatives on AI. The growing interest by companies in these new technologies is confirmed by the exponential growth registered by the AI market in recent years. According to the latest release of the IDC (International Data Corporation), worldwide revenues for the AI market, including software, hardware, and services, is estimated to grow 15.2% year over year in 2021 to $341.8 billion. The market is forecasted to accelerate further in 2022 with a 18.8% growth and remain on track to break the $500 billion mark by 2024. Interest in ai is also very strong in Europe. The European AI software market is expected to experience significant growth in the coming years, with revenues increasing from around US $2.09 billion in 2018 to an expected 26.5 billion by 2025. However, comparing the EU to China and the US, a pattern of a clear competitive disadvantage seems to emerge. The gap in the overall amount of investments appears to be the main reason for Europe lagging behind. Moreover, the US and China account for most AI start-up investments (80%), and they were followed by the EU-27 representing almost 5% of the value of VC investments in AI start-ups. The EU disadvantage seems to emerge also in terms of AI publications and patents, especially compared to the US. An analysis of single EU states reveals substantial differences, with some countries able to keep pace even at the international level and others not very inclined to full AI adoption. In order to give an idea of the degree of AI development in European countries, I-Com has developed a new synthetic index on AI development in the European countries that takes into account some variables relating to the industrial and research AI ecosystem in the various MSs, as well as the level of the adoption of some AI technologies. Ireland tops the rankings with a score of 100, followed by Malta and Finland with scores of 95 and 78, respectively. These countries, despite being small in terms of size compared to others, have a good Al ecosystem. For instance, Ireland is emerging as a leading player with 273 AI firms, many having filed patent applications. Moreover, Ireland has a much higher percentage than the EU average (2%) of enterprises that analyse big data internally using machine learning (20%). At the bottom of the ranking, we find the countries of Eastern Europe, where both the industrial and research AI ecosystem sees a lower number of active AI players or where the level of adoption of technologies is very low. Despite the many benefits, the use of AI technology also presents some concerns, especially with regards to human rights and possible threats to people’s safety. One of the major causes of these concerns can be traced back to the lack of a well-defined regulatory framework that can set clear principles for its development and use. Following the White Paper (Artificial Intelligence: a European Approach to excellence and trust), published in February 2020, in April 2021, the European Commission presented the “AI Package”, which consists of three documents – a Communication on Fostering a European Approach to Artificial Intelligence, the 2021 update to the Coordinated Plan with Member States, and a proposal for an AI Regulation laying down harmonised rules for the EU (Artificial Intelligence Act). The core element of this package is, of course, the proposal of an Artificial Intelligence Act, which has been described as “the first ever legal framework on AI”. The AI Act aims to create an environment of trust among European citizens in AI, by imposing specific obligations on actors. More specifically, following a risk-based approach the AI ACT establishes a list of prohibited practices for all AI systems and differentiates between AI that creates: (i) unacceptable risk; (ii) high risk; and (iii) low or minimal risk. Paragraph 1.5 is focused on 5G networks. Throughout 2021, Europe has made a number of important steps towards the development of 5G networks. Significant improvements have been made in the allocation of a large number of frequencies through national auctions, and in the launch of innovative services by a large number of operators. However, the EU-27 average percentage of assigned spectrum is only 45.8%, as a number of countries still present impacting delays. On the other hand, the adoption of 5G is accelerating worldwide, and about 8% of all connections are already being made on 5G. Indeed, according to GSMA’s estimation, in 2025, Asian countries will reach more than a billion connections on 5G networks (more than 800 million in China and more than 160 million in the Pacific-Asian countries), compared to about 240 million connections in Europe and 220 million in the US. In proportional terms, the percentage of 5G usage is expected to be significantly lower in Europe (about 35% of total mobile users) than in the US and Asia (up to over 50% of users). Wide availability of high-performance networks is a prerequisite for citizens, businesses and public administrations tofullyenjoythebenefitsofdigitalisation. The EU institutions, aware that the EU is lagging behind other parts of the world, have set increasingly challenging connectivity targets and taken action in a range of areas to improve connectivity and define harmonised rules for connectivity services. From the adoption of the Digital Agenda for Europe in 2010, several initiatives have been set and ambitious goals have been fixed. On 9 March 2021, the European Commission published the Communication “2030 Digital Compass: the European way for the Digital Decade” that has underlined the importance to ensure an excellent and secure connectivity for everybody and everywhere in Europe and achieve gigabite connectivity by 2030. To this end, any technology mix can be used even if the focus should be on the more sustainable next generation fixed, mobile and satellite connectivity, with very highcapacity networks including 5G being rolled out. After the adoption of the 2018 European Electronic Communications Code updating the rules for radio spectrum management across the EU, and calling for creating a stable and harmonised regulatory environment and  facilitating innovation, particularly through 5G networks, to accelerate infrastructure development, in September 2020, the Commission adopted Recommendation n. 2020/1307 on a common Union toolbox. This aims to reduce the cost of deploying very high capacity networks and ensure timely and investment-friendly access to 5G radio spectrum, and to foster connectivity in support of economic recovery from the Covid-19 crisis. In July 2020, the European Council agreed on the Recovery and Resilience Facility, the centrepiece of NextGenerationEU, a temporary recovery instrument that allows the Commission to raise funds to help repair the immediate economic and social damage brought about by the pandemic. In order to receive funds from the Facility, MSs must prepare national recovery and resilience plans of which at least 20% must be allocated in support of digital transformation. Among flagships areas for investments and reforms, the roll-out of rapid broadband services is one of the most important. In October 2020, the Connectivity Special Group, made up MS representatives responsible for the area of electronic communications and the Commission, was established to assist the states in identifying and agreeing on the best practices and, upon request, in the implementation and reporting of the toolbox. In line with the roadmap set out in the recommendation, Member States, in close cooperation with the Commission, agreed, on 25 March 2021, on a Connectivity Toolbox outlining a set of best practices to reduce these costs, promote access to physical infrastructure and streamline authorisation procedures for civil works. Paragraph 1.6, finally, analyses the critical issues connected to cybersecurity. In fact, together with many advantages (always accessible, everywhere and at any moment), this relatively new way of living has brought to light many new problems in terms of security and, specifically, cybersecurity. The dimensions that this problem has assumed are even more evident by observing Europol data. In 2019, the agency focused 20.1% of its total operations on the fight against cybercrime. According to a study carried out by Comparitech in the third quarter of 2019, 9.68% of computers and 3.04% of mobile devices in the EU were infected with malware. Comparing the European data with those of the other major world economies, we can see how the EU ranks first for the percentage of infected computers, ahead of China, Japan, the USA, South Korea and the UK. Instead, where mobile devices are concerned, the EU states are, on average, more protected than those of all the other geographical areas considered except for Japan. From the point of view of organisations, suffering a cyberattack that involves the loss of data results in a highly damaging negative impact both from the economic point of view and the loss of trust on the part of users. According to an IBM study, the average cost of violations globally is estimated to be around $4.2 million in 2021. By observing the time trend, it is possible to see how the economic repercussions on companies affected by cyberattacks have grown by 15% between 2017 (the year in which they amounted to $3.62 million) and 2021, of which, by 9% only in the last year. Since 2013, the EU has worked on a wide legislation on cybersecurity to appropriately face the challenges of digitalisation. The EU Cybersecurity Strategy of 2013 was adopted to safeguard the online environment providing security and freedom. It outlines the EU’s vision and proposes actions aimed at pursuing cyber resilience, reducing cybercrime, developing an EU Cyber Defence Policy and fostering the industrial and technological resources required to benefit from the Digital Single Market. Nevertheless, an important step forward in the EU legislation on cybersecurity was the Directive on Security of Network and Information System (the NIS Directive), adopted by the European Parliament on 6 July 2016, entering into force in August 2016. With Regulation 2019/881, known as the Cybersecurity Act, the EU reached a political agreement to strengthen the EU Agency for Cybersecurity (ENISA) and established a wide certification framework on digital products, services and processes. On 16 December 2020, the Commission launched several initiatives on security. Specifically, the Commission adopted a proposal for a revised Directive on Security of Network and Information Systems (NIS 2 Directive), a proposal for a Directive on the Resilience of Critical Entities (2020/0365 COD) and the new Cybersecurity Strategy. Starting from the consideration that transport, energy, health, telecommunications, finance, security, democratic processes, space and defence are heavily reliant on networks, information systems have become increasingly interconnected and these cross-sector interdependences have increased vulnerabilities to cyberattacks, the Commission has launched a strategy focused on three pillars and connected initiatives. Here, the setting up of the European Cybersecurity Competence Centre (ECCC) in Bucharest is crucial. Its goal is to bring together various organisations from industry, academia and civil society to create a so-called cybersecurity skills community and collaborate with a network of national coordination centres.

CHAPTER TWO analyses the main facts that have occurred during the last two years in the EU as a result of the spreading of the Covid-19 pandemic. The health emergency has created an unprecedented burden on the European Member States, leading to the European institutions having to rapidly intervene to address the main bottlenecks and strengthen the European capacity to respond to common threats. Twenty months on from the outbreak of Covid-19 in Europe, the importance of a strong and cohesive EU especially in relation to public health is still a central matter to be addressed. Paragraph 2.1 analyses the first responses of the MSs and the EU in the early months of the pandemic, with a view to better understanding the role that the EU should have in such extraordinary (but not unrepeatable) circumstances. When the initial spread of the virus rapidly escalated, the EU struggled to play a coordinating role, complementing national policies to help countries in facing common challenges, such as a lack of sufficient healthcare organisation and provision, so that each state was better prepared for the healthcare challenges. The pandemic has clearly shown that the EU needs a crisis-resilient system and the means to produce medicines within the EU to ensure timely access to essential medicines for citizens and hospitals under all circumstances. A key political lesson of this crisis is that further collaboration is required in Europe to face public health challenges such as the one we are still living, and the EU seems to have learnt the lesson. That is why on September 2021, the EU established the European Health Emergency Preparedness and Response Authority (HERA). The establishment of a European biomedical advanced research agency allows not only for overcoming the fragmentation of the expertise currently scattered amongst various European bodies and organisations, but also plays the role of coordinating the research of diagnostic and therapeutic solutions with the aim of being prepared for the management of epidemic and pandemic emergencies, unfortunately expected to reoccur over time. The creation of such an agency also strengthens the role of the ECDC whose mandate is to work with national and EU-level health authorities to facilitate cooperation, and to provide the evidence base needed for effective action. Paragraph 2.2 describes the aftermath of the early months of the pandemic which led the EU onto the road to the creation of the European Health Union. The pandemic put an immense strain on European countries, testing the resilience of every country’s health and economic systems, together with the ability of the European Commission to develop a coordinated set of responses to what is still a common threat. The lack of investment in health systems, while saving money in the short term, can have devastating effects on a economy and society in the long term. Moreover, it has highlighted that other health emergencies will occur in the future, especially concerning the increasing burden of non-communicable diseases which will require placing the patient at the centre of health policies and the uptake of new innovations in treatment. The European Commission is committed to building a strong European Health Union, where all EU countries prepare and respond together to health crises, with available, affordable and innovative medical supplies, and where countries work together to improve prevention, treatment and aftercare for diseases such as cancer. The key initiatives to build a European Health Union include a Pharmaceutical Strategy for Europe, crisis preparedness and response measures and the European Plan to Beat Cancer. The pandemic has clearly demonstrated the need to revise how the Union supplies medicines to its population, as well as highlighting the importance of establishing the conditions and means to produce medicines within the EU, guaranteeing accessibility, sustainability and safety. Returning the production of pharmaceutical raw materials to Europe is one of the cornerstones of this strategy, as is the need to increase innovation in the areas of unmet needs. Indeed, although Europe has a strong manufacturing footprint, the supply chain still relies heavily on subcontractors to produce pharmaceutical raw materials outside the EU – in fact, between 60% and 80% of the active chemical ingredients are produced outside Europe, mainly in China and India. On 1 June 2020, the European Commission began working on this problem, publishing a roadmap for drawing up a European Pharmaceutical Strategy and launching a public consultation. The aim was to promote competitiveness, the ability to innovate and the sustainability of the EU pharmaceutical industry. Then, on 25 November 2020, the Commission published the final document of the Pharmaceutical Strategy for Europe1, in line with the new Industrial Strategy for Europe and the priorities outlined in the European Green Deal, with the European Cancer Plan and the European Digital Strategy. Bringing the production of pharmaceutical raw materials back to Europe is a cornerstone of this strategy, requiring the design of an adequate industrial policy, and the creation and preservation of incentives. The latter obviously also depends on, but not only, the definition of the price negotiation by MSs. The medium/long term objective is, instead, to overcome the fragmentation of the health ecosystem also from an industrial point of view. While working on the industrial side, the EU also needs to increase capacity building, and the digital upskilling of employers working in the health sector, while also intervening to leverage the health data potential, which is still underdeveloped and underused. That is why one of the corollary initiatives of the pharmaceutical strategy is the European Health Data Space and Eu4health. The ambition is to prepare a reform for the pharma strategy packet by the end of 2022. The EU understood that industries need to partner up with institutions for better collaboration, and to avoid shortages and increase production capacity. This is why EMA is the second EU agency whose role and operation needed to be reinforced. The Parliament and the Council reached an agreement at the end of October 2021 to strengthen the EMA’s role to avoid potential future shortages of medicines and medical devices. Here, it is crucial to have monitoring and reporting procedures, and to develop IT tools to check on supply chains in order to prevent major crises from escalating. Moreover, the European Commission proceeded with a Proposal for a Regulation on Serious Cross-border Health Threats, in order to create a more robust mandate for coordination at EU-level. The regulation applies to threats of biological origin (communicable diseases, antimicrobial resistance and biotoxins), threats of chemical origin, threats of environmental and unknown origin, and events which may constitute public health emergencies of international concern under the International Health Regulations (IHR), provided that they fall under one of the previously listed categories. The main operative consequences would be the creation of an EU health crisis and pandemic preparedness plan, complemented by national plans and transparent reporting of capacities, strengthened and integrated surveillance systems, enhanced risk assessment for health threats, increased power to enforce a coordinated response at EU level through the Health Security Committee, and an improved mechanism for recognition of and response to public health emergencies. Lastly, the EU adopted the Europe Beating Cancer Plan on February 2021. Since cancer is the second leading cause of mortality in EU countries after cardiovascular diseases, accounting for 29% of all deaths among males and 23% among females across all EU MSs, improving prevention and care is crucial. The actions and flagship initiatives included in the plan cover and tackle the entire pathwayofthedisease–prevention,diagnosis,treatment and the quality of life of patients and survivors. It will enable expertise and resources to be shared across the EU supporting countries, regions and cities with less knowledge and capabilities. It will also help researchers to exchange findings in the EU and access health data on the potential causes of cancer and its promising treatments. As much as 30% of the world’s stored data is currently produced by health systems, but the health sector lags behind in exploiting this potential and making information out of data. The European Health Data Space (EHDS) will enable cancer patients (and not only) to securely access and share their health data in an integrated format in the electronic health records between healthcare providers and across borders in the EU. The Commission will pursue work with MSs on a common exchange format for electronic health records and to tackle data security, privacy and interoperability. In Paragraph 2.3, we analyse how the emergence of new technologies and enhanced connectivity have spurred the exponential growth of health data and how the European Health Data Space fits the EU purpose of leading the forthcoming data-driven society. Nowadays, a vast quantity of this remains hidden in private or proprietary and project specific registries. Nevertheless, the promotion of health-data exchange is highly important in supporting all kinds of clinical research, guaranteeing new treatments, medicines, medical devices and health outcomes and to enhance the responsiveness of the whole system. However, there are challenges such as limitations and obstacles created by interoperability and the differing legal regimes within the EU that govern the access and right to process health data for research purposes, a lack of high-quality data, organisational and structural barriers and the need for a highly ethical approach essential to build trust with individuals and strives to use the data for the greater good. Having access to a growing volume of data and being able to process it are both key to growth and innovation. Data-driven innovation can deliver important benefits for citizens and for the European economy, from refining decision-making to improving public services. The European Data Strategy aims to make EU a leader in a data-driven society. Here, it is essential to be aware that governing health data for its secondary use is a distinct case in EU data governance. Governing health data requires a specific mechanism and cannot be governed by horizontal legislation alone, such as the proposed Data Governance Act. There are many different reasons why health data needs ad hoc initiatives. First of all, the respect of a patient’s right to protect personal data. With the General Data Protection Regulation2 (GDPR), the EU has underlined the protection of personal health data as a fundamental right. Yet, aggregated health information consists of personal health data, where it is essentially the basic input for research and policy-making. At the same time, health data is special in that it regards a subject with high societal saliency – that is, public health. The sharing of health data and the implied benefits for the wider public, could be the grounds on which the rights of an individual or patient may not prevail. This is clear in the case of infectious diseases, as well as societal or environmental health threats where the use of data is of vital and urgent interest, but also when developing prevention or treatment of other diseases. Moreover, a responsible secondary use of health data is imperative to maintaining citizen trust and significant investments in data processing. The growing volume of health data and increasing variety of methods to use it for secondary purposes is a growing source for the development of new businesses and innovation in personal health, health services, health care management, development of effectivity and quality of health services. The GDPR allows for the use of data in the private sector for research purposes. However, national health systems vary in Europe – from publicly funded systems, to semipublic health insurance and provision of health services, to totally private systems. The Data Governance Act separates governance mechanisms and rules for data from public or private sectors, but it does not specifically differentiate between health data provided by the public or private sectors. To date, many EU states have already established a national health data governance framework, or are in the process of establishing one. Far fewer states, however, have embedded these nationwide and centralised regulatory frameworks for the access and reuse of health data in national law. As well, several MSs have reported experiencing data governance challenges to developing health data infrastructures, with most mentioning legal or policy barriers to public authorities undertaking data linkages and sharing data among public health authorities. This could lead to fragmentation and hamper the unambiguous access and exchange of health data, which, in turn, proves the need for a more unified regulatory framework. The creation of a European Health Data Space is one of the key priorities of this Commission in the area of health. The main purpose of the EHDS is to promote healthdata exchange and support research on new preventive strategies, as well as on treatments, medicines, medical devices and outcomes. As a policy initiative, the EHDS aims to provide a common framework across EU Member States for the sharing and exchange of quality health data such as electronic health records, patient registries and genomic data. However, the EHDS should not only be limited to the promotion of cross-border services or data transfers. It should also address the broader issue of data access for permissible data use subject to appropriate safeguards, e.g., for research and innovation purposes, and not solely for the provision of care.

CHAPTER 3 discusses the role of the EU in global decarbonisation. Specifically, Paragraph 3.1 deals with ambitious European energy transition policies. Global energy demand reached 13,297 Mtoe in 2020, a 10% increase compared to 2010. The EUn is also the only region with the largest share of renewables in the energy mix with 13% in 2020, clearly above the world average, at only 6%. According to data released by IRENA (International Renewable Energy Agency), Western Europe ranked second for investments in renewables in the period from 2013 to 2018 amounting to $347 billion, 19% of the world total. The installed capacity from renewable sources increased from around 303 GW in 2011 to over 528 GW in 2020, registering an increase of +74% compared to only 10.5% globally. In line with the increase in consumption, globally produced CO2 emissions have also increased, albeit proportionally less (+3.2%) – from 31,291 Mt in 2010 to 32,284 Mt in 2020. The increase is mainly due to emissions from the Asia-Pacific area, which increased by about one fifth over the decade, while the US and the EU contributed with a considerable decrease related to the decarbonisation objectives – -18.9% for the former, -24.7% for the latter. In order to promote zero emissions and support MSs in their path towards a fair and inclusive transition, in December 2019, the European Commission presented the ambitious communication on the European Green Deal. The strategy aims at making energy production and European citizens’ lifestyle more sustainable and less harmful to the environment. The Green Deal is divided into a series of macro-actions containing strategies for all sectors of the economy and, in particular, transport, energy, agriculture, construction and industrial sectors. At the same time, the Commission has launched a European Green Deal Investment Plan (EGDIP), mobilising up to €1 trillion. Since March 2020, the initiatives taken by the Commission have been numerous. These are mainly action plans and strategic documents concerning the multiple areas included in the European Green Deal. Amongst these, a prominent place is held by the European Climate Law, aimed at inserting into EU law the goal of climate neutrality by 2050. MSs are not unprepared for this challenge. Over the last few decades, EU countries have increasingly invested in green technologies and in the production of energy from renewable sources. In 2019, renewables represented 13.6% of EU total gross domestic consumption. Of the renewable energy sources, sun and wind energy carry the greatest weight in the European race towards climate neutrality. The installed electricity production capacity from these two sources amounted to approximately 289 GW in 2019. Germany takes the lion’s share, with 190.8 GW (66% of EU installed capacity) with a value of over five times higher than Spain (36.9 GW), ranking second. Italy, with 31.5 GW installed, ranks third, ahead of France (27.9 GW). Another essential dimension for the challenge of decarbonisation, as well as for strengthening the security of supply, is energy efficiency. The country that consumes the least energy per unit of GDP is Ireland (0.49 GWh per € million), followed by Denmark (0.65) and Malta (0.75). In order to steer the economic recovery in the green direction, in February 2021, the regulation relating to the Recovery and Resilience Facility (RRF) was published. This is the key tool of the NextGenerationEU package which aims at mitigating the economic and social impact of the Covid-19 crisis and, at the same time, addressing the longterm challenges of the Union. One of the main conditions imposed by the EU is that the plans drawn up by the MSs contribute substantially to the green transition, as promoted by the Green Deal, and that, therefore, at least 37% of the available resources should be assigned to the green compartment. According to a comparative analysis of the National Plans presented to the Commission, the country that has devoted the largest share of its funds to the ecological transition is Luxembourg (60% of the available resources), followed by Denmark (59.6%) and Belgium (51.7%). Reducing emissions is the main objective of EU policies. To this end, the Emissions Trading System (ETS) was launched in 2005 and, today, it is one of the cornerstones of Community policies. It has undergone various revisions (phase 4 of the programme runs from 2021 to 2030) and has expanded the number of countries involved and sectors and plants covered. Verified emissions from stationary installations decreased by 35% between 2005 and 2019, decreasing at an annual average rate of about 3%, to reach 1.53 Gt C02 equivalent. Combustion plants have reduced their emissions the most, despite still accounting for 60% of the total verified emissions. Industrial plants on the other hand, have increased their emissions, on average, by 14% and account for 36% of overall emissions. The ETS reform is, therefore, one of the pillars around which “Fit for 55” revolves. This is the package of measures proposed by the European Commission to place the EU on the path to reducing CO2 emissions by 55% by 2030, the first step towards achieving climate neutrality by 2050. “Fit for 55” consists of 16 acts – two communications, four directives, eight regulations and two decisions. The communications concern emission targets for the coming decades and infrastructures for alternative fuels. The directives concern the ETS, renewable sources, energy efficiency and the taxation of energy products and electricity. The regulations relate to Effort Sharing (the annual reduction targets of emissions), the carbon adjustment mechanism at the border (CBAM), the creation of a Social Climate Fund, the use of soil and forestry (LULUCF), emission standards for cars and vans and infrastructure for alternative fuels, through the revision of the DAFI, air transport (ReFuelEu Aviation), and the use of renewable and low-carbon fuels in transport maritime (FuelEu Maritime). The decisions also propose a notification system for emission offsets for the aviation sector and the ETS market stability reserve until 2030. Overall, in this way, the European Commission wants to review the entire toolbox available to climate policies, setting the bar high for ambitions. Paragraph 3.2 is focused on green finance. The most recent scenario analyses highlight the need to mobilise a considerable amount of funding to achieve the goal of climate neutrality by 2050. The IEA report “Net Zero by 2050: A Roadmap for the Global Energy Sector” quantified US$5 trillion by 2030 as the investment needed for the energy transition, about 4.5% of global GDP. Today, investments to achieve climate neutrality are much lower than what is needed. In 2020, global investments in the low-carbon energy transition amounted to $501.3 billion, up from $458.6 billion last year, and from just $235.4 billion in 2010. The first sector for investments has been renewable energy ($303.5 billion), up by 2% compared to 2019 despite some delays due the Covid-19 pandemic. Following, we find electric transport with $139 billion being invested in new vehicles and charging infrastructures (+28%) and electric heating with $50.8 billion in investments (+12%). Europe and China are currently competing for the most active markets in energy transition investments. Last year, European countries allocated a large part of the increase in investments in this area. Growth for Europe is +67% compared to 2019, for a total value of $166.2 billion, higher than China and the US. Europe recorded an increase of 28% in green bonds issued in 2020, with an overall increase (+$34.5 bln) even higher than the world average (+$23.2 bln). This trend strengthens European leadership, with an overall volume, in the 2014-2020 period of approximately $465 billion, almost double that of North America and the Asia-Pacific area. EU actions to promote sustainable finance are made up of numerous legislative initiatives, which have gradually intensified, particularly after March 2018, when the Action Plan on Financing Sustainable Growth was published. Measures in this area have taken on even greater importance following the launch of the European Green Deal, which announced the revision of the European Strategy on Sustainable Finance. On March 2020, the final report on the “EU Taxonomy” of sustainable economic activities was published. The document classifies the main economic sectors on the basis of their ability to mitigate or adapt to climate change. The first of the delegated acts of the EU Taxonomy, approved by Commissioners on 21 April, introduces a series of technical screening criteria to define the activities mainly contributing to two of the environmental objectives envisaged by the taxonomy regulation – the adaptation to climate change and climate change mitigation. A second delegated act covering the remaining targets will be published in 2022. The EU sustainability disclosure obligations will be extended to all large or listed companies, so that nearly 50,000 companies in the EU will have to comply with detailed standards, compared to the 11,000 currently subject to current obligations. The Commission is aiming to raise 30% of the €750 billion of resources needed to finance NextGenerationEU on the markets through the issuance of green bonds. The first issue recorded a demand for more than €135 billion, compared to the 12 billion of securities issued. An important role in the European context of sustainable finance is played by the European Investment Bank (EIB), which already, in 2007, had launched the first green bond – the Climate Awareness Bond. Paragraph 3.3 analyses the decarbonisation of the transport sector. Reducing the pressures of transport on the environment and climate is key to achieving the long-term vision of EU zero emissions by 2050. Over the last decades, emissions from the EU transport sector have not been dropping enough to limit its environmental and climate impacts. Nowadays, it represents almost a quarter of Europe’s greenhouse gas emissions and is the main cause of air pollution in urban areas. The average age of cars on EU-27 roads is 11.5 years, meaning that more than half of the cars currently used by European citizens were purchased before the introduction of the Euro 5 emission standard. Despite an increase in registrations in recent years, alternatively-powered cars make up just 4.6% of the total EU car fleet. Only 0.8% of all cars on Europe’s roads are hybrid electric, while both battery electric and plug-in hybrids each account for only 0.2% of the total. In 2019, almost 60% of all new cars registered in the EU ran on petrol In addition to the Sustainable and Smart Mobility Strategy, the transformation of mobility and transport systems also finds its place in other papers from the European Green Deal – e.g. “A Hydrogen Strategy for a climate neutral Europe” aims to boost clean hydrogen production in Europe. The IPCEI “Fuel Cells and Hydrogen” funded by Horizon 2020 seeks to accelerate European technological progress in this area. The European Commission is also pushing for the development of electric batteries, key enabling technology for the ecological transition and central to European automotive competitiveness. To this end, in 2017, the Commission had already launched the European Battery Alliance (EBA) in agreement with the EIB, EU countries, industry and the scientific community. Recently, the Commission approved a second IPCEI to support research and innovation in the battery value chain prepared jointly by 12 MSs for a total value of €2.9 billion in funding until 2028. This should mobilise €9 billion in private investments, contributing to EU autonomy in the sector.