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2.50. (...) More recently, in August 2022, Canada and Germany signed a joint declaration of intent on establishing a Canada-Germany Hydrogen Alliance to facilitate the bilateral trade of hydrogen, which provides, inter alia, that Canada will export hydrogen to Germany by 2025. [87]
[87] Government of Canada (2022), Joint Declaration of Intent between the Government of Canada and the Government of the Federal Republic of Germany on Establishing a Canada-Germany Hydrogen Alliance. Viewed at: https://www.nrcan.gc.ca/climate-change-adapting-impacts-and-reducing-emissions/canadas-green-future/the-hydrogen-strategy/joint-declaration-intent-between-the-government-canada-and-the-government-the-federal/24607.

2.65. (...) The European Union has also been engaged in the discussions to modernize the Energy Charter Treaty (ECT), notably its ISDS [the Investor-State Dispute Settlement] mechanism. The ECT comprises 53 signatories, including the European Union and all of its member States except for Italy, and it provides for a multilateral framework to promote cooperation and facilitate commercial relations in the energy sector. In June 2022, the ECT parties reached an agreement in principle for a new ECT. The text amending the ECT was to be adopted during the Energy Charter Conference in November 2022, but its adoption was subsequently postponed. Prior to the conference, some EU member States announced their intention to withdraw from the ECT as they considered its reform was not aligned enough with their environmental objectives. [112] In 2021, the CJEU [the Court of Justice of the European Union] ruled that the ECT could not be used in intra-EU disputes. The Commission states that it has recently proposed the conclusion of a subsequent agreement to EU member States to address the risk of a conflict between the ECT and the EU Treaties.
[112] International Institute for Sustainable Development (2022), Energy Charter Treaty Withdrawal Announcements Reflect Reform Outcome is Insufficient for Climate Ambition, 7 November. Viewed at: https://www.iisd.org/press.

3.2. Customs duties are an important part of the EU budget, accounting for 8% of total revenues in 2021. Pursuant to the European Union's system of own resources, customs revenues are shared between the member States and the Union. Previously, member States were allowed to keep 20% of the customs revenues they collected, but this was changed in the latest directive to 25% for the period 2021-27, thus the Union receives the remaining 75%. [2] (...)
[2] New sources of revenue contained therein include national contributions based on the amount of plastic packaging not recycled, and from 2023 possible revenues from the carbon border tax adjustment scheme and a digital levy. Council Decision (EU, Euratom) 2020/2053.

Box 3.1 Overview of possible future customs developments
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Main areas of challenge: (...)
• Climate change and the sustainable transition
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3.64. The EU VAT Directive has undergone various modifications in recent years with an intentional shift of payment collection from the member State of the supplier to the member State of the consumer. This in part removes some distortions or incentives with respect to establishing presence in lower tax jurisdictions and has allowed greater diversity and flexibility in VAT rates through recent amendments. The most significant changes were implemented in April 2022 and include (i) expanding the list whereby reduced VAT rates may apply; (ii) removing the possibility to apply lower VAT to goods and services deemed detrimental to the environment (by 2030 or 2032 [82] ); (...)
[82] 1 January 2030 for fossil fuels, other goods with a similar impact on greenhouse gas emissions, such as peat, and wood used as firewood; 1 January 2032 for chemical pesticides and chemical fertilizers.

3.77. The European Union launched a review of the Energy Tax Directive in 2021 in order to better align energy taxation with energy and climate policies and this included proposals that would amend certain aspects related to energy excise duties (Section 4.4.1). (...)

3.79. Certain goods are prohibited or restricted when imported into the European Union due to various regulations, but the majority emanate from international conventions designed to track or protect the movement of goods, i.e. hazardous chemicals, protected plant and animal species, wastes, etc. (...)

3.80. (...) The Regulation on hazardous chemicals and the Regulation on wastes were amended to change the product coverage in their annexes, (...)

3.81. As noted in the previous Review, the EU Directive on single-use plastics was approved in 2019 with varying dates for implementation. [104] Member States had to transpose most of the measures by 3 July 2021 including the prohibition to place certain single-use plastics on the market. The Commission is monitoring the implementation of these measures. The Directive puts extended responsibilities on importers of certain goods, as well as producers, requiring them to cover the cost of litter clean-up and awareness programmes. The Commission has started preparing guidelines on the implementation of the costs of litter clean-up.
[104] Directive (EU) 2019/904. This Directive was complemented by five subsequent regulations or decisions to aid implementation and monitoring, e.g. on calculating and verifying waste.

Table 3.11 Prohibitions or restrictions on imports, 2022
Product: Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH)
Measure: Restriction
Number of CN lines: 76
Rationale: To ensure a high level of protection of human health and the environment
Legislation: Regulation (EC) 1907/2006
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