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We have happily returned from the COP and are enjoying November in Germany. The conference still lingers with us a little, for example in the reports that COP President Babayev is still playing by his own rules after the conference and gossiping about what’s been happening. Or when we look at the negotiations on a new plastics agreement in Busan, Korea, we unexpectedly discover that the negotiations and disputes follow patterns similar to those at the climate COPs.
However, the climate world keeps on turning. Especially three months before the federal election in Germany. That is why we write about the industry’s demand that heat pumps must need reliable regulations in the future – regardless of which chancellor is in office. Then there’s the fear that large sums of state funds could be lost in the clean-up of Leag’s opencast lignite mines. And we look back in history and find out in Angela Merkel’s memoirs how she sees the legacy of her climate policy.
More and more experts expect China’s emissions to peak this year or next. The world’s largest CO2 emitter is in the midst of decarbonizing its economy. While some indicators point in the right direction, the pace needs to be stepped up in other areas, as a new study by the Centre for Research on Energy and Clean Air (CREA) shows. At the end of October, the Chinese Academy of Sciences (CAS) and the German Leopoldina highlighted the importance of decarbonization. In response to a question from Table.Briefings, CAS scientists have now formulated the country’s priorities on this path.
However, assessing the country’s climate course clearly remains difficult at present. Actually, China is supposed to submit a new climate target (NDC) to the UN in February 2025. So far, however, the People’s Republic has been rather reserved. Experts believe that Donald Trump’s election will delay the NDC. Like other major emitters, China will first wait and see what course Trump takes before making any big climate policy promises.
China continues to record high growth in the expansion of renewable energies and the electrification of the transportation sector:
This progress is partly negated by high energy consumption and rising emissions in other sectors:
Decarbonization is an important topic, at least in China’s scientific community. This became clear in a joint declaration by the Chinese Academy of Sciences (CAS) and the German Academy of Sciences Leopoldina. Professors and members of the CAS, Pu Wang (Institute of Science and Development), Buxing Han (Institute of Chemistry) and Shuhing Yu (University of Science and Technology of China) answered written questions from Table.Briefings about China’s decarbonization strategy. The answers are documented here.
China has pledged to achieve net-zero emissions by 2060. “The order in which sectors will achieve net zero is uncertain. Some studies suggest that the power generation sector is likely to make a large contribution sooner due to the rapid and large-scale deployment of renewable energy and the maturity of existing technologies,” the three CAS scientists write. They praise the “impressive progress” in renewables and the advances “in the development and manufacture of battery technologies.”
The main challenges in the energy sector “include the problems of the intermittency of renewable energies and the challenges of grid infrastructure.” China invests massively in the expansion of electricity grids and in battery storage systems to bridge dark doldrums. However, there is no functioning business model for battery storage operators yet. And electricity trading between provinces is still in its infancy, slowing down the energy transition.
The CAS researchers confirm the expansion of emissions trading to the “steel, cement and aluminum sectors.” In addition, China has “emphasized the importance of controlling non-CO2 greenhouse gas emissions and adopted a series of measures to reduce non-CO2 greenhouse gases in the energy, agriculture and waste sectors.”
Whether China will further accelerate its climate policy regarding climate targets (NDC) remains unclear. China’s government has left the door open to increasing emissions by 2030. Analysts hope that the new NDC for 2035 will provide more clarity. It can be assumed that the new NDC will, for the first time, include lower CO2 emissions. However, “setting an absolute target is not progress per se. It depends on the level of the target,” says Lauri Myllyvirta from CREA. He is concerned that the “current deliberations on emissions targets for the next decade are very conservative.”
China would have to submit this NDC to the UN by February 2025. At the climate conference (COP29) in Baku, however, experts doubted that this deadline would be met. According to one China expert, many large emitters would wait until the USA under Donald Trump has set its course before submitting overly ambitious NDCs. Another observer from Beijing said that China could also soon present a major economic stimulus program that could further increase emissions. What is clear, however, is that China has assured the US in bilateral talks that the new NDC will include all greenhouse gases for the first time.
In the run-up to the German federal election, a controversy is unfolding between the ideas of the CDU/CSU and part of the economy in a key climate policy area: While the CDU/CSU wants to revoke the requirements on new heating systems adopted by the current government and significantly cut heat pump subsidies, the German Heat Pump Association (BWP) calls for “continuity.” And the tone is also getting rougher, as was evident at the association’s “Heat Pump Forum” on Wednesday in Berlin: Jens Spahn, Vice-Chairman of the CDU/CSU parliamentary group, commented on the government’s new regulations: “There is no planning security for nonsense.” Kai Schiefelbein, Managing Director of the medium-sized heat pump manufacturer Stiebel Eltron, on the other hand, urged politicians: “Don’t screw around!”
The meeting in Berlin confirmed that if the CDU wins the elections, it will repeal the most recent amendment to the Building Energy Act, which contains specific requirements for newly installed heating systems. “The path of the last two years is unacceptable,” said Spahn. That is why it is necessary to “abolish the heating law à la Habeck.” Spahn also announced that cuts would be made to subsidies for green heating systems. He said they would be “adapted to the current budgetary situation” without specifying the amount. In the medium term, the subsidy should be abolished altogether, said the former health minister, who would also like to take over a ministry in the next government. Spahn said that heat pumps are a “good technology.” However: “I don’t want any industries in Germany that are permanently dependent on subsidies and grants in order to function.”
Spahn thus went against the industry’s calls for planning security. Stiebel-Eltron CEO Schiefelbein previously explained that it was “super important for us in the industry to have continuity,” otherwise, German companies would be under real threat. Claus Fest, CEO of EnBW and President of the BWP, also called for “fact-based and decisive decisions that enable planning security.” Spahn rejected this. “The argument that we have to leave things as they are now because we need planning security doesn’t work for us,” adding that the CDU/CSU considered the law amendment a mistake from the beginning.
In the run-up to the congress, BWP Managing Director Martin Sabel also urged politicians to maintain continuity. “We continue to need regulatory requirements and reliable funding,” he told Table.Briefings. Relying on the carbon price alone cannot work, he said. “That puts people in a cost trap.” A recent study by the association found that even with the existing rules, the target of 500,000 newly installed heat pumps per year, which the German government actually wanted to achieve this year, would not be reached until 2030. To achieve this by 2027, more reliable subsidies, better communication and lower electricity prices are required. Abolishing the subsidy, which Spahn has called for, would have the opposite effect, said Sabel. “That would mean giving up on the climate targets.”
The amended Building Energy Act is intended to essentially prevent the installation of new oil and gas heating systems by stipulating that newly installed heating systems must use at least 65 percent renewable energy from 2026 or 2028 after the municipal heating plan has been finalized. The main options envisaged are heat pumps, district heating and wood heating. Spahn, on the other hand, claimed that more heat pumps will be installed in the future without the law introduced by Habeck than with it. As evidence, he cited that sales figures have slumped this year due to the lack of acceptance among the population.
The heat pump industry also partially rejected this interpretation. “The truth is that a large part of the lack of acceptance is not due to the law itself, but to populism in public and political debates,” said contractor Markus Rausch, accompanied by loud applause. Spahn’s statement that his mother had just had a new oil heating system installed in his parents’ house in Ahaus because it “could not reasonably be operated with a heat pump” also caused considerable irritation.
After all, various studies have shown that modern heat pumps work flawlessly in the vast majority of old buildings in Germany without any significant alterations. However, experts consider Spahn’s proposal to make oil heating systems more climate-friendly in the future by using “green oil” to be unrealistic because such fuels, which are produced from plants or generated synthetically using green electricity, will be both scarce and expensive.
However, at least one of Spahn’s calls was met with undivided approval from industry representatives, namely to lower electricity prices by cutting electricity tax and grid fees. All agreed this was urgently needed to make heat pumps more economically attractive. The CDU/CSU wants to fund this relief from CO2 revenues, which are also currently used to subsidize green heating systems.
The mining and generation of electricity from lignite in eastern Germany is set to end by 2038 at the latest. What will then be left are the billions in costs for recultivating the opencast mines in Germany’s east. Nature restoration must be done by those responsible – primarily Leag, which operates opencast mines and power plants in Brandenburg and Saxony.
However, the federal states concerned have long been concerned whether the company, with its approximately 7,000 employees in Lusatia, can afford the necessary reserves for this. Operating opencast mines and power plants economically will become increasingly difficult over the next few years due to falling renewable electricity prices and the rising costs of European emissions trading.
The environmental organization Greenpeace has now accused Leag’s owners of “balance sheet embellishment” and of using a company restructuring to withdraw profits that are no longer available for the announced transformation to a “green” energy supplier and for the recultivation obligations. “The current owners cannot prove how Leag plans to cover the foreseeable costs of recultivating the lignite mines,” says Karsten Smid, energy expert at Greenpeace.
The source of the discrepancies is the sale of a 20 percent stake in Leag by the PPF Group to EP Energy Transition (EPETr) for just one symbolic euro last year. For Smid, this sale price reflects Leag’s actual value – because the costs of future recultivation are priced into it.
What raises eyebrows is that another sale of half of the Leag shares occurred in the same period at a much higher price: from Energetický a Průmyslový Holding (EPH), again to EPETr. According to Greenpeace, EPH’s 2023 annual report shows that the group credited itself almost two billion euros for this.
Both EPH and EPETr are owned by the Czech entrepreneur Daniel Křetínský. This means that the billions were moved within Křetínský’s convoluted corporate empire, which the Financial Times valued at over 50 billion euros. He acquired Leag from the Swedish energy group Vattenfall in 2016.
In December 2023, Benjamin Raschke, then parliamentary group leader of the Green Party in the Brandenburg state parliament, expressed the suspicion that the restructuring would leave Leag with insufficient funds to cover future obligations: “It looks to us as if Leag wants to create a bad bank for coal.”
This suspicion is now reinforced by the apparent outflow of Leag’s operating profits: PPF Group’s annual reports for the last two years show revenues of around 1.5 billion euros in total from the then-half shareholding. However, it is not clear from publicly available information exactly how the billions of euros in operating and sales profits were generated in the books of the PPT Group and EPH.
At least Leag’s mining and power plant divisions reported profits in their latest annual reports: For 2022, this was around 750 million euros, and in 2023, as much as 2.4 billion euros. This is because a lot of lignite was used to generate electricity in the years after Russia stopped supplying Germany with gas. However, in the years before – since the purchase of Leag by Křetínský and the PPF Group – Leag posted losses or only small profits.
The debate about how the recultivation costs of the eastern German opencast mines can be secured has been ongoing since Křetínský’s purchase of Leag from the Swedish energy group Vattenfall eight years ago. At that time, billions of euros in reserves for recultivation were also transferred to EPH, which only left part of them with Leag. It is unknown whether these funds are still available for recultivation.
In the meantime, Brandenburg and Saxony have established insolvency-proof special-purpose assets in provident funds into which Leag pays. By 2030 – when opencast mining in the federal state will expire – the Brandenburg provident fund is expected to have around 900 million euros at its disposal. However, according to estimates by the federal state, this is less than half of the recultivation costs.
The situation is even more dire in Saxony, where the lignite business will continue for eight years. According to Greenpeace, only 478 million euros will have flowed into the Saxon provident fund by the end of 2023. The target by 2038 is 1.5 billion euros. However, this can only be achieved if Leag generates profits from lignite by then. In any case, Greenpeace says that the funds secured in Saxony are far from enough to cover the recultivation costs.
The suspicion of profit-taking is particularly controversial due to Křetínský’s increasingly prominent role in the German economy: In May of this year, he acquired a fifth of Thyssenkrupp’s steel division (TKSE) for – according to rumors – just 200 million euros. There is also talk of increasing the stake to half of the shares.
Křetínský thus remains true to his business model: He prefers to invest in companies that are cheap to buy, as they are burdened with high transformation costs. The 49-year-old entrepreneur built up his fortune as a business partner of the late PPF Group founder Petr Kellner, who invested in privatized state-owned companies after the fall of the Iron Curtain. Křetínský now holds stakes in numerous Western and Eastern European energy, logistics, media and trading companies.
The hope in the Ruhr region is that Křetínský will use Leag to supply cheap renewable energy – electricity and hydrogen – to enable green steel production at profitable conditions. Thyssenkrupp CEO Miguel López recently confirmed the plan on Wednesday.
Indeed, Leag plans to make massive investments in photovoltaics, wind power, large-scale storage and other plants through three new operating companies, with a small number already in operation. However, TKSE also has a heavy burden to bear. Unlike Leag, the issue here is not recultivation, but pension obligations and the upcoming conversion of the blast furnaces for the decarbonization process.
We have happily returned from the COP and are enjoying November in Germany. The conference still lingers with us a little, for example in the reports that COP President Babayev is still playing by his own rules after the conference and gossiping about what’s been happening. Or when we look at the negotiations on a new plastics agreement in Busan, Korea, we unexpectedly discover that the negotiations and disputes follow patterns similar to those at the climate COPs.
However, the climate world keeps on turning. Especially three months before the federal election in Germany. That is why we write about the industry’s demand that heat pumps must need reliable regulations in the future – regardless of which chancellor is in office. Then there’s the fear that large sums of state funds could be lost in the clean-up of Leag’s opencast lignite mines. And we look back in history and find out in Angela Merkel’s memoirs how she sees the legacy of her climate policy.
More and more experts expect China’s emissions to peak this year or next. The world’s largest CO2 emitter is in the midst of decarbonizing its economy. While some indicators point in the right direction, the pace needs to be stepped up in other areas, as a new study by the Centre for Research on Energy and Clean Air (CREA) shows. At the end of October, the Chinese Academy of Sciences (CAS) and the German Leopoldina highlighted the importance of decarbonization. In response to a question from Table.Briefings, CAS scientists have now formulated the country’s priorities on this path.
However, assessing the country’s climate course clearly remains difficult at present. Actually, China is supposed to submit a new climate target (NDC) to the UN in February 2025. So far, however, the People’s Republic has been rather reserved. Experts believe that Donald Trump’s election will delay the NDC. Like other major emitters, China will first wait and see what course Trump takes before making any big climate policy promises.
China continues to record high growth in the expansion of renewable energies and the electrification of the transportation sector:
This progress is partly negated by high energy consumption and rising emissions in other sectors:
Decarbonization is an important topic, at least in China’s scientific community. This became clear in a joint declaration by the Chinese Academy of Sciences (CAS) and the German Academy of Sciences Leopoldina. Professors and members of the CAS, Pu Wang (Institute of Science and Development), Buxing Han (Institute of Chemistry) and Shuhing Yu (University of Science and Technology of China) answered written questions from Table.Briefings about China’s decarbonization strategy. The answers are documented here.
China has pledged to achieve net-zero emissions by 2060. “The order in which sectors will achieve net zero is uncertain. Some studies suggest that the power generation sector is likely to make a large contribution sooner due to the rapid and large-scale deployment of renewable energy and the maturity of existing technologies,” the three CAS scientists write. They praise the “impressive progress” in renewables and the advances “in the development and manufacture of battery technologies.”
The main challenges in the energy sector “include the problems of the intermittency of renewable energies and the challenges of grid infrastructure.” China invests massively in the expansion of electricity grids and in battery storage systems to bridge dark doldrums. However, there is no functioning business model for battery storage operators yet. And electricity trading between provinces is still in its infancy, slowing down the energy transition.
The CAS researchers confirm the expansion of emissions trading to the “steel, cement and aluminum sectors.” In addition, China has “emphasized the importance of controlling non-CO2 greenhouse gas emissions and adopted a series of measures to reduce non-CO2 greenhouse gases in the energy, agriculture and waste sectors.”
Whether China will further accelerate its climate policy regarding climate targets (NDC) remains unclear. China’s government has left the door open to increasing emissions by 2030. Analysts hope that the new NDC for 2035 will provide more clarity. It can be assumed that the new NDC will, for the first time, include lower CO2 emissions. However, “setting an absolute target is not progress per se. It depends on the level of the target,” says Lauri Myllyvirta from CREA. He is concerned that the “current deliberations on emissions targets for the next decade are very conservative.”
China would have to submit this NDC to the UN by February 2025. At the climate conference (COP29) in Baku, however, experts doubted that this deadline would be met. According to one China expert, many large emitters would wait until the USA under Donald Trump has set its course before submitting overly ambitious NDCs. Another observer from Beijing said that China could also soon present a major economic stimulus program that could further increase emissions. What is clear, however, is that China has assured the US in bilateral talks that the new NDC will include all greenhouse gases for the first time.
In the run-up to the German federal election, a controversy is unfolding between the ideas of the CDU/CSU and part of the economy in a key climate policy area: While the CDU/CSU wants to revoke the requirements on new heating systems adopted by the current government and significantly cut heat pump subsidies, the German Heat Pump Association (BWP) calls for “continuity.” And the tone is also getting rougher, as was evident at the association’s “Heat Pump Forum” on Wednesday in Berlin: Jens Spahn, Vice-Chairman of the CDU/CSU parliamentary group, commented on the government’s new regulations: “There is no planning security for nonsense.” Kai Schiefelbein, Managing Director of the medium-sized heat pump manufacturer Stiebel Eltron, on the other hand, urged politicians: “Don’t screw around!”
The meeting in Berlin confirmed that if the CDU wins the elections, it will repeal the most recent amendment to the Building Energy Act, which contains specific requirements for newly installed heating systems. “The path of the last two years is unacceptable,” said Spahn. That is why it is necessary to “abolish the heating law à la Habeck.” Spahn also announced that cuts would be made to subsidies for green heating systems. He said they would be “adapted to the current budgetary situation” without specifying the amount. In the medium term, the subsidy should be abolished altogether, said the former health minister, who would also like to take over a ministry in the next government. Spahn said that heat pumps are a “good technology.” However: “I don’t want any industries in Germany that are permanently dependent on subsidies and grants in order to function.”
Spahn thus went against the industry’s calls for planning security. Stiebel-Eltron CEO Schiefelbein previously explained that it was “super important for us in the industry to have continuity,” otherwise, German companies would be under real threat. Claus Fest, CEO of EnBW and President of the BWP, also called for “fact-based and decisive decisions that enable planning security.” Spahn rejected this. “The argument that we have to leave things as they are now because we need planning security doesn’t work for us,” adding that the CDU/CSU considered the law amendment a mistake from the beginning.
In the run-up to the congress, BWP Managing Director Martin Sabel also urged politicians to maintain continuity. “We continue to need regulatory requirements and reliable funding,” he told Table.Briefings. Relying on the carbon price alone cannot work, he said. “That puts people in a cost trap.” A recent study by the association found that even with the existing rules, the target of 500,000 newly installed heat pumps per year, which the German government actually wanted to achieve this year, would not be reached until 2030. To achieve this by 2027, more reliable subsidies, better communication and lower electricity prices are required. Abolishing the subsidy, which Spahn has called for, would have the opposite effect, said Sabel. “That would mean giving up on the climate targets.”
The amended Building Energy Act is intended to essentially prevent the installation of new oil and gas heating systems by stipulating that newly installed heating systems must use at least 65 percent renewable energy from 2026 or 2028 after the municipal heating plan has been finalized. The main options envisaged are heat pumps, district heating and wood heating. Spahn, on the other hand, claimed that more heat pumps will be installed in the future without the law introduced by Habeck than with it. As evidence, he cited that sales figures have slumped this year due to the lack of acceptance among the population.
The heat pump industry also partially rejected this interpretation. “The truth is that a large part of the lack of acceptance is not due to the law itself, but to populism in public and political debates,” said contractor Markus Rausch, accompanied by loud applause. Spahn’s statement that his mother had just had a new oil heating system installed in his parents’ house in Ahaus because it “could not reasonably be operated with a heat pump” also caused considerable irritation.
After all, various studies have shown that modern heat pumps work flawlessly in the vast majority of old buildings in Germany without any significant alterations. However, experts consider Spahn’s proposal to make oil heating systems more climate-friendly in the future by using “green oil” to be unrealistic because such fuels, which are produced from plants or generated synthetically using green electricity, will be both scarce and expensive.
However, at least one of Spahn’s calls was met with undivided approval from industry representatives, namely to lower electricity prices by cutting electricity tax and grid fees. All agreed this was urgently needed to make heat pumps more economically attractive. The CDU/CSU wants to fund this relief from CO2 revenues, which are also currently used to subsidize green heating systems.
The mining and generation of electricity from lignite in eastern Germany is set to end by 2038 at the latest. What will then be left are the billions in costs for recultivating the opencast mines in Germany’s east. Nature restoration must be done by those responsible – primarily Leag, which operates opencast mines and power plants in Brandenburg and Saxony.
However, the federal states concerned have long been concerned whether the company, with its approximately 7,000 employees in Lusatia, can afford the necessary reserves for this. Operating opencast mines and power plants economically will become increasingly difficult over the next few years due to falling renewable electricity prices and the rising costs of European emissions trading.
The environmental organization Greenpeace has now accused Leag’s owners of “balance sheet embellishment” and of using a company restructuring to withdraw profits that are no longer available for the announced transformation to a “green” energy supplier and for the recultivation obligations. “The current owners cannot prove how Leag plans to cover the foreseeable costs of recultivating the lignite mines,” says Karsten Smid, energy expert at Greenpeace.
The source of the discrepancies is the sale of a 20 percent stake in Leag by the PPF Group to EP Energy Transition (EPETr) for just one symbolic euro last year. For Smid, this sale price reflects Leag’s actual value – because the costs of future recultivation are priced into it.
What raises eyebrows is that another sale of half of the Leag shares occurred in the same period at a much higher price: from Energetický a Průmyslový Holding (EPH), again to EPETr. According to Greenpeace, EPH’s 2023 annual report shows that the group credited itself almost two billion euros for this.
Both EPH and EPETr are owned by the Czech entrepreneur Daniel Křetínský. This means that the billions were moved within Křetínský’s convoluted corporate empire, which the Financial Times valued at over 50 billion euros. He acquired Leag from the Swedish energy group Vattenfall in 2016.
In December 2023, Benjamin Raschke, then parliamentary group leader of the Green Party in the Brandenburg state parliament, expressed the suspicion that the restructuring would leave Leag with insufficient funds to cover future obligations: “It looks to us as if Leag wants to create a bad bank for coal.”
This suspicion is now reinforced by the apparent outflow of Leag’s operating profits: PPF Group’s annual reports for the last two years show revenues of around 1.5 billion euros in total from the then-half shareholding. However, it is not clear from publicly available information exactly how the billions of euros in operating and sales profits were generated in the books of the PPT Group and EPH.
At least Leag’s mining and power plant divisions reported profits in their latest annual reports: For 2022, this was around 750 million euros, and in 2023, as much as 2.4 billion euros. This is because a lot of lignite was used to generate electricity in the years after Russia stopped supplying Germany with gas. However, in the years before – since the purchase of Leag by Křetínský and the PPF Group – Leag posted losses or only small profits.
The debate about how the recultivation costs of the eastern German opencast mines can be secured has been ongoing since Křetínský’s purchase of Leag from the Swedish energy group Vattenfall eight years ago. At that time, billions of euros in reserves for recultivation were also transferred to EPH, which only left part of them with Leag. It is unknown whether these funds are still available for recultivation.
In the meantime, Brandenburg and Saxony have established insolvency-proof special-purpose assets in provident funds into which Leag pays. By 2030 – when opencast mining in the federal state will expire – the Brandenburg provident fund is expected to have around 900 million euros at its disposal. However, according to estimates by the federal state, this is less than half of the recultivation costs.
The situation is even more dire in Saxony, where the lignite business will continue for eight years. According to Greenpeace, only 478 million euros will have flowed into the Saxon provident fund by the end of 2023. The target by 2038 is 1.5 billion euros. However, this can only be achieved if Leag generates profits from lignite by then. In any case, Greenpeace says that the funds secured in Saxony are far from enough to cover the recultivation costs.
The suspicion of profit-taking is particularly controversial due to Křetínský’s increasingly prominent role in the German economy: In May of this year, he acquired a fifth of Thyssenkrupp’s steel division (TKSE) for – according to rumors – just 200 million euros. There is also talk of increasing the stake to half of the shares.
Křetínský thus remains true to his business model: He prefers to invest in companies that are cheap to buy, as they are burdened with high transformation costs. The 49-year-old entrepreneur built up his fortune as a business partner of the late PPF Group founder Petr Kellner, who invested in privatized state-owned companies after the fall of the Iron Curtain. Křetínský now holds stakes in numerous Western and Eastern European energy, logistics, media and trading companies.
The hope in the Ruhr region is that Křetínský will use Leag to supply cheap renewable energy – electricity and hydrogen – to enable green steel production at profitable conditions. Thyssenkrupp CEO Miguel López recently confirmed the plan on Wednesday.
Indeed, Leag plans to make massive investments in photovoltaics, wind power, large-scale storage and other plants through three new operating companies, with a small number already in operation. However, TKSE also has a heavy burden to bear. Unlike Leag, the issue here is not recultivation, but pension obligations and the upcoming conversion of the blast furnaces for the decarbonization process.