When the EU interior ministers meet in Brussels today, all eyes will be on Nancy Faeser. At the most recent meeting in June, the SPD politician was still able to shine as a dealmaker on the Common European Asylum System (CEAS), which seemed impossible for quite some time.
Because Berlin abstained on an important part of the reform, the crisis regulation, it lacked the necessary qualified majority in the Council. The European Parliament took this as an opportunity to suspend the trilogue negotiations on the entire asylum and migration package. Nothing works in Brussels anymore, now Faeser is supposed to fix it.
She received the necessary backing yesterday from her party colleague Olaf Scholz: The Chancellor ended the internal government tug-of-war over the CEAS reform on Wednesday by putting his foot down. He decided that Germany would “stop nothing” in connection with the crisis regulation in Brussels and also informed the Greens of this.
The Greens had previously blocked German approval because the crisis regulation allows states under particularly high migration pressure to extend detention-like housing for migrants in the future and also to apply stricter rules to immigrants from countries with high recognition rates.
But Germany has not been alone so far in putting the brakes on. Austria and the Czech Republic have also said no, while the Netherlands and Slovakia have abstained. The Spanish EU Presidency is exercising great caution: Pressing the issue now would be counterproductive, according to Madrid. Not even a debate on the explosive issue is planned at the Home Affairs Council in Brussels.
EU Commission President Ursula von der Leyen has called for a quick political agreement. A word of power and a reminder – will that be enough to get the cow off the ice? The latest signals from Brussels sounded optimistic. A diplomat said that the meeting of interior ministers would be used for bilateral talks and a political “fine-tuning” of the crisis regulation. After that, everything could happen very quickly.
According to EU Commission President Ursula von der Leyen, only 23 percent of global greenhouse gas emissions are currently subject to a CO2 price, which would bring in $95 billion in revenue, she said last week at the UN climate summit in New York – and added to the sum with a thought experiment: imagine the revenue that would be generated for investments in low- and middle-income countries if the 60 percent of global greenhouse gas emissions targeted by UN Secretary-General António Guterres could be covered by 2030.
At the EU level, an instrument is being launched this weekend to help persuade countries outside Europe to put a CO2 price on their most climate-damaging industries – similar to what the EU ETS already does. The CBAM imposes a tariff equal to the European CO2 price on emissions-intensive manufactured products imported into the EU. If the emissions in the country of manufacture are already subject to a CO2 price, the duty is discounted by this amount.
Admittedly, the ostensible purpose of the instrument is to protect European industry from competitive disadvantages and carbon leakage – the relocation of emissions-intensive operations to third countries. But EU legislators emphasized early on that CBAM should also motivate non-European countries and regions to introduce their own CO2 prices. This is the only way they can avoid or at least limit the CBAM levy in trade with the EU.
In fact, there were first tentative imitators even before the CBAM was finally adopted. Turkey had long resisted a CO2 levy, but after the CBAM was presented in 2021 it conceded that the instrument would be an incentive to restructure its own industry with the help of the EU, to make it future-proof and to adapt it to the Green Deal. Although there is still no Turkish ETS, planning is underway.
Following the European model, Australia reformed its emissions trading system this year and introduced a CO2 price for its most emissions-intensive industrial plants as recently as July. As with the EU ETS, the emissions cap falls year by year, forcing plants to reduce their greenhouse gas emissions. Meanwhile, Australia is also planning a CBAM to protect its own markets from climate-damaging imports from abroad. The government now wants to take a close look at the European CBAM and submit its own proposal for imports of steel and cement next year.
In Indonesia, too, work is proceeding at full speed on a CO2 price. Voluntary certificate trading has already been launched to finance the transformation of the energy sector. Now a mandatory CO2 price is to follow for other sectors as well. Indonesia wants to adopt international standards so that it can also offer its carbon credits to foreign buyers.
That there are not only quick imitators of the most important European climate protection instruments is shown in particular by India. 19 percent of India’s exports go to the EU. In 2022, they were worth over €9 billion in the CBAM sectors of aluminum, fertilizer, electricity, cement, hydrogen, and iron and steel. The Indian steel and aluminum industry in particular is concerned about the CBAM price premium because the CO2 intensity of the domestic industry is significantly higher than the global average.
India has therefore expressed considerable reservations about the CBAM and has also presented these to the WTO. This is also about fairness between the European industrialized countries and the emerging country India. Suranjali Tandon, a professor at the National Institute of Public Finance and Policy in New Delhi, criticizes the CBAM as imposing the EU’s transition speed on developing countries. Since developing countries do not have CO2 pricing, the EU would earn from their exports through the CBAM. While this is a discriminatory measure, it also offers opportunities, he said. “Developing countries can build markets and impose domestic taxes that not only support their efforts to achieve net-zero targets, but also better articulate the potential limits to pricing that are consistent with development priorities and highlight the inaction of developed countries.”
India is therefore considering regulatory responses. Under discussion is a separate CO2 tax for export goods to the EU that meets the CBAM criteria for rebates. If introduced, India would earn from the CO2 price instead of the EU. Another option, and a retaliatory measure of sorts, is to impose a countervailing tax on imports from the EU to India. However, India is threatening to violate WTO guidelines itself by doing so. India is also in the process of introducing emissions trading.
In the United States, too, there are proposals for a CO2 border adjustment to protect the country’s own industry from foreign competitors. Ideas for this are supported by Democrats and Republicans. However, the effort has so far foundered on the question of whether it would take a national CO2 price to impose a CBAM on foreign imports. Republicans do not want such a price – but imposing a CBAM without a national CO2 price would not comply with WTO rules. The Democrats, on the other hand, have already introduced a CO2 price in twelve states.
Brazil, under President Lula da Silva, has also announced an emissions cap for large polluting companies and the creation of a regulated carbon market. A CO2 price is part of the plan. Around 5,000 companies from the steel, aluminum, cement as well as chemical industries that emit more than 25,000 metric tons of CO2 annually are to be affected. It is not yet known how high the cap will be set, but it is to fall gradually in line with the European model.
It is true that Brazil is an important trading partner for Europe, mainly because of its agricultural exports – and these are not affected by the CBAM. But steel and iron, aluminum, fertilizers and cement are also high on Brazil’s export list. In addition, Brazil could become Europe’s oil supplier in the future, and there is already consideration of extending the CBAM to all fossil fuels in the next step.
China has had a functioning emissions trading system since 2021 – the year the EU launched its Fit For 55 package and a landmark reform of the ETS. It covers around four billion tons of CO2 and over 40 percent of the country’s greenhouse gases, but so far it only affects larger coal and gas-fired power plants. Expansion to all industrial sectors has been repeatedly postponed and is currently scheduled for 2025, a year before financial compensation is due for the first time at the EU’s external borders under the CBAM. To be sure, there are still significant flaws in China’s CO2 price. But the goal is obvious: avoid EU border tariffs. With Urmi Goswami
If the Commission has its way, we will be in the middle of the “Digital Decade”. The associated measures for this decade include regulatory measures at EU level on the one hand, and on the other, that the member states create the conditions for sustainable digitization with their authorities, the economy and society. To this end, various areas are being scrutinized and compared with targets – the Commission officially launched the project in 2022.
The interim report on the Digital Decade presented by the Commission yesterday reveals a whole host of problematic developments. One in particular stands out: Germany ranks second to last in Europe when it comes to real fiber connections for end users (Fiber-to-the-Premises, FTTP). Between Belgium and Greece, the Federal Republic finds itself at the bottom of the EU-27, with just around 19 percent of all households connected. Other countries in the region, such as Romania, Spain, Bulgaria and Sweden, are already close to the target of connecting every household to the fiber-optic network, at well over 80 percent.
There is no sign of Germany catching up: while the number of really fast fiber-optic connections to end customers in Belgium is already three times higher this year than it will be in 2021, Germany has only managed to increase this by 50 percent in the same period.
Minister of Digital Affairs Volker Wissing (FDP) is thus threatened with a fiasco – the EU’s red fiber optic lantern. At the launch of the German government’s digital agenda, Wissing had set the goal of becoming one of the top 10 countries in Europe in terms of digitization. But the German Federal Ministry of Digital Affairs and Transport remains confident: a ministry spokesman told Table.Media that the report is seen as an incentive for further efforts and that it wants to catch up with the European leaders: “If we look at the latest progress, the digital transformation in Germany is making steady progress in all dimensions. Particularly in fiber-optic expansion, the momentum is high and we are confident of achieving the goals set out in the gigabit strategy of supplying every household by 2030.” We have made “good progress,” he said.
But this will hardly succeed with the current means of fiber optic expansion. So far, the German government and providers have not prioritized connecting users – but rather laying fiber in the streets and under sidewalks. This part of the infrastructure is a necessary prerequisite for expansion to the end customer. But it does not generate revenue for the operators, who could then reinvest in further expansion. In addition, there are other specifically German problems, such as the long legally privileged supply of cable TV connections or a persistent belief in VDSL technologies – but these technologies have not been considered future-proof for years.
One secret of the indicator experts who determine the state of digitization for the Commission remains the measurement of the digitization of administrative services. They did not look at whether Germany’s administration actually works digitally, or whether processes or at least access are available digitally – instead, they asked whether citizens had interacted with the administration once within twelve months using an online form. This probably has little to do with the citizens’ perspective on the state of digital administration, but it does help Germany to a mid-table position in this category.
In a European comparison, however, Wissing and the German government can praise themselves for another digital policy measure: unlike in some other countries, the 5G radio spectrum available and planned for this purpose at the European level has already been fully allocated in Germany – and the country thus achieves a place in the top group here.
Meanwhile, across Europe, another problem is emerging: while cloud providers as a whole are making massive gains in revenue volume, and according to the report generated more than $60 billion in revenue from cloud services worldwide for the first time in the first quarter, the market is firmly in US hands, with Amazon (32 percent), Microsoft (23 percent) and Google (10 percent) dominating by a wide margin. According to the data, even in Europe, European providers had just 13 percent of the market. The Commission remains cautious in its choice of words here. But since in the future, with edge computing connections in mobile communications, very significant parts of the critical infrastructure will no longer be able to manage without a cloud connection, the next geopolitically problematic dependency is looming here, which is unlikely to be compatible with the ambitions of the EU.
The current partial dependence on Chinese providers, for example, is to be overcome in the future. With a view to future mobile communications generations, the report therefore states that it is imperative to continue working on 5G Advanced and 6G in close cooperation with telecommunications companies and the two European network suppliers Nokia and Ericsson.
But the EU also remains far from its goals in another field: Although the number of announcements in the semiconductor industry has increased massively in recent months, the market share of chips manufactured in the EU is still small. The semiconductor market is expected to grow to €1 trillion by 2030, from the current €615 billion worldwide. To reach the target of 20 percent of the global market, Europe’s activity in the semiconductor segment would have to quadruple by 2030.
The report on the digital decade relentlessly identifies the mistakes of the past: insufficient investment, focus on development and manufacturing in sectors that do not need cutting-edge technology – especially the automotive sector – would have provided too little incentive to keep up in the tech race.
It’s no wonder that EU Internal Market Commissioner Thierry Breton is making a plea to member states: “We need to accelerate our efforts. Now is the moment to work together to put Europe at the forefront of digital transformation.” The EU is still very far from doing so.
Sept. 28, 2023; 8:30-9:30 a.m., online
DGAP, Discussion EU Reforms and Enlargement: Actualizing the Franco-German Expert Report
The German Council on Foreign Relations (DGAP) looks at the prospects for and obstacles against reforming and enlarging the EU. INFO & REGISTRATION
Sept. 28, 2023; 12:30-1:30 p.m., online
ECFR, Discussion Powering the future: Charting Europe’s climate and energy sovereignty
The European Council on Foreign Relations (ECFR) addresses the state of European energy and climate sovereignty. INFO & REGISTRATION
Oct. 2, 2023; 1-2:30 p.m., online
ERCST, Roundtable Expert Stakeholder Consultation: European Carbon Bank
The European Roundtable on Climate Change and Sustainable Transition (ERCST) brainstorms on the potential aims and governance of a Carbon Bank in the EU. INFO & REGISTRATION
Oct. 3, 2023; 2:30-4:30, Brussels (Belgium)
ERCST, Roundtable Renewable hydrogen: what way forward?
The European Roundtable on Climate Change and Sustainable Transition (ERCST) explores strategies required to bridge the gap between the current and targeted levels of renewable hydrogen production and consumption in the EU. INFO & REGISTRATION
The environmental spokesman for the Social Democrats in the EU Parliament, Tiemo Wölken, is demanding an explanation from climate commissioner-designate Wopke Hoekstra about his professional past at the Shell oil company. “He spent three years at a company that is only gradually half-heartedly grasping how important climate action actually is.”
So far, the Dutch have not necessarily distinguished themselves with expertise in climate policy, said the SPD politician. For this reason, he said, it must be looked at very closely in the context of the negotiations at the UN Climate Change Conference COP28 in Dubai. There, under the name Loss & Damage, negotiations are taking place on how to provide financial support to countries particularly affected by climate change. As Dutch foreign minister, Hoekstra sharply criticized the agreement on a Loss & Damage fund during COP27 last year, Wölken explains. Hoekstra would therefore have to convincingly demonstrate that he had changed his mind in this regard.
In addition, Wölken demanded that he be given an assurance that he would not regard climate policy as a fig leaf, but would take seriously the F-gas dossiers and the framework for CO2 emissions that are still to be negotiated.
After the hearing on Monday evening from 6:30 p.m. in the EU Parliament’s Environment Committee, the coordinators of the political groups will meet and draw up a recommendation to be voted on in plenary on Thursday. Wölken announced a fair, but also tough hearing of the Dutchman. He said no preliminary decision had yet been made on whether to reject or confirm him. luk
France’s government will slow fiscal consolidation next year to cushion the impact of inflation on poorer households and pensioners. “The first challenge, of course, is to respond to the worst inflation crisis since the 1970s,” Finance and Economy Minister Bruno Le Maire said Wednesday in presenting the draft budget for 2024. “The second challenge is to cut debt and reduce the deficit.”
Le Maire wants to save €16 billion to reduce the budget deficit from an estimated 4.9 percent of GDP this year to 4.4 percent in 2024. To do so, the government wants to reduce generous subsidies for household energy prices, postpone tax cuts for companies and cut unemployment benefits. The Haut Conseil des Finances Publiques, an independent watchdog, criticized the plans as lacking ambition. It said there was a danger that France would lag behind other EU countries. The government does not want to reduce the budget deficit below the EU ceiling of three percent until 2027.
The state can no longer bear the cost of fighting inflation alone, Le Maire said. Among other things, the government is putting pressure on France’s major grocers to sell fuel at cost price. At the same time, it wants to make tax policy more environmentally friendly and use the revenues to finance green investments.
To this end, the government wants to phase out the tax reduction that farmers and public works companies receive on fuel. An existing tax on vehicles with particularly high carbon dioxide emissions is to be increased. Le Maire said the 2024 budget would also introduce a global minimum tax rate of 15 percent for companies, which nearly 140 countries agreed to in 2021. This is expected to generate tax revenue of €1.5 billion in 2025, he said.
The 20 eurozone countries have until mid-October to submit their draft budgets for 2024 to the EU Commission. Next year, the fiscal rules suspended due to the Corona pandemic and the Ukraine war are to take effect again. According to these rules, countries with deficits of more than three percent would have to cut by 0.5 percent per year. However, member states are currently negotiating a reform of the rules, so the Commission is unlikely to strictly enforce the old requirements.
Italy is also well above the three percent threshold so far. According to Reuters, the government of Prime Minister Giorgia Meloni plans to increase its deficit target for 2024 to between 4.1 percent and 4.3 percent of GDP, up from the 3.7 percent target set in April. Accordingly, the right-wing government is likely to revise the 2023 deficit upward from 4.5 percent to 5.5 percent.
The reason, according to the report, is that Meloni wants to extend tax cuts to ease the burden on middle- and low-income workers until 2024, even though eurozone ministers decided in July to end them. Markets have already reacted by increasing the risk premium on Italy’s government bonds. rtr/tho
Beijing is apparently already pressuring Hungary to act on the EU investigation into alleged subsidies on Chinese EVs. China hopes Hungary will press the EU to adopt a more active and open policy of cooperation with the country, top Chinese diplomat Wang Yi said Wednesday, according to a Chinese Foreign Ministry statement. Yi spoke on the phone with Hungary’s Foreign Minister Péter Szijjártó on the issue, he said. The European Union’s review on China’s electric vehicle products violates the basic rules of international trade and is likely to disrupt global auto industry and supply chains, Yi warned.
The message to Budapest is clear: Beijing is counting on the EU member it is still most comfortable with to exert influence in the case. In the past, for example, Hungary had actively blocked resolutions related to Hong Kong in the EU Council of Member States. Hungary’s Prime Minister Viktor Orbán is expected to visit Beijing in October. He is also expected to attend the New Silk Road Forum as part of his visit. rtr/ari
Time is running out, but global warming could still be kept below 1.5 degrees because renewable energies are growing so dynamically. That’s according to the International Energy Agency (IEA) in its updated net-zero scenario for the energy sector. However, in order to keep the climate targets achievable, countries will have to massively expand investments in the energy transition and stop investing in expanding the extraction and burning of fossil fuels.
Accordingly, $4.5 trillion would have to be invested annually worldwide in the early 2030s. For the current year, the IEA is forecasting record investment in clean energies of $1.8 trillion. Developing countries and emerging economies in particular would have to invest more in the energy transition and would need international support to the tune of $80 billion to $100 billion a year in loans at concessionary terms, the IEA writes.
According to the IEA calculations, CO2 emissions from the energy sector must fall by 35 percent and the demand for fossil fuels must fall by 25 percent by 2030. This would be possible if renewable energies were expanded fast enough and coal-fired power plants were taken off the grid more quickly. New oil and gas production and new coal mines and power plants would then no longer be necessary for a secure power supply.
It is true that CO2 emissions from the energy sector would have reached a global peak of 37 billion metric tons in 2022. But the energy sector is changing faster than many believe, explains the IEA:
However, much more needs to be achieved. According to the report, CO2 emissions from the energy sector must fall by 80 percent in rich countries and by 60 percent in emerging and developing countries by 2035 compared to 2022. The climate targets of the countries are not sufficient to achieve net zero emissions by 2050.
To be on a climate path for 1.5 degrees by 2030, the IEA scenario envisions, among other things:
CCS technologies for capturing and storing CO2, as well as hydrogen and its derivatives, are also important in order to keep the climate targets achievable by 2030. However, experience with CCS technologies has been disappointing so far. Despite many announcements, final investment commitments are still lacking. According to the IEA, political support is needed to strengthen demand for this technology. nib
It is the largest climate change case in the history of the European Court of Human Rights (ECtHR): Six young people from Portugal are suing a total of 32 European governments. Among them are all 27 EU member states as well as Great Britain, Switzerland, Norway, Russia and Turkey. The trial kicked off in Strasbourg on Wednesday. The six young Portuguese claimed that their human rights are being violated because governments are not acting fast enough against climate change.
“Because of the extreme heat, I have limited movement and cannot spend as much time outdoors“, 15-year-old plaintiff André Oliveira told the ECtHR. “I’m forced to stay indoors, I can hardly sleep, and thanks to the weak climate policies of these governments, it’s getting worse.”
With the support of the UK-based Global Legal Action Network (GLAN), the Portuguese plaintiffs, aged 11 to 24, want a legally binding decision that would force states to act on climate change.
A lawyer for the Portuguese government told the court that the evidence presented did not show the concrete harm that climate change had caused to the lives of the young plaintiffs. Greece stated in a brief submitted to the court before the hearing that “the impacts of climate change identified to date do not appear to have a direct impact on human life or health,” a factless argument that GLAN attorney Gearoid O’Cuinn called “climate denial”.
Four of the six plaintiffs are from the central Portuguese region of Leiria, where two forest fires killed more than 100 people in 2017. A lawyer representing the UK said the consequences of climate change are “global”, but protecting the plaintiffs’ interests falls under Portugal’s jurisdiction. He said the case should be dismissed. rtr
US President Joe Biden will host EU Commission President Ursula von der Leyen and Council President Charles Michel on Oct. 20. The main topics of the meeting will include US steel tariffs, according to a senior EU official.
Biden had agreed last year to suspend tariffs on EU steel and aluminum imposed by former President Donald Trump. But the understanding is set to expire. Without an agreement, the tariffs are likely to be reimposed. By the end of October, both sides wanted to reach an agreement to promote environmentally friendly production and reduce overcapacity. So far, however, the positions are still significantly apart. rtr
Federal Minister of the Interior Nancy Faeser has announced extended, flexible border controls with Poland and the Czech Republic with immediate effect to combat illegal migration to Germany. This means that stationary border controls, as had been discussed in the meantime, are off the table for the time being.
The SPD politician announced on Wednesday that the border police would carry out “additional flexible focus controls on the smuggling routes at the borders to Poland and the Czech Republic”. These checks are a supplement to the dragnet, which has already been intensified in recent months.
She said she is in close contact with Poland and the Czech Republic, as well as Brandenburg and Saxony, regarding further measures. “We want to prevent evasive movements of smugglers through flexible and mobile controls at changing locations”, Faeser said. Police presence will be increased accordingly for the task on the ground. At the same time, it will be ensured that the controls have as little impact as possible on the everyday lives of people and the economy in the border area. rtr/lei
Markus Ritter, head of the civilian EU mission in Armenia (EUMA), was forced to watch helplessly last week as Azerbaijani soldiers fired rockets at the Nagorno-Karabakh region for around 24 hours. The hope that the EUMA would reduce tensions between Armenia and Azerbaijan, or even create trust, died that day.
Ritter, a lawyer who has been with the federal police since 1996, was always aware of the limitations of his observer mission. The only “weapons” he and his team of observers brought with them to Armenia in February 2023 were binoculars, cameras, and notepads.
During patrols, the 100 EU observers fly their flag and report any violations of the ceasefire agreement between Armenia and Azerbaijan to Brussels. They are not allowed into Azerbaijan in the process. “What we can do is bring publicity to this area and make people feel that they are not alone, that the international community is watching the situation”, Ritter had said shortly after the mission began.
He is considered an experienced head in international crisis areas. Before he was appointed by the Council of the European Union on Jan. 24, 2023, to head the mission, which will initially have a two-year mandate, he had already completed five foreign missions, two of them under the European flag.
In 2004 and 2005, he was Chief of Staff of the United Nations Mission in Kosovo, and two years later he held the same position at the United Nations Observer Mission in Georgia. Again two years later, he went to Afghanistan as head of the German Police Project Team, and in 2012 and 2013 he was head of planning and operations for the EU’s air security mission in South Sudan. From 2017 to 2019, he led the EU Advisory Mission in Iraq.
In Germany, Ritter, born in 1962 and father of two daughters, was head of a unit in the riot police and held various positions in border protection, including at Frankfurt Airport, and in the Federal Police Headquarters in Potsdam. In 2020, he was finally promoted to President of the Federal Police Headquarters in Stuttgart.
Before that, from 1981 to 1985, he served in the German Armed Forces. Ritter then studied law at the University of Heidelberg, passing his second state examination there in 1996. At the same time, he studied administrative sciences in Speyer and received his doctorate in the subject in 1999.
The EUMA was established in January 2023 with strong support from European member states at the request of the government in Yerevan. Armenia had feared a steady expansion of the conflict after the September 2022 attacks. Azerbaijan’s recent escalation in the Nagorno-Karabakh region, as well as on localities along the Armenian-Azerbaijani border, now confirmed these concerns. Lisa-Martina Klein
When the EU interior ministers meet in Brussels today, all eyes will be on Nancy Faeser. At the most recent meeting in June, the SPD politician was still able to shine as a dealmaker on the Common European Asylum System (CEAS), which seemed impossible for quite some time.
Because Berlin abstained on an important part of the reform, the crisis regulation, it lacked the necessary qualified majority in the Council. The European Parliament took this as an opportunity to suspend the trilogue negotiations on the entire asylum and migration package. Nothing works in Brussels anymore, now Faeser is supposed to fix it.
She received the necessary backing yesterday from her party colleague Olaf Scholz: The Chancellor ended the internal government tug-of-war over the CEAS reform on Wednesday by putting his foot down. He decided that Germany would “stop nothing” in connection with the crisis regulation in Brussels and also informed the Greens of this.
The Greens had previously blocked German approval because the crisis regulation allows states under particularly high migration pressure to extend detention-like housing for migrants in the future and also to apply stricter rules to immigrants from countries with high recognition rates.
But Germany has not been alone so far in putting the brakes on. Austria and the Czech Republic have also said no, while the Netherlands and Slovakia have abstained. The Spanish EU Presidency is exercising great caution: Pressing the issue now would be counterproductive, according to Madrid. Not even a debate on the explosive issue is planned at the Home Affairs Council in Brussels.
EU Commission President Ursula von der Leyen has called for a quick political agreement. A word of power and a reminder – will that be enough to get the cow off the ice? The latest signals from Brussels sounded optimistic. A diplomat said that the meeting of interior ministers would be used for bilateral talks and a political “fine-tuning” of the crisis regulation. After that, everything could happen very quickly.
According to EU Commission President Ursula von der Leyen, only 23 percent of global greenhouse gas emissions are currently subject to a CO2 price, which would bring in $95 billion in revenue, she said last week at the UN climate summit in New York – and added to the sum with a thought experiment: imagine the revenue that would be generated for investments in low- and middle-income countries if the 60 percent of global greenhouse gas emissions targeted by UN Secretary-General António Guterres could be covered by 2030.
At the EU level, an instrument is being launched this weekend to help persuade countries outside Europe to put a CO2 price on their most climate-damaging industries – similar to what the EU ETS already does. The CBAM imposes a tariff equal to the European CO2 price on emissions-intensive manufactured products imported into the EU. If the emissions in the country of manufacture are already subject to a CO2 price, the duty is discounted by this amount.
Admittedly, the ostensible purpose of the instrument is to protect European industry from competitive disadvantages and carbon leakage – the relocation of emissions-intensive operations to third countries. But EU legislators emphasized early on that CBAM should also motivate non-European countries and regions to introduce their own CO2 prices. This is the only way they can avoid or at least limit the CBAM levy in trade with the EU.
In fact, there were first tentative imitators even before the CBAM was finally adopted. Turkey had long resisted a CO2 levy, but after the CBAM was presented in 2021 it conceded that the instrument would be an incentive to restructure its own industry with the help of the EU, to make it future-proof and to adapt it to the Green Deal. Although there is still no Turkish ETS, planning is underway.
Following the European model, Australia reformed its emissions trading system this year and introduced a CO2 price for its most emissions-intensive industrial plants as recently as July. As with the EU ETS, the emissions cap falls year by year, forcing plants to reduce their greenhouse gas emissions. Meanwhile, Australia is also planning a CBAM to protect its own markets from climate-damaging imports from abroad. The government now wants to take a close look at the European CBAM and submit its own proposal for imports of steel and cement next year.
In Indonesia, too, work is proceeding at full speed on a CO2 price. Voluntary certificate trading has already been launched to finance the transformation of the energy sector. Now a mandatory CO2 price is to follow for other sectors as well. Indonesia wants to adopt international standards so that it can also offer its carbon credits to foreign buyers.
That there are not only quick imitators of the most important European climate protection instruments is shown in particular by India. 19 percent of India’s exports go to the EU. In 2022, they were worth over €9 billion in the CBAM sectors of aluminum, fertilizer, electricity, cement, hydrogen, and iron and steel. The Indian steel and aluminum industry in particular is concerned about the CBAM price premium because the CO2 intensity of the domestic industry is significantly higher than the global average.
India has therefore expressed considerable reservations about the CBAM and has also presented these to the WTO. This is also about fairness between the European industrialized countries and the emerging country India. Suranjali Tandon, a professor at the National Institute of Public Finance and Policy in New Delhi, criticizes the CBAM as imposing the EU’s transition speed on developing countries. Since developing countries do not have CO2 pricing, the EU would earn from their exports through the CBAM. While this is a discriminatory measure, it also offers opportunities, he said. “Developing countries can build markets and impose domestic taxes that not only support their efforts to achieve net-zero targets, but also better articulate the potential limits to pricing that are consistent with development priorities and highlight the inaction of developed countries.”
India is therefore considering regulatory responses. Under discussion is a separate CO2 tax for export goods to the EU that meets the CBAM criteria for rebates. If introduced, India would earn from the CO2 price instead of the EU. Another option, and a retaliatory measure of sorts, is to impose a countervailing tax on imports from the EU to India. However, India is threatening to violate WTO guidelines itself by doing so. India is also in the process of introducing emissions trading.
In the United States, too, there are proposals for a CO2 border adjustment to protect the country’s own industry from foreign competitors. Ideas for this are supported by Democrats and Republicans. However, the effort has so far foundered on the question of whether it would take a national CO2 price to impose a CBAM on foreign imports. Republicans do not want such a price – but imposing a CBAM without a national CO2 price would not comply with WTO rules. The Democrats, on the other hand, have already introduced a CO2 price in twelve states.
Brazil, under President Lula da Silva, has also announced an emissions cap for large polluting companies and the creation of a regulated carbon market. A CO2 price is part of the plan. Around 5,000 companies from the steel, aluminum, cement as well as chemical industries that emit more than 25,000 metric tons of CO2 annually are to be affected. It is not yet known how high the cap will be set, but it is to fall gradually in line with the European model.
It is true that Brazil is an important trading partner for Europe, mainly because of its agricultural exports – and these are not affected by the CBAM. But steel and iron, aluminum, fertilizers and cement are also high on Brazil’s export list. In addition, Brazil could become Europe’s oil supplier in the future, and there is already consideration of extending the CBAM to all fossil fuels in the next step.
China has had a functioning emissions trading system since 2021 – the year the EU launched its Fit For 55 package and a landmark reform of the ETS. It covers around four billion tons of CO2 and over 40 percent of the country’s greenhouse gases, but so far it only affects larger coal and gas-fired power plants. Expansion to all industrial sectors has been repeatedly postponed and is currently scheduled for 2025, a year before financial compensation is due for the first time at the EU’s external borders under the CBAM. To be sure, there are still significant flaws in China’s CO2 price. But the goal is obvious: avoid EU border tariffs. With Urmi Goswami
If the Commission has its way, we will be in the middle of the “Digital Decade”. The associated measures for this decade include regulatory measures at EU level on the one hand, and on the other, that the member states create the conditions for sustainable digitization with their authorities, the economy and society. To this end, various areas are being scrutinized and compared with targets – the Commission officially launched the project in 2022.
The interim report on the Digital Decade presented by the Commission yesterday reveals a whole host of problematic developments. One in particular stands out: Germany ranks second to last in Europe when it comes to real fiber connections for end users (Fiber-to-the-Premises, FTTP). Between Belgium and Greece, the Federal Republic finds itself at the bottom of the EU-27, with just around 19 percent of all households connected. Other countries in the region, such as Romania, Spain, Bulgaria and Sweden, are already close to the target of connecting every household to the fiber-optic network, at well over 80 percent.
There is no sign of Germany catching up: while the number of really fast fiber-optic connections to end customers in Belgium is already three times higher this year than it will be in 2021, Germany has only managed to increase this by 50 percent in the same period.
Minister of Digital Affairs Volker Wissing (FDP) is thus threatened with a fiasco – the EU’s red fiber optic lantern. At the launch of the German government’s digital agenda, Wissing had set the goal of becoming one of the top 10 countries in Europe in terms of digitization. But the German Federal Ministry of Digital Affairs and Transport remains confident: a ministry spokesman told Table.Media that the report is seen as an incentive for further efforts and that it wants to catch up with the European leaders: “If we look at the latest progress, the digital transformation in Germany is making steady progress in all dimensions. Particularly in fiber-optic expansion, the momentum is high and we are confident of achieving the goals set out in the gigabit strategy of supplying every household by 2030.” We have made “good progress,” he said.
But this will hardly succeed with the current means of fiber optic expansion. So far, the German government and providers have not prioritized connecting users – but rather laying fiber in the streets and under sidewalks. This part of the infrastructure is a necessary prerequisite for expansion to the end customer. But it does not generate revenue for the operators, who could then reinvest in further expansion. In addition, there are other specifically German problems, such as the long legally privileged supply of cable TV connections or a persistent belief in VDSL technologies – but these technologies have not been considered future-proof for years.
One secret of the indicator experts who determine the state of digitization for the Commission remains the measurement of the digitization of administrative services. They did not look at whether Germany’s administration actually works digitally, or whether processes or at least access are available digitally – instead, they asked whether citizens had interacted with the administration once within twelve months using an online form. This probably has little to do with the citizens’ perspective on the state of digital administration, but it does help Germany to a mid-table position in this category.
In a European comparison, however, Wissing and the German government can praise themselves for another digital policy measure: unlike in some other countries, the 5G radio spectrum available and planned for this purpose at the European level has already been fully allocated in Germany – and the country thus achieves a place in the top group here.
Meanwhile, across Europe, another problem is emerging: while cloud providers as a whole are making massive gains in revenue volume, and according to the report generated more than $60 billion in revenue from cloud services worldwide for the first time in the first quarter, the market is firmly in US hands, with Amazon (32 percent), Microsoft (23 percent) and Google (10 percent) dominating by a wide margin. According to the data, even in Europe, European providers had just 13 percent of the market. The Commission remains cautious in its choice of words here. But since in the future, with edge computing connections in mobile communications, very significant parts of the critical infrastructure will no longer be able to manage without a cloud connection, the next geopolitically problematic dependency is looming here, which is unlikely to be compatible with the ambitions of the EU.
The current partial dependence on Chinese providers, for example, is to be overcome in the future. With a view to future mobile communications generations, the report therefore states that it is imperative to continue working on 5G Advanced and 6G in close cooperation with telecommunications companies and the two European network suppliers Nokia and Ericsson.
But the EU also remains far from its goals in another field: Although the number of announcements in the semiconductor industry has increased massively in recent months, the market share of chips manufactured in the EU is still small. The semiconductor market is expected to grow to €1 trillion by 2030, from the current €615 billion worldwide. To reach the target of 20 percent of the global market, Europe’s activity in the semiconductor segment would have to quadruple by 2030.
The report on the digital decade relentlessly identifies the mistakes of the past: insufficient investment, focus on development and manufacturing in sectors that do not need cutting-edge technology – especially the automotive sector – would have provided too little incentive to keep up in the tech race.
It’s no wonder that EU Internal Market Commissioner Thierry Breton is making a plea to member states: “We need to accelerate our efforts. Now is the moment to work together to put Europe at the forefront of digital transformation.” The EU is still very far from doing so.
Sept. 28, 2023; 8:30-9:30 a.m., online
DGAP, Discussion EU Reforms and Enlargement: Actualizing the Franco-German Expert Report
The German Council on Foreign Relations (DGAP) looks at the prospects for and obstacles against reforming and enlarging the EU. INFO & REGISTRATION
Sept. 28, 2023; 12:30-1:30 p.m., online
ECFR, Discussion Powering the future: Charting Europe’s climate and energy sovereignty
The European Council on Foreign Relations (ECFR) addresses the state of European energy and climate sovereignty. INFO & REGISTRATION
Oct. 2, 2023; 1-2:30 p.m., online
ERCST, Roundtable Expert Stakeholder Consultation: European Carbon Bank
The European Roundtable on Climate Change and Sustainable Transition (ERCST) brainstorms on the potential aims and governance of a Carbon Bank in the EU. INFO & REGISTRATION
Oct. 3, 2023; 2:30-4:30, Brussels (Belgium)
ERCST, Roundtable Renewable hydrogen: what way forward?
The European Roundtable on Climate Change and Sustainable Transition (ERCST) explores strategies required to bridge the gap between the current and targeted levels of renewable hydrogen production and consumption in the EU. INFO & REGISTRATION
The environmental spokesman for the Social Democrats in the EU Parliament, Tiemo Wölken, is demanding an explanation from climate commissioner-designate Wopke Hoekstra about his professional past at the Shell oil company. “He spent three years at a company that is only gradually half-heartedly grasping how important climate action actually is.”
So far, the Dutch have not necessarily distinguished themselves with expertise in climate policy, said the SPD politician. For this reason, he said, it must be looked at very closely in the context of the negotiations at the UN Climate Change Conference COP28 in Dubai. There, under the name Loss & Damage, negotiations are taking place on how to provide financial support to countries particularly affected by climate change. As Dutch foreign minister, Hoekstra sharply criticized the agreement on a Loss & Damage fund during COP27 last year, Wölken explains. Hoekstra would therefore have to convincingly demonstrate that he had changed his mind in this regard.
In addition, Wölken demanded that he be given an assurance that he would not regard climate policy as a fig leaf, but would take seriously the F-gas dossiers and the framework for CO2 emissions that are still to be negotiated.
After the hearing on Monday evening from 6:30 p.m. in the EU Parliament’s Environment Committee, the coordinators of the political groups will meet and draw up a recommendation to be voted on in plenary on Thursday. Wölken announced a fair, but also tough hearing of the Dutchman. He said no preliminary decision had yet been made on whether to reject or confirm him. luk
France’s government will slow fiscal consolidation next year to cushion the impact of inflation on poorer households and pensioners. “The first challenge, of course, is to respond to the worst inflation crisis since the 1970s,” Finance and Economy Minister Bruno Le Maire said Wednesday in presenting the draft budget for 2024. “The second challenge is to cut debt and reduce the deficit.”
Le Maire wants to save €16 billion to reduce the budget deficit from an estimated 4.9 percent of GDP this year to 4.4 percent in 2024. To do so, the government wants to reduce generous subsidies for household energy prices, postpone tax cuts for companies and cut unemployment benefits. The Haut Conseil des Finances Publiques, an independent watchdog, criticized the plans as lacking ambition. It said there was a danger that France would lag behind other EU countries. The government does not want to reduce the budget deficit below the EU ceiling of three percent until 2027.
The state can no longer bear the cost of fighting inflation alone, Le Maire said. Among other things, the government is putting pressure on France’s major grocers to sell fuel at cost price. At the same time, it wants to make tax policy more environmentally friendly and use the revenues to finance green investments.
To this end, the government wants to phase out the tax reduction that farmers and public works companies receive on fuel. An existing tax on vehicles with particularly high carbon dioxide emissions is to be increased. Le Maire said the 2024 budget would also introduce a global minimum tax rate of 15 percent for companies, which nearly 140 countries agreed to in 2021. This is expected to generate tax revenue of €1.5 billion in 2025, he said.
The 20 eurozone countries have until mid-October to submit their draft budgets for 2024 to the EU Commission. Next year, the fiscal rules suspended due to the Corona pandemic and the Ukraine war are to take effect again. According to these rules, countries with deficits of more than three percent would have to cut by 0.5 percent per year. However, member states are currently negotiating a reform of the rules, so the Commission is unlikely to strictly enforce the old requirements.
Italy is also well above the three percent threshold so far. According to Reuters, the government of Prime Minister Giorgia Meloni plans to increase its deficit target for 2024 to between 4.1 percent and 4.3 percent of GDP, up from the 3.7 percent target set in April. Accordingly, the right-wing government is likely to revise the 2023 deficit upward from 4.5 percent to 5.5 percent.
The reason, according to the report, is that Meloni wants to extend tax cuts to ease the burden on middle- and low-income workers until 2024, even though eurozone ministers decided in July to end them. Markets have already reacted by increasing the risk premium on Italy’s government bonds. rtr/tho
Beijing is apparently already pressuring Hungary to act on the EU investigation into alleged subsidies on Chinese EVs. China hopes Hungary will press the EU to adopt a more active and open policy of cooperation with the country, top Chinese diplomat Wang Yi said Wednesday, according to a Chinese Foreign Ministry statement. Yi spoke on the phone with Hungary’s Foreign Minister Péter Szijjártó on the issue, he said. The European Union’s review on China’s electric vehicle products violates the basic rules of international trade and is likely to disrupt global auto industry and supply chains, Yi warned.
The message to Budapest is clear: Beijing is counting on the EU member it is still most comfortable with to exert influence in the case. In the past, for example, Hungary had actively blocked resolutions related to Hong Kong in the EU Council of Member States. Hungary’s Prime Minister Viktor Orbán is expected to visit Beijing in October. He is also expected to attend the New Silk Road Forum as part of his visit. rtr/ari
Time is running out, but global warming could still be kept below 1.5 degrees because renewable energies are growing so dynamically. That’s according to the International Energy Agency (IEA) in its updated net-zero scenario for the energy sector. However, in order to keep the climate targets achievable, countries will have to massively expand investments in the energy transition and stop investing in expanding the extraction and burning of fossil fuels.
Accordingly, $4.5 trillion would have to be invested annually worldwide in the early 2030s. For the current year, the IEA is forecasting record investment in clean energies of $1.8 trillion. Developing countries and emerging economies in particular would have to invest more in the energy transition and would need international support to the tune of $80 billion to $100 billion a year in loans at concessionary terms, the IEA writes.
According to the IEA calculations, CO2 emissions from the energy sector must fall by 35 percent and the demand for fossil fuels must fall by 25 percent by 2030. This would be possible if renewable energies were expanded fast enough and coal-fired power plants were taken off the grid more quickly. New oil and gas production and new coal mines and power plants would then no longer be necessary for a secure power supply.
It is true that CO2 emissions from the energy sector would have reached a global peak of 37 billion metric tons in 2022. But the energy sector is changing faster than many believe, explains the IEA:
However, much more needs to be achieved. According to the report, CO2 emissions from the energy sector must fall by 80 percent in rich countries and by 60 percent in emerging and developing countries by 2035 compared to 2022. The climate targets of the countries are not sufficient to achieve net zero emissions by 2050.
To be on a climate path for 1.5 degrees by 2030, the IEA scenario envisions, among other things:
CCS technologies for capturing and storing CO2, as well as hydrogen and its derivatives, are also important in order to keep the climate targets achievable by 2030. However, experience with CCS technologies has been disappointing so far. Despite many announcements, final investment commitments are still lacking. According to the IEA, political support is needed to strengthen demand for this technology. nib
It is the largest climate change case in the history of the European Court of Human Rights (ECtHR): Six young people from Portugal are suing a total of 32 European governments. Among them are all 27 EU member states as well as Great Britain, Switzerland, Norway, Russia and Turkey. The trial kicked off in Strasbourg on Wednesday. The six young Portuguese claimed that their human rights are being violated because governments are not acting fast enough against climate change.
“Because of the extreme heat, I have limited movement and cannot spend as much time outdoors“, 15-year-old plaintiff André Oliveira told the ECtHR. “I’m forced to stay indoors, I can hardly sleep, and thanks to the weak climate policies of these governments, it’s getting worse.”
With the support of the UK-based Global Legal Action Network (GLAN), the Portuguese plaintiffs, aged 11 to 24, want a legally binding decision that would force states to act on climate change.
A lawyer for the Portuguese government told the court that the evidence presented did not show the concrete harm that climate change had caused to the lives of the young plaintiffs. Greece stated in a brief submitted to the court before the hearing that “the impacts of climate change identified to date do not appear to have a direct impact on human life or health,” a factless argument that GLAN attorney Gearoid O’Cuinn called “climate denial”.
Four of the six plaintiffs are from the central Portuguese region of Leiria, where two forest fires killed more than 100 people in 2017. A lawyer representing the UK said the consequences of climate change are “global”, but protecting the plaintiffs’ interests falls under Portugal’s jurisdiction. He said the case should be dismissed. rtr
US President Joe Biden will host EU Commission President Ursula von der Leyen and Council President Charles Michel on Oct. 20. The main topics of the meeting will include US steel tariffs, according to a senior EU official.
Biden had agreed last year to suspend tariffs on EU steel and aluminum imposed by former President Donald Trump. But the understanding is set to expire. Without an agreement, the tariffs are likely to be reimposed. By the end of October, both sides wanted to reach an agreement to promote environmentally friendly production and reduce overcapacity. So far, however, the positions are still significantly apart. rtr
Federal Minister of the Interior Nancy Faeser has announced extended, flexible border controls with Poland and the Czech Republic with immediate effect to combat illegal migration to Germany. This means that stationary border controls, as had been discussed in the meantime, are off the table for the time being.
The SPD politician announced on Wednesday that the border police would carry out “additional flexible focus controls on the smuggling routes at the borders to Poland and the Czech Republic”. These checks are a supplement to the dragnet, which has already been intensified in recent months.
She said she is in close contact with Poland and the Czech Republic, as well as Brandenburg and Saxony, regarding further measures. “We want to prevent evasive movements of smugglers through flexible and mobile controls at changing locations”, Faeser said. Police presence will be increased accordingly for the task on the ground. At the same time, it will be ensured that the controls have as little impact as possible on the everyday lives of people and the economy in the border area. rtr/lei
Markus Ritter, head of the civilian EU mission in Armenia (EUMA), was forced to watch helplessly last week as Azerbaijani soldiers fired rockets at the Nagorno-Karabakh region for around 24 hours. The hope that the EUMA would reduce tensions between Armenia and Azerbaijan, or even create trust, died that day.
Ritter, a lawyer who has been with the federal police since 1996, was always aware of the limitations of his observer mission. The only “weapons” he and his team of observers brought with them to Armenia in February 2023 were binoculars, cameras, and notepads.
During patrols, the 100 EU observers fly their flag and report any violations of the ceasefire agreement between Armenia and Azerbaijan to Brussels. They are not allowed into Azerbaijan in the process. “What we can do is bring publicity to this area and make people feel that they are not alone, that the international community is watching the situation”, Ritter had said shortly after the mission began.
He is considered an experienced head in international crisis areas. Before he was appointed by the Council of the European Union on Jan. 24, 2023, to head the mission, which will initially have a two-year mandate, he had already completed five foreign missions, two of them under the European flag.
In 2004 and 2005, he was Chief of Staff of the United Nations Mission in Kosovo, and two years later he held the same position at the United Nations Observer Mission in Georgia. Again two years later, he went to Afghanistan as head of the German Police Project Team, and in 2012 and 2013 he was head of planning and operations for the EU’s air security mission in South Sudan. From 2017 to 2019, he led the EU Advisory Mission in Iraq.
In Germany, Ritter, born in 1962 and father of two daughters, was head of a unit in the riot police and held various positions in border protection, including at Frankfurt Airport, and in the Federal Police Headquarters in Potsdam. In 2020, he was finally promoted to President of the Federal Police Headquarters in Stuttgart.
Before that, from 1981 to 1985, he served in the German Armed Forces. Ritter then studied law at the University of Heidelberg, passing his second state examination there in 1996. At the same time, he studied administrative sciences in Speyer and received his doctorate in the subject in 1999.
The EUMA was established in January 2023 with strong support from European member states at the request of the government in Yerevan. Armenia had feared a steady expansion of the conflict after the September 2022 attacks. Azerbaijan’s recent escalation in the Nagorno-Karabakh region, as well as on localities along the Armenian-Azerbaijani border, now confirmed these concerns. Lisa-Martina Klein