Carbon farming + Sanctions against Russi • Table.Briefings

Dear reader,

The energy transition in Germany could be more successful than previously expected: According to a study by Allianz Trade, the current energy crisis could accelerate the green transformation – even if the German government initially went back to coal, it would be forced out of the market by renewables in the medium term.

Today in Brussels, the foreign ministers of the member states once again discuss the Russian invasion of Ukraine. On Friday, the Commission proposed a package of measures to extend and strengthen EU sanctions against Russia until 2023. Read more in the News.

Commission President Ursula von der Leyen and Energy Commissioner Kadri Simson are traveling to Azerbaijan today to discuss energy imports, among other things. Southeastern Europe is significantly dependent on the Southern Gas Corridor for its supply of natural gas. The EU and Azerbaijan are also working to build a long-term partnership in the areas of clean energy and energy efficiency.

Read Timo Landenberger‘s Feature on how the EU plans to achieve its targets for removing greenhouse gases from the atmosphere: In November, the Commission plans to present a legal framework for the certification of CO2 reduction services in agriculture. Politicians and industry see a great opportunity to achieve climate targets, while environmentalists fear greenwashing.

Last but not least: On Thursday, July 21, my colleague Manuel Berkel will host a Europe.Table webinar in which he discusses the emergency plan for energy supply without Russian gas, in line with what the EU Commission plans to present on Wednesday. He is joined by Lion Hirth, Assistant Professor at the Hertie School, and Jens Völler, Head of Business Unit Gas Markets at TEAM CONSULT. You can sign up here – we look forward to seeing you.

Have a good and safe start to the week!

Your
Leonie Düngefeld

Carbon farming: climate protection solution or greenwashing?

By

Timo Landenberger

One thing is clear: Without the systematic capture and storage of greenhouse gases from the atmosphere, the climate targets of the Paris Agreement and the European Union cannot be achieved. This has been proven by several scientific studies, including the reports of the Intergovernmental Panel on Climate Change (IPCC).

However, it is also clear that technical solutions such as carbon capture and storage (CCS) are far from widespread use, and the storage capacity of natural sinks such as forests and peatlands has been declining for years. By 2030, however, the EU wants to achieve a reduction capacity of 310 million metric tons of CO2 equivalents in the so-called LULUCF sectors (Land Use, land-use change, and forestry), and thereafter it must be even more. How can this be achieved?

One possible and market-based solution is called carbon farming. In November, the European Commission plans to launch a legal framework for the certification of greenhouse gas reduction measures, particularly for agriculture. Thegoal is to create financial incentives for Europe’s farmers to use appropriate farming methods to significantly increase the CO2 storage capacity of the soils they cultivate.

This is to be achieved mainly by building up more humus. For example, through intercropping, but also the use of special machinery for sowing, which preserves the structure of the soil and increases CO2 storage by the root system over the years. Positive side effects, according to the Commission: strengthening of biodiversity, soil fertility, and water balance.

Sustainable carbon cycles report

Most recently, the French Council Presidency emphasized the potential of carbon farming and pushed the issue. The European Parliament is also working on a positioning. The corresponding “sustainable carbon cycles” report was presented in the Environment Committee on Monday and primarily raises questions. Carbon farming could become a business model, but the criteria for it are still completely unclear, said rapporteur Alexander Bernhuber (EPP) from Austria.

“How can CO2 be permanently stored in the soil? How can we make it measurable, and how can certificates be created?” Bernhuber asks. It is also important to create coherence with other programs, such as CAP, which are not market-based but provide government support. Here, double remuneration must be avoided.

Norbert Lins (CDU), Chairman of the Agriculture Committee, welcomes the Commission’s plans. “Anyone who reduces emissions or permanently stores CO2 should be remunerated for this achievement. Climate neutrality is not only possible with organic but especially with conventional and regenerative agriculture.”

Carbon farming not necessarily organic farming

In fact, participation in the carbon farming program is not intended to oblige organic farming. The use of pesticides and mineral fertilizers remains permitted. This is also imperative, informs the Industrieverband Agrar. This is the only way to avoid mechanical weed control, which releases the CO2 stored in the soil, and to safeguard yields.

Martin Häusling, agricultural policy spokesman for the Greens in the EU Parliament, takes a critical view of carbon farming. The primary goal should be to reduce the still high emissions in agriculture instead of “inventing technical systems”. In addition, organic farmers who already have good and storable soils would not be compensated retroactively for the services they provide. “That means those who have waited a long time with sustainable humus management will now be rewarded for it.” In addition, it cannot be the job of agriculture to absorb emissions caused by industrial processes.

Environmentalists, therefore, see a particular danger of greenwashing. The proposed trading of allowances would make it easy to offset emissions that might be avoidable, they argue. “If this plan goes through, polluters could simply buy their way out of pollution,” says Alex Mason from WWF’s European office.

A non-issue in Germany – a reality in the USA

The German Farmers’ Association (DBV) welcomes the Commission’s plan. The possibility of humus build-up gives agriculture a special responsibility in CO2 storage. But this achievement must also be rewarded, the association demands.

In contrast, the German government’s emergency climate protection program focuses on set-aside and organic farming. Carbon farming is not mentioned in the catalog of measures. According to DBV Secretary General Bernhard Krüsken, this is “more than incomprehensible”. The potential is too great not to be exploited.

What is still being discussed in theory in Europe is already a reality in the USA. At the end of June, Indigo Agriculture, which launched the first private sector carbon farming program, announced the issuance of the world’s first agricultural carbon credits. In doing so, Indigo is capitalizing on an already existing and rapidly growing market: Voluntary carbon offsetting is trending, and more and more companies are emphasizing a carbon-neutral value chain for their products (Scope 3 emissions), including in the food industry.

“In Europe, we are testing our program and want to help make carbon farming the high-quality climate protection contribution of agriculture in the EU as well,” according to Georg Goeres, managing director of Indigo Agriculture Europe.

Commission wants to strengthen sanctions against Russia

The European Commission wants to extend and further strengthen the EU’s six sanctions packages against Russia until the end of January 2023. On Friday, it adopted a proposal for a new package of measures together with Josep Borrell, the EU High Representative for Foreign Affairs and Security Policy.

The “maintenance and alignment” package clarifies a number of provisions to increase legal certainty for operators and enforcement by member states, according to the Commission. It also further aligns EU sanctions with those of allies and partners, particularly in the G7. In addition, the package reaffirms the Commission’s position on protecting global food security.

The package provides for a new import ban on Russian gold. At the same time, export controls on dual-use goods and advanced technology will be tightened. To ensure a more robust asset freeze by the EU, reporting requirements will be tightened. In the process, the sanctions will not target trade in agricultural products between third countries and Russia, according to the Commission. The sanctions are to be extended until the end of January 2023 and then reviewed again.

Proposals for the blacklist

Ursula von der Leyen, President of the European Commission, said: “Russia’s brutal war against Ukraine continues unabated. Therefore, we are proposing today to tighten our hard-hitting EU sanctions against the Kremlin, enforce them more effectively and extend them until January 2023. Moscow must continue to pay a high price for its aggression.”

“The EU’s sanctions are tough and hard-hitting,” Josep Borrell said. “We continue to target those close to Putin and the Kremlin. Today’s package reflects our coordinated approach with international partners including the G7.” Borell said that in addition to these measures, he would also present proposals to Council for the listing of more individuals and entities, with their assets frozen and ability to travel curtailed.

The Commission and the High Representative now submit the proposal to the European Council, which must formally adopt it. leo

Scholz: Germany’s responsibility for Europe

Chancellor Olaf Scholz sees Germany in a leadership role in the EU. “We are very aware of the consequences of our decision for a geopolitical European Union,” Scholz wrote in an op-ed for the German newsletter Frankfurter Allgemeine Zeitung, referring to the turning point in time after the Russian attack on Ukraine. “The European Union is the lived antithesis of imperialism and autocracy,” he added. The EU must therefore become a “geopolitical EU” – and based on that, Germany will assume responsibility for Europe and in the world. “To lead can only mean to bring together, in both senses of the word,” the SPD politician stressed, however. This means working out solutions together with others and refraining from going it alone. “And so, as a country in the middle of Europe, as a country that was on both sides of the Iron Curtain, we bring together East and West, North and South of Europe.”

At the same time, he announced German proposals in migration policy, the development of a European defense, technological sovereignty, and democratic resilience. “Germany will make concrete proposals on this in the coming months,” the chancellor wrote. So far, the EU has responded with “unprecedented determination and unity” to the “neo-imperialism” of Russian President Vladimir Putin. “But we must not stop there.” He said the EU must also become united in other fields. “For me, that means an end to selfish blockades of European decisions by individual member states. An end to national solo efforts that harm Europe as a whole,” he said. “We simply can no longer afford national vetoes, for example, in foreign policy, if we want to continue to be heard in a world of competing great powers.”

A few days ago, SPD leader Lars Klingbeil had already called for a new leading role for Germany in Europe. “Germany must claim to be a leading power,” he said in a keynote speech on foreign policy. However, he expressly did not mean that Germany should act in a “broad-legged or thuggish” manner. rtr

Hydrogen: first IPCEI tranche approved

The Commission has approved the first of four waves of the hydrogen IPCEI (Important Projects of Common European Interest). The step concerns 41 projects of the so-called technology wave, including four from Germany. They revolve around technologies for production, transport and use, especially in mobility. “Member states will provide up to €5.4 billion in public funding, which should mobilize an additional €8.8 billion in private investment,” the Commission said on Friday.

The approval had been expected for months, and the hydrogen IPCEI was already launched at the end of 2020. With REPowerEU, the Commission actually wanted to accelerate the hydrogen ramp-up because of the gas crisis. More than 400 projects from 18 EU countries had registered for the IPCEI, the German Federal Ministry for Economic Affairs and Climate Action (BMWK) wrote last year. From Germany alone, the ministry, together with the transport ministry, had selected 62 projects, most of which are still waiting for the green light from Brussels.

Approval for industrial projects is expected in the fall, the BMWK added. Proposals for the infrastructure wave have already been submitted to the Commission. The fourth wave for mobility applications is in the works.

The projects now approved from Germany are from BoschPowerUnits for stationary solid oxide fuel cell systems, production lines for alkali and high-temperature electrolyzers from Sunfire, truck powertrains from Daimler Truck, and fuel cell stacks from EKPO Fuel Cell Technologies for buses, ships, trains, and stationary re-energization. ber

EU files multiple lawsuits against Hungary

In the dispute with Hungary over human rights and democratic standards, the EU Commission is increasing the pressure on Prime Minister Viktor Orbán’s government. On Friday, the Brussels-based agency decided to file a case with the European Court of Justice (ECJ) in connection with Hungary’s controversial law on the treatment of homosexuals and transgender people. The law discriminates against people on the basis of their sexual orientation and gender identity, the commission said in justification. A second lawsuit before the EU court in Luxembourg will target Hungary’s refusal to grant a broadcasting license to Klubrádió, a station critical of the government.

Prime Minister Orbán has repeatedly spoken out against lesbian, gay, bisexual, and transgender (LGBT) people. Hungary enacted a law last year that censors information about homosexuality and transgender people in schools. The law has been criticized by the EU Commission, other countries and by human rights activists, and in the Hungarian opposition. Orbán said that only Hungary itself could decide how children in the country would be raised and educated. The politician, who has ruled with the right-wing conservative Fidesz party since 2010, is also criticized in the EU for his handling of the judiciary and the media.

Fuel price lawsuit

“We use all the means at our disposal to defend media freedom,” Vera Jourová said, the EU Commissioner for Values and Transparency. Klubrádió, which is now only present online, lost its broadcasting license just over a year ago. The EU Commission’s complaint relates to the fact that an application for a new license was denied. When the broadcasting license was revoked, the government in Budapest had stated that there were no problems with media freedom. The station had not been shut down by the government.

The EU Commission is also taking action against Hungary in the dispute over different fuel prices for domestic and foreign vehicles and initiated legal action on Friday. The practice of excluding vehicles with foreign license plates from discounted refueling is unlawful, Industry Commissioner Thierry Breton said. Such an approach disrupts the EU’s single internal market as a means of dealing with crises and instability. In view of high fuel prices, Hungary subsidizes refueling but excludes, among others, trucks with foreign license plates, and weighing more than 3.5 tons. rtr

Consequences of war could accelerate energy transition

According to a study, the consequences of the war in Ukraine could accelerate the energy transition in Germany. The green transformation could sometimes succeed more successfully than previously expected, although the Federal Government will initially have to rely more on coal in its quest for greater energy independence, an analysis by credit insurer Allianz Trade said on Sunday. “In the medium term, Germany’s ambitious targets are likely to increase the share of renewables in the electricity mix even beyond what would be needed to meet the Paris climate targets by 2035,” said Milo Bogaerts, head of Allianz Trade in the Germany, Austria and Switzerland region.

More coal-fired power generation will not increase CO2 emissions in the EU because they are limited by the EU Emissions Trading Scheme (EU ETS). Due to high EU ETS prices, coal is very unlikely to be a long-term substitute for Russian gas, said study author Markus Zimmer of Allianz Trade. “It will be forced out of the market.” In the medium term, Germany’s ambitions are to more than quadruple its renewable energy capacity. To be sure, that would accelerate the move away from Russian gas. But it would be conditional on a paradigm shift in key areas of the electricity system. “The planning and approval procedures for renewable energy, electricity, and hydrogen networks must be consistently simplified and accelerated,” Zimmer stressed.

According to the study, the expansion of renewable energies also drives growth and employment. The expansion of power generation capacity alone will require investments averaging €28 billion per year by 2035. This would lead directly and indirectly to additional value creation of €40 billion per year. “In addition, the expansion of renewable energies will employ an average of 440,000 workers in Germany between 2022 and 2035,” Allianz Trade concluded. rtr

Poland: next step in the rule of law process

The EU Commission is pressing ahead with proceedings against Warsaw in the Polish rule of law dispute. As the Brussels-based authority announced on Friday, it initiated the next step in so-called infringement proceedings against Poland. Poland now has two months to respond to the statement from Brussels and address the concerns.

Otherwise, the Commission could take the country to the European Court of Justice (ECJ). The consequence could be financial sanctions. As guardian of the EU treaties, the Commission is responsible for monitoring that states comply with EU law.

The background to Friday’s decision is several rulings by the Polish Constitutional Court, which the EU Commission believes violate, among other things, the primacy of EU law and the binding effect of ECJ rulings. In addition, the authority expressed considerable doubts about the independence and impartiality of the Constitutional Court.

EU law takes precedence over national law

One of the issues at stake is a ruling by the Constitutional Court in early October 2021 that parts of EU law are not compatible with the Polish constitution. This calls into question a cornerstone of the European legal community that EU law takes precedence over national law. Already in July 2021, the Polish court had ruled that the application of interim ECJ rulings relating to the country’s court system was not compatible with Poland’s constitution.

In Warsaw, Deputy Justice Minister Sebastian Kaleta called Brussels’ action an “unprecedented attack on Poland”. The EU Commission not only wants to force the annulment of decisions of the Polish Constitutional Court. It also presumes to judge the independence of the court and the election of its judges by parliament. This undermines the Polish constitution, the politician from the small governing party Solidarity Poland (SP) wrote on Twitter.

In an interview with the German newspaper Frankfurter Allgemeine Zeitung, EU Justice Commissioner Didier Reynders spoke out against a “war rebate” for Poland: He said Poland should not receive faster reconstruction aid because of its absorption of millions of war-displaced Ukrainians and that the requirements for judicial reform should not be lowered. “We are committed to the rules-based international order, therefore, we ourselves must adhere to the rule of law,” he said. leo/dpa

Bulgaria and North Macedonia sign protocol on EU talks

North Macedonia and its EU neighbor Bulgaria have agreed on a roadmap for the start of North Macedonia’s EU accession negotiations after a long dispute. The foreign ministers of both countries, Teodora Genchovska and Bujar Osmani, signed a protocol to this effect in the Bulgarian capital Sofia on Sunday. The protocol is intended to clarify outstanding bilateral issues, particularly with regard to the interpretation of history.

Since the end of 2020, Bulgaria has blocked the start of EU negotiations with its small neighboring country, which North Macedonia has been waiting for since 2008, because of a dispute. Among the issues at stake are the interpretation of the partly shared history and the rights of ethnic Bulgarians in North Macedonia. The French EU presidency, which was in office until the end of June, drew up a compromise proposal. The North Macedonian parliament in Skopje on Saturday approved the negotiating framework for accession talks subsequently proposed by the EU Commission.

The protocol signed in Sofia on Sunday will reportedly include approaches and deadlines for settling, among other things, the dispute over the interpretation of history. According to media reports, textbooks and inscriptions on monuments are to be changed. Also to be settled is the inclusion of ethnic Bulgarians as an ethnic group in North Macedonia’s constitution. The text of the document is to be published on Tuesday. dpa

Germany on the way to becoming a battery cell center

A quarter of the predicted European production capacities of battery cells could be covered by Germany by the end of the decade. This is the result of a data analysis by researchers at the Fraunhofer Institute for Systems and Innovation Research ISI in Karlsruhe. To do this, the experts took a close look at the plans and announcements of more than 40 companies worldwide that want to set up battery factories in Europe. On this basis, they then developed scenarios that were as realistic as possible, said battery researcher Lukas Weymann.

The evaluations showed that production capacity in Europe is expected to quadruple to more than 500 gigawatt-hours (GWh) by 2025 and even increase tenfold to as much as 1.5 terawatt-hours (TWh) by 2030. This means that by the end of the decade, about a quarter of the globally announced capacity would be in Europe. According to the analysis, more than a quarter of this – and thus the largest share – would be generated in new production facilities in Germany, at just under 400 GWh.

Growth through Northvolt and VW

“We have been tracking and evaluating announcements for many years and have seen a very strong increase in production capacity in Europe, especially recently,” Weymann said. “At 1.5 TWh, a remarkable sound barrier has now been broken.”

The forecast rapid growth is being driven to a large extent by European players such as the Swedish company Northvolt and Volkswagen. Just over a week ago, VW laid the foundation stone for a battery factory in Salzgitter in Lower Saxony. Northvolt is planning, among other things, a battery cell production facility in Heide in Schleswig-Holstein. Asian and US companies have also announced plans to expand into Germany and Europe. dpa

Melanie Vogelbach – opening doors

Melanie Vogelbach is Head of International Economic Policy and Foreign Trade Law at the Association of German Chambers of Industry and Commerce

“I’ve always been interested in other countries and societies,” Melanie Vogelbach says, describing her passion for international affairs. As a student, she spent a year in the USA and a few months in Ecuador. Today, traveling is part of her everyday life.

Vogelbach works as Head of Division for International Economic Policy and Foreign Trade Law at the Association of German Chambers of Industry and Commerce (DIHK). Vogelbach was born in Munich, studied International Relations in Darmstadt and Valparaíso, and Global Affairs in New York. She then landed in the protocol department of the German Foreign Office. “There, I had the exciting task of preparing and accompanying trips abroad by German President Gauck.” She often traveled to the destination beforehand and took care of the important details: program points, interlocutors, and seating arrangements.

One of these trips took her to Myanmar, where a new office of the Chambers of Commerce Abroad was opened. There, she got to know the global network of chambers of commerce and exchanged ideas with the DIHK’s chief executive. A short time later, she found her new destiny at the Wirtschaftsjunioren, an association of around 10,000 young entrepreneurs that is part of the DIHK. Vogelbach became deputy federal managing director and press spokeswoman there in 2014, and later managing director.

With crisis comes opportunity

“My range of tasks was very broad and exciting,” Vogelbach says. The encounters with young company founders often inspired her, she says. What she was missing after a few years: a focus on the international. When the opportunity arose, she applied to become a division manager at DIHK in 2019. Since then, she has led a 13-person team that focuses on international economic policy. Vogelbach is also a co-author of the regular economic surveys, the latest of which is titled “Stimmung in der Wirtschaft kippt” (“the economic mood tilts”).

The 38-year-old strives to remain optimistic despite supply chain problems, inflation, and rising energy prices: “Times of crisis always offer opportunities to question things.” And to find new opportunities: “I hope that some new doors will now also be opened in trade policy.” Free trade agreements could help companies diversify.

At the moment, she is dealing a lot with the implementation of the sanctions against Russia and advises politicians when unregulated details cause problems for companies. For example, in the case of the ban on Russian and Belarusian freight forwarders, it was not clear which authority would issue exemptions and whether they would apply throughout Europe. Something like this needed to be resolved quickly and considered in advance in the case of further sanctions packages. “We already have enough challenges to deal with in logistics at the moment.” Paul Meerkamp

EUROPE.TABLE EDITORS

Till
Hoppe

Charlotte
Wirth

Falk
Steiner

Timo
Landenberger

Corinna
Visser

Lukas
Knigge

Eric
Bonse

Sarah
Schaefer

Manuel
Berkel

Lisa-Martina
Klein

Markus
Grabitz

Stephan
Israel

Claire
Stam

Dear reader,

The energy transition in Germany could be more successful than previously expected: According to a study by Allianz Trade, the current energy crisis could accelerate the green transformation – even if the German government initially went back to coal, it would be forced out of the market by renewables in the medium term.

Today in Brussels, the foreign ministers of the member states once again discuss the Russian invasion of Ukraine. On Friday, the Commission proposed a package of measures to extend and strengthen EU sanctions against Russia until 2023. Read more in the News.

Commission President Ursula von der Leyen and Energy Commissioner Kadri Simson are traveling to Azerbaijan today to discuss energy imports, among other things. Southeastern Europe is significantly dependent on the Southern Gas Corridor for its supply of natural gas. The EU and Azerbaijan are also working to build a long-term partnership in the areas of clean energy and energy efficiency.

Read Timo Landenberger‘s Feature on how the EU plans to achieve its targets for removing greenhouse gases from the atmosphere: In November, the Commission plans to present a legal framework for the certification of CO2 reduction services in agriculture. Politicians and industry see a great opportunity to achieve climate targets, while environmentalists fear greenwashing.

Last but not least: On Thursday, July 21, my colleague Manuel Berkel will host a Europe.Table webinar in which he discusses the emergency plan for energy supply without Russian gas, in line with what the EU Commission plans to present on Wednesday. He is joined by Lion Hirth, Assistant Professor at the Hertie School, and Jens Völler, Head of Business Unit Gas Markets at TEAM CONSULT. You can sign up here – we look forward to seeing you.

Have a good and safe start to the week!

Your
Leonie Düngefeld

Carbon farming: climate protection solution or greenwashing?

By

Timo Landenberger

One thing is clear: Without the systematic capture and storage of greenhouse gases from the atmosphere, the climate targets of the Paris Agreement and the European Union cannot be achieved. This has been proven by several scientific studies, including the reports of the Intergovernmental Panel on Climate Change (IPCC).

However, it is also clear that technical solutions such as carbon capture and storage (CCS) are far from widespread use, and the storage capacity of natural sinks such as forests and peatlands has been declining for years. By 2030, however, the EU wants to achieve a reduction capacity of 310 million metric tons of CO2 equivalents in the so-called LULUCF sectors (Land Use, land-use change, and forestry), and thereafter it must be even more. How can this be achieved?

One possible and market-based solution is called carbon farming. In November, the European Commission plans to launch a legal framework for the certification of greenhouse gas reduction measures, particularly for agriculture. Thegoal is to create financial incentives for Europe’s farmers to use appropriate farming methods to significantly increase the CO2 storage capacity of the soils they cultivate.

This is to be achieved mainly by building up more humus. For example, through intercropping, but also the use of special machinery for sowing, which preserves the structure of the soil and increases CO2 storage by the root system over the years. Positive side effects, according to the Commission: strengthening of biodiversity, soil fertility, and water balance.

Sustainable carbon cycles report

Most recently, the French Council Presidency emphasized the potential of carbon farming and pushed the issue. The European Parliament is also working on a positioning. The corresponding “sustainable carbon cycles” report was presented in the Environment Committee on Monday and primarily raises questions. Carbon farming could become a business model, but the criteria for it are still completely unclear, said rapporteur Alexander Bernhuber (EPP) from Austria.

“How can CO2 be permanently stored in the soil? How can we make it measurable, and how can certificates be created?” Bernhuber asks. It is also important to create coherence with other programs, such as CAP, which are not market-based but provide government support. Here, double remuneration must be avoided.

Norbert Lins (CDU), Chairman of the Agriculture Committee, welcomes the Commission’s plans. “Anyone who reduces emissions or permanently stores CO2 should be remunerated for this achievement. Climate neutrality is not only possible with organic but especially with conventional and regenerative agriculture.”

Carbon farming not necessarily organic farming

In fact, participation in the carbon farming program is not intended to oblige organic farming. The use of pesticides and mineral fertilizers remains permitted. This is also imperative, informs the Industrieverband Agrar. This is the only way to avoid mechanical weed control, which releases the CO2 stored in the soil, and to safeguard yields.

Martin Häusling, agricultural policy spokesman for the Greens in the EU Parliament, takes a critical view of carbon farming. The primary goal should be to reduce the still high emissions in agriculture instead of “inventing technical systems”. In addition, organic farmers who already have good and storable soils would not be compensated retroactively for the services they provide. “That means those who have waited a long time with sustainable humus management will now be rewarded for it.” In addition, it cannot be the job of agriculture to absorb emissions caused by industrial processes.

Environmentalists, therefore, see a particular danger of greenwashing. The proposed trading of allowances would make it easy to offset emissions that might be avoidable, they argue. “If this plan goes through, polluters could simply buy their way out of pollution,” says Alex Mason from WWF’s European office.

A non-issue in Germany – a reality in the USA

The German Farmers’ Association (DBV) welcomes the Commission’s plan. The possibility of humus build-up gives agriculture a special responsibility in CO2 storage. But this achievement must also be rewarded, the association demands.

In contrast, the German government’s emergency climate protection program focuses on set-aside and organic farming. Carbon farming is not mentioned in the catalog of measures. According to DBV Secretary General Bernhard Krüsken, this is “more than incomprehensible”. The potential is too great not to be exploited.

What is still being discussed in theory in Europe is already a reality in the USA. At the end of June, Indigo Agriculture, which launched the first private sector carbon farming program, announced the issuance of the world’s first agricultural carbon credits. In doing so, Indigo is capitalizing on an already existing and rapidly growing market: Voluntary carbon offsetting is trending, and more and more companies are emphasizing a carbon-neutral value chain for their products (Scope 3 emissions), including in the food industry.

“In Europe, we are testing our program and want to help make carbon farming the high-quality climate protection contribution of agriculture in the EU as well,” according to Georg Goeres, managing director of Indigo Agriculture Europe.

Commission wants to strengthen sanctions against Russia

The European Commission wants to extend and further strengthen the EU’s six sanctions packages against Russia until the end of January 2023. On Friday, it adopted a proposal for a new package of measures together with Josep Borrell, the EU High Representative for Foreign Affairs and Security Policy.

The “maintenance and alignment” package clarifies a number of provisions to increase legal certainty for operators and enforcement by member states, according to the Commission. It also further aligns EU sanctions with those of allies and partners, particularly in the G7. In addition, the package reaffirms the Commission’s position on protecting global food security.

The package provides for a new import ban on Russian gold. At the same time, export controls on dual-use goods and advanced technology will be tightened. To ensure a more robust asset freeze by the EU, reporting requirements will be tightened. In the process, the sanctions will not target trade in agricultural products between third countries and Russia, according to the Commission. The sanctions are to be extended until the end of January 2023 and then reviewed again.

Proposals for the blacklist

Ursula von der Leyen, President of the European Commission, said: “Russia’s brutal war against Ukraine continues unabated. Therefore, we are proposing today to tighten our hard-hitting EU sanctions against the Kremlin, enforce them more effectively and extend them until January 2023. Moscow must continue to pay a high price for its aggression.”

“The EU’s sanctions are tough and hard-hitting,” Josep Borrell said. “We continue to target those close to Putin and the Kremlin. Today’s package reflects our coordinated approach with international partners including the G7.” Borell said that in addition to these measures, he would also present proposals to Council for the listing of more individuals and entities, with their assets frozen and ability to travel curtailed.

The Commission and the High Representative now submit the proposal to the European Council, which must formally adopt it. leo

Scholz: Germany’s responsibility for Europe

Chancellor Olaf Scholz sees Germany in a leadership role in the EU. “We are very aware of the consequences of our decision for a geopolitical European Union,” Scholz wrote in an op-ed for the German newsletter Frankfurter Allgemeine Zeitung, referring to the turning point in time after the Russian attack on Ukraine. “The European Union is the lived antithesis of imperialism and autocracy,” he added. The EU must therefore become a “geopolitical EU” – and based on that, Germany will assume responsibility for Europe and in the world. “To lead can only mean to bring together, in both senses of the word,” the SPD politician stressed, however. This means working out solutions together with others and refraining from going it alone. “And so, as a country in the middle of Europe, as a country that was on both sides of the Iron Curtain, we bring together East and West, North and South of Europe.”

At the same time, he announced German proposals in migration policy, the development of a European defense, technological sovereignty, and democratic resilience. “Germany will make concrete proposals on this in the coming months,” the chancellor wrote. So far, the EU has responded with “unprecedented determination and unity” to the “neo-imperialism” of Russian President Vladimir Putin. “But we must not stop there.” He said the EU must also become united in other fields. “For me, that means an end to selfish blockades of European decisions by individual member states. An end to national solo efforts that harm Europe as a whole,” he said. “We simply can no longer afford national vetoes, for example, in foreign policy, if we want to continue to be heard in a world of competing great powers.”

A few days ago, SPD leader Lars Klingbeil had already called for a new leading role for Germany in Europe. “Germany must claim to be a leading power,” he said in a keynote speech on foreign policy. However, he expressly did not mean that Germany should act in a “broad-legged or thuggish” manner. rtr

Hydrogen: first IPCEI tranche approved

The Commission has approved the first of four waves of the hydrogen IPCEI (Important Projects of Common European Interest). The step concerns 41 projects of the so-called technology wave, including four from Germany. They revolve around technologies for production, transport and use, especially in mobility. “Member states will provide up to €5.4 billion in public funding, which should mobilize an additional €8.8 billion in private investment,” the Commission said on Friday.

The approval had been expected for months, and the hydrogen IPCEI was already launched at the end of 2020. With REPowerEU, the Commission actually wanted to accelerate the hydrogen ramp-up because of the gas crisis. More than 400 projects from 18 EU countries had registered for the IPCEI, the German Federal Ministry for Economic Affairs and Climate Action (BMWK) wrote last year. From Germany alone, the ministry, together with the transport ministry, had selected 62 projects, most of which are still waiting for the green light from Brussels.

Approval for industrial projects is expected in the fall, the BMWK added. Proposals for the infrastructure wave have already been submitted to the Commission. The fourth wave for mobility applications is in the works.

The projects now approved from Germany are from BoschPowerUnits for stationary solid oxide fuel cell systems, production lines for alkali and high-temperature electrolyzers from Sunfire, truck powertrains from Daimler Truck, and fuel cell stacks from EKPO Fuel Cell Technologies for buses, ships, trains, and stationary re-energization. ber

EU files multiple lawsuits against Hungary

In the dispute with Hungary over human rights and democratic standards, the EU Commission is increasing the pressure on Prime Minister Viktor Orbán’s government. On Friday, the Brussels-based agency decided to file a case with the European Court of Justice (ECJ) in connection with Hungary’s controversial law on the treatment of homosexuals and transgender people. The law discriminates against people on the basis of their sexual orientation and gender identity, the commission said in justification. A second lawsuit before the EU court in Luxembourg will target Hungary’s refusal to grant a broadcasting license to Klubrádió, a station critical of the government.

Prime Minister Orbán has repeatedly spoken out against lesbian, gay, bisexual, and transgender (LGBT) people. Hungary enacted a law last year that censors information about homosexuality and transgender people in schools. The law has been criticized by the EU Commission, other countries and by human rights activists, and in the Hungarian opposition. Orbán said that only Hungary itself could decide how children in the country would be raised and educated. The politician, who has ruled with the right-wing conservative Fidesz party since 2010, is also criticized in the EU for his handling of the judiciary and the media.

Fuel price lawsuit

“We use all the means at our disposal to defend media freedom,” Vera Jourová said, the EU Commissioner for Values and Transparency. Klubrádió, which is now only present online, lost its broadcasting license just over a year ago. The EU Commission’s complaint relates to the fact that an application for a new license was denied. When the broadcasting license was revoked, the government in Budapest had stated that there were no problems with media freedom. The station had not been shut down by the government.

The EU Commission is also taking action against Hungary in the dispute over different fuel prices for domestic and foreign vehicles and initiated legal action on Friday. The practice of excluding vehicles with foreign license plates from discounted refueling is unlawful, Industry Commissioner Thierry Breton said. Such an approach disrupts the EU’s single internal market as a means of dealing with crises and instability. In view of high fuel prices, Hungary subsidizes refueling but excludes, among others, trucks with foreign license plates, and weighing more than 3.5 tons. rtr

Consequences of war could accelerate energy transition

According to a study, the consequences of the war in Ukraine could accelerate the energy transition in Germany. The green transformation could sometimes succeed more successfully than previously expected, although the Federal Government will initially have to rely more on coal in its quest for greater energy independence, an analysis by credit insurer Allianz Trade said on Sunday. “In the medium term, Germany’s ambitious targets are likely to increase the share of renewables in the electricity mix even beyond what would be needed to meet the Paris climate targets by 2035,” said Milo Bogaerts, head of Allianz Trade in the Germany, Austria and Switzerland region.

More coal-fired power generation will not increase CO2 emissions in the EU because they are limited by the EU Emissions Trading Scheme (EU ETS). Due to high EU ETS prices, coal is very unlikely to be a long-term substitute for Russian gas, said study author Markus Zimmer of Allianz Trade. “It will be forced out of the market.” In the medium term, Germany’s ambitions are to more than quadruple its renewable energy capacity. To be sure, that would accelerate the move away from Russian gas. But it would be conditional on a paradigm shift in key areas of the electricity system. “The planning and approval procedures for renewable energy, electricity, and hydrogen networks must be consistently simplified and accelerated,” Zimmer stressed.

According to the study, the expansion of renewable energies also drives growth and employment. The expansion of power generation capacity alone will require investments averaging €28 billion per year by 2035. This would lead directly and indirectly to additional value creation of €40 billion per year. “In addition, the expansion of renewable energies will employ an average of 440,000 workers in Germany between 2022 and 2035,” Allianz Trade concluded. rtr

Poland: next step in the rule of law process

The EU Commission is pressing ahead with proceedings against Warsaw in the Polish rule of law dispute. As the Brussels-based authority announced on Friday, it initiated the next step in so-called infringement proceedings against Poland. Poland now has two months to respond to the statement from Brussels and address the concerns.

Otherwise, the Commission could take the country to the European Court of Justice (ECJ). The consequence could be financial sanctions. As guardian of the EU treaties, the Commission is responsible for monitoring that states comply with EU law.

The background to Friday’s decision is several rulings by the Polish Constitutional Court, which the EU Commission believes violate, among other things, the primacy of EU law and the binding effect of ECJ rulings. In addition, the authority expressed considerable doubts about the independence and impartiality of the Constitutional Court.

EU law takes precedence over national law

One of the issues at stake is a ruling by the Constitutional Court in early October 2021 that parts of EU law are not compatible with the Polish constitution. This calls into question a cornerstone of the European legal community that EU law takes precedence over national law. Already in July 2021, the Polish court had ruled that the application of interim ECJ rulings relating to the country’s court system was not compatible with Poland’s constitution.

In Warsaw, Deputy Justice Minister Sebastian Kaleta called Brussels’ action an “unprecedented attack on Poland”. The EU Commission not only wants to force the annulment of decisions of the Polish Constitutional Court. It also presumes to judge the independence of the court and the election of its judges by parliament. This undermines the Polish constitution, the politician from the small governing party Solidarity Poland (SP) wrote on Twitter.

In an interview with the German newspaper Frankfurter Allgemeine Zeitung, EU Justice Commissioner Didier Reynders spoke out against a “war rebate” for Poland: He said Poland should not receive faster reconstruction aid because of its absorption of millions of war-displaced Ukrainians and that the requirements for judicial reform should not be lowered. “We are committed to the rules-based international order, therefore, we ourselves must adhere to the rule of law,” he said. leo/dpa

Bulgaria and North Macedonia sign protocol on EU talks

North Macedonia and its EU neighbor Bulgaria have agreed on a roadmap for the start of North Macedonia’s EU accession negotiations after a long dispute. The foreign ministers of both countries, Teodora Genchovska and Bujar Osmani, signed a protocol to this effect in the Bulgarian capital Sofia on Sunday. The protocol is intended to clarify outstanding bilateral issues, particularly with regard to the interpretation of history.

Since the end of 2020, Bulgaria has blocked the start of EU negotiations with its small neighboring country, which North Macedonia has been waiting for since 2008, because of a dispute. Among the issues at stake are the interpretation of the partly shared history and the rights of ethnic Bulgarians in North Macedonia. The French EU presidency, which was in office until the end of June, drew up a compromise proposal. The North Macedonian parliament in Skopje on Saturday approved the negotiating framework for accession talks subsequently proposed by the EU Commission.

The protocol signed in Sofia on Sunday will reportedly include approaches and deadlines for settling, among other things, the dispute over the interpretation of history. According to media reports, textbooks and inscriptions on monuments are to be changed. Also to be settled is the inclusion of ethnic Bulgarians as an ethnic group in North Macedonia’s constitution. The text of the document is to be published on Tuesday. dpa

Germany on the way to becoming a battery cell center

A quarter of the predicted European production capacities of battery cells could be covered by Germany by the end of the decade. This is the result of a data analysis by researchers at the Fraunhofer Institute for Systems and Innovation Research ISI in Karlsruhe. To do this, the experts took a close look at the plans and announcements of more than 40 companies worldwide that want to set up battery factories in Europe. On this basis, they then developed scenarios that were as realistic as possible, said battery researcher Lukas Weymann.

The evaluations showed that production capacity in Europe is expected to quadruple to more than 500 gigawatt-hours (GWh) by 2025 and even increase tenfold to as much as 1.5 terawatt-hours (TWh) by 2030. This means that by the end of the decade, about a quarter of the globally announced capacity would be in Europe. According to the analysis, more than a quarter of this – and thus the largest share – would be generated in new production facilities in Germany, at just under 400 GWh.

Growth through Northvolt and VW

“We have been tracking and evaluating announcements for many years and have seen a very strong increase in production capacity in Europe, especially recently,” Weymann said. “At 1.5 TWh, a remarkable sound barrier has now been broken.”

The forecast rapid growth is being driven to a large extent by European players such as the Swedish company Northvolt and Volkswagen. Just over a week ago, VW laid the foundation stone for a battery factory in Salzgitter in Lower Saxony. Northvolt is planning, among other things, a battery cell production facility in Heide in Schleswig-Holstein. Asian and US companies have also announced plans to expand into Germany and Europe. dpa

Melanie Vogelbach – opening doors

“I’ve always been interested in other countries and societies,” Melanie Vogelbach says, describing her passion for international affairs. As a student, she spent a year in the USA and a few months in Ecuador. Today, traveling is part of her everyday life.

Vogelbach works as Head of Division for International Economic Policy and Foreign Trade Law at the Association of German Chambers of Industry and Commerce (DIHK). Vogelbach was born in Munich, studied International Relations in Darmstadt and Valparaíso, and Global Affairs in New York. She then landed in the protocol department of the German Foreign Office. “There, I had the exciting task of preparing and accompanying trips abroad by German President Gauck.” She often traveled to the destination beforehand and took care of the important details: program points, interlocutors, and seating arrangements.

One of these trips took her to Myanmar, where a new office of the Chambers of Commerce Abroad was opened. There, she got to know the global network of chambers of commerce and exchanged ideas with the DIHK’s chief executive. A short time later, she found her new destiny at the Wirtschaftsjunioren, an association of around 10,000 young entrepreneurs that is part of the DIHK. Vogelbach became deputy federal managing director and press spokeswoman there in 2014, and later managing director.

With crisis comes opportunity

“My range of tasks was very broad and exciting,” Vogelbach says. The encounters with young company founders often inspired her, she says. What she was missing after a few years: a focus on the international. When the opportunity arose, she applied to become a division manager at DIHK in 2019. Since then, she has led a 13-person team that focuses on international economic policy. Vogelbach is also a co-author of the regular economic surveys, the latest of which is titled “Stimmung in der Wirtschaft kippt” (“the economic mood tilts”).

The 38-year-old strives to remain optimistic despite supply chain problems, inflation, and rising energy prices: “Times of crisis always offer opportunities to question things.” And to find new opportunities: “I hope that some new doors will now also be opened in trade policy.” Free trade agreements could help companies diversify.

At the moment, she is dealing a lot with the implementation of the sanctions against Russia and advises politicians when unregulated details cause problems for companies. For example, in the case of the ban on Russian and Belarusian freight forwarders, it was not clear which authority would issue exemptions and whether they would apply throughout Europe. Something like this needed to be resolved quickly and considered in advance in the case of further sanctions packages. “We already have enough challenges to deal with in logistics at the moment.” Paul Meerkamp