Climate target 2040 + Congo and supply chains + Ex-MEPs

Dear reader,

Commission President Ursula von der Leyen’s current mandate is informally entitled “ensuring that Europe meets its climate target of minus 55 percent CO2 by 2030″. Parliament and member states are still wrangling over the details of individual dossiers, while other projects in the Fit for 55 package have already been ticked off. But the authority is already eyeing what the next climate target might be in 2040, ten years later. My colleague Lukas Scheid reports on considerations to include negative emissions in the ETS.

In Europe, the recent compromise on the Deforestation-Free Supply Chain Regulation is being celebrated. It is intended to help ensure that the last rainforests in the Congo and Amazon basins are not cleared for consumption by Europeans. But on the ground, for example in the Democratic Republic of Congo, there are concerns: small farmers growing cocoa and coffee in primary rainforests, of all places, might not be able to cope with the EU’s complex documentation requirements. They could become economic victims of EU regulation. Jonas Gerding analyzes this as part of our series “Is Europe Regulating the World?”.

The reform of the European electricity market is the topic of a digital event by Table.Media at the Berlin Energy Days tomorrow. On May 3, from 2-3 p.m., our editor Manuel Berkel will discuss the issue with experts from the Internal Market Unit of the EU Commission’s Directorate General for Energy, BDEW and DIW Berlin. France’s position will be the subject of an introductory presentation by the Franco-German Office for the Energy Transition, which is also a partner of the event. To register for the online event, click here.

We hope you have a wonderful start to the new week.

Your
Markus Grabitz

Climate target 2040: Will negative emissions be integrated into the ETS?

By

Lukas Knigge

A lot of market economy, some regulatory law and quite a lot of hope for innovation are in the Fit for 55 package, which is intended to pave the way to the EU’s 2030 climate target. The reform of the European Emissions Trading System (ETS) and the introduction of the Carbon Border Adjustment Mechanism CBAM are the major market-based instruments of the climate protection package and the heart of the Green Deal. On Tuesday, the Council gave final approval to the ETS reform and the CBAM. The two laws can now be published in the Official Journal and enter into force. The CO2 fleet targets for passenger cars and the ramp-up of EU-wide charging infrastructure (AFIR) are regulatory measures, and the efficiency targets in the Battery Regulation focus primarily on technological advancement in the future.

But as soon as the main parts of the package have been written into law, the question arises as to the next target and which instruments are suitable for achieving it. If the target for 2030 is a CO2 reduction of around 55 percent, it could be as high as 90 percent by 2040. The Commission has already begun discussions on the target and the necessary measures. An impact assessment is to be published in spring 2024, with the legislative proposal for the new climate target expected to follow in 2026.

EPP to consider carbon removal

A key question raised by the Commission in its announcement is the role of CO2 removals for the 2040 climate target. From the ranks of the EPP, the demand is clear: Negative emissions must be integrated into emissions trading. ETS rapporteur Peter Liese even wanted to anchor this in the current reform, because without carbon removal technologies the ambitious climate targets would be almost impossible to achieve. Liese was unable to get his way. And the discussions are unlikely to get any easier with the next interim target on the road to climate neutrality in 2050, because resistance continues unabated.

Michael Bloss, environmental spokesman for the Greens in the EU Parliament and previous ETS shadow rapporteur, fears a softening of climate protection if negative emissions can be monetized in the ETS. The ETS is not a money printing machine for businesses, he said. “The fixed cap on emissions in the ETS is meant to provide CO2 reductions”. Otherwise, the ETS is worthless and it would be better to introduce a CO2 tax, Bloss said.

Liese argues that demand for negative emissions would increase if companies could use them to meet their climate targets. Investments in technologies such as Direct Air Capture (DAC) and long-term storage of CO2 (Carbon Capture and Storage, CCS) and storage in products (Carbon Capture and Utilization, CCU) could grow massively as a result, making them profitable. “How are we going to achieve negative emissions on a large scale in 20 years if we don’t improve the technology now?”, asks Liese.

Deflection from emission reductions

That may be true in business terms, says Anne Gläser, CO2 price expert at Germanwatch, but from a climate protection perspective, CO2 reductions must take priority. “Before 2040, we should not focus on investing resources in developing carbon removal technologies that we will then miss out on when investing in emissions reductions”.

There is no doubt that these technologies are needed to achieve the climate targets. The Intergovernmental Panel on Climate Change (IPCC) also explicitly points to this possibility. Michael Bloss, for example, does not want to ban them at all, but rather use them to compensate for emissions from sectors that cannot be decarbonized after 2050. But he believes that softening the fixed cap on CO2 emissions in the ETS for this reason is the wrong approach. Bloss argues that only “three percent of the sectors that cannot be fully decarbonized” are at stake.

Liese also does not want to soften the cap, at least in the short term. But the CDU politician argues that incentives for CO2 reductions must be put in place long before 2040 if Germany is to be climate neutral in 2045 and Europe in 2050. “Precisely because the technology is still very expensive and not ready for the market at the moment, we need to get started quickly”.

He said it is important to distinguish between permanent removals, such as the production of bricks from captured carbon or underground storage of CO2, on the one hand, and non-permanent removals on the other. “Permanent removals should be fully recognized, and of course you have to make a deduction for the non-permanent ones”. Non-permanent storage methods include storage in chemical products as well as carbon farming, which means storage in soils and wood.

Negative experience with withdrawal certificates

Michael Bloss doubts the effectiveness of such methods and recalls the Clean Development Mechanism (CDM) from the Kyoto Protocol. There, too, companies had the option of buying certificates for external CO2 reductions or CO2 avoidance to achieve their own climate targets. The system is now considered to have failed because it did not deliver the desired emissions reductions but instead enabled greenwashing. The problem was that the stored CO2 was not sequestered in the long term, yet companies were able to use it to neutralize their emissions, at least on paper.

CO2 price expert Gläser believes that the EU has learned from the mistakes of the CDM. It is now known that stricter requirements for certification are needed. “But the problem that carbon removals in the ETS reduce incentives for the green transition, as was already the case with the CDM, still exists”, Gläser criticizes.

Insurance against renewed escape of CO2

Christian Democrat Liese has an idea for solving the problem. If stored quantities of CO2 are released back into the atmosphere earlier than planned due to unforeseen events, such as forest fires, he proposes an insurance system. An ETS market participant and allowance buyer would pay the carbon removals provider a higher amount than usual for a CO2 allowance in the ETS. The difference would go into an insurance fund. If the captured CO2 were to escape back into the atmosphere sooner than anticipated, the insurance company would buy the corresponding amount of CO2 allowances back from the market. In this way, the reductions could be guaranteed, Liese believes.

So far, scientists are still reluctant about the extent to which integrating CO2 removals into the ETS makes sense. Researchers at the Potsdam Institute for Climate Impact Research (PIK) believe that integration is feasible in principle in the near future. However, carbon farming and permanent storage in products should not play a role in this, only the stored quantities of CO2. The PIK researchers also point to the problem of supply uncertainty in the ETS due to the surrender of negative emission allowances. This could “destabilize the market and lead to excessive price volatility”.

Deforestation-free supply chains: Are smallholders in Congo victims?

In view of the EU regulation on deforestation-free supply chains, Congolese smallholder representative Kambale Malembe speaks of a new kind of colonization. From the fall of 2024, anyone who imports cocoa, coffee, palm oil, rubber, soy, timber and livestock into the EU will have to guarantee that forests have not previously been cleared at the place of origin for the cultivation of the plants or the keeping of the livestock. Violations will be punished. The EU wants to take action against companies that clear forests on a grand scale in the Amazon and in Southeast Asia to make room for plantations and cattle herds.

Last Wednesday, after more than three years of negotiations, the EU Parliament voted in favor of the regulation. Delara Burkhardt, chief negotiator for the Socialist Group, spoke of a “game changer”: “With the regulation against deforestation, we are now taking companies to task and making it clear: Anyone who destroys our planet must not do business with us”.

Clearance risks also exist in the world’s second largest rainforest: the Congo Basin, which extends across several countries in central Africa. About 60 percent of it is in the DR Congo, where an average of half a million hectares of forest have been cleared annually in recent years. The main reason is the production of corn, cassava and charcoal for the local market. At the same time, export crops can later be grown on land that is initially used for local needs.

Small farmers could not meet the strict requirements

With the regulation, the EU is making it more difficult for small farmers from the DR Congo to access the European market, says Malembe, who works as a program manager for the country’s National Confederation of Agricultural Producers. That’s because many small farmers are unable to meet the requirements to export their goods to the EU, he says. These include, above all, documentation of the area by GPS data. The EU regulation is likely to affect farmers in the country who grow coffee or cocoa. According to Eurostat, the DR Congo exports €32 million worth of cocoa and €28 million worth of coffee to the EU. These are important growth sectors for a country that ranks 179th out of 191 countries on the Human Development Index.

Malembe emphasizes that in most cases there is no clearing at all for cocoa cultivation. It is usually grown between trees in forests that are already heavily managed. To prove this, importers have to show all kinds of documents: in particular, GPS data of the production area. With satellite data, the inspection bodies in Europe can see whether there really has been no logging on site as of the deadline of the end of 2021. The EU classifies countries in which a particularly large amount of land is cleared into the “high-risk” category. Goods from such countries are inspected more frequently and more strictly than those from supposedly low-risk regions.

The classification of the countries is still pending. Alain Karsenty suspects that the DR Congo will be one of them. He is an economist at the French research institute CIRAD, focusing on agriculture in developing countries. “Many of the importers will turn away from countries classified as ‘high risk’ or work with the big companies“, he expects. That’s because large producers are most likely to have the capital and know-how to survey fields on the ground, digitize the information, provide information on the human rights situation and process all of that for inspectors. “The small producers who supply part of their production to Europe are in all likelihood the main victims of this measure“, he says.

Rainforest Alliance helps smallholders with implementation

The Rainforest Alliance organization supports smallholders in implementing environmental and social standards. “No deforestation” is one of the core criteria. Fanny Gauttier is responsible for public affairs in Brussels. In principle, Rainforest Alliance has supported the legislation, she says, “but we advocate for better consideration of smallholders“. The organization itself requires only incremental controls from small farmers so as not to overwhelm them.

“We start by requiring GPS data to be available for 10 percent of the land. Over the years, there will then be an obligation to expand that“, she says, explaining the pragmatic approach. The EU regulation, on the other hand, requires everything to be recorded immediately. Gauttier thinks that’s wrong. She now sees room for maneuver only in support for small farmers, as vaguely announced in the legislation. According to the text of the legislation, which also refers to small farmers as a target group, the “high-risk countries” are to receive support to protect forests and to farm more sustainably. It doesn’t spell it out much more clearly, however. “We are still in the dark“, she says. There is a lack of information on measures and funding amounts, she adds.

The EU wants to conduct a review in five years at the latest – with regard to the “impact of the regulation on farmers, especially smallholders, indigenous peoples and local communities”. If necessary, they will then receive additional support.

Criticism of EU’s ‘unilateral’ approach

For many farmers in the DR Congo, this could come too late, fears Joseph Bobia, national coordinator of the Congolese Natural Resources Network. He criticizes the EU’s “unilateral” approach. He is currently working with colleagues from other countries in the Congo basin on a position paper on the regulation.

“Our producers are waiting for those who come and buy. Those who don’t want to should stay at home“, he says harshly with regard to importers from the EU. He points to China, which already buys problematic tropical wood from the DR Congo on a large scale.

Malembe, the representative of Congolese farmers, fears that there will be fraud in the DRC. He has doubts about whether such a weak state will check when large companies buy up goods from all sorts of small farms at cheap prices, mix them up and export them at a high price. “In the end, the question is whether we want a market that is limited to two or three certified companies. That would be at the expense of the many small producers”.

The European fight against profit-hungry large companies that do not care about the environment would then have turned into the opposite. Jonas Gerding

You can read all the texts in the series “Is Europe Regulating the World?” published so far here (list in German, articles available in English).

Chip factory in France: Commission approves aid

France is allowed to support the construction and operation of a new chip factory by ST Microelectronics and Global Foundries with direct grants. The approval under EU state aid rules was granted by the Commission on Friday.

The two companies are planning a further plant at the ST Microelectronics site in Crolles near Lyon. The project is a front-end semiconductor production facility with a total investment volume of €7.4 billion.

The measure is in line with the Chips Act’s goals of strengthening Europe’s security of supply, resilience and digital sovereignty in semiconductor technologies, the commission said.

Energy-saving high-performance chips from Europe for Europe

The project envisages the development of a fully operational large-scale production facility for high-performance chips in Europe from 2027, in particular for FD-SOI (Fully Depleted Silicon On Insulator) technology. “A reliable source of energy-saving semiconductors for various applications will be created for industry in Europe”, said Commission Vice-President Margrethe Vestager. “They are needed for electric vehicles, charging stations and other applications important for Europe’s environmental transition”. Annually, the plant is expected to produce 620,000 wafers with a diameter of 300 millimeters.

The companies have agreed:

to give priority to fulfilling orders from the EU in the event of supply bottlenecks;
to continue to invest in the development of the next generation of FD-SOI technology;
to make capacities available to SMEs and third parties to a certain extent in order to further strengthen the European semiconductor ecosystem.

The approval is the second based on the principles of the Communication on the European Chips Act. On Oct. 5, 2022, the Commission had already approved a measure by Italy under the state aid rules to support the construction of a chip factory by ST Microelectronics in Catania, Sicily. vis

Deal ends dispute over grain from Ukraine

The EU Commission announces an agreement in principle in the dispute over the transport of Ukrainian grain through five member countries – Poland, Bulgaria, Hungary, Romania and Slovakia. Commission Vice-President Valdis Dombrovskis wrote on Twitter that the agreement took into account the concerns of farmers in Ukraine as well as in neighboring EU countries. Wheat, corn, rapeseed and sunflower seeds were covered, he said. The agreement includes an aid package worth €100 million for farmers.

Bulgaria, Hungary, Poland, Romania and Slovakia had imposed restrictions on Ukrainian shipments out of concern that supplies from Ukraine could end up on their markets and spoil prices for their farmers. The EU states involved have given assurances that they will refrain from unilateral measures in the future. Grain will continue to be transported overland from Ukraine to the EU via “solidarity lanes” and from there on to countries in need, for example, in Africa. On Friday, the member states also cleared the way for an extension of the exemption from customs duties on numerous agricultural products for another year. The lifting of agricultural tariffs had been decided after Russia’s attack on Ukraine: On the one hand, this should help the farmers in Ukraine economically, and on the other hand, the food shortages on the world market should be alleviated. rtr/mgr

Trilogue on Buildings Directive in June

The first trilogue on the Buildings Directive (EPBD) will take place on June 6. This was confirmed by a Council spokeswoman after an inquiry from Table.Media. Difficult negotiations are to be expected – shortly before the weekend, parts of the Berlin coalition and the real estate industry criticized the planned tightening of energy standards.

“Moderation and middle ground must be achieved in the standards for new buildings”, Federal Minister for Finance Christian Lindner (FDP) told “Wirtschaftswoche”. “We can get by for many years with what we have now. I don’t think further increases are necessary from a climate policy point of view and are not economically viable”. The Commission’s draft EPBD legislation is “already highly ambitious – the even more far-reaching tightening of the European Parliament is definitely not sustainable. This must be changed if the German government is to agree”.

Lindner also opposed “substantial remediation obligations” and “many billions of euros in additional costs”. It remained unclear for the time being what standards the FDP leader is aiming for. The Council’s general orientation already contains numerous attenuations compared to the positions of the Commission and Parliament.

According to the Federal Association of German Housing and Real Estate Companies (GdW), the EPBD would increase investment in energy refurbishment in Germany alone from the current level of just under €50 billion to between €187 and €261 billion per year. In just nine years, 45 percent of all buildings in the entire EU would have to be refurbished. “Achieving this is illusory”, GdW President Axel Gedaschko told “Der Spiegel”. Even if the renovation rate doubled to two percent, only 18 percent of the existing stock could be renovated in nine years. ber

Ex-MEPs must wait in the ‘cooling basin’ for six months

Former members of the European Parliament must go to the “cooling basin” for six months before they take up lobbying activities or carry out “representative activities at the European Parliament”. If they take up lobbying activities or perform “representative activities at the European Parliament” after six months, they must first register in the transparency register and apply for an access pass to the European Parliament for the visits. Apart from ex-MEPs who take up lobbying activities or carry out “representative activities at the European Parliament”, ex-MEPs retain the right of access to the European Parliament. That’s according to an April 17 decision by the European Parliament’s Bureau, obtained by “Contexte”. The decision came into force on May 1. It is part of the consequences drawn by the European Parliament from the corruption affair surrounding the deposed Vice-President Eva Kaili (formerly S&D). mgr

Bettina Fortunato – life as a real European during the Berlin Wall era

Bettina Fortunato (The Left) from Seelow is a member of the Brandenburg state parliament and chairwoman of the European Affairs Committee.

Bettina Fortunato grew up in the GDR and already led a very European life during the Wall era. She studied agriculture in Bulgaria and married a Portuguese man. After reunification, she began working in local politics, and today she is chairwoman of the European Affairs Committee in the Brandenburg state parliament.

Fortunato’s father was a farmer near Delitzsch in Saxony. She was eager to learn more about agriculture and improve working conditions in the GDR. In Plovdiv, Bulgaria, there was a course of study that was unique in the Eastern Bloc: Viticulture and vegetable growing, plus cooperation with the Netherlands, which established modern greenhouse production in the 1970s. That’s where she wanted to learn.

Family visits to Portugal

At the age of 19, Fortunato became a member of the SED. Out of “herd instinct”, she says today. “But that didn’t bring me any advantages”. During her studies, she met her current husband, a Portuguese man who was also studying agriculture in Bulgaria. The relationship was not desired, Fortunato recounts. When it came out, her already-planned doctorate was canceled. In 1983, her husband was finally allowed to enter the GDR, they married and had three children. “We were a training family for the GDR authorities”, Fortunato says. “We were allowed to go to Portugal three times with the whole family to visit grandparents after a long back and forth.” Today, her daughter works in Portugal and often visits her parents in Brandenburg. “That’s how I imagine Europe to be”.

After graduating, Fortunato decided to move to the Oderbruch region and became a department head at the LPG. “The Oderbruch was the vegetable garden for the capital city of Berlin”, she recalls. “That’s where I hoped to put the new skills from my studies to use. That was to prove wrong”.

The reunification politicized Fortunato. “I had the feeling after the reunification that people in the East were not prepared at all for what was coming”. Many were paralyzed; 10,000 people on the shores of the Oder, including Fortunato, lost their jobs. In the meantime, she worked in her husband’s advertising agency. She found her political home in the PDS and became a local politician. Since 2004, she has been an uninterrupted member of the Märkisch-Oderland district council, she lives in Seelow, and between 2009 and 2014 and again since 2016 she has been a member of the state parliament. Since this legislature, she leads the European Committee.

Disappointed by citizen dialogs

She says that last year she hoped that the European institutions would open up to the people. In Frankfurt (Oder), there was one of the citizens’ dialogues organized by the EU. “People were very enthusiastic and eager to discuss”, she says. More than 200 proposals were developed. “Since then, it’s been quiet, and we haven’t heard from Brussels yet what the next step will be”. Many people are disappointed, she says. Now the state parliament and the state government want to continue the discussion formats. She says she is also working on this in her office as committee chair. When the presidency takes office, the ambassadors of the respective member state visit the state parliament; the Swedish ambassador came most recently. “That’s when we always deliver our messages and have people explain what the countries are up to”.

At the same time, she is also the spokesperson for women’s policy for her parliamentary group. “I can network a lot in my job”. Fortunato says. Since Corona, she says, violence against women has also increased by 23 percent in this country. The Istanbul Convention, which is supposed to protect victims, is not taken seriously in many European countries, including neighboring Poland. “We should not cooperate with countries that trample on the convention”. Tom Schmidtgen

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,

Commission President Ursula von der Leyen’s current mandate is informally entitled “ensuring that Europe meets its climate target of minus 55 percent CO2 by 2030″. Parliament and member states are still wrangling over the details of individual dossiers, while other projects in the Fit for 55 package have already been ticked off. But the authority is already eyeing what the next climate target might be in 2040, ten years later. My colleague Lukas Scheid reports on considerations to include negative emissions in the ETS.

In Europe, the recent compromise on the Deforestation-Free Supply Chain Regulation is being celebrated. It is intended to help ensure that the last rainforests in the Congo and Amazon basins are not cleared for consumption by Europeans. But on the ground, for example in the Democratic Republic of Congo, there are concerns: small farmers growing cocoa and coffee in primary rainforests, of all places, might not be able to cope with the EU’s complex documentation requirements. They could become economic victims of EU regulation. Jonas Gerding analyzes this as part of our series “Is Europe Regulating the World?”.

The reform of the European electricity market is the topic of a digital event by Table.Media at the Berlin Energy Days tomorrow. On May 3, from 2-3 p.m., our editor Manuel Berkel will discuss the issue with experts from the Internal Market Unit of the EU Commission’s Directorate General for Energy, BDEW and DIW Berlin. France’s position will be the subject of an introductory presentation by the Franco-German Office for the Energy Transition, which is also a partner of the event. To register for the online event, click here.

We hope you have a wonderful start to the new week.

Your
Markus Grabitz

Climate target 2040: Will negative emissions be integrated into the ETS?

By

Lukas Knigge

A lot of market economy, some regulatory law and quite a lot of hope for innovation are in the Fit for 55 package, which is intended to pave the way to the EU’s 2030 climate target. The reform of the European Emissions Trading System (ETS) and the introduction of the Carbon Border Adjustment Mechanism CBAM are the major market-based instruments of the climate protection package and the heart of the Green Deal. On Tuesday, the Council gave final approval to the ETS reform and the CBAM. The two laws can now be published in the Official Journal and enter into force. The CO2 fleet targets for passenger cars and the ramp-up of EU-wide charging infrastructure (AFIR) are regulatory measures, and the efficiency targets in the Battery Regulation focus primarily on technological advancement in the future.

But as soon as the main parts of the package have been written into law, the question arises as to the next target and which instruments are suitable for achieving it. If the target for 2030 is a CO2 reduction of around 55 percent, it could be as high as 90 percent by 2040. The Commission has already begun discussions on the target and the necessary measures. An impact assessment is to be published in spring 2024, with the legislative proposal for the new climate target expected to follow in 2026.

EPP to consider carbon removal

A key question raised by the Commission in its announcement is the role of CO2 removals for the 2040 climate target. From the ranks of the EPP, the demand is clear: Negative emissions must be integrated into emissions trading. ETS rapporteur Peter Liese even wanted to anchor this in the current reform, because without carbon removal technologies the ambitious climate targets would be almost impossible to achieve. Liese was unable to get his way. And the discussions are unlikely to get any easier with the next interim target on the road to climate neutrality in 2050, because resistance continues unabated.

Michael Bloss, environmental spokesman for the Greens in the EU Parliament and previous ETS shadow rapporteur, fears a softening of climate protection if negative emissions can be monetized in the ETS. The ETS is not a money printing machine for businesses, he said. “The fixed cap on emissions in the ETS is meant to provide CO2 reductions”. Otherwise, the ETS is worthless and it would be better to introduce a CO2 tax, Bloss said.

Liese argues that demand for negative emissions would increase if companies could use them to meet their climate targets. Investments in technologies such as Direct Air Capture (DAC) and long-term storage of CO2 (Carbon Capture and Storage, CCS) and storage in products (Carbon Capture and Utilization, CCU) could grow massively as a result, making them profitable. “How are we going to achieve negative emissions on a large scale in 20 years if we don’t improve the technology now?”, asks Liese.

Deflection from emission reductions

That may be true in business terms, says Anne Gläser, CO2 price expert at Germanwatch, but from a climate protection perspective, CO2 reductions must take priority. “Before 2040, we should not focus on investing resources in developing carbon removal technologies that we will then miss out on when investing in emissions reductions”.

There is no doubt that these technologies are needed to achieve the climate targets. The Intergovernmental Panel on Climate Change (IPCC) also explicitly points to this possibility. Michael Bloss, for example, does not want to ban them at all, but rather use them to compensate for emissions from sectors that cannot be decarbonized after 2050. But he believes that softening the fixed cap on CO2 emissions in the ETS for this reason is the wrong approach. Bloss argues that only “three percent of the sectors that cannot be fully decarbonized” are at stake.

Liese also does not want to soften the cap, at least in the short term. But the CDU politician argues that incentives for CO2 reductions must be put in place long before 2040 if Germany is to be climate neutral in 2045 and Europe in 2050. “Precisely because the technology is still very expensive and not ready for the market at the moment, we need to get started quickly”.

He said it is important to distinguish between permanent removals, such as the production of bricks from captured carbon or underground storage of CO2, on the one hand, and non-permanent removals on the other. “Permanent removals should be fully recognized, and of course you have to make a deduction for the non-permanent ones”. Non-permanent storage methods include storage in chemical products as well as carbon farming, which means storage in soils and wood.

Negative experience with withdrawal certificates

Michael Bloss doubts the effectiveness of such methods and recalls the Clean Development Mechanism (CDM) from the Kyoto Protocol. There, too, companies had the option of buying certificates for external CO2 reductions or CO2 avoidance to achieve their own climate targets. The system is now considered to have failed because it did not deliver the desired emissions reductions but instead enabled greenwashing. The problem was that the stored CO2 was not sequestered in the long term, yet companies were able to use it to neutralize their emissions, at least on paper.

CO2 price expert Gläser believes that the EU has learned from the mistakes of the CDM. It is now known that stricter requirements for certification are needed. “But the problem that carbon removals in the ETS reduce incentives for the green transition, as was already the case with the CDM, still exists”, Gläser criticizes.

Insurance against renewed escape of CO2

Christian Democrat Liese has an idea for solving the problem. If stored quantities of CO2 are released back into the atmosphere earlier than planned due to unforeseen events, such as forest fires, he proposes an insurance system. An ETS market participant and allowance buyer would pay the carbon removals provider a higher amount than usual for a CO2 allowance in the ETS. The difference would go into an insurance fund. If the captured CO2 were to escape back into the atmosphere sooner than anticipated, the insurance company would buy the corresponding amount of CO2 allowances back from the market. In this way, the reductions could be guaranteed, Liese believes.

So far, scientists are still reluctant about the extent to which integrating CO2 removals into the ETS makes sense. Researchers at the Potsdam Institute for Climate Impact Research (PIK) believe that integration is feasible in principle in the near future. However, carbon farming and permanent storage in products should not play a role in this, only the stored quantities of CO2. The PIK researchers also point to the problem of supply uncertainty in the ETS due to the surrender of negative emission allowances. This could “destabilize the market and lead to excessive price volatility”.

Deforestation-free supply chains: Are smallholders in Congo victims?

In view of the EU regulation on deforestation-free supply chains, Congolese smallholder representative Kambale Malembe speaks of a new kind of colonization. From the fall of 2024, anyone who imports cocoa, coffee, palm oil, rubber, soy, timber and livestock into the EU will have to guarantee that forests have not previously been cleared at the place of origin for the cultivation of the plants or the keeping of the livestock. Violations will be punished. The EU wants to take action against companies that clear forests on a grand scale in the Amazon and in Southeast Asia to make room for plantations and cattle herds.

Last Wednesday, after more than three years of negotiations, the EU Parliament voted in favor of the regulation. Delara Burkhardt, chief negotiator for the Socialist Group, spoke of a “game changer”: “With the regulation against deforestation, we are now taking companies to task and making it clear: Anyone who destroys our planet must not do business with us”.

Clearance risks also exist in the world’s second largest rainforest: the Congo Basin, which extends across several countries in central Africa. About 60 percent of it is in the DR Congo, where an average of half a million hectares of forest have been cleared annually in recent years. The main reason is the production of corn, cassava and charcoal for the local market. At the same time, export crops can later be grown on land that is initially used for local needs.

Small farmers could not meet the strict requirements

With the regulation, the EU is making it more difficult for small farmers from the DR Congo to access the European market, says Malembe, who works as a program manager for the country’s National Confederation of Agricultural Producers. That’s because many small farmers are unable to meet the requirements to export their goods to the EU, he says. These include, above all, documentation of the area by GPS data. The EU regulation is likely to affect farmers in the country who grow coffee or cocoa. According to Eurostat, the DR Congo exports €32 million worth of cocoa and €28 million worth of coffee to the EU. These are important growth sectors for a country that ranks 179th out of 191 countries on the Human Development Index.

Malembe emphasizes that in most cases there is no clearing at all for cocoa cultivation. It is usually grown between trees in forests that are already heavily managed. To prove this, importers have to show all kinds of documents: in particular, GPS data of the production area. With satellite data, the inspection bodies in Europe can see whether there really has been no logging on site as of the deadline of the end of 2021. The EU classifies countries in which a particularly large amount of land is cleared into the “high-risk” category. Goods from such countries are inspected more frequently and more strictly than those from supposedly low-risk regions.

The classification of the countries is still pending. Alain Karsenty suspects that the DR Congo will be one of them. He is an economist at the French research institute CIRAD, focusing on agriculture in developing countries. “Many of the importers will turn away from countries classified as ‘high risk’ or work with the big companies“, he expects. That’s because large producers are most likely to have the capital and know-how to survey fields on the ground, digitize the information, provide information on the human rights situation and process all of that for inspectors. “The small producers who supply part of their production to Europe are in all likelihood the main victims of this measure“, he says.

Rainforest Alliance helps smallholders with implementation

The Rainforest Alliance organization supports smallholders in implementing environmental and social standards. “No deforestation” is one of the core criteria. Fanny Gauttier is responsible for public affairs in Brussels. In principle, Rainforest Alliance has supported the legislation, she says, “but we advocate for better consideration of smallholders“. The organization itself requires only incremental controls from small farmers so as not to overwhelm them.

“We start by requiring GPS data to be available for 10 percent of the land. Over the years, there will then be an obligation to expand that“, she says, explaining the pragmatic approach. The EU regulation, on the other hand, requires everything to be recorded immediately. Gauttier thinks that’s wrong. She now sees room for maneuver only in support for small farmers, as vaguely announced in the legislation. According to the text of the legislation, which also refers to small farmers as a target group, the “high-risk countries” are to receive support to protect forests and to farm more sustainably. It doesn’t spell it out much more clearly, however. “We are still in the dark“, she says. There is a lack of information on measures and funding amounts, she adds.

The EU wants to conduct a review in five years at the latest – with regard to the “impact of the regulation on farmers, especially smallholders, indigenous peoples and local communities”. If necessary, they will then receive additional support.

Criticism of EU’s ‘unilateral’ approach

For many farmers in the DR Congo, this could come too late, fears Joseph Bobia, national coordinator of the Congolese Natural Resources Network. He criticizes the EU’s “unilateral” approach. He is currently working with colleagues from other countries in the Congo basin on a position paper on the regulation.

“Our producers are waiting for those who come and buy. Those who don’t want to should stay at home“, he says harshly with regard to importers from the EU. He points to China, which already buys problematic tropical wood from the DR Congo on a large scale.

Malembe, the representative of Congolese farmers, fears that there will be fraud in the DRC. He has doubts about whether such a weak state will check when large companies buy up goods from all sorts of small farms at cheap prices, mix them up and export them at a high price. “In the end, the question is whether we want a market that is limited to two or three certified companies. That would be at the expense of the many small producers”.

The European fight against profit-hungry large companies that do not care about the environment would then have turned into the opposite. Jonas Gerding

You can read all the texts in the series “Is Europe Regulating the World?” published so far here (list in German, articles available in English).

Chip factory in France: Commission approves aid

France is allowed to support the construction and operation of a new chip factory by ST Microelectronics and Global Foundries with direct grants. The approval under EU state aid rules was granted by the Commission on Friday.

The two companies are planning a further plant at the ST Microelectronics site in Crolles near Lyon. The project is a front-end semiconductor production facility with a total investment volume of €7.4 billion.

The measure is in line with the Chips Act’s goals of strengthening Europe’s security of supply, resilience and digital sovereignty in semiconductor technologies, the commission said.

Energy-saving high-performance chips from Europe for Europe

The project envisages the development of a fully operational large-scale production facility for high-performance chips in Europe from 2027, in particular for FD-SOI (Fully Depleted Silicon On Insulator) technology. “A reliable source of energy-saving semiconductors for various applications will be created for industry in Europe”, said Commission Vice-President Margrethe Vestager. “They are needed for electric vehicles, charging stations and other applications important for Europe’s environmental transition”. Annually, the plant is expected to produce 620,000 wafers with a diameter of 300 millimeters.

The companies have agreed:

to give priority to fulfilling orders from the EU in the event of supply bottlenecks;
to continue to invest in the development of the next generation of FD-SOI technology;
to make capacities available to SMEs and third parties to a certain extent in order to further strengthen the European semiconductor ecosystem.

The approval is the second based on the principles of the Communication on the European Chips Act. On Oct. 5, 2022, the Commission had already approved a measure by Italy under the state aid rules to support the construction of a chip factory by ST Microelectronics in Catania, Sicily. vis

Deal ends dispute over grain from Ukraine

The EU Commission announces an agreement in principle in the dispute over the transport of Ukrainian grain through five member countries – Poland, Bulgaria, Hungary, Romania and Slovakia. Commission Vice-President Valdis Dombrovskis wrote on Twitter that the agreement took into account the concerns of farmers in Ukraine as well as in neighboring EU countries. Wheat, corn, rapeseed and sunflower seeds were covered, he said. The agreement includes an aid package worth €100 million for farmers.

Bulgaria, Hungary, Poland, Romania and Slovakia had imposed restrictions on Ukrainian shipments out of concern that supplies from Ukraine could end up on their markets and spoil prices for their farmers. The EU states involved have given assurances that they will refrain from unilateral measures in the future. Grain will continue to be transported overland from Ukraine to the EU via “solidarity lanes” and from there on to countries in need, for example, in Africa. On Friday, the member states also cleared the way for an extension of the exemption from customs duties on numerous agricultural products for another year. The lifting of agricultural tariffs had been decided after Russia’s attack on Ukraine: On the one hand, this should help the farmers in Ukraine economically, and on the other hand, the food shortages on the world market should be alleviated. rtr/mgr

Trilogue on Buildings Directive in June

The first trilogue on the Buildings Directive (EPBD) will take place on June 6. This was confirmed by a Council spokeswoman after an inquiry from Table.Media. Difficult negotiations are to be expected – shortly before the weekend, parts of the Berlin coalition and the real estate industry criticized the planned tightening of energy standards.

“Moderation and middle ground must be achieved in the standards for new buildings”, Federal Minister for Finance Christian Lindner (FDP) told “Wirtschaftswoche”. “We can get by for many years with what we have now. I don’t think further increases are necessary from a climate policy point of view and are not economically viable”. The Commission’s draft EPBD legislation is “already highly ambitious – the even more far-reaching tightening of the European Parliament is definitely not sustainable. This must be changed if the German government is to agree”.

Lindner also opposed “substantial remediation obligations” and “many billions of euros in additional costs”. It remained unclear for the time being what standards the FDP leader is aiming for. The Council’s general orientation already contains numerous attenuations compared to the positions of the Commission and Parliament.

According to the Federal Association of German Housing and Real Estate Companies (GdW), the EPBD would increase investment in energy refurbishment in Germany alone from the current level of just under €50 billion to between €187 and €261 billion per year. In just nine years, 45 percent of all buildings in the entire EU would have to be refurbished. “Achieving this is illusory”, GdW President Axel Gedaschko told “Der Spiegel”. Even if the renovation rate doubled to two percent, only 18 percent of the existing stock could be renovated in nine years. ber

Ex-MEPs must wait in the ‘cooling basin’ for six months

Former members of the European Parliament must go to the “cooling basin” for six months before they take up lobbying activities or carry out “representative activities at the European Parliament”. If they take up lobbying activities or perform “representative activities at the European Parliament” after six months, they must first register in the transparency register and apply for an access pass to the European Parliament for the visits. Apart from ex-MEPs who take up lobbying activities or carry out “representative activities at the European Parliament”, ex-MEPs retain the right of access to the European Parliament. That’s according to an April 17 decision by the European Parliament’s Bureau, obtained by “Contexte”. The decision came into force on May 1. It is part of the consequences drawn by the European Parliament from the corruption affair surrounding the deposed Vice-President Eva Kaili (formerly S&D). mgr

Bettina Fortunato – life as a real European during the Berlin Wall era

Bettina Fortunato grew up in the GDR and already led a very European life during the Wall era. She studied agriculture in Bulgaria and married a Portuguese man. After reunification, she began working in local politics, and today she is chairwoman of the European Affairs Committee in the Brandenburg state parliament.

Fortunato’s father was a farmer near Delitzsch in Saxony. She was eager to learn more about agriculture and improve working conditions in the GDR. In Plovdiv, Bulgaria, there was a course of study that was unique in the Eastern Bloc: Viticulture and vegetable growing, plus cooperation with the Netherlands, which established modern greenhouse production in the 1970s. That’s where she wanted to learn.

Family visits to Portugal

At the age of 19, Fortunato became a member of the SED. Out of “herd instinct”, she says today. “But that didn’t bring me any advantages”. During her studies, she met her current husband, a Portuguese man who was also studying agriculture in Bulgaria. The relationship was not desired, Fortunato recounts. When it came out, her already-planned doctorate was canceled. In 1983, her husband was finally allowed to enter the GDR, they married and had three children. “We were a training family for the GDR authorities”, Fortunato says. “We were allowed to go to Portugal three times with the whole family to visit grandparents after a long back and forth.” Today, her daughter works in Portugal and often visits her parents in Brandenburg. “That’s how I imagine Europe to be”.

After graduating, Fortunato decided to move to the Oderbruch region and became a department head at the LPG. “The Oderbruch was the vegetable garden for the capital city of Berlin”, she recalls. “That’s where I hoped to put the new skills from my studies to use. That was to prove wrong”.

The reunification politicized Fortunato. “I had the feeling after the reunification that people in the East were not prepared at all for what was coming”. Many were paralyzed; 10,000 people on the shores of the Oder, including Fortunato, lost their jobs. In the meantime, she worked in her husband’s advertising agency. She found her political home in the PDS and became a local politician. Since 2004, she has been an uninterrupted member of the Märkisch-Oderland district council, she lives in Seelow, and between 2009 and 2014 and again since 2016 she has been a member of the state parliament. Since this legislature, she leads the European Committee.

Disappointed by citizen dialogs

She says that last year she hoped that the European institutions would open up to the people. In Frankfurt (Oder), there was one of the citizens’ dialogues organized by the EU. “People were very enthusiastic and eager to discuss”, she says. More than 200 proposals were developed. “Since then, it’s been quiet, and we haven’t heard from Brussels yet what the next step will be”. Many people are disappointed, she says. Now the state parliament and the state government want to continue the discussion formats. She says she is also working on this in her office as committee chair. When the presidency takes office, the ambassadors of the respective member state visit the state parliament; the Swedish ambassador came most recently. “That’s when we always deliver our messages and have people explain what the countries are up to”.

At the same time, she is also the spokesperson for women’s policy for her parliamentary group. “I can network a lot in my job”. Fortunato says. Since Corona, she says, violence against women has also increased by 23 percent in this country. The Istanbul Convention, which is supposed to protect victims, is not taken seriously in many European countries, including neighboring Poland. “We should not cooperate with countries that trample on the convention”. Tom Schmidtgen