Table.Briefing: Europe

Commission puts REACH on hold + Struggle over gas price cap + Gas storage 2023

  • Considering industry impact: Commission wants to put REACH on hold
  • Struggle over gas price cap
  • Gas storage: German government expects ten-year low
  • Scholz and Sánchez confirm partnership for Midcat gas pipeline
  • New sanctions package against Russia
  • WTO: bleak forecast for 2023
  • Denmark elects a new parliament on Nov. 1
  • Nicolai von Ondarza – EU policy researcher
Dear reader,

Originally, the EU Commission wanted to present the proposal for the REACH chemicals regulation at the end of 2022. But apparently, it wants to put the project on ice for the time being – out of consideration for the industry. As Markus Grabitz and Till Hoppe have learned, the proposal is not due until 2024 at the earliest. Against the backdrop of massively increased raw material prices, the industry had repeatedly called for the regulation to be abandoned at the present time. But resistance is stirring among the member states, including Germany.

Premiere at Prague Castle: Today, the heads of state and government of more than 40 European countries will meet in the new format of the European Political Community. EU diplomats stressed in advance that this is not an “EU-plus” event; EU members and other countries will meet at eye level to discuss security and stability as well as energy and the economy. There will also be a need for discussion at tomorrow’s informal EU summit, for example, on the gas price cap, on which the member states are still in disagreement. In the run-up to the summit, EU Commission President Ursula von der Leyen signaled her willingness to introduce a gas price cap – but on closer inspection, her proposal turns out to be a veiled rejection, as Stephan Israel and Manuel Berkel report.

Germany’s gas storage facilities are currently well filled. But for the coming year, the German government and experts assume a very different situation. According to information available to Europe.Table, Berlin expects storage facilities to be almost empty in the upcoming spring, and also lower levels in July and September than in the current year. The winter of 2023/24 will also be challenging, experts say. “This winter is difficult but next winter may also be very difficult,” IEA chief Fatih Birol said yesterday in Finland, as Manuel Berkel reports.

Your
Sarah Schaefer
Image of Sarah  Schaefer

Feature

Considering industry impact: Commission wants to put REACH on hold

Out of consideration for industry, the EU Commission is expected to put the proposal for the REACH chemicals regulation on hold. Originally, the Commission wanted to present the proposal for comprehensive chemicals regulation at the end of 2022. Now, according to information available to Europe.Table, it will be much later, possibly not until 2024. Commission President Ursula von der Leyen had announced the postponement in the group of MEPs from the CDU and CSU.

In Commission circles, the considerations were confirmed. However, the talks were still ongoing. Vice President Frans Timmermans and Environment Commissioner Virginijus Sinkevičius are pushing internally for the reform of REACH to be presented before the end of 2023. They fear that the project will otherwise be delayed considerably longer because a new European Parliament will be elected in 2024 and the Commission will be reappointed.

They are getting support from eight member states, including Germany: In a letter, they urged the Commission “to proceed with the planned revision of REACH and not leave it to the next Commission to fulfill its promises”. The letter, signed among others by German Environment Minister Steffi Lemke and her colleagues from France, Austria and Belgium, is available to Europe.Table.

Proposal as good as ready

The background to the postponement is that companies in the chemical industry have been massively affected by the rise in raw material prices as a result of the war against Ukraine. The industry has urgently requested that the burdens not be further increased by new regulatory steps. The acronym REACH stands for the Registration, Evaluation, Authorization and Regulation of Chemicals. The regulation came into force in 2007 and should now be revised as part of the EU’s Green Deal chemicals strategy.

The European Chemicals Agency (ECHA), which is based in Helsinki, is responsible for monitoring REACH. The EU had adopted REACH because companies in the chemical industry had developed a large number of substances and placed them on the market without adequately clarifying the possible risks to humans and the environment. Fifteen years after the gradual entry into force of REACH, a fundamental revision should now take place.

The proposal for the EU legal text is reportedly as good as ready. From January to April 2022, the public consultation on the revision of REACH took place. In the summer, the Commission prepared the impact assessment for the law.

Industry association called Commission plans ‘negligent’

The industry association VCI had previously repeatedly called on the Commission not to impose further cost-intensive regulation on industry at present. In July, VCI President Christian Kullmann had pointed out: “Companies are already being forced to curb their production in particularly energy-intensive processes.”

In addition to the drastically increased prices for energy and raw materials, there is now also the “uncertainty factor Brussels,” the lobbyist warned verbatim. “Virtually unimpressed by current developments, the EU Commission is behaving in a way that can only be described as negligent.” Instead of relieving the economy of unnecessary additional burdens, it is unflinchingly relying on projects from the pre-war era and is enjoying “the role of the global model pupil in matters of environmental and climate protection.”

CDU leader Friedrich Merz and the CDU/CSU members of the European Parliament have long been calling on the Commission President to introduce a moratorium on burdens for companies. So far, they have not been successful.

In the circle of MEPs, the Commission’s decision to put REACH on ice was welcomed as overdue. It is expected that the amendment will no longer be part of the new work program that the EU Commission plans to adopt at its meeting on Oct. 18. With Till Hoppe

  • EU
  • European Commission

Struggle over the gas price cap

Shortly before the double summit this Thursday and Friday in Prague, EU Commission President Ursula von der Leyen indicated to the EU Parliament in Strasbourg that she was doing a U-turn in the dispute over a gas price cap – she signaled her willingness in principle to introduce a cap on gas prices. Later, her spokesman Eric Mamer made a spectacular addition: The Commission President was only interested in a price cap for gas trading within the EU.

Just a week ago, Commission officials had unequivocally rejected such a move. If there were only one – low – unit price in the internal market, gas flows between member states would be jeopardized and it would be practically impossible to allocate gas through administrative channels, the authority wrote in a non-paper to the Council of Energy Ministers.

However, 15 member states had previously exerted pressure in a letter to the Commission, calling for a proposal for a general gas price cap – including for imports. In the meantime, further EU states are said to have joined the initiative, according to EU diplomats. Should the Commission now accommodate the signatories after all?

Circumlocuted rejection of the 15 member states

Yesterday evening, it emerged that von der Leyen is attaching conditions to her apparent conciliation that advocates of a general price cap are unlikely to accept. First, if the price is to be temporarily capped, there would have to be binding solidarity agreements between the member states. So far, however, only a few have concluded these.

Secondly, there need to be increased obligations to save gas. In a letter, von der Leyen writes of EU-wide auctions for this purpose. However, some of the countries calling for a price cap – Poland and Spain, for example – reject stricter obligations. Von der Leyen’s offer is thus once again a veiled rejection of the 15 member states. In Berlin, but also in The Hague, there have already been reservations about a general price cap.

However, the Commission’s proposal for a price cap on gas for power generation is still on the table. Von der Leyen also reiterated on Wednesday the proposal to intensify negotiations with “trusted partners” such as Norway to lower the price of gas imports. For now, the Commission relies on voluntarism and the EU’s market power. Suppliers have an interest in concluding contracts with the EU that are mutually beneficial, von der Leyen told the Parliament. The goal is to achieve an “acceptable price corridor” and to be able to dampen price jumps.

At the same time, Brussels wants to push ahead with the idea of a joint purchasing platform to leverage the EU’s market power more effectively. Von der Leyen would prefer to launch it in spring when the gas storage facilities have to be filled again. The idea is to prevent member states from outbidding each other again.

Commissioners warn against fragmentation of the internal market

At the same time, a conflict is simmering ahead of the summit over national go-it-alone aid packages. The focus is primarily on the German government’s €200 billion package. On the one hand, Germany is subsidizing gas for households and companies, thus encouraging consumption, according to the criticism. On the other hand, Berlin is blocking the price cap.

Critics complain of national egoism and a certain inconsistency. First and foremost, Italy’s outgoing Prime Minister Mario Draghi is likely to urge a European approach to aid for households and the economy at the summit, similar to the Covid pandemic. Similarly, Internal Market Commissioner Thierry Breton and Economic Affairs Commissioner Paolo Gentiloni warned in an opinion piece against fragmentation of the single market. The Frenchman and the Italian suggest taking a cue from the SURE mechanism, through which measures against short-time work were jointly financed during the pandemic. EU Council President Charles Michel also argued along these lines in an opinion piece in the Financial Times on Wednesday.

Expectations for EPG meeting positive

The informal EU summit on Friday in Prague is primarily intended to serve as a discussion forum so that decisions can then be made at the formal summit on Oct. 20. Today, however, the heads of state and government will first meet in the new format of the so-called European Political Community (EPC).

The format was originally an idea of French President Emmanuel Macron, with the ulterior motive of putting off the EU accession candidates. The concerns, especially in the Western Balkans, have since been dispelled, however, and expectations are generally positive. The format is a “good idea,” Albania’s Prime Minister Edi Rama and the Dutch head of government Mark Rutte wrote in a joint opinion piece in the run-up to the event. The continent must shape its own future. This presupposes that all democratic states work together.

Czech Prime Minister Petr Fiala, as current EU Council President, and EU Council President Michel have invited the heads of state and government of 44 European states to Prague Castle for the premiere. In addition to the EU members, these are the EEA states, ex-member Great Britain, non-member Switzerland, but also the eastern partners such as Armenia and Azerbaijan, as well as Turkish President Recep Tayyip Erdoğan.

Not an ‘EU-plus’ event

Everyone agreed to come except the Danish head of government, who is prevented from attending because of an urgent parliamentary debate. The Ukrainian president will be videoed in, while his prime minister is expected to be there. The aim is to create a political platform to talk about peace and prosperity on the continent, EU diplomats said. It is emphasized that the EPG is not an “EU-plus” event and that EU members and other countries are supposed to meet on an equal footing.

The meeting against the backdrop of the Russian war against Ukraine will begin with a plenary session at 1 p.m. Later, the meeting will be divided into two round tables to discuss security and stability as well as energy and the economy. Time is also reserved for bilateral talks. Results are to be exchanged at a working dinner in the evening. No conclusions are planned, but “a message of unity and solidarity” – provided that tensions between Azerbaijan and Armenia, for example, or between Turkey and Greece do not disturb the harmony.

The plan, according to diplomats, is for the European Political Community to meet every six to eight months. British Prime Minister Liz Truss, who initially did not want to attend at all, has offered London as the next venue. Britain could be up for grabs on a later occasion, EU diplomats said. The next EPG summit will be held in the east of the continent, specifically probably in Chişinău, the capital of Moldova, they said. With Manuel Berkel

  • Energy
  • European policy
  • Fossil fuels
  • Natural gas

Gas storage: German government expects ten-year low

Despite new LNG terminals, the German government expects gas storage levels in 2023 to be lower than in the current year by summer. For May 1, Berlin expects German storage facilities to be only ten percent full. By contrast, at the beginning of May this year, German storage facilities were still around 36 percent full, according to data from the European gas association GIE.

The EU Commission provided this information at the request of Europe.Table. Since this year, EU states with gas storage facilities have to report to the authority by September 15 which filling path they expect for February, May, July and September of the following year. According to a spokeswoman, the Commission intends to publish a complete overview of the reports in mid-November.

As Europe.Table learned in advance, the federal government expects lower gas storage levels for July 1 and September 1, 2023, than in the current year. While the federal government expects 30 and 65 percent for these dates, the figures for this year were 61 and 85 percent. The Federal Ministry for Economic Affairs did not want to comment on this.

The gas volume expected at the beginning of May corresponds to a ten-year low. Less than 24 terawatt hours of natural gas were last held in German storage facilities in April 2013, according to EIG data.

Situation expected to remain tense

Many experts expect that the winter of 2023/24 could be even more challenging than the upcoming one. For the end of the heating season, the International Energy Agency (IEA) expects European storage facilities to still be 25 to 30 percent full on average. “This winter is difficult but next winter may also be very difficult,” IEA executive director Fatih Birol told reporters in Finland on Wednesday.

According to energy group RWE, gas storage facilities could still be filled with 15 to more than 30 percent next spring: The development depends on how much temperatures drop, how the nuclear power situation in France develops and how much wind power can be generated, said Group CEO Markus Krebber in a conversation with analysts on Tuesday.

In the further course, the situation will probably remain tense. “A level of 90 percent will not be reached again next year,” IfW Kiel Vice President Stefan Kooths told Europe.Table. In doing so, the institute’s head of the economy referred to the fall report for the BMWK from the end of September.

Berlin looks ahead to February with conspicuous optimism

Until July, the simulations of the IfW and the other three participating institutes coincided with the filling path reported to Brussels by the German government. “For the beginning of September and the beginning of November 2023, however, our model delivers filling levels of 56 percent and 65 percent, respectively, and then declining again,” Kooths explains. So, at least for September 2023, the BMWK’s latest report is more optimistic than the economists’ expectation. Nevertheless, Kooths does not believe that a level of 90 percent will be reached again with the better September forecast.

At the beginning of August, the Federal Network Agency also simulated a worse development in storage levels. Of the eight scenarios for a supply stop via Nord Stream 1, only one saw similar gas storage levels for May and July as the German government now forecasts. Other calculations predicted that storage facilities would be completely empty for months.

Berlin is now conspicuously optimistic for next February: The German government reported its legally fixed target to Brussels – a fill level of 40 percent. The network agency, however, expects 20 percent at best in the event of a Nord Stream outage.

  • Climate & Environment
  • Energy
  • Fossil fuels
  • Gasspeicher
  • Germany
  • LNG
  • Natural gas

News

Scholz and Sánchez confirm partnership for Midcat gas pipeline

German Chancellor Olaf Scholz and Spanish Prime Minister Pedro Sánchez reaffirmed their joint commitment to the Midcat gas pipeline at the 25th Spanish-German summit in the northwestern Spanish city of A Coruña. This is intended to facilitate the transport of energy from the Iberian Peninsula to the center of Europe. However, French President Emmanuel Macron is speaking out against the project.

“We will continue to work for greater interconnection capacity of the Iberian Peninsula to strengthen its contribution to the security of supply of the entire EU,” the joint action plan states in reference to Midcat. It does not include a joint agreement to cap the price of gas for electricity generation at the European level. It is one of the aspects that Sánchez has vehemently defended in Brussels.

At the press conference following the signing of the agreements on Wednesday, Sánchez recalled that the issue of energy interconnections was already agreed at the European level in 2015. “Although there is a commitment at the European level to achieve a degree of interconnection of 10 percent, we are below 5 percent, at not even 3 percent.” He stressed that Spain, with its six regasification plants, could help overcome its dependence on Russian gas.

Labor and education part of the action plan

President Emmanuel Macron has refused to support the Midcat project in recent months, saying it is uneconomical and unprofitable. In A Coruña, Scholz pointed out that more energy interconnections are needed in Europe. “If some interconnections are not very profitable now, they may become so in the future. This is an issue where all countries must work together,” he said.

The action plan signed by the two countries also focuses on labor and higher education. The meeting was also attended by eight ministers from Spain and seven ministers from Germany. The last government consultations between Spain and Germany took place nine years ago – between then German Chancellor Angela Merkel and then Prime Minister Mariano Rajoy.

The joint action plan, to be developed bilaterally by Germany and Spain within the framework of the EU, has six basic axes. In addition to the areas of security and defense, it also sets goals in the field of foreign policy cooperation, including migration, and mentions the southern neighborhood, which is of particular importance to the Sánchez government. Isabel Cuesta

  • Energy
  • European policy
  • Fossil fuels
  • Germany
  • Natural gas
  • Spain

New sanctions package against Russia

The EU states have launched the eighth sanctions package against Russia. On Wednesday, the permanent representatives of the member states approved, among other things, the legal requirements for a price cap on oil imports from Russia supported by the G7 countries. Several diplomats confirmed this to the German news agency Deutsche Presse-Agentur in Brussels. The agreement still has to be confirmed by the capitals in a written procedure.

EU Commission President Ursula von der Leyen proposed the package in the middle of last week in response to Russia’s recent escalation in the war against Ukraine. “We will never accept Putin’s sham referenda nor any kind of annexation in Ukraine,” the German politician said.

Part of the agreement in principle on the new sanctions are various export bans, which affect key technologies for aviation, for example. In addition, there is to be an import ban on specific steel from Russia, among other things. EU citizens are also to be banned from taking seats on the management bodies of Russian state-owned companies. The German government in particular had lobbied for this after former Chancellor Gerhard Schröder (SPD) had long been head of the supervisory board of the Russian oil company Rosneft.

In addition, there are, for example, punitive measures against people who helped to carry out the sham referendums in the territories on Ukrainian territory that Russia has since annexed. They are subject to entry bans and asset freezes.

With the new sanctions package, the EU states are also creating the basis for Russia to have to sell oil to large customers such as India for a significantly lower price in the future than at present. This is intended to reduce Moscow’s revenues, which are also used to finance the war against Ukraine. dpa

  • Geopolitics

WTO: bleak forecast for 2023

The World Trade Organization (WTO) expects global trade in the coming year to be noticeably lower than last year. Trade in goods will increase by only 1.0 percent, the WTO announced in Geneva on Wednesday. Previously, the organization had still assumed 3.4 percent growth. “The picture for 2023 has darkened considerably,” WTO Director-General Ngozi Okonjo-Iweala said.

The situation in the coming year would also depend on developments in Ukraine. “If the war in Ukraine worsens, rather than gets better, that’s going to have a huge impact,” Okonjo-Iweala said.

This year, however, world trade is growing surprisingly faster than assumed in the spring. The WTO now expects the volume of trade in goods to grow by 3.5 percent in 2022. In its forecast in April, it had assumed only 3.0 percent.

Warning against trade barriers

The WTO said its forecasts were subject to considerable uncertainty. It gave a trade development range of +2.0 to +4.9 percent for this year and -2.8 to +4.6 percent for 2023. Weather events hitting food-producing regions or damaging infrastructure for energy exports could further affect development. This also applies to the weaker development in China, where Covid outbreaks have disrupted production.

Okonjo-Iweala said the world needs a more diversified and less concentrated base for the production of goods and services. This could boost growth, increase resilience and promote long-term price stability because it would reduce vulnerability to extreme weather events and local disruptions.

The WTO warned governments against the reflex to erect trade barriers in the face of the difficult environment. Withdrawing from global supply chains could increase inflationary pressures, limit economic growth and bring restrictions on living standards. Free trade is also needed to address climate change to share new technologies. Governments should not lose sight of the long-term goals of limiting climate change while tackling short-term problems such as energy supply, Okonjo-Iweala said. rtr/dpa

  • Supply chains
  • Trade
  • Trade Policy

Denmark elects a new parliament on Nov. 1

Denmark will elect a new parliament this fall. After weeks of speculation, Prime Minister Mette Frederiksen announced on Wednesday outside her official residence Marienborg, north of Copenhagen, that the next election will take place as early as Nov. 1. In doing so, she ultimately bowed to a demand from the Danish Social Liberal Party, Radikale Venstre, which is linked to the Covid mink scandal.

Elections must be held every four years in Denmark – in this case, Frederiksen would have until June 4, 2023. However, the Radical Venstre, which supports Frederiksen’s minority government consisting only of Social Democrats, had given the prime minister an ultimatum in the summer: By the time parliament opened after the summer recess on Tuesday, the prime minister should have called the election. Otherwise, the party wanted to force a vote of no confidence.

The background to the ultimatum is Frederiksen’s role in the Danish mink scandal, in which millions of mink were killed during the Covid pandemic. Only later did it emerge that the legal basis for this had been lacking. In a report, an independent commission had sharply criticized the prime minister and parts of her government for the decision to cull all mink in the country, bred for fur production over fears of spreading a mutated coronavirus variant. dpa

  • Coronavirus
  • Denmark
  • Health

Heads

Nicolai von Ondarza – EU policy researcher

Nicolai von Ondarza heads the EU/Europe research group at the German Institute for International and Security Affairs (SWP).

“The EU must succeed in bringing the two processes of internal reform and further opening from a geostrategic perspective together,” says Nicolai von Ondarza. As head of the EU/Europe research group at the German Institute for International and Security Affairs (SWP), the committed European deals with the fundamental issues of the EU, such as its deepening and enlargement policies.

Since the beginning of the Russian war of aggression on Ukraine, he has observed a fundamental change in the EU: “The EU states have recognized for themselves that they have a strong geostrategic self-interest in a functioning enlargement policy. The candidate status of Ukraine and Moldova is not just a purely symbolic promise, but the start of a process.” However, an EU 30 Plus cannot avoid institutional reform to remain capable of acting.

Preserving transatlantic ties

The ability to act is also a decisive keyword in the debate on strategic sovereignty, which von Ondarza is helping to shape. He argues for a new understanding of European sovereignty in which the US continues to be considered as a partner, especially in the area of defense: “We must not fall into the trap of playing NATO and the EU or transatlantic ties and European ties off against each other.”

Von Ondarza not only wants to combine this in the debate, but it is also a lived part of his biography: An exchange year in the US had shown him a transatlantic perspective. His studies of European Studies in Great Britain have repeatedly shown him the strengths and opportunities of the EU.

Relationship between EU and UK remains difficult

Since 2011, he has also worked intensively on Great Britain and Northern Ireland at the German Institute for International and Security Affairs (Stiftung Wissenschaft und Politik) and, as organizer of the British-German Outlook Group, is committed to bilateral dialogue between Germany and Great Britain. He describes the period since 2011 as one in which the UK has become increasingly polarized – as have relations with the EU regarding the Brexit.

He eagerly awaits what the election of new Prime Minister Liz Truss and the death of Queen Elizabeth II will mean for the United Kingdom and post-Brexit relations with the EU. Despite troubled times ahead and the multitude of crises such as the Northern Ireland Protocol, the energy crisis or Brexit, von Ondarza sees the Queen’s death first and foremost as a unifying moment for the country. He also observes great sympathy at the European level.

“But that doesn’t change the fact that we are again heading for a difficult situation between Europe and the UK,” von Ondarza said. Even under the new prime minister, Liz Truss, he expects “continued tough, confrontational rhetoric from London”. Marlene Resch

  • Brexit
  • European policy
  • Great Britain
  • United Kingdom
  • USA

Europe.Table Editorial Office

EUROPE.TABLE EDITORS

Licenses:
    • Considering industry impact: Commission wants to put REACH on hold
    • Struggle over gas price cap
    • Gas storage: German government expects ten-year low
    • Scholz and Sánchez confirm partnership for Midcat gas pipeline
    • New sanctions package against Russia
    • WTO: bleak forecast for 2023
    • Denmark elects a new parliament on Nov. 1
    • Nicolai von Ondarza – EU policy researcher
    Dear reader,

    Originally, the EU Commission wanted to present the proposal for the REACH chemicals regulation at the end of 2022. But apparently, it wants to put the project on ice for the time being – out of consideration for the industry. As Markus Grabitz and Till Hoppe have learned, the proposal is not due until 2024 at the earliest. Against the backdrop of massively increased raw material prices, the industry had repeatedly called for the regulation to be abandoned at the present time. But resistance is stirring among the member states, including Germany.

    Premiere at Prague Castle: Today, the heads of state and government of more than 40 European countries will meet in the new format of the European Political Community. EU diplomats stressed in advance that this is not an “EU-plus” event; EU members and other countries will meet at eye level to discuss security and stability as well as energy and the economy. There will also be a need for discussion at tomorrow’s informal EU summit, for example, on the gas price cap, on which the member states are still in disagreement. In the run-up to the summit, EU Commission President Ursula von der Leyen signaled her willingness to introduce a gas price cap – but on closer inspection, her proposal turns out to be a veiled rejection, as Stephan Israel and Manuel Berkel report.

    Germany’s gas storage facilities are currently well filled. But for the coming year, the German government and experts assume a very different situation. According to information available to Europe.Table, Berlin expects storage facilities to be almost empty in the upcoming spring, and also lower levels in July and September than in the current year. The winter of 2023/24 will also be challenging, experts say. “This winter is difficult but next winter may also be very difficult,” IEA chief Fatih Birol said yesterday in Finland, as Manuel Berkel reports.

    Your
    Sarah Schaefer
    Image of Sarah  Schaefer

    Feature

    Considering industry impact: Commission wants to put REACH on hold

    Out of consideration for industry, the EU Commission is expected to put the proposal for the REACH chemicals regulation on hold. Originally, the Commission wanted to present the proposal for comprehensive chemicals regulation at the end of 2022. Now, according to information available to Europe.Table, it will be much later, possibly not until 2024. Commission President Ursula von der Leyen had announced the postponement in the group of MEPs from the CDU and CSU.

    In Commission circles, the considerations were confirmed. However, the talks were still ongoing. Vice President Frans Timmermans and Environment Commissioner Virginijus Sinkevičius are pushing internally for the reform of REACH to be presented before the end of 2023. They fear that the project will otherwise be delayed considerably longer because a new European Parliament will be elected in 2024 and the Commission will be reappointed.

    They are getting support from eight member states, including Germany: In a letter, they urged the Commission “to proceed with the planned revision of REACH and not leave it to the next Commission to fulfill its promises”. The letter, signed among others by German Environment Minister Steffi Lemke and her colleagues from France, Austria and Belgium, is available to Europe.Table.

    Proposal as good as ready

    The background to the postponement is that companies in the chemical industry have been massively affected by the rise in raw material prices as a result of the war against Ukraine. The industry has urgently requested that the burdens not be further increased by new regulatory steps. The acronym REACH stands for the Registration, Evaluation, Authorization and Regulation of Chemicals. The regulation came into force in 2007 and should now be revised as part of the EU’s Green Deal chemicals strategy.

    The European Chemicals Agency (ECHA), which is based in Helsinki, is responsible for monitoring REACH. The EU had adopted REACH because companies in the chemical industry had developed a large number of substances and placed them on the market without adequately clarifying the possible risks to humans and the environment. Fifteen years after the gradual entry into force of REACH, a fundamental revision should now take place.

    The proposal for the EU legal text is reportedly as good as ready. From January to April 2022, the public consultation on the revision of REACH took place. In the summer, the Commission prepared the impact assessment for the law.

    Industry association called Commission plans ‘negligent’

    The industry association VCI had previously repeatedly called on the Commission not to impose further cost-intensive regulation on industry at present. In July, VCI President Christian Kullmann had pointed out: “Companies are already being forced to curb their production in particularly energy-intensive processes.”

    In addition to the drastically increased prices for energy and raw materials, there is now also the “uncertainty factor Brussels,” the lobbyist warned verbatim. “Virtually unimpressed by current developments, the EU Commission is behaving in a way that can only be described as negligent.” Instead of relieving the economy of unnecessary additional burdens, it is unflinchingly relying on projects from the pre-war era and is enjoying “the role of the global model pupil in matters of environmental and climate protection.”

    CDU leader Friedrich Merz and the CDU/CSU members of the European Parliament have long been calling on the Commission President to introduce a moratorium on burdens for companies. So far, they have not been successful.

    In the circle of MEPs, the Commission’s decision to put REACH on ice was welcomed as overdue. It is expected that the amendment will no longer be part of the new work program that the EU Commission plans to adopt at its meeting on Oct. 18. With Till Hoppe

    • EU
    • European Commission

    Struggle over the gas price cap

    Shortly before the double summit this Thursday and Friday in Prague, EU Commission President Ursula von der Leyen indicated to the EU Parliament in Strasbourg that she was doing a U-turn in the dispute over a gas price cap – she signaled her willingness in principle to introduce a cap on gas prices. Later, her spokesman Eric Mamer made a spectacular addition: The Commission President was only interested in a price cap for gas trading within the EU.

    Just a week ago, Commission officials had unequivocally rejected such a move. If there were only one – low – unit price in the internal market, gas flows between member states would be jeopardized and it would be practically impossible to allocate gas through administrative channels, the authority wrote in a non-paper to the Council of Energy Ministers.

    However, 15 member states had previously exerted pressure in a letter to the Commission, calling for a proposal for a general gas price cap – including for imports. In the meantime, further EU states are said to have joined the initiative, according to EU diplomats. Should the Commission now accommodate the signatories after all?

    Circumlocuted rejection of the 15 member states

    Yesterday evening, it emerged that von der Leyen is attaching conditions to her apparent conciliation that advocates of a general price cap are unlikely to accept. First, if the price is to be temporarily capped, there would have to be binding solidarity agreements between the member states. So far, however, only a few have concluded these.

    Secondly, there need to be increased obligations to save gas. In a letter, von der Leyen writes of EU-wide auctions for this purpose. However, some of the countries calling for a price cap – Poland and Spain, for example – reject stricter obligations. Von der Leyen’s offer is thus once again a veiled rejection of the 15 member states. In Berlin, but also in The Hague, there have already been reservations about a general price cap.

    However, the Commission’s proposal for a price cap on gas for power generation is still on the table. Von der Leyen also reiterated on Wednesday the proposal to intensify negotiations with “trusted partners” such as Norway to lower the price of gas imports. For now, the Commission relies on voluntarism and the EU’s market power. Suppliers have an interest in concluding contracts with the EU that are mutually beneficial, von der Leyen told the Parliament. The goal is to achieve an “acceptable price corridor” and to be able to dampen price jumps.

    At the same time, Brussels wants to push ahead with the idea of a joint purchasing platform to leverage the EU’s market power more effectively. Von der Leyen would prefer to launch it in spring when the gas storage facilities have to be filled again. The idea is to prevent member states from outbidding each other again.

    Commissioners warn against fragmentation of the internal market

    At the same time, a conflict is simmering ahead of the summit over national go-it-alone aid packages. The focus is primarily on the German government’s €200 billion package. On the one hand, Germany is subsidizing gas for households and companies, thus encouraging consumption, according to the criticism. On the other hand, Berlin is blocking the price cap.

    Critics complain of national egoism and a certain inconsistency. First and foremost, Italy’s outgoing Prime Minister Mario Draghi is likely to urge a European approach to aid for households and the economy at the summit, similar to the Covid pandemic. Similarly, Internal Market Commissioner Thierry Breton and Economic Affairs Commissioner Paolo Gentiloni warned in an opinion piece against fragmentation of the single market. The Frenchman and the Italian suggest taking a cue from the SURE mechanism, through which measures against short-time work were jointly financed during the pandemic. EU Council President Charles Michel also argued along these lines in an opinion piece in the Financial Times on Wednesday.

    Expectations for EPG meeting positive

    The informal EU summit on Friday in Prague is primarily intended to serve as a discussion forum so that decisions can then be made at the formal summit on Oct. 20. Today, however, the heads of state and government will first meet in the new format of the so-called European Political Community (EPC).

    The format was originally an idea of French President Emmanuel Macron, with the ulterior motive of putting off the EU accession candidates. The concerns, especially in the Western Balkans, have since been dispelled, however, and expectations are generally positive. The format is a “good idea,” Albania’s Prime Minister Edi Rama and the Dutch head of government Mark Rutte wrote in a joint opinion piece in the run-up to the event. The continent must shape its own future. This presupposes that all democratic states work together.

    Czech Prime Minister Petr Fiala, as current EU Council President, and EU Council President Michel have invited the heads of state and government of 44 European states to Prague Castle for the premiere. In addition to the EU members, these are the EEA states, ex-member Great Britain, non-member Switzerland, but also the eastern partners such as Armenia and Azerbaijan, as well as Turkish President Recep Tayyip Erdoğan.

    Not an ‘EU-plus’ event

    Everyone agreed to come except the Danish head of government, who is prevented from attending because of an urgent parliamentary debate. The Ukrainian president will be videoed in, while his prime minister is expected to be there. The aim is to create a political platform to talk about peace and prosperity on the continent, EU diplomats said. It is emphasized that the EPG is not an “EU-plus” event and that EU members and other countries are supposed to meet on an equal footing.

    The meeting against the backdrop of the Russian war against Ukraine will begin with a plenary session at 1 p.m. Later, the meeting will be divided into two round tables to discuss security and stability as well as energy and the economy. Time is also reserved for bilateral talks. Results are to be exchanged at a working dinner in the evening. No conclusions are planned, but “a message of unity and solidarity” – provided that tensions between Azerbaijan and Armenia, for example, or between Turkey and Greece do not disturb the harmony.

    The plan, according to diplomats, is for the European Political Community to meet every six to eight months. British Prime Minister Liz Truss, who initially did not want to attend at all, has offered London as the next venue. Britain could be up for grabs on a later occasion, EU diplomats said. The next EPG summit will be held in the east of the continent, specifically probably in Chişinău, the capital of Moldova, they said. With Manuel Berkel

    • Energy
    • European policy
    • Fossil fuels
    • Natural gas

    Gas storage: German government expects ten-year low

    Despite new LNG terminals, the German government expects gas storage levels in 2023 to be lower than in the current year by summer. For May 1, Berlin expects German storage facilities to be only ten percent full. By contrast, at the beginning of May this year, German storage facilities were still around 36 percent full, according to data from the European gas association GIE.

    The EU Commission provided this information at the request of Europe.Table. Since this year, EU states with gas storage facilities have to report to the authority by September 15 which filling path they expect for February, May, July and September of the following year. According to a spokeswoman, the Commission intends to publish a complete overview of the reports in mid-November.

    As Europe.Table learned in advance, the federal government expects lower gas storage levels for July 1 and September 1, 2023, than in the current year. While the federal government expects 30 and 65 percent for these dates, the figures for this year were 61 and 85 percent. The Federal Ministry for Economic Affairs did not want to comment on this.

    The gas volume expected at the beginning of May corresponds to a ten-year low. Less than 24 terawatt hours of natural gas were last held in German storage facilities in April 2013, according to EIG data.

    Situation expected to remain tense

    Many experts expect that the winter of 2023/24 could be even more challenging than the upcoming one. For the end of the heating season, the International Energy Agency (IEA) expects European storage facilities to still be 25 to 30 percent full on average. “This winter is difficult but next winter may also be very difficult,” IEA executive director Fatih Birol told reporters in Finland on Wednesday.

    According to energy group RWE, gas storage facilities could still be filled with 15 to more than 30 percent next spring: The development depends on how much temperatures drop, how the nuclear power situation in France develops and how much wind power can be generated, said Group CEO Markus Krebber in a conversation with analysts on Tuesday.

    In the further course, the situation will probably remain tense. “A level of 90 percent will not be reached again next year,” IfW Kiel Vice President Stefan Kooths told Europe.Table. In doing so, the institute’s head of the economy referred to the fall report for the BMWK from the end of September.

    Berlin looks ahead to February with conspicuous optimism

    Until July, the simulations of the IfW and the other three participating institutes coincided with the filling path reported to Brussels by the German government. “For the beginning of September and the beginning of November 2023, however, our model delivers filling levels of 56 percent and 65 percent, respectively, and then declining again,” Kooths explains. So, at least for September 2023, the BMWK’s latest report is more optimistic than the economists’ expectation. Nevertheless, Kooths does not believe that a level of 90 percent will be reached again with the better September forecast.

    At the beginning of August, the Federal Network Agency also simulated a worse development in storage levels. Of the eight scenarios for a supply stop via Nord Stream 1, only one saw similar gas storage levels for May and July as the German government now forecasts. Other calculations predicted that storage facilities would be completely empty for months.

    Berlin is now conspicuously optimistic for next February: The German government reported its legally fixed target to Brussels – a fill level of 40 percent. The network agency, however, expects 20 percent at best in the event of a Nord Stream outage.

    • Climate & Environment
    • Energy
    • Fossil fuels
    • Gasspeicher
    • Germany
    • LNG
    • Natural gas

    News

    Scholz and Sánchez confirm partnership for Midcat gas pipeline

    German Chancellor Olaf Scholz and Spanish Prime Minister Pedro Sánchez reaffirmed their joint commitment to the Midcat gas pipeline at the 25th Spanish-German summit in the northwestern Spanish city of A Coruña. This is intended to facilitate the transport of energy from the Iberian Peninsula to the center of Europe. However, French President Emmanuel Macron is speaking out against the project.

    “We will continue to work for greater interconnection capacity of the Iberian Peninsula to strengthen its contribution to the security of supply of the entire EU,” the joint action plan states in reference to Midcat. It does not include a joint agreement to cap the price of gas for electricity generation at the European level. It is one of the aspects that Sánchez has vehemently defended in Brussels.

    At the press conference following the signing of the agreements on Wednesday, Sánchez recalled that the issue of energy interconnections was already agreed at the European level in 2015. “Although there is a commitment at the European level to achieve a degree of interconnection of 10 percent, we are below 5 percent, at not even 3 percent.” He stressed that Spain, with its six regasification plants, could help overcome its dependence on Russian gas.

    Labor and education part of the action plan

    President Emmanuel Macron has refused to support the Midcat project in recent months, saying it is uneconomical and unprofitable. In A Coruña, Scholz pointed out that more energy interconnections are needed in Europe. “If some interconnections are not very profitable now, they may become so in the future. This is an issue where all countries must work together,” he said.

    The action plan signed by the two countries also focuses on labor and higher education. The meeting was also attended by eight ministers from Spain and seven ministers from Germany. The last government consultations between Spain and Germany took place nine years ago – between then German Chancellor Angela Merkel and then Prime Minister Mariano Rajoy.

    The joint action plan, to be developed bilaterally by Germany and Spain within the framework of the EU, has six basic axes. In addition to the areas of security and defense, it also sets goals in the field of foreign policy cooperation, including migration, and mentions the southern neighborhood, which is of particular importance to the Sánchez government. Isabel Cuesta

    • Energy
    • European policy
    • Fossil fuels
    • Germany
    • Natural gas
    • Spain

    New sanctions package against Russia

    The EU states have launched the eighth sanctions package against Russia. On Wednesday, the permanent representatives of the member states approved, among other things, the legal requirements for a price cap on oil imports from Russia supported by the G7 countries. Several diplomats confirmed this to the German news agency Deutsche Presse-Agentur in Brussels. The agreement still has to be confirmed by the capitals in a written procedure.

    EU Commission President Ursula von der Leyen proposed the package in the middle of last week in response to Russia’s recent escalation in the war against Ukraine. “We will never accept Putin’s sham referenda nor any kind of annexation in Ukraine,” the German politician said.

    Part of the agreement in principle on the new sanctions are various export bans, which affect key technologies for aviation, for example. In addition, there is to be an import ban on specific steel from Russia, among other things. EU citizens are also to be banned from taking seats on the management bodies of Russian state-owned companies. The German government in particular had lobbied for this after former Chancellor Gerhard Schröder (SPD) had long been head of the supervisory board of the Russian oil company Rosneft.

    In addition, there are, for example, punitive measures against people who helped to carry out the sham referendums in the territories on Ukrainian territory that Russia has since annexed. They are subject to entry bans and asset freezes.

    With the new sanctions package, the EU states are also creating the basis for Russia to have to sell oil to large customers such as India for a significantly lower price in the future than at present. This is intended to reduce Moscow’s revenues, which are also used to finance the war against Ukraine. dpa

    • Geopolitics

    WTO: bleak forecast for 2023

    The World Trade Organization (WTO) expects global trade in the coming year to be noticeably lower than last year. Trade in goods will increase by only 1.0 percent, the WTO announced in Geneva on Wednesday. Previously, the organization had still assumed 3.4 percent growth. “The picture for 2023 has darkened considerably,” WTO Director-General Ngozi Okonjo-Iweala said.

    The situation in the coming year would also depend on developments in Ukraine. “If the war in Ukraine worsens, rather than gets better, that’s going to have a huge impact,” Okonjo-Iweala said.

    This year, however, world trade is growing surprisingly faster than assumed in the spring. The WTO now expects the volume of trade in goods to grow by 3.5 percent in 2022. In its forecast in April, it had assumed only 3.0 percent.

    Warning against trade barriers

    The WTO said its forecasts were subject to considerable uncertainty. It gave a trade development range of +2.0 to +4.9 percent for this year and -2.8 to +4.6 percent for 2023. Weather events hitting food-producing regions or damaging infrastructure for energy exports could further affect development. This also applies to the weaker development in China, where Covid outbreaks have disrupted production.

    Okonjo-Iweala said the world needs a more diversified and less concentrated base for the production of goods and services. This could boost growth, increase resilience and promote long-term price stability because it would reduce vulnerability to extreme weather events and local disruptions.

    The WTO warned governments against the reflex to erect trade barriers in the face of the difficult environment. Withdrawing from global supply chains could increase inflationary pressures, limit economic growth and bring restrictions on living standards. Free trade is also needed to address climate change to share new technologies. Governments should not lose sight of the long-term goals of limiting climate change while tackling short-term problems such as energy supply, Okonjo-Iweala said. rtr/dpa

    • Supply chains
    • Trade
    • Trade Policy

    Denmark elects a new parliament on Nov. 1

    Denmark will elect a new parliament this fall. After weeks of speculation, Prime Minister Mette Frederiksen announced on Wednesday outside her official residence Marienborg, north of Copenhagen, that the next election will take place as early as Nov. 1. In doing so, she ultimately bowed to a demand from the Danish Social Liberal Party, Radikale Venstre, which is linked to the Covid mink scandal.

    Elections must be held every four years in Denmark – in this case, Frederiksen would have until June 4, 2023. However, the Radical Venstre, which supports Frederiksen’s minority government consisting only of Social Democrats, had given the prime minister an ultimatum in the summer: By the time parliament opened after the summer recess on Tuesday, the prime minister should have called the election. Otherwise, the party wanted to force a vote of no confidence.

    The background to the ultimatum is Frederiksen’s role in the Danish mink scandal, in which millions of mink were killed during the Covid pandemic. Only later did it emerge that the legal basis for this had been lacking. In a report, an independent commission had sharply criticized the prime minister and parts of her government for the decision to cull all mink in the country, bred for fur production over fears of spreading a mutated coronavirus variant. dpa

    • Coronavirus
    • Denmark
    • Health

    Heads

    Nicolai von Ondarza – EU policy researcher

    Nicolai von Ondarza heads the EU/Europe research group at the German Institute for International and Security Affairs (SWP).

    “The EU must succeed in bringing the two processes of internal reform and further opening from a geostrategic perspective together,” says Nicolai von Ondarza. As head of the EU/Europe research group at the German Institute for International and Security Affairs (SWP), the committed European deals with the fundamental issues of the EU, such as its deepening and enlargement policies.

    Since the beginning of the Russian war of aggression on Ukraine, he has observed a fundamental change in the EU: “The EU states have recognized for themselves that they have a strong geostrategic self-interest in a functioning enlargement policy. The candidate status of Ukraine and Moldova is not just a purely symbolic promise, but the start of a process.” However, an EU 30 Plus cannot avoid institutional reform to remain capable of acting.

    Preserving transatlantic ties

    The ability to act is also a decisive keyword in the debate on strategic sovereignty, which von Ondarza is helping to shape. He argues for a new understanding of European sovereignty in which the US continues to be considered as a partner, especially in the area of defense: “We must not fall into the trap of playing NATO and the EU or transatlantic ties and European ties off against each other.”

    Von Ondarza not only wants to combine this in the debate, but it is also a lived part of his biography: An exchange year in the US had shown him a transatlantic perspective. His studies of European Studies in Great Britain have repeatedly shown him the strengths and opportunities of the EU.

    Relationship between EU and UK remains difficult

    Since 2011, he has also worked intensively on Great Britain and Northern Ireland at the German Institute for International and Security Affairs (Stiftung Wissenschaft und Politik) and, as organizer of the British-German Outlook Group, is committed to bilateral dialogue between Germany and Great Britain. He describes the period since 2011 as one in which the UK has become increasingly polarized – as have relations with the EU regarding the Brexit.

    He eagerly awaits what the election of new Prime Minister Liz Truss and the death of Queen Elizabeth II will mean for the United Kingdom and post-Brexit relations with the EU. Despite troubled times ahead and the multitude of crises such as the Northern Ireland Protocol, the energy crisis or Brexit, von Ondarza sees the Queen’s death first and foremost as a unifying moment for the country. He also observes great sympathy at the European level.

    “But that doesn’t change the fact that we are again heading for a difficult situation between Europe and the UK,” von Ondarza said. Even under the new prime minister, Liz Truss, he expects “continued tough, confrontational rhetoric from London”. Marlene Resch

    • Brexit
    • European policy
    • Great Britain
    • United Kingdom
    • USA

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