At 7:30 p.m. CEST, the Reuters news agency reported the death of the United Kingdom‘s head of state. “Queen Elizabeth II,” as German president Frank-Walter Steinmeier wrote, “is a woman who shaped a century. She has experienced and written contemporary history. Her Majesty was held in the highest esteem and respect throughout the world.” On the other side of the canal in the French capital, the lights on the Eiffel Tower were switched off in commemoration.
It is crunch time in the EU for emergency measures against high prices on gas and electricity. Today, the energy ministers will meet to discuss the proposals for further action drawn up by the EU Commission. According to reports in Brussels, the Commission will present a legislative proposal as early as Tuesday. This shows that under pressure, the civil service apparatus in the Berlaymont can work very quickly and come up with very concrete results. The script then provides for Ursula von der Leyen’s speech on the state of the European Union on Wednesday. In the address, under the acronym SOTEU2022, she will passionately detail what the EU wants to do to protect citizens from price shocks. It is said that a second special meeting of the energy ministers of the 27 member states could be due before the end of September.
In her outlook for the fall, Claire Stam describes the status of the other legislative projects relating to energy in detail. The plenary votes on the Renewable Energy Directive and the Energy Efficiency Directive are due soon.
A piece by Till Hoppe and Finn Mayer-Kuckuk deals with the siting of a TSMC factory in Europe, which has long been the subject of speculation. However, the world market leader for chips from Taiwan is insisting on state subsidies and purchase guarantees from car manufacturers. A German site is also being discussed. Industry Commissioner Thierry Breton, who wants to increase Europe’s share of chip production, was not yet able to announce the green light during his visit to Berlin. However, Breton emphasized how welcome the company would be here.
A whole series of ambitious laws, measures, and targets have been imposed on the EU in recent years and months to protect the climate and the environment. Environment Commissioner Virginijus Sinkevičius even spoke of a “completely new path” for the economy and society.
However, adopting new legal frameworks at the EU level is ultimately ineffective if they are not implemented in the member states. In the environmental sector, in particular, there is still a large gap despite some progress, Sinkevičius said at the presentation of the Commission’s latest report on the implementation of EU environmental policy in the countries. Germany has some catching up to do.
Probably the biggest and most important construction site for Germany is and remains the protection of water bodies, especially groundwater. The quality of the latter has not improved even after the latest documentation on the implementation of the EU Nitrates Directive. Pollution from nitrates, especially from overfertilization in agriculture, remains “very worrying”, the Commission’s report says. The limit value of 50 milligrams of nitrate per liter is exceeded at 27 percent of all measuring points, which means that Germany almost brings up the rear in an EU-wide comparison. Only Malta performs worse.
This also leads to “acute problems with excessive plant and algae growth in the Baltic and North Seas due to high nutrient concentrations,” the Commission said. Only eight percent of all surface waters are in good ecological condition. This means that Germany has failed to meet its environmental targets for water by 2021. Even by 2027, the targets will be barely achievable, the report says.
The Brussels authority had recently approved a proposal by the Ministry of Agriculture (BMEL) to significantly expand the so-called red areas. These are agricultural areas where nitrate contamination in the groundwater is particularly high and where 20 percent less fertilizer may therefore be applied. According to the new proposal, the size of these areas is to increase from the current two to just under three million hectares.
The EU Commission has repeatedly denounced the inadequate implementation of the Nitrates Directive in Germany in recent years and has already won several cases before the European Court of Justice (ECJ). If the directive is still not complied with and further proceedings are instituted, billions of euros in fines could be imposed.
Swimming in German bathing lakes is nevertheless safe. According to the Commission, 90 percent of bathing waters were of “excellent quality” in 2020, as in previous years.
For years, the limit values for nitrogen dioxide were significantly exceeded, particularly in major cities, not least as a result of the emissions scandal surrounding the manipulation of pollutant levels in diesel vehicles. Following infringement proceedings and Germany’s condemnation before the ECJ, the Commission’s report now notes significant improvements in air quality in German cities.
The number of areas where the limit values were exceeded fell from 35 to five compared to 2017. In the case of particulate matter, the values have been complied with for three years in a row. It is therefore assumed that Germany will comply with the reduction targets for most air pollutants. A prominent exception is ammonia, which is mainly released into the air by the large-scale use of nitrogen fertilizers in agriculture.
The EU’s 2030 Zero Pollution Action Plan targets are to reduce the health impacts of air pollution by 55 percent and ecosystems threatened by air pollution in the EU by 25 percent.
In the coming years, EU regulations for clean air are to be tightened again significantly to better meet the recommendations of the World Health Organization, according to Commission circles.
Less present, but no less important than climate protection, is biodiversity preservation. There is widespread scientific agreement on this. As part of its biodiversity strategy, the EU wants to define targets and measures to create healthy and resilient ecosystems.
One of the most important legislative instruments for the conservation of flora and fauna is the Habitats and Birds Directive, which includes the designation of Natura 2000 and other protected areas. While Germany has a large number of national nature reserves and the Natura 2000 network is also almost complete, according to the Commission. However, the designated objectives and measures in the areas are not nearly sufficient to implement the directive. The Federal Republic of Germany did not comply with corresponding requests from Brussels, which is why infringement proceedings are also pending before the ECJ in this area.
Although the number of habitats in “good condition” has increased minimally, according to the Commission’s report. However, the number of habitats in “poor condition” has increased considerably more. This is one of the reasons why the organic share of agriculture is to be significantly increased. At around ten percent, Germany is roughly in line with the EU average. Only Austria meets the Europe-wide target of 25 percent by 2030. Germany even wants to reach 30 percent, but most experts consider this unrealistic.
The EU action plan for the circular economy is one of the most important building blocks of the Green Deal. It envisages initiatives for the entire life cycle of products and a doubling of the utilization rate of recyclable materials by 2030. Here, there are major differences among the member states.
In Germany, secondary use of materials increased from 11.4 percent in 2017 to 13.4 percent in 2020, which is just above the EU average, but only a small increase and still far from the leader, the Netherlands (31 percent).
In terms of waste management, on the other hand, Germany continues to lead the way, at least in terms of recycling. In 2019, around 67 percent of municipal waste was recycled. This is the highest figure in an EU-wide comparison. However, it would be even better to avoid waste, and this is where the tide turns: In 2020, waste generation per capita was 632 kilograms. This means that Germany has the fourth-highest per capita rate and is well above the EU average of 505 kilograms.
After all, in 2020 Germany became the first EU member state to introduce a general “duty of care” for manufacturers and retailers to avoid waste. This includes, for example, selling goods at a reduced price shortly before their expiration date.
Germany will have to rely predominantly on national sources to finance environmental protection measures. For the period 2021 to 2027, the Commission estimates the investment requirement at at least 0.82 percent of GDP per year. Based on investments to date, the Brussels-based authority expects a funding gap in the environmental sector of 0.19 percent of GDP, or around €7 billion per year.
No surprise: According to the report, Germany’s revenue from environment-related taxes as a percentage of GDP is the fourth lowest in the EU, amounting to 1.71 percent in 2020. This contrasts with still high subsidies for fossil fuels, which amounted to a good €12 billion in 2019, equivalent to 0.36 percent of GDP.
The electricity price brake adopted by the Austrian government under Chancellor Karl Nehammer (ÖVP) is earning little applause. Economists warn that the black-green coalition in Vienna is pursuing too loose a spending policy to deal with the energy crisis. “The government is opening a door that can no longer be closed. The electricity bill cap will be followed by the gas price cap, as already envisioned by Nehammer. At the end comes then perhaps also still another cover for food and all rents. That will be expensive,” criticizes the liberal think tank Agenda Austria. “We burden future generations with financing our illusion of prosperity.”
The electricity price brake adopted by the black-green coalition will cost taxpayers between €3 and €4 billion, according to Finance Minister Magnus Brunner (ÖVP). The Austrian government passed the electricity price brake on Wednesday in response to the sharp rise in prices. Originally, the relief package was to be adopted in August.
“No one in Austria should not be able to afford their basic electricity needs. That is the most important goal of the electricity price brake,” Nehammer said at the Chancellor’s Office. For the time being, the regulation is to apply until June 2024. The electricity price brake will relieve each household by about €500.
The tariff applies at 10 cents net per kWh for consumption of up to 2900 kilowatt hours (kWh) per year. Consumption above this limit must be paid at market rates, which are therefore very high. In the electricity price brake, the coalition has also built in a social component. All households that are exempt from the broadcasting fee – known as the GIS fee – and households with more than three people can apply for additional financial assistance. In this way, the coalition in Vienna accommodated critics from the employee camp.
An electricity price brake is also to become part of the third relief package of the government in Berlin. In Meseberg, the cabinet decided on “a basic supply at lower prices”. However, the Austrian electricity price brake is hardly suitable as a model for Germany.
The Vienna model does not impose any energy-saving requirements. This would be the case, for example, if 80 percent of a household’s average consumption were subsidized. This could maintain an incentive to save 20 percent of the more expensive electricity. Even this, however, is in doubt. Energy economist Andreas Löschel points to empirical studies according to which the average electricity costs of their total consumption are decisive for consumers, not the cost of an additional kilowatt hour.
The Vienna model accommodates citizens even further, as 2900 kilowatt hours corresponds to the consumption of a two- to three-person household. Four-fifths of Austrian households consume less annually. So hardly anyone has any incentives to save electricity.
Moreover, ten cents per kilowatt hour is dirt cheap and even far less than households were paying before the war began. In Austria, the average electricity price in 2021 was 23 cents, and in Germany it was as high as 32 cents. “That not only kills any incentive to save electricity,” says energy expert Lion Hirth of the Hertie School. “It might even encourage people to heat electrically to avoid the higher gas prices. That would put a lot of strain on the power grids.”
For the Austrian government, in any case, the electricity price brake adopted on Wednesday is a central building block for relieving the burden on households. The coalition recently launched a series of financial support measures such as the double family allowance or the anti-inflation and climate bonus. “Overall, we now have a wealth of measures to ensure that we do not leave the people of Austria to fend for themselves in this phase of stress,” Nehammer said.
Unions and environmental organizations are unhappy with the electricity price brake. They demand that the partly state-owned energy giants in Austria, the electricity company Verbund and oil and gas company OMV, be made to pay. “While high support payments are made from tax revenues, some energy companies make gigantic profits at the expense of the general public,” criticizes the energy spokesman of the environmental organization Global 2000, Johannes Wahlmüller. Global 2000 demands a penalty payment for energy companies that do not present a roadmap for the phase-out of oil and gas and for investments in renewable energies. Green energy minister Leonore Gewessler was managing director of Global 2000 before taking up her government post.
The Austrian Federation of Trade Unions (ÖGB) and the influential Chamber of Labor have already presented a model of how the “excess profits” of companies can be collected by the state. “In any case, we reject the idea that taxpayers should pay for the electricity price brake themselves,” said Chamber of Labor President Renate Anderl. The Austrian state owns the majority of shares in Verbund with 51 percent. It holds 31.5 percent of the shares in OMV.
“Neither in Germany nor in Austria does the state have the data to transfer money directly to citizens. In Austria, the state does not even have the account numbers of 1.2 million households,” says Gabriel Felbermeyer. The former president of the Kiel Institute for the World Economy is considered the most influential economist in the Alpine Republic. He is skeptical about a gas brake that has been much discussed at the EU level: “It makes sense that we start with electricity. But if we want a gas brake, we have to ask ourselves: What do we do with oil, pellet and wood heating systems?”
Not only in Austria but also in other EU countries, governments are trying to use electricity price brakes to reduce the impact of the European sanctions policy against Russia and to curb high inflation. Experts assume that, despite this, the political clashes between supporters and opponents of the EU sanctions against Russia will increase. There was already a foretaste of this in the Czech Republic last weekend. In Prague, around 70,000 people took to the streets against the EU sanctions.
“We have high electricity prices and high volatility. Neither will go away. This development is very cleverly controlled by the Kremlin,” Felbermayr said. “The game of gas price and volatility is the revenge of the Russians. But the Kremlin’s influence on the price of electricity will decline because we will increasingly have other energy sources, such as LNG.” He said there will be a slow normalization at the price level of global liquefied natural gas.
He expects the EU Commission to pick up the pace in the energy crisis. “The EU Commission is not fast enough to find solutions for the European electricity market. The Commission must act more quickly. The pressure will grow in view of the dramatic nature of the events. Europe must get prices down,” the economist demanded in Vienna. with Manuel Berkel
As a reminder, the RED and EED guidelines are being revised as part of the Fit for 55 package adopted by the Commission in July 2021. What sounds like a fitness program for fifty-year-olds is actually a mammoth legislative package with the goal of making Europe climate neutral by 2050. This goal is enshrined in European climate law, as is a legally binding commitment to reduce net greenhouse gas emissions by at least 55 percent from 1990 levels by 2030. These proposals would reduce European gas consumption by percent by 2030, with more than one-third of these savings coming from meeting energy efficiency targets.
Actors: Responsible is the Industry Committee (ITRE); rapporteur is Markus Pieper (CDU)
Content: Most of the changes sought under the RePowerEU plan relate to the Renewable Energy Directive (RED). The Commission’s proposal would increase the required share of renewable energy sources (RES) in EU final energy consumption to 45 percent by 2030. This RE share is higher than the 40 percent the Commission envisioned in its Fit for 55 proposal. And much higher than the 32.5 percent share in the existing RED (last amended in 2018). The Commission’s proposal also includes enhanced measures to expedite the permitting process for new RE plants or for the adaptation of existing RE plants.
On the Parliament side, ITRE’s report proposes a more ambitious target of 45 percent RE share of final energy consumption by 2030.
The Council of the EU adopted a general approach on June 29, 2022, that supports the 40 percent renewable energy target proposed by the Commission in July 2021. The general approach sets less ambitious sectoral targets than the Commission proposal or the ITRE report, but supports tightening sustainability criteria for biomass and speeding up the RE permit process. Vote in Parliament next week.
Actors: Responsible is the Industry Committee (ITRE); rapporteur is Niels Fuglsang (S&D, Denmark).
Content: The Commission’s proposal sets higher targets for reducing the EU’s primary energy consumption (down 39 percent) and final energy consumption (down 36 percent) by 2030, with a cap of 1023 million metric tons of oil equivalent (Mtoe) for primary energy consumption and 787 Mtoe for final energy consumption (compared to 1128 and 846 Mtoe, respectively, under the 2018 EED). These new targets will become binding at the EU level and will be reinforced by a benchmarking system that will allow member states to set their national benchmarks for this binding EU target. The recast EED aims to significantly increase energy efficiency in EU member states by focusing on sectors with high energy saving potential (heating and cooling, industry, and energy services) and expecting the public sector to lead by example.
The ITRE report sets more ambitious targets than the Commission’s proposal, namely a 40 percent reduction in final energy consumption (cap of 740 Mtoe) and a 42.5 percent reduction in primary energy consumption (cap of 960 Mtoe). This is slightly more ambitious than the revised targets from the Commission under its Repower EU Plan. According to the ITRE report, member states would have to make binding national contributions based on both energy consumption indicators and reach milestones in 2025 and 2027 to ensure they are on track. Vote in Parliament next week.
Actors: Responsible are the Economic Committee ECON and the Budget Committee BUDG, but for the part dealing with emissions trading, the Environment Committee ENVI is solely responsible. The rapporteur for the ETS section is Peter Liese (CDU).
Content: With the REPowerEU plan, the Commission wants to promote Europe’s energy independence. In view of the Russian war of aggression, fossil energy supplies from Russia, in particular, are to be drastically reduced, and in the longer term, the intention is to do without them altogether. The need for such a program is largely undisputed both in Parliament and among the member states.
The big question is still financing. Of the more than €300 billion to be mobilized for REPowerEU from various sources, €20 billion would come from the sale of CO2 allowances from the market stability reserve, according to the Commission proposal. Not an uncontroversial model, as it could destabilize the market (Europe.Table reported).
The EPP is nevertheless open to such partial financing. The fact that this could also reduce the CO2 price is seen less as a problem among the Christian Democrats and more as a relieving element. “We urgently need to react quickly to protect electricity customers and companies from unbearable costs. European emissions trading must also make a contribution to this,” says Liese.
The Commission has proposed auctioning the allowances by 2026 to avoid too large short-term increases in CO2 prices. Liese believes this is precisely what is desirable and therefore proposes that the auctioning should take place within twelve months of the REPowerEU plan coming into force. This would lower prices in the ETS in the short term, and in the long term, money would be available for decarbonization and greater energy independence.
Nevertheless, there is opposition in the Environment Committee: The financial and environmental integrity of the ETS would be jeopardized by the approach.
Schedule: The Parliament wants to vote on its own position on REPowerEU in the first October plenary. It is not ruled out that the date will still be postponed.
Actors: Responsible is the Industry Committee ITRE; rapporteur is Ciarán Cuffe (Greens/EFA, Ireland).
The Commission presented its proposal for the Energy Performance of Buildings Directive (EPBD) on December 15, 2021. It aims to set out the tools for achieving a zero-emission building stock by 2050, introduce a new definition of zero-emission building, and refine existing definitions such as “near-zero energy building” (nZEB) and “deep renovation“.
The EPBD is intended to oblige member states to ensure that new buildings are suitable for the use of solar energy, on the one hand. On the other, they are to ensure that solar energy systems are also installed on buildings. This would apply to all new public and commercial buildings with a floor area of more than 250 square meters from 2027 and to all existing public and commercial buildings of that size from 2028. From 2030, this requirement would be extended to all new residential buildings.
Schedule: ITRE vote on October 26, rapporteur submitted draft report in June 2022, opened for amendments currently under negotiation.
Actors: Responsible is the Environment Committee ENVI; rapporteur is Jessica Polfjärd (EPP, Sweden).
Content: The 2018 Effort Sharing Regulation sets binding annual GHG emission targets for each member state (MS) for 2020 to 2030 for sectors not included in the EU Emissions Trading System (ETS): Buildings, Agriculture, Waste, Small Industry, and Transport, which account for about 60 percent of emissions. The Commission proposes to reduce emissions from the ETS sectors by at least 40 percent from 2005 levels – an increase of 11 percentage points from the existing collective EU-27 target of a 29 percent emissions reduction.
Schedule: On September 27, 2021, ENVI members met for an initial exchange of views. They highlighted several issues, such as the need to ensure alignment of the ESR with the EU ETS and the lack of a post-2030 guidance framework. The topic was also the complexity of creating a carbon market for road transport and buildings.
Actors: Responsible is the Economic Committee ECON; rapporteur Johan Van Overtveldt (ECR, Belgium).
Content: The Commission wants to revise the Energy Taxation Directive. The goal is to bring the taxation of energy products into line with the EU’s energy and climate policy, promote clean technologies and abolish outdated exemptions.
Schedule: The committee is scheduled to vote on September 26.
Actors: Responsible is the ENVI Environment Committee; rapporteurs are Jutta Paulus (Greens, Germany) and Silvia Sardone (ID, Italy).
Content: The Commission wants to drastically reduce methane emissions in the energy sector. The sectors involved are energy, agriculture, waste and wastewater. As stated in the strategy document, the legislative proposals will focus on the energy sector.
Actors: Responsible is the ITRE Industry Committee, rapporteur is Jens Geier (SPD).
Content: The Commission intends to revise the EU Gas Directive. This is part of the Hydrogen and Decarbonized Gas Markets Package, which also includes a recast of the 2009 EU Gas Regulation and revisions to the 2017 Regulation on security of gas supply. The 2009 EU Gas Directive is part of the Third Energy Package, which sets the regulatory framework for the EU’s internal energy market. While the electricity component of the third energy package was revised in 2019 to align it with the EU’s more ambitious climate and energy targets, the gas component of the third energy package has only been selectively revised to date. The revised Gas Directive consists of 10 chapters with a total of 90 articles.
Schedule: ITRE vote on November 28, 2022.
Actors: Responsible is the Industry Committee ITRE; rapporteur is Jerzy Buzek (EPP, Poland)
Content: Like the revision of the EU Gas Directive, the revision of the EU Gas Regulation is part of the Hydrogen and Decarbonized Gas Markets Package, which also includes a fundamental revision of the 2009 EU Gas Directive. The revision of the EU Gas Regulation consists of five chapters with 69 articles.
Schedule: ITRE vote on Nov. 28, 2022. with Lukas Scheid
To paraphrase France’s chansonnier Charles Aznavour, I will tell you about a time unknown to those under thirty. At that time, energy and especially electricity issues were only important to experts, engineers and other “geeks”.
Those days are over. And the State of the Union address, known as SOTEU in EU jargon, will reflect how much energy and power issues now permeate the entire political spectrum: Foreign, social, economic, climate policy – it doesn’t even stop. Most citizens will go about their business in the 27 member states without feeling much of the stir caused by the speech in the EU bubble – and yet: The speech will have consequences for every one of them.
The political agenda in these months is now very much dominated by energy issues. That starts with today, Friday, when the EU energy ministers meet. Then there are the elections in Sweden next Sunday. Why are we talking about that here? The government in Stockholm will take over the rotating presidency of the EU Council on January 1, replacing the Czech Republic.
Certainly, not all trilogues on the Fit for 55 package will be completed by the end of the year. This means that when Stockholm takes over the “business” in the Council, the government there will have to take the negotiations to the end. Next Sunday’s election results are likely to give a first indication of how much ambition the incoming Swedish Council presidency will – or will not – display, particularly on climate issues. At the moment, opinion polls ahead of the September 11 vote show Social Democrat Magdalena Andersson and her allies neck and neck with a right-wing bloc in which Ulf Kristersson, the leader of the moderate Conservatives, is the main candidate to oust her from the post of head of government.
For once, Michael Bloss (Greens/EFA), the EU parliamentarian responsible for energy and climate, and the European Commission, represented by its spokesman Eric Mamer, are in agreement: both stressed this week how urgent it is for member states to go on a joint gas shopping spree. Until now, it was rather the case that each individual country made representations to the exporting countries on its own mission. In this way, they inadvertently drove up each other’s prices. The record prices on the markets are also the reason why the energy ministers are meeting today to discuss suitable measures for reducing them.
It is worth noting here that there are six so-called bilateral solidarity agreements between member states on gas supplies: The first one was signed between Germany and Denmark on December 14, 2020; another five agreements were signed between Germany and Austria on December 2, 2021; between Estonia and Latvia on January 4, 2022; between Lithuania and Latvia on March 10, 2022; between Italy and Slovenia on April 22, 2022; and between Finland and Estonia on April 25, 2022.
We do not want to discuss here whether joint purchasing should be legally binding or voluntary. Rather, the point is to emphasize the need to define electricity as a common good for all. And to align the new electricity market with the EU’s climate goals towards decarbonization of our energy.
For one thing, the price rise fueled by Putin’s invasion of Ukraine and a summer that showed the true consequences of the climate emergency shows that the two problems are linked. It also becomes clear that the logic of “me first” is at an end. Or do we really have to remind people once again that the principle of “chaqu’un pour soi“, which in English means something like “Everyone is his own neighbor”, is to be prevented at all costs in the current situation. Unless, of course, one wants to play into Putin’s hands.
At 7:30 p.m. CEST, the Reuters news agency reported the death of the United Kingdom‘s head of state. “Queen Elizabeth II,” as German president Frank-Walter Steinmeier wrote, “is a woman who shaped a century. She has experienced and written contemporary history. Her Majesty was held in the highest esteem and respect throughout the world.” On the other side of the canal in the French capital, the lights on the Eiffel Tower were switched off in commemoration.
It is crunch time in the EU for emergency measures against high prices on gas and electricity. Today, the energy ministers will meet to discuss the proposals for further action drawn up by the EU Commission. According to reports in Brussels, the Commission will present a legislative proposal as early as Tuesday. This shows that under pressure, the civil service apparatus in the Berlaymont can work very quickly and come up with very concrete results. The script then provides for Ursula von der Leyen’s speech on the state of the European Union on Wednesday. In the address, under the acronym SOTEU2022, she will passionately detail what the EU wants to do to protect citizens from price shocks. It is said that a second special meeting of the energy ministers of the 27 member states could be due before the end of September.
In her outlook for the fall, Claire Stam describes the status of the other legislative projects relating to energy in detail. The plenary votes on the Renewable Energy Directive and the Energy Efficiency Directive are due soon.
A piece by Till Hoppe and Finn Mayer-Kuckuk deals with the siting of a TSMC factory in Europe, which has long been the subject of speculation. However, the world market leader for chips from Taiwan is insisting on state subsidies and purchase guarantees from car manufacturers. A German site is also being discussed. Industry Commissioner Thierry Breton, who wants to increase Europe’s share of chip production, was not yet able to announce the green light during his visit to Berlin. However, Breton emphasized how welcome the company would be here.
A whole series of ambitious laws, measures, and targets have been imposed on the EU in recent years and months to protect the climate and the environment. Environment Commissioner Virginijus Sinkevičius even spoke of a “completely new path” for the economy and society.
However, adopting new legal frameworks at the EU level is ultimately ineffective if they are not implemented in the member states. In the environmental sector, in particular, there is still a large gap despite some progress, Sinkevičius said at the presentation of the Commission’s latest report on the implementation of EU environmental policy in the countries. Germany has some catching up to do.
Probably the biggest and most important construction site for Germany is and remains the protection of water bodies, especially groundwater. The quality of the latter has not improved even after the latest documentation on the implementation of the EU Nitrates Directive. Pollution from nitrates, especially from overfertilization in agriculture, remains “very worrying”, the Commission’s report says. The limit value of 50 milligrams of nitrate per liter is exceeded at 27 percent of all measuring points, which means that Germany almost brings up the rear in an EU-wide comparison. Only Malta performs worse.
This also leads to “acute problems with excessive plant and algae growth in the Baltic and North Seas due to high nutrient concentrations,” the Commission said. Only eight percent of all surface waters are in good ecological condition. This means that Germany has failed to meet its environmental targets for water by 2021. Even by 2027, the targets will be barely achievable, the report says.
The Brussels authority had recently approved a proposal by the Ministry of Agriculture (BMEL) to significantly expand the so-called red areas. These are agricultural areas where nitrate contamination in the groundwater is particularly high and where 20 percent less fertilizer may therefore be applied. According to the new proposal, the size of these areas is to increase from the current two to just under three million hectares.
The EU Commission has repeatedly denounced the inadequate implementation of the Nitrates Directive in Germany in recent years and has already won several cases before the European Court of Justice (ECJ). If the directive is still not complied with and further proceedings are instituted, billions of euros in fines could be imposed.
Swimming in German bathing lakes is nevertheless safe. According to the Commission, 90 percent of bathing waters were of “excellent quality” in 2020, as in previous years.
For years, the limit values for nitrogen dioxide were significantly exceeded, particularly in major cities, not least as a result of the emissions scandal surrounding the manipulation of pollutant levels in diesel vehicles. Following infringement proceedings and Germany’s condemnation before the ECJ, the Commission’s report now notes significant improvements in air quality in German cities.
The number of areas where the limit values were exceeded fell from 35 to five compared to 2017. In the case of particulate matter, the values have been complied with for three years in a row. It is therefore assumed that Germany will comply with the reduction targets for most air pollutants. A prominent exception is ammonia, which is mainly released into the air by the large-scale use of nitrogen fertilizers in agriculture.
The EU’s 2030 Zero Pollution Action Plan targets are to reduce the health impacts of air pollution by 55 percent and ecosystems threatened by air pollution in the EU by 25 percent.
In the coming years, EU regulations for clean air are to be tightened again significantly to better meet the recommendations of the World Health Organization, according to Commission circles.
Less present, but no less important than climate protection, is biodiversity preservation. There is widespread scientific agreement on this. As part of its biodiversity strategy, the EU wants to define targets and measures to create healthy and resilient ecosystems.
One of the most important legislative instruments for the conservation of flora and fauna is the Habitats and Birds Directive, which includes the designation of Natura 2000 and other protected areas. While Germany has a large number of national nature reserves and the Natura 2000 network is also almost complete, according to the Commission. However, the designated objectives and measures in the areas are not nearly sufficient to implement the directive. The Federal Republic of Germany did not comply with corresponding requests from Brussels, which is why infringement proceedings are also pending before the ECJ in this area.
Although the number of habitats in “good condition” has increased minimally, according to the Commission’s report. However, the number of habitats in “poor condition” has increased considerably more. This is one of the reasons why the organic share of agriculture is to be significantly increased. At around ten percent, Germany is roughly in line with the EU average. Only Austria meets the Europe-wide target of 25 percent by 2030. Germany even wants to reach 30 percent, but most experts consider this unrealistic.
The EU action plan for the circular economy is one of the most important building blocks of the Green Deal. It envisages initiatives for the entire life cycle of products and a doubling of the utilization rate of recyclable materials by 2030. Here, there are major differences among the member states.
In Germany, secondary use of materials increased from 11.4 percent in 2017 to 13.4 percent in 2020, which is just above the EU average, but only a small increase and still far from the leader, the Netherlands (31 percent).
In terms of waste management, on the other hand, Germany continues to lead the way, at least in terms of recycling. In 2019, around 67 percent of municipal waste was recycled. This is the highest figure in an EU-wide comparison. However, it would be even better to avoid waste, and this is where the tide turns: In 2020, waste generation per capita was 632 kilograms. This means that Germany has the fourth-highest per capita rate and is well above the EU average of 505 kilograms.
After all, in 2020 Germany became the first EU member state to introduce a general “duty of care” for manufacturers and retailers to avoid waste. This includes, for example, selling goods at a reduced price shortly before their expiration date.
Germany will have to rely predominantly on national sources to finance environmental protection measures. For the period 2021 to 2027, the Commission estimates the investment requirement at at least 0.82 percent of GDP per year. Based on investments to date, the Brussels-based authority expects a funding gap in the environmental sector of 0.19 percent of GDP, or around €7 billion per year.
No surprise: According to the report, Germany’s revenue from environment-related taxes as a percentage of GDP is the fourth lowest in the EU, amounting to 1.71 percent in 2020. This contrasts with still high subsidies for fossil fuels, which amounted to a good €12 billion in 2019, equivalent to 0.36 percent of GDP.
The electricity price brake adopted by the Austrian government under Chancellor Karl Nehammer (ÖVP) is earning little applause. Economists warn that the black-green coalition in Vienna is pursuing too loose a spending policy to deal with the energy crisis. “The government is opening a door that can no longer be closed. The electricity bill cap will be followed by the gas price cap, as already envisioned by Nehammer. At the end comes then perhaps also still another cover for food and all rents. That will be expensive,” criticizes the liberal think tank Agenda Austria. “We burden future generations with financing our illusion of prosperity.”
The electricity price brake adopted by the black-green coalition will cost taxpayers between €3 and €4 billion, according to Finance Minister Magnus Brunner (ÖVP). The Austrian government passed the electricity price brake on Wednesday in response to the sharp rise in prices. Originally, the relief package was to be adopted in August.
“No one in Austria should not be able to afford their basic electricity needs. That is the most important goal of the electricity price brake,” Nehammer said at the Chancellor’s Office. For the time being, the regulation is to apply until June 2024. The electricity price brake will relieve each household by about €500.
The tariff applies at 10 cents net per kWh for consumption of up to 2900 kilowatt hours (kWh) per year. Consumption above this limit must be paid at market rates, which are therefore very high. In the electricity price brake, the coalition has also built in a social component. All households that are exempt from the broadcasting fee – known as the GIS fee – and households with more than three people can apply for additional financial assistance. In this way, the coalition in Vienna accommodated critics from the employee camp.
An electricity price brake is also to become part of the third relief package of the government in Berlin. In Meseberg, the cabinet decided on “a basic supply at lower prices”. However, the Austrian electricity price brake is hardly suitable as a model for Germany.
The Vienna model does not impose any energy-saving requirements. This would be the case, for example, if 80 percent of a household’s average consumption were subsidized. This could maintain an incentive to save 20 percent of the more expensive electricity. Even this, however, is in doubt. Energy economist Andreas Löschel points to empirical studies according to which the average electricity costs of their total consumption are decisive for consumers, not the cost of an additional kilowatt hour.
The Vienna model accommodates citizens even further, as 2900 kilowatt hours corresponds to the consumption of a two- to three-person household. Four-fifths of Austrian households consume less annually. So hardly anyone has any incentives to save electricity.
Moreover, ten cents per kilowatt hour is dirt cheap and even far less than households were paying before the war began. In Austria, the average electricity price in 2021 was 23 cents, and in Germany it was as high as 32 cents. “That not only kills any incentive to save electricity,” says energy expert Lion Hirth of the Hertie School. “It might even encourage people to heat electrically to avoid the higher gas prices. That would put a lot of strain on the power grids.”
For the Austrian government, in any case, the electricity price brake adopted on Wednesday is a central building block for relieving the burden on households. The coalition recently launched a series of financial support measures such as the double family allowance or the anti-inflation and climate bonus. “Overall, we now have a wealth of measures to ensure that we do not leave the people of Austria to fend for themselves in this phase of stress,” Nehammer said.
Unions and environmental organizations are unhappy with the electricity price brake. They demand that the partly state-owned energy giants in Austria, the electricity company Verbund and oil and gas company OMV, be made to pay. “While high support payments are made from tax revenues, some energy companies make gigantic profits at the expense of the general public,” criticizes the energy spokesman of the environmental organization Global 2000, Johannes Wahlmüller. Global 2000 demands a penalty payment for energy companies that do not present a roadmap for the phase-out of oil and gas and for investments in renewable energies. Green energy minister Leonore Gewessler was managing director of Global 2000 before taking up her government post.
The Austrian Federation of Trade Unions (ÖGB) and the influential Chamber of Labor have already presented a model of how the “excess profits” of companies can be collected by the state. “In any case, we reject the idea that taxpayers should pay for the electricity price brake themselves,” said Chamber of Labor President Renate Anderl. The Austrian state owns the majority of shares in Verbund with 51 percent. It holds 31.5 percent of the shares in OMV.
“Neither in Germany nor in Austria does the state have the data to transfer money directly to citizens. In Austria, the state does not even have the account numbers of 1.2 million households,” says Gabriel Felbermeyer. The former president of the Kiel Institute for the World Economy is considered the most influential economist in the Alpine Republic. He is skeptical about a gas brake that has been much discussed at the EU level: “It makes sense that we start with electricity. But if we want a gas brake, we have to ask ourselves: What do we do with oil, pellet and wood heating systems?”
Not only in Austria but also in other EU countries, governments are trying to use electricity price brakes to reduce the impact of the European sanctions policy against Russia and to curb high inflation. Experts assume that, despite this, the political clashes between supporters and opponents of the EU sanctions against Russia will increase. There was already a foretaste of this in the Czech Republic last weekend. In Prague, around 70,000 people took to the streets against the EU sanctions.
“We have high electricity prices and high volatility. Neither will go away. This development is very cleverly controlled by the Kremlin,” Felbermayr said. “The game of gas price and volatility is the revenge of the Russians. But the Kremlin’s influence on the price of electricity will decline because we will increasingly have other energy sources, such as LNG.” He said there will be a slow normalization at the price level of global liquefied natural gas.
He expects the EU Commission to pick up the pace in the energy crisis. “The EU Commission is not fast enough to find solutions for the European electricity market. The Commission must act more quickly. The pressure will grow in view of the dramatic nature of the events. Europe must get prices down,” the economist demanded in Vienna. with Manuel Berkel
As a reminder, the RED and EED guidelines are being revised as part of the Fit for 55 package adopted by the Commission in July 2021. What sounds like a fitness program for fifty-year-olds is actually a mammoth legislative package with the goal of making Europe climate neutral by 2050. This goal is enshrined in European climate law, as is a legally binding commitment to reduce net greenhouse gas emissions by at least 55 percent from 1990 levels by 2030. These proposals would reduce European gas consumption by percent by 2030, with more than one-third of these savings coming from meeting energy efficiency targets.
Actors: Responsible is the Industry Committee (ITRE); rapporteur is Markus Pieper (CDU)
Content: Most of the changes sought under the RePowerEU plan relate to the Renewable Energy Directive (RED). The Commission’s proposal would increase the required share of renewable energy sources (RES) in EU final energy consumption to 45 percent by 2030. This RE share is higher than the 40 percent the Commission envisioned in its Fit for 55 proposal. And much higher than the 32.5 percent share in the existing RED (last amended in 2018). The Commission’s proposal also includes enhanced measures to expedite the permitting process for new RE plants or for the adaptation of existing RE plants.
On the Parliament side, ITRE’s report proposes a more ambitious target of 45 percent RE share of final energy consumption by 2030.
The Council of the EU adopted a general approach on June 29, 2022, that supports the 40 percent renewable energy target proposed by the Commission in July 2021. The general approach sets less ambitious sectoral targets than the Commission proposal or the ITRE report, but supports tightening sustainability criteria for biomass and speeding up the RE permit process. Vote in Parliament next week.
Actors: Responsible is the Industry Committee (ITRE); rapporteur is Niels Fuglsang (S&D, Denmark).
Content: The Commission’s proposal sets higher targets for reducing the EU’s primary energy consumption (down 39 percent) and final energy consumption (down 36 percent) by 2030, with a cap of 1023 million metric tons of oil equivalent (Mtoe) for primary energy consumption and 787 Mtoe for final energy consumption (compared to 1128 and 846 Mtoe, respectively, under the 2018 EED). These new targets will become binding at the EU level and will be reinforced by a benchmarking system that will allow member states to set their national benchmarks for this binding EU target. The recast EED aims to significantly increase energy efficiency in EU member states by focusing on sectors with high energy saving potential (heating and cooling, industry, and energy services) and expecting the public sector to lead by example.
The ITRE report sets more ambitious targets than the Commission’s proposal, namely a 40 percent reduction in final energy consumption (cap of 740 Mtoe) and a 42.5 percent reduction in primary energy consumption (cap of 960 Mtoe). This is slightly more ambitious than the revised targets from the Commission under its Repower EU Plan. According to the ITRE report, member states would have to make binding national contributions based on both energy consumption indicators and reach milestones in 2025 and 2027 to ensure they are on track. Vote in Parliament next week.
Actors: Responsible are the Economic Committee ECON and the Budget Committee BUDG, but for the part dealing with emissions trading, the Environment Committee ENVI is solely responsible. The rapporteur for the ETS section is Peter Liese (CDU).
Content: With the REPowerEU plan, the Commission wants to promote Europe’s energy independence. In view of the Russian war of aggression, fossil energy supplies from Russia, in particular, are to be drastically reduced, and in the longer term, the intention is to do without them altogether. The need for such a program is largely undisputed both in Parliament and among the member states.
The big question is still financing. Of the more than €300 billion to be mobilized for REPowerEU from various sources, €20 billion would come from the sale of CO2 allowances from the market stability reserve, according to the Commission proposal. Not an uncontroversial model, as it could destabilize the market (Europe.Table reported).
The EPP is nevertheless open to such partial financing. The fact that this could also reduce the CO2 price is seen less as a problem among the Christian Democrats and more as a relieving element. “We urgently need to react quickly to protect electricity customers and companies from unbearable costs. European emissions trading must also make a contribution to this,” says Liese.
The Commission has proposed auctioning the allowances by 2026 to avoid too large short-term increases in CO2 prices. Liese believes this is precisely what is desirable and therefore proposes that the auctioning should take place within twelve months of the REPowerEU plan coming into force. This would lower prices in the ETS in the short term, and in the long term, money would be available for decarbonization and greater energy independence.
Nevertheless, there is opposition in the Environment Committee: The financial and environmental integrity of the ETS would be jeopardized by the approach.
Schedule: The Parliament wants to vote on its own position on REPowerEU in the first October plenary. It is not ruled out that the date will still be postponed.
Actors: Responsible is the Industry Committee ITRE; rapporteur is Ciarán Cuffe (Greens/EFA, Ireland).
The Commission presented its proposal for the Energy Performance of Buildings Directive (EPBD) on December 15, 2021. It aims to set out the tools for achieving a zero-emission building stock by 2050, introduce a new definition of zero-emission building, and refine existing definitions such as “near-zero energy building” (nZEB) and “deep renovation“.
The EPBD is intended to oblige member states to ensure that new buildings are suitable for the use of solar energy, on the one hand. On the other, they are to ensure that solar energy systems are also installed on buildings. This would apply to all new public and commercial buildings with a floor area of more than 250 square meters from 2027 and to all existing public and commercial buildings of that size from 2028. From 2030, this requirement would be extended to all new residential buildings.
Schedule: ITRE vote on October 26, rapporteur submitted draft report in June 2022, opened for amendments currently under negotiation.
Actors: Responsible is the Environment Committee ENVI; rapporteur is Jessica Polfjärd (EPP, Sweden).
Content: The 2018 Effort Sharing Regulation sets binding annual GHG emission targets for each member state (MS) for 2020 to 2030 for sectors not included in the EU Emissions Trading System (ETS): Buildings, Agriculture, Waste, Small Industry, and Transport, which account for about 60 percent of emissions. The Commission proposes to reduce emissions from the ETS sectors by at least 40 percent from 2005 levels – an increase of 11 percentage points from the existing collective EU-27 target of a 29 percent emissions reduction.
Schedule: On September 27, 2021, ENVI members met for an initial exchange of views. They highlighted several issues, such as the need to ensure alignment of the ESR with the EU ETS and the lack of a post-2030 guidance framework. The topic was also the complexity of creating a carbon market for road transport and buildings.
Actors: Responsible is the Economic Committee ECON; rapporteur Johan Van Overtveldt (ECR, Belgium).
Content: The Commission wants to revise the Energy Taxation Directive. The goal is to bring the taxation of energy products into line with the EU’s energy and climate policy, promote clean technologies and abolish outdated exemptions.
Schedule: The committee is scheduled to vote on September 26.
Actors: Responsible is the ENVI Environment Committee; rapporteurs are Jutta Paulus (Greens, Germany) and Silvia Sardone (ID, Italy).
Content: The Commission wants to drastically reduce methane emissions in the energy sector. The sectors involved are energy, agriculture, waste and wastewater. As stated in the strategy document, the legislative proposals will focus on the energy sector.
Actors: Responsible is the ITRE Industry Committee, rapporteur is Jens Geier (SPD).
Content: The Commission intends to revise the EU Gas Directive. This is part of the Hydrogen and Decarbonized Gas Markets Package, which also includes a recast of the 2009 EU Gas Regulation and revisions to the 2017 Regulation on security of gas supply. The 2009 EU Gas Directive is part of the Third Energy Package, which sets the regulatory framework for the EU’s internal energy market. While the electricity component of the third energy package was revised in 2019 to align it with the EU’s more ambitious climate and energy targets, the gas component of the third energy package has only been selectively revised to date. The revised Gas Directive consists of 10 chapters with a total of 90 articles.
Schedule: ITRE vote on November 28, 2022.
Actors: Responsible is the Industry Committee ITRE; rapporteur is Jerzy Buzek (EPP, Poland)
Content: Like the revision of the EU Gas Directive, the revision of the EU Gas Regulation is part of the Hydrogen and Decarbonized Gas Markets Package, which also includes a fundamental revision of the 2009 EU Gas Directive. The revision of the EU Gas Regulation consists of five chapters with 69 articles.
Schedule: ITRE vote on Nov. 28, 2022. with Lukas Scheid
To paraphrase France’s chansonnier Charles Aznavour, I will tell you about a time unknown to those under thirty. At that time, energy and especially electricity issues were only important to experts, engineers and other “geeks”.
Those days are over. And the State of the Union address, known as SOTEU in EU jargon, will reflect how much energy and power issues now permeate the entire political spectrum: Foreign, social, economic, climate policy – it doesn’t even stop. Most citizens will go about their business in the 27 member states without feeling much of the stir caused by the speech in the EU bubble – and yet: The speech will have consequences for every one of them.
The political agenda in these months is now very much dominated by energy issues. That starts with today, Friday, when the EU energy ministers meet. Then there are the elections in Sweden next Sunday. Why are we talking about that here? The government in Stockholm will take over the rotating presidency of the EU Council on January 1, replacing the Czech Republic.
Certainly, not all trilogues on the Fit for 55 package will be completed by the end of the year. This means that when Stockholm takes over the “business” in the Council, the government there will have to take the negotiations to the end. Next Sunday’s election results are likely to give a first indication of how much ambition the incoming Swedish Council presidency will – or will not – display, particularly on climate issues. At the moment, opinion polls ahead of the September 11 vote show Social Democrat Magdalena Andersson and her allies neck and neck with a right-wing bloc in which Ulf Kristersson, the leader of the moderate Conservatives, is the main candidate to oust her from the post of head of government.
For once, Michael Bloss (Greens/EFA), the EU parliamentarian responsible for energy and climate, and the European Commission, represented by its spokesman Eric Mamer, are in agreement: both stressed this week how urgent it is for member states to go on a joint gas shopping spree. Until now, it was rather the case that each individual country made representations to the exporting countries on its own mission. In this way, they inadvertently drove up each other’s prices. The record prices on the markets are also the reason why the energy ministers are meeting today to discuss suitable measures for reducing them.
It is worth noting here that there are six so-called bilateral solidarity agreements between member states on gas supplies: The first one was signed between Germany and Denmark on December 14, 2020; another five agreements were signed between Germany and Austria on December 2, 2021; between Estonia and Latvia on January 4, 2022; between Lithuania and Latvia on March 10, 2022; between Italy and Slovenia on April 22, 2022; and between Finland and Estonia on April 25, 2022.
We do not want to discuss here whether joint purchasing should be legally binding or voluntary. Rather, the point is to emphasize the need to define electricity as a common good for all. And to align the new electricity market with the EU’s climate goals towards decarbonization of our energy.
For one thing, the price rise fueled by Putin’s invasion of Ukraine and a summer that showed the true consequences of the climate emergency shows that the two problems are linked. It also becomes clear that the logic of “me first” is at an end. Or do we really have to remind people once again that the principle of “chaqu’un pour soi“, which in English means something like “Everyone is his own neighbor”, is to be prevented at all costs in the current situation. Unless, of course, one wants to play into Putin’s hands.
