Disagreement on gas price cap + E-fuels • Table.Briefings

Dear reader,

Shortly before the upcoming EU summit, the Commission presented its package of measures against higher energy prices (Europe.Table reported on the proposals yesterday). But member states remain divided on the gas price cap. The idea of a dynamic price cap, the Commission’s response to calls for a general price cap on gas, was followed by mixed reactions. Berlin voiced criticism, directed particularly at Commission President Ursula von der Leyen. The proposal for joint gas purchasing, however, met with overall positive response. Manuel Berkel and Till Hoppe summarize the debate’s current status.

It was one of the FDP’s big election campaign promises: The Liberals campaigned persistently for the internal combustion engine to be powered by e-fuels beyond 2035. But it is now becoming apparent that nothing will come of this. Because according to information from Europe.Table, the co-legislators are planning to reach a compromise on combustion engine phase-out and fleet limits in a single trialogue session on Oct. 27. To succeed, they would have to skip the issue of e-fuels. But the situation is not hopeless for the FDP, as Markus Grabitz analyzes. “A few phone calls from the chancellor’s office would be sufficient,” says one observer.

Even at the beginning of his term as EU foreign affairs representative, there were already critical voices. Josep Borrell attracted attention with rather undiplomatic statements. Now, one of his speeches caused fierce criticism. “The gardeners have to go to the jungle,” he said in front of junior diplomats, whereby “jungle” apparently meant the non-European part of the world. Read more in the Heads section from Ella Joyner.

Your
Sarah Schaefer

Continued disagreement over gas price cap

By

Manuel Berkel

Parts of Ursula von der Leyen’s speech yesterday sounded like an appeal as the Commission President presented her experts’ package of measures for lower energy prices. “As soon as the Council has agreed on these principles, we will work them out,” von der Leyen said in Strasbourg. She was talking about the Commission’s idea for a dynamic price cap (Europe.Table reported). It is to apply to the most important gas price index, the Dutch TTF, on which many gas supplies in the EU are based and is supposed to be the Commission’s response to demands from the Council to quickly introduce a general gas price cap on all gas purchases.

It will then be the Council that decides on the price cap. However, the Commission has written a whole series of conditions as principles into its draft regulation. For example, the cap should not jeopardize the security of supply and should be conditional on further progress being made in saving gas. However, the cap could quickly bring relief if member states agree to these principles, von der Leyen promised. “The price correction mechanism will have a taming effect on gas prices and could take effect immediately once we have fleshed out today’s proposal.”

However, the approval of the member states is not yet certain. “Although progress is being made at an unprecedented speed, we are far from being able to clearly identify solutions that can be sustained over time,” Spain’s Energy Minister Teresa Ribera said on Tuesday. Croatia and Lithuania again spoke out in favor of a general gas price cap.

Federal government sees danger of gas allocation

Although the Commission has not taken up calls for a general gas price cap, the German government is critical of the package. The proposals on the TTF increase the risk that gas will have to be rationed and allocated, Berlin says. The criticism is directed particularly against von der Leyen: She pushed for more far-reaching proposals against the advice of her Head of Cabinet, Björn Seibert, says a diplomat. In contrast, explicit approval of the TTF proposals came from Greece’s Prime Minister Kyriakos Mitsotakis.

The planned joint gas procurement was met with a generally positive response – for example by Luxembourg and Austria. However, experts in the Commission are still unsure whether the major gas companies will coordinate purchasing more in the future. “Nobody is preventing the companies from already procuring gas in cooperation,” Oliver Koch from the Directorate-General for Energy said yesterday at an event organized by the Florence School of Regulation. In any case, he warned against making joint ventures easier by softening competition rules. Then, consumers could be threatened with even higher prices.

Other proposals in the package (Europe.Table reported):

A new benchmark index for liquefied natural gas imports is to be completed by the end of March and decouple LNG supplies from the high TTF price.
A “circuit breaker” for intra-day trading should limit volatility on the gas exchanges and make trading easier for companies.
Precise rules for the solidarity supply of gas between member states in the event of a shortage.
A successor regulation for aid under the Temporary Crisis Framework is to be in place by the end of October.
By reallocating existing funds, the member states should be able to relieve the burden on citizens and SMEs of around €40 billion.

But even over the weekend, the Commission found no consensus for extending the Iberian model for the electricity market. With this, EU states would subsidize gas for electricity generation to subsidize the price of electricity.

Electricity price cap faces high hurdles

However, von der Leyen promised yesterday to continue working on a proposal. Before that, however, two issues need to be resolved: Subsidizing gas-fired power plants must not result in cheaper electricity flowing to neighboring non-EU countries. In addition, it has not yet been clarified which EU states will bear which part of the financing. Energy Commissioner Kadri Simson cited another condition: “We cannot take action that would lead to increased consumption of natural gas.”

In view of such problems, the EU Parliament Greens are now discussing an ending. “The Spanish model of a fixed gas price cap for power generation is off the table for now, and that’s a first ray of hope,” says MEP Michael Bloss. “Because it also puts to rest the billions in subsidies to gas companies.” However, the Commission scheduled the planned reform of the electricity market for the beginning of 2023 in its work program, which was also published yesterday. One of its goals is to decouple the price of electricity from the price of gas.

SPD wants winter solidarity package

The EPP Group agreed to the Commission’s plans on Tuesday. “The targeted dynamic gas price cap for the TTF gas trading point and the plans against excessive price fluctuations seem sensible at first glance as temporary measures,” said CSU MEP Angelika Niebler. “Close examination will show whether they live up to expectations. In any case, however, such complex market interventions are only a bridge. The goal must be to introduce the planned new price benchmark for liquid gas as quickly as possible.”

The Social Democrats demanded more financial aid. “We need a European winter solidarity package to keep people and businesses afloat in the face of rising energy costs,” said Jens Geier, Chairman of the European SPD. He also called for a continuation of the SURE program established in the Covid crisis. “The EU Commission and the Member States should expand the successful EU program for short-time work, and thus securing jobs in crises into a permanent cushioning instrument. Otherwise, this social EU success will expire this year.” With Till Hoppe

Time window for e-fuels is closing

By

Markus Grabitz

Now everything is supposed to happen very quickly. According to information from Europe.Table, negotiators from Parliament and the Czech Council Presidency want to conclude the trilogue on the phase-out of internal combustion engines in 2035 and carbon fleet limits for passenger cars and light commercial vehicles as early as Oct. 27. Originally, Dec. 6 had been the target day. The start of the meeting was moved from the midday hours on Oct. 27 to the afternoon. This also indicates that a night session is supposed to deliver the deal.

A breakthrough by the negotiators would have consequences for an issue playing an important role for the FDP in the last election campaign and is still hotly disputed between the traffic light parties. It is about e-fuels – synthetic fuels produced in a virtually climate-neutral manner that can be burned by virtually all vehicles today. They are seen as a way to decarbonize the vehicle population.

If the negotiators want to reach the informal compromise in the trilogue next week, this would mean they would have to exclude the issue of e-fuels. The FDP’s election promise to ensure in the federal government that the internal combustion engine can be operated with e-fuels beyond 2035 would then hardly be achievable.

Timmermans thinks nothing of e-fuels

As a reminder, the FDP was still triumphant at the end of June. The environment ministers of the 27 member states agreed on the following wording: “The Commission will propose how vehicles powered by carbon-free fuels can be registered even after 2035″. The passage contains the addition that this will be done “outside the systematics of carbon fleet legislation.”

However, this wording is not included in the legal text but rather in the recitals and is thus not legally binding but purely appellatory in nature. The European Parliament rejected the use of e-fuels in the legal text.

The FDP celebrated the passage from the so-called Recital 9 as a great success. It also spread the message that, in a telephone call, Chancellor Olaf Scholz wrested the promise from the Commission President that the Commission would still propose implementation.

So far, however, nothing has come of this. The Vice President in charge, Frans Timmermans, is avowedly not a supporter of e-fuels. He made no secret of the fact that no proposal will come from him.

Just a few days before the final trilogue, there is no longer any indication that the issue will be discussed. When Ursula von der Leyen was a guest in the group of CDU/CSU members of parliament on Monday, e-fuels were reportedly not an issue. The FDP seems to have resigned. FDP circles say it is already a success if the sentence about the e-fuels makes it as a recital into the legal text. In government circles, it is said that Transport Minister Volker Wissing (FDP) is in talks with Environment Minister Steffi Lemke (Greens). Lemke is in charge of the issue. And she is known to be against e-fuels.

There would be allies among the member states

The starting position before the decisive trilogue would be difficult for the FDP but not hopeless. The German government would have to find comrades-in-arms in the ranks of the member states, outline a concept on a non-paper and ensure that it is fed into the negotiations. “A few phone calls from the chancellery would be sufficient,” says one observer.

On the part of the member states, there would certainly be allies. Portugal, Italy, Poland, and Slovakia are counted to be interested. Even the Czech presidency is said to be open. However, such a move would not fit in with the Czech Republic’s role as an “honest broker” – the country still holds the Council presidency until the end of the year.

At present, however, there is every indication that a compromise will be found quickly next week, thus putting an end to the e-fuels issue. The co-legislators are not far apart on the issue anyway: Parliament and environment ministers support the Commission’s proposal not to allow any new vehicles with combustion engines in the EU from 2035. There is also little disagreement on the reduction path for the average carbon emissions of manufacturers’ new vehicle fleets.

Commission to accelerate digitization of energy system

The EU Commission wants to drive forward the digitization of the energy system with an action plan. The aim is to make Europe independent of fossil fuels from Russia and tackle the climate crisis. Last but not least, the accelerated digitization of the sector should help reduce consumers’ energy bills. The Commission plans to radically transform the European energy system. It envisages new rules for data centers and wants to allow member states a temporal ban on energy-intensive crypto mining.

The action plan has three impact directions:

Development of a sturdy regulatory framework for a common European energy data space
control of the growing energy consumption of IT and communications technology – including an eco-labeling scheme for data centers, an energy label for computers, and an energy efficiency label for blockchains
strengthening of energy network cybersecurity through new legislation.

To drive these developments, the Commission plans to reorganize the existing Smart Grid Task Force. The group will be renamed the Smart Energy Expert Group and will have more responsibilities. Within this expert group, the Commission will establish the Data for Energy (D4E) working group by March 2023 at the latest to develop a common European data space for energy.

New rules for data centers

With data centers already accounting for nearly three percent of electricity demand in the EU in 2018 and an expected increase of their energy consumption by 200 percent between 2020 and 2030, the action plan includes several measures to address growth.

Introduction of monitoring and reporting requirements for data center energy consumption as part of the revision of the Energy Efficiency Directive
development of an environmental labeling system for data centers
exploration of the introduction of separate reporting lines for indirect greenhouse gas emissions from the purchase of cloud computing and data center services in the EU sustainability standards
improvement of requirements for operating conditions of servers and data storage by revising eco-design regulations.

In addition, the Commission will work towards an EU Code of Conduct for the sustainability of telecommunications networks.

About 0.4 percent of the world’s electricity consumption is devoted to the creation of cryptocurrencies, and this figure is rising. The Commission calls on the Member States to take targeted and ambitious measures to reduce electricity consumption by crypto players. If load reductions in electricity grids become necessary, Member States would need to be prepared to stop mining cryptocurrencies.

In the longer term, the Commission intends to ensure that tax breaks and other fiscal measures in favor of crypto miners, which are currently in place in some Member States, are abolished. vis

5G expansion: EU Commission warns not to trust Chinese suppliers

The EU Commission urged European governments to safeguard their 5G mobile networks. “Member States which have not yet enacted restrictions on high-risk suppliers should do so without further delay, considering that time lost can increase the vulnerability of networks in the Union,” the EU Commission wrote in a proposal for a council recommendation regarding the protection of critical infrastructure, published on Tuesday.

The term “high-risk supplier” is used in Brussels to refer primarily to the Chinese telecommunications providers Huawei and ZTE. While Huawei’s technology plays a central role in many European mobile networks, it faces a de facto exclusion from 5G rollout in many important markets (China.Table reported). The network equipment supplier is considered to be technically sophisticated and comparatively cheap on the global market. However, there are doubts about its trustworthiness; the group is suspected of spying on rivals for its country’s intelligence services and gaining control of critical infrastructure. (China.Table reported)

The EU Commission warns not to rely on information provided by manufacturers. “It is essential that all Member States urgently achieve the implementation of the measures recommended in the Toolbox and in particular apply the relevant restrictions on high-risk suppliers for key assets defined as critical and sensitive in the EU coordinated risk assessment,” the proposal continues.

Coinciding with the EU’s warning, however, Huawei strengthened its presence in Europe. The technology giant announced plans to invest €150 million in its first European cloud center in Dublin. Over the next two years, 60 jobs are to be created, rising to 200 by 2027

Faeser releases BSI President Schönbohm

Federal Interior Minister Nancy Faeser (SPD) banned the President of the Federal Office for Information Security (BSI), Arne Schönbohm, from conducting official business. Schönbohm has been Head of the Bonn-based agency responsible for IT security since 2016 but is not a so-called political official who could be put into temporary retirement at any time.

The reasons given by the BMI are debatable: “The background is not least the allegations, which are well known and widely discussed in the media, and which have permanently damaged the necessary public trust in the neutrality and impartiality of the performance of his duties as President of Germany’s most important cybersecurity authority.”

Within a few hours after reporting by the satirical program ZDF Magazin Royal, the minister announced that she would consider all options, including Schönbohm’s resignation. The reason for this was contact with an association he co-founded in 2012. In this, a company founded by Russian intelligence circles had also been a member since 2020. The Ministry of the Interior approved Schönbohm’s appearance in late summer 2022 as an anniversary speaker at this same association.

Vice President takes over leadership temporarily

Nevertheless, Faeser sees the accusations as a problem “in the current crisis situation with regard to Russian hybrid warfare. The accusations also affect the minister’s indispensable relationship of trust in the conduct of her office,” the Ministry of the Interior informs.

Whether the minister’s action has legal force remains open: Schönbohm can take legal action against the minister’s move and have it examined to determine whether the prohibition of the office is justified. Until then, no successor to the BSI president could be appointed either. For the time being, BSI Vice President Gerhard Schabhüser is in charge of the office. Insofar as Schönbohm cannot be proven to have committed any misconduct, Faeser would then have to find an adequate replacement for him if he does not return to the BSI.

Since it became public, the case, which at times seems bizarre, attracted attention throughout Europe: The BSI is recognized throughout Europe as an IT security authority and is active both within the framework of the European Network and Information Security Agency ENISA and in bilateral projects. The Bonn-based authority is one of the largest of its kind in Europe – and works largely independently. In its coalition agreement, the coalition government set itself the goal of further expanding this independence. fst

Raw materials working group calls for reduction targets for resource consumption

Yesterday, at the Raw Materials Summit of the NGO network Arbeitskreis Rohstoffe, stakeholders from civil society and industry called for reduction targets to reduce the consumption of primary raw materials. Mining violates human rights and the environment worldwide and especially in the global south, while demand continues to rise in Europe and resources are wasted on a massive scale. At the event in Berlin, activists from mining regions in Africa and South America also reported on the impact of mining projects.

The network, which includes Germanwatch, Power Shift, and BUND, among others, is calling on policymakers to set an upper limit for total raw material consumption. Without such a target, there would be no progress toward a circular economy. To date, the proportion of recycled raw materials in German production as a whole is only about 13 percent. Little has been done in recent years, the network stated.

The upper limit must apply aggregately to all material flows so that there are no shifts or substitutions in the form of other raw materials, said Benedikt Jacobs of BUND. This, he said, requires reliable monitoring that verifies consumption and is published regularly. All stakeholders should be able to see whether the measures are working.

“The secret is target definition,” said Herwart Wilms, Managing Director of recycling company Remondis and Chairman of the BDI raw materials committee. “That gets things moving.” Specific targets would provide incentives for manufacturers to use fewer primary raw materials and contribute to a circular economy.

A driving financial control is also needed, Wilms said: “Anyone who manufactures a product in such a way that it can be recycled must be better off in the market than those who don’t.” Tomorrow, the raw materials congress of the Federation of German Industries will be held in Berlin. leo

European Election reform: council reacts skeptically to EP proposals

The European Parliament’s initiative for a far-reaching reform of European electoral law is in danger of failing. At a meeting of the responsible ministers of the EU states in Luxembourg on Tuesday, several participants expressed criticism or even outright rejection of the proposals submitted by the Parliament. However, a unanimous decision would be necessary for the adoption of new rules.

Specifically, several states criticized, among other things, the proposal to set May 9 as a Europe-wide election day for the election to the European Parliament and to create another EU-wide constituency for transnational lists of candidates in addition to the constituencies of the member states. The argument against May 9 was that many countries traditionally vote on Sunday. According to critics, a new EU constituency could make it more difficult for voters to identify with the Parliament and Europe.

Parliament’s proposals also include the introduction of a 3.5 percent blocking clause, which could hit German parties in particular, such as the Free Voters, the satirical party Die Partei or the Animal Protection Party. This measure was not controversial in Tuesday’s debate, but it is also likely to have a chance of implementation only as part of a larger reform. The next European election is in 2024. dpa

EU Parliament criticizes again Frontex financial management

The EU Parliament continues to doubt the financial management of the scandal-plagued EU border protection agency Frontex. MEPs on Tuesday in Strasbourg refused for the second time to grant the so-called discharge for the 2020 budget, criticizing the “extent of the serious misconduct” of former Frontex Chief Fabrice Leggeri. They said the agency failed to adequately protect the fundamental rights of migrants and asylum seekers. In May, the Parliament already voted against the discharge.

The European Parliament reviews spending from the EU budget by the various institutions every year. If an institution is not initially granted discharge because of discrepancies, it must follow recommendations from the Parliament. If not, discharge can be refused altogether, which in the past led to changes in the management of authority, for example. Normally, however, the Parliament grants the discharge necessary for the closing of the accounts.

European SPD leader Jens Geier welcomed Tuesday’s decision, saying, “To date, Frontex has failed to meet two of the 2021 discharge conditions.” He pointed to the recruitment of at least 40 fundamental rights observers by December 2020 and an end to the assistance with returns from Hungary.

On the other hand, the Chairwoman of the European Parliament’s Frontex monitoring body, Lena Düpont (CDU), saw positive developments at Frontex and criticized, “These improvements in such a short time under the most difficult geopolitical conditions should be recognized instead of a politically motivated campaign aimed solely at weakening the agency.”

Green MEP Erik Marquardt, on the other hand, sees the decision as “a slap in the face for the EU member states that let Frontex have its way and let European borders degenerate into places without values and without the principles of the rule of law.” dpa

Sweden’s new government in office

Under the impact of numerous crises, a new government headed by conservative Ulf Kristersson took over in Sweden on Tuesday. His coalition of moderates, Christian Democrats, and liberals are taking over “a country which stands in the middle of many parallel crises,” Kristersson said Tuesday in the Swedish parliament. He was referring to Sweden’s problems with gang crime and the energy crisis, among other issues. “It’s a very tough situation that could get considerably worse,” the 58-year-old said.

The conservative government team includes 26-year-old Climate and Environment Minister Romina Pourmokhtari, the youngest cabinet member Sweden has ever had. The new cabinet, which Kristersson presented on Tuesday, consists of 23 ministers in addition to the prime minister. Twelve of them are from Kristersson’s conservative Moderaterna party, six from the Christian Democrats, and five from the Liberals. Thirteen are men, and eleven are women.

Coalition wants to tighten immigration policy

The new Swedish Foreign Minister is the experienced conservative politician Tobias Billström. Ebba Busch, Party Leader of the Christian Democrats, is the new Minister of Energy and Economic Affairs and Deputy Prime Minister. Liberal leader Johan Pehrson is the Labor Market and Integration Minister.

One of the new government’s main projects is to combat escalating gang violence in Sweden. The government also wants to tighten immigration policy and, among other things, significantly reduce the number of quota refugees to 900. “Sweden cannot continue to take on such a great responsibility,” said the new conservative Migration Minister, Maria Malmer Stenergard.

On Monday, Ulf Kristersson was elected Prime Minister. He succeeds Social Democrat Magdalena Andersson after his conservative-right camp won a narrow majority in the Swedish parliamentary election on Sep. 11.

The second-strongest political force, however, was not Kristersson’s Conservatives, but the right-wing Sweden Democrats. In order to achieve a majority, the new three-party coalition will have to rely on the right-wingers. The minority government’s cooperation with the Sweden Democrats, which the parties have set out in a joint agreement, is a new territory in Sweden. dpa

Josep Borrell: EU chief diplomat who offends repeatedly

There were critical voices right at the beginning. One high-ranking EU diplomat heaved a sigh when Josep Borrell was appointed in 2019. Spanish Prime Minister Pedro Sánchez pushed the now 75-year-old through as “EU Foreign Minister” when the heads of state and government agreed on the personnel tableau with Ursula von der Leyen as Commission President and the other top jobs.

By then, Borrell, who took office as High Representative for Foreign Affairs and Security Policy in December, was no longer an unknown quantity on the Brussels stage. The Catalan was elected to the European Parliament in 2004 and immediately took off as Parliamentary President. A parliamentary president has to make a lot of speeches.

So in 2019, it was known, that someone was on his way, who tends to use flowery, powerful language, revels in his own word power, and occasionally overshoots the mark in a completely undiplomatic way. Would you like a sample of his time as Spanish Foreign Minister in the Sánchez cabinet? “Borders are the scars that history has left in the skin of the earth.” That’s what Borrell – a Catalan who positioned himself against secession from Madrid – said regarding the intra-Spanish conflict over independence for the northeastern region.

Problem case in von der Leyen’s team

The first half of the election period in Brussels is now over. Following the resignation of Irish Trade Commissioner Phil Hogan for violating Covid rules, the chief diplomat became a problem in von der Leyen’s team. He is the one who repeatedly makes ill-considered remarks. Those around him are alarmed every time Borrell deviates from the prepared speech text.

In recent weeks, this happened to him particularly frequently. The most recent stumbling block: Josep Borrell gave a speech to young diplomats in Brussels and used a somewhat crude botanical metaphor. He drew a picture of Europe being an idyllic garden and the rest of the world resembling a jungle. He urged the next generation of diplomats to become missionaries. “The gardeners have to go to the jungle,” were his words. “Europeans have to be much more engaged with the rest of the world.” Otherwise, as the apocalyptic warning went, the world would “invade the garden.”

Apart from him, there was hardly anyone surprised by the reactions to the passage: He was accused of colonialist thinking. Canada’s ambassador to the United Nations, Bob Rae, branded Borrell’s words a “terrible analogy.” “History and our own lived experience teach us that no part of the world is free from violence.”

Scholar Mohammadbagher Forough of the Leibniz Institute for Global and Area Studies criticized Borrell for not properly understanding the history of colonization: “Historically, in recent centuries at least, it’s been the ‘garden’ invading/imperializing/colonizing the “jungle.”

Green MEP Anna Cavazzini, Head of the Internal Market Committee, is stunned: “How can the EU’s highest Diplomat use such a colonialist analogy? It’s just wrong.”

Strong criticism followed by clarification

A few days earlier, Borrell already made headlines with an unfortunate formulation: He wanted to call on his own diplomatic corps of the European External Action Service (EEAS) to become faster and more willing to report. And he chose words that did not go down so well: “I should actually be the best-informed person in the world,” he spurred on the career diplomats. The EU maintains so many delegations around the globe. His appeal: “Send a telegram, a cable, a mail – quickly.” Gladly also more tweets, that would become increasingly important.

Josep Borrell is not the first politician to feel compelled to follow up his statements with a clarification. He has enough experience in the business to know that something has gone wrong when clarification is needed. Earlier this week, the criticism of his botany passages was so intense that he had to concede: He may not have expressed himself correctly. His speech had actually been intended as a “message against Fortress Europe.”

He wanted to promote young Europeans going out into the world, getting involved, and promoting EU values and our model of life. “Honestly, I don’t understand and I don’t share the interpretation that this message should be racist and colonialist.”

An EU Commission spokeswoman assured Monday that Borrell has the confidence of Ursula von der Leyen. Ella Joyner

EUROPE.TABLE EDITORS

Till
Hoppe

Charlotte
Wirth

Falk
Steiner

Timo
Landenberger

Corinna
Visser

Lukas
Knigge

Eric
Bonse

Sarah
Schaefer

Manuel
Berkel

Lisa-Martina
Klein

Markus
Grabitz

Stephan
Israel

Claire
Stam

Dear reader,

Shortly before the upcoming EU summit, the Commission presented its package of measures against higher energy prices (Europe.Table reported on the proposals yesterday). But member states remain divided on the gas price cap. The idea of a dynamic price cap, the Commission’s response to calls for a general price cap on gas, was followed by mixed reactions. Berlin voiced criticism, directed particularly at Commission President Ursula von der Leyen. The proposal for joint gas purchasing, however, met with overall positive response. Manuel Berkel and Till Hoppe summarize the debate’s current status.

It was one of the FDP’s big election campaign promises: The Liberals campaigned persistently for the internal combustion engine to be powered by e-fuels beyond 2035. But it is now becoming apparent that nothing will come of this. Because according to information from Europe.Table, the co-legislators are planning to reach a compromise on combustion engine phase-out and fleet limits in a single trialogue session on Oct. 27. To succeed, they would have to skip the issue of e-fuels. But the situation is not hopeless for the FDP, as Markus Grabitz analyzes. “A few phone calls from the chancellor’s office would be sufficient,” says one observer.

Even at the beginning of his term as EU foreign affairs representative, there were already critical voices. Josep Borrell attracted attention with rather undiplomatic statements. Now, one of his speeches caused fierce criticism. “The gardeners have to go to the jungle,” he said in front of junior diplomats, whereby “jungle” apparently meant the non-European part of the world. Read more in the Heads section from Ella Joyner.

Your
Sarah Schaefer

Continued disagreement over gas price cap

By

Manuel Berkel

Parts of Ursula von der Leyen’s speech yesterday sounded like an appeal as the Commission President presented her experts’ package of measures for lower energy prices. “As soon as the Council has agreed on these principles, we will work them out,” von der Leyen said in Strasbourg. She was talking about the Commission’s idea for a dynamic price cap (Europe.Table reported). It is to apply to the most important gas price index, the Dutch TTF, on which many gas supplies in the EU are based and is supposed to be the Commission’s response to demands from the Council to quickly introduce a general gas price cap on all gas purchases.

It will then be the Council that decides on the price cap. However, the Commission has written a whole series of conditions as principles into its draft regulation. For example, the cap should not jeopardize the security of supply and should be conditional on further progress being made in saving gas. However, the cap could quickly bring relief if member states agree to these principles, von der Leyen promised. “The price correction mechanism will have a taming effect on gas prices and could take effect immediately once we have fleshed out today’s proposal.”

However, the approval of the member states is not yet certain. “Although progress is being made at an unprecedented speed, we are far from being able to clearly identify solutions that can be sustained over time,” Spain’s Energy Minister Teresa Ribera said on Tuesday. Croatia and Lithuania again spoke out in favor of a general gas price cap.

Federal government sees danger of gas allocation

Although the Commission has not taken up calls for a general gas price cap, the German government is critical of the package. The proposals on the TTF increase the risk that gas will have to be rationed and allocated, Berlin says. The criticism is directed particularly against von der Leyen: She pushed for more far-reaching proposals against the advice of her Head of Cabinet, Björn Seibert, says a diplomat. In contrast, explicit approval of the TTF proposals came from Greece’s Prime Minister Kyriakos Mitsotakis.

The planned joint gas procurement was met with a generally positive response – for example by Luxembourg and Austria. However, experts in the Commission are still unsure whether the major gas companies will coordinate purchasing more in the future. “Nobody is preventing the companies from already procuring gas in cooperation,” Oliver Koch from the Directorate-General for Energy said yesterday at an event organized by the Florence School of Regulation. In any case, he warned against making joint ventures easier by softening competition rules. Then, consumers could be threatened with even higher prices.

Other proposals in the package (Europe.Table reported):

A new benchmark index for liquefied natural gas imports is to be completed by the end of March and decouple LNG supplies from the high TTF price.
A “circuit breaker” for intra-day trading should limit volatility on the gas exchanges and make trading easier for companies.
Precise rules for the solidarity supply of gas between member states in the event of a shortage.
A successor regulation for aid under the Temporary Crisis Framework is to be in place by the end of October.
By reallocating existing funds, the member states should be able to relieve the burden on citizens and SMEs of around €40 billion.

But even over the weekend, the Commission found no consensus for extending the Iberian model for the electricity market. With this, EU states would subsidize gas for electricity generation to subsidize the price of electricity.

Electricity price cap faces high hurdles

However, von der Leyen promised yesterday to continue working on a proposal. Before that, however, two issues need to be resolved: Subsidizing gas-fired power plants must not result in cheaper electricity flowing to neighboring non-EU countries. In addition, it has not yet been clarified which EU states will bear which part of the financing. Energy Commissioner Kadri Simson cited another condition: “We cannot take action that would lead to increased consumption of natural gas.”

In view of such problems, the EU Parliament Greens are now discussing an ending. “The Spanish model of a fixed gas price cap for power generation is off the table for now, and that’s a first ray of hope,” says MEP Michael Bloss. “Because it also puts to rest the billions in subsidies to gas companies.” However, the Commission scheduled the planned reform of the electricity market for the beginning of 2023 in its work program, which was also published yesterday. One of its goals is to decouple the price of electricity from the price of gas.

SPD wants winter solidarity package

The EPP Group agreed to the Commission’s plans on Tuesday. “The targeted dynamic gas price cap for the TTF gas trading point and the plans against excessive price fluctuations seem sensible at first glance as temporary measures,” said CSU MEP Angelika Niebler. “Close examination will show whether they live up to expectations. In any case, however, such complex market interventions are only a bridge. The goal must be to introduce the planned new price benchmark for liquid gas as quickly as possible.”

The Social Democrats demanded more financial aid. “We need a European winter solidarity package to keep people and businesses afloat in the face of rising energy costs,” said Jens Geier, Chairman of the European SPD. He also called for a continuation of the SURE program established in the Covid crisis. “The EU Commission and the Member States should expand the successful EU program for short-time work, and thus securing jobs in crises into a permanent cushioning instrument. Otherwise, this social EU success will expire this year.” With Till Hoppe

Time window for e-fuels is closing

By

Markus Grabitz

Now everything is supposed to happen very quickly. According to information from Europe.Table, negotiators from Parliament and the Czech Council Presidency want to conclude the trilogue on the phase-out of internal combustion engines in 2035 and carbon fleet limits for passenger cars and light commercial vehicles as early as Oct. 27. Originally, Dec. 6 had been the target day. The start of the meeting was moved from the midday hours on Oct. 27 to the afternoon. This also indicates that a night session is supposed to deliver the deal.

A breakthrough by the negotiators would have consequences for an issue playing an important role for the FDP in the last election campaign and is still hotly disputed between the traffic light parties. It is about e-fuels – synthetic fuels produced in a virtually climate-neutral manner that can be burned by virtually all vehicles today. They are seen as a way to decarbonize the vehicle population.

If the negotiators want to reach the informal compromise in the trilogue next week, this would mean they would have to exclude the issue of e-fuels. The FDP’s election promise to ensure in the federal government that the internal combustion engine can be operated with e-fuels beyond 2035 would then hardly be achievable.

Timmermans thinks nothing of e-fuels

As a reminder, the FDP was still triumphant at the end of June. The environment ministers of the 27 member states agreed on the following wording: “The Commission will propose how vehicles powered by carbon-free fuels can be registered even after 2035″. The passage contains the addition that this will be done “outside the systematics of carbon fleet legislation.”

However, this wording is not included in the legal text but rather in the recitals and is thus not legally binding but purely appellatory in nature. The European Parliament rejected the use of e-fuels in the legal text.

The FDP celebrated the passage from the so-called Recital 9 as a great success. It also spread the message that, in a telephone call, Chancellor Olaf Scholz wrested the promise from the Commission President that the Commission would still propose implementation.

So far, however, nothing has come of this. The Vice President in charge, Frans Timmermans, is avowedly not a supporter of e-fuels. He made no secret of the fact that no proposal will come from him.

Just a few days before the final trilogue, there is no longer any indication that the issue will be discussed. When Ursula von der Leyen was a guest in the group of CDU/CSU members of parliament on Monday, e-fuels were reportedly not an issue. The FDP seems to have resigned. FDP circles say it is already a success if the sentence about the e-fuels makes it as a recital into the legal text. In government circles, it is said that Transport Minister Volker Wissing (FDP) is in talks with Environment Minister Steffi Lemke (Greens). Lemke is in charge of the issue. And she is known to be against e-fuels.

There would be allies among the member states

The starting position before the decisive trilogue would be difficult for the FDP but not hopeless. The German government would have to find comrades-in-arms in the ranks of the member states, outline a concept on a non-paper and ensure that it is fed into the negotiations. “A few phone calls from the chancellery would be sufficient,” says one observer.

On the part of the member states, there would certainly be allies. Portugal, Italy, Poland, and Slovakia are counted to be interested. Even the Czech presidency is said to be open. However, such a move would not fit in with the Czech Republic’s role as an “honest broker” – the country still holds the Council presidency until the end of the year.

At present, however, there is every indication that a compromise will be found quickly next week, thus putting an end to the e-fuels issue. The co-legislators are not far apart on the issue anyway: Parliament and environment ministers support the Commission’s proposal not to allow any new vehicles with combustion engines in the EU from 2035. There is also little disagreement on the reduction path for the average carbon emissions of manufacturers’ new vehicle fleets.

Commission to accelerate digitization of energy system

The EU Commission wants to drive forward the digitization of the energy system with an action plan. The aim is to make Europe independent of fossil fuels from Russia and tackle the climate crisis. Last but not least, the accelerated digitization of the sector should help reduce consumers’ energy bills. The Commission plans to radically transform the European energy system. It envisages new rules for data centers and wants to allow member states a temporal ban on energy-intensive crypto mining.

The action plan has three impact directions:

Development of a sturdy regulatory framework for a common European energy data space
control of the growing energy consumption of IT and communications technology – including an eco-labeling scheme for data centers, an energy label for computers, and an energy efficiency label for blockchains
strengthening of energy network cybersecurity through new legislation.

To drive these developments, the Commission plans to reorganize the existing Smart Grid Task Force. The group will be renamed the Smart Energy Expert Group and will have more responsibilities. Within this expert group, the Commission will establish the Data for Energy (D4E) working group by March 2023 at the latest to develop a common European data space for energy.

New rules for data centers

With data centers already accounting for nearly three percent of electricity demand in the EU in 2018 and an expected increase of their energy consumption by 200 percent between 2020 and 2030, the action plan includes several measures to address growth.

Introduction of monitoring and reporting requirements for data center energy consumption as part of the revision of the Energy Efficiency Directive
development of an environmental labeling system for data centers
exploration of the introduction of separate reporting lines for indirect greenhouse gas emissions from the purchase of cloud computing and data center services in the EU sustainability standards
improvement of requirements for operating conditions of servers and data storage by revising eco-design regulations.

In addition, the Commission will work towards an EU Code of Conduct for the sustainability of telecommunications networks.

About 0.4 percent of the world’s electricity consumption is devoted to the creation of cryptocurrencies, and this figure is rising. The Commission calls on the Member States to take targeted and ambitious measures to reduce electricity consumption by crypto players. If load reductions in electricity grids become necessary, Member States would need to be prepared to stop mining cryptocurrencies.

In the longer term, the Commission intends to ensure that tax breaks and other fiscal measures in favor of crypto miners, which are currently in place in some Member States, are abolished. vis

5G expansion: EU Commission warns not to trust Chinese suppliers

The EU Commission urged European governments to safeguard their 5G mobile networks. “Member States which have not yet enacted restrictions on high-risk suppliers should do so without further delay, considering that time lost can increase the vulnerability of networks in the Union,” the EU Commission wrote in a proposal for a council recommendation regarding the protection of critical infrastructure, published on Tuesday.

The term “high-risk supplier” is used in Brussels to refer primarily to the Chinese telecommunications providers Huawei and ZTE. While Huawei’s technology plays a central role in many European mobile networks, it faces a de facto exclusion from 5G rollout in many important markets (China.Table reported). The network equipment supplier is considered to be technically sophisticated and comparatively cheap on the global market. However, there are doubts about its trustworthiness; the group is suspected of spying on rivals for its country’s intelligence services and gaining control of critical infrastructure. (China.Table reported)

The EU Commission warns not to rely on information provided by manufacturers. “It is essential that all Member States urgently achieve the implementation of the measures recommended in the Toolbox and in particular apply the relevant restrictions on high-risk suppliers for key assets defined as critical and sensitive in the EU coordinated risk assessment,” the proposal continues.

Coinciding with the EU’s warning, however, Huawei strengthened its presence in Europe. The technology giant announced plans to invest €150 million in its first European cloud center in Dublin. Over the next two years, 60 jobs are to be created, rising to 200 by 2027

Faeser releases BSI President Schönbohm

Federal Interior Minister Nancy Faeser (SPD) banned the President of the Federal Office for Information Security (BSI), Arne Schönbohm, from conducting official business. Schönbohm has been Head of the Bonn-based agency responsible for IT security since 2016 but is not a so-called political official who could be put into temporary retirement at any time.

The reasons given by the BMI are debatable: “The background is not least the allegations, which are well known and widely discussed in the media, and which have permanently damaged the necessary public trust in the neutrality and impartiality of the performance of his duties as President of Germany’s most important cybersecurity authority.”

Within a few hours after reporting by the satirical program ZDF Magazin Royal, the minister announced that she would consider all options, including Schönbohm’s resignation. The reason for this was contact with an association he co-founded in 2012. In this, a company founded by Russian intelligence circles had also been a member since 2020. The Ministry of the Interior approved Schönbohm’s appearance in late summer 2022 as an anniversary speaker at this same association.

Vice President takes over leadership temporarily

Nevertheless, Faeser sees the accusations as a problem “in the current crisis situation with regard to Russian hybrid warfare. The accusations also affect the minister’s indispensable relationship of trust in the conduct of her office,” the Ministry of the Interior informs.

Whether the minister’s action has legal force remains open: Schönbohm can take legal action against the minister’s move and have it examined to determine whether the prohibition of the office is justified. Until then, no successor to the BSI president could be appointed either. For the time being, BSI Vice President Gerhard Schabhüser is in charge of the office. Insofar as Schönbohm cannot be proven to have committed any misconduct, Faeser would then have to find an adequate replacement for him if he does not return to the BSI.

Since it became public, the case, which at times seems bizarre, attracted attention throughout Europe: The BSI is recognized throughout Europe as an IT security authority and is active both within the framework of the European Network and Information Security Agency ENISA and in bilateral projects. The Bonn-based authority is one of the largest of its kind in Europe – and works largely independently. In its coalition agreement, the coalition government set itself the goal of further expanding this independence. fst

Raw materials working group calls for reduction targets for resource consumption

Yesterday, at the Raw Materials Summit of the NGO network Arbeitskreis Rohstoffe, stakeholders from civil society and industry called for reduction targets to reduce the consumption of primary raw materials. Mining violates human rights and the environment worldwide and especially in the global south, while demand continues to rise in Europe and resources are wasted on a massive scale. At the event in Berlin, activists from mining regions in Africa and South America also reported on the impact of mining projects.

The network, which includes Germanwatch, Power Shift, and BUND, among others, is calling on policymakers to set an upper limit for total raw material consumption. Without such a target, there would be no progress toward a circular economy. To date, the proportion of recycled raw materials in German production as a whole is only about 13 percent. Little has been done in recent years, the network stated.

The upper limit must apply aggregately to all material flows so that there are no shifts or substitutions in the form of other raw materials, said Benedikt Jacobs of BUND. This, he said, requires reliable monitoring that verifies consumption and is published regularly. All stakeholders should be able to see whether the measures are working.

“The secret is target definition,” said Herwart Wilms, Managing Director of recycling company Remondis and Chairman of the BDI raw materials committee. “That gets things moving.” Specific targets would provide incentives for manufacturers to use fewer primary raw materials and contribute to a circular economy.

A driving financial control is also needed, Wilms said: “Anyone who manufactures a product in such a way that it can be recycled must be better off in the market than those who don’t.” Tomorrow, the raw materials congress of the Federation of German Industries will be held in Berlin. leo

European Election reform: council reacts skeptically to EP proposals

The European Parliament’s initiative for a far-reaching reform of European electoral law is in danger of failing. At a meeting of the responsible ministers of the EU states in Luxembourg on Tuesday, several participants expressed criticism or even outright rejection of the proposals submitted by the Parliament. However, a unanimous decision would be necessary for the adoption of new rules.

Specifically, several states criticized, among other things, the proposal to set May 9 as a Europe-wide election day for the election to the European Parliament and to create another EU-wide constituency for transnational lists of candidates in addition to the constituencies of the member states. The argument against May 9 was that many countries traditionally vote on Sunday. According to critics, a new EU constituency could make it more difficult for voters to identify with the Parliament and Europe.

Parliament’s proposals also include the introduction of a 3.5 percent blocking clause, which could hit German parties in particular, such as the Free Voters, the satirical party Die Partei or the Animal Protection Party. This measure was not controversial in Tuesday’s debate, but it is also likely to have a chance of implementation only as part of a larger reform. The next European election is in 2024. dpa

EU Parliament criticizes again Frontex financial management

The EU Parliament continues to doubt the financial management of the scandal-plagued EU border protection agency Frontex. MEPs on Tuesday in Strasbourg refused for the second time to grant the so-called discharge for the 2020 budget, criticizing the “extent of the serious misconduct” of former Frontex Chief Fabrice Leggeri. They said the agency failed to adequately protect the fundamental rights of migrants and asylum seekers. In May, the Parliament already voted against the discharge.

The European Parliament reviews spending from the EU budget by the various institutions every year. If an institution is not initially granted discharge because of discrepancies, it must follow recommendations from the Parliament. If not, discharge can be refused altogether, which in the past led to changes in the management of authority, for example. Normally, however, the Parliament grants the discharge necessary for the closing of the accounts.

European SPD leader Jens Geier welcomed Tuesday’s decision, saying, “To date, Frontex has failed to meet two of the 2021 discharge conditions.” He pointed to the recruitment of at least 40 fundamental rights observers by December 2020 and an end to the assistance with returns from Hungary.

On the other hand, the Chairwoman of the European Parliament’s Frontex monitoring body, Lena Düpont (CDU), saw positive developments at Frontex and criticized, “These improvements in such a short time under the most difficult geopolitical conditions should be recognized instead of a politically motivated campaign aimed solely at weakening the agency.”

Green MEP Erik Marquardt, on the other hand, sees the decision as “a slap in the face for the EU member states that let Frontex have its way and let European borders degenerate into places without values and without the principles of the rule of law.” dpa

Sweden’s new government in office

Under the impact of numerous crises, a new government headed by conservative Ulf Kristersson took over in Sweden on Tuesday. His coalition of moderates, Christian Democrats, and liberals are taking over “a country which stands in the middle of many parallel crises,” Kristersson said Tuesday in the Swedish parliament. He was referring to Sweden’s problems with gang crime and the energy crisis, among other issues. “It’s a very tough situation that could get considerably worse,” the 58-year-old said.

The conservative government team includes 26-year-old Climate and Environment Minister Romina Pourmokhtari, the youngest cabinet member Sweden has ever had. The new cabinet, which Kristersson presented on Tuesday, consists of 23 ministers in addition to the prime minister. Twelve of them are from Kristersson’s conservative Moderaterna party, six from the Christian Democrats, and five from the Liberals. Thirteen are men, and eleven are women.

Coalition wants to tighten immigration policy

The new Swedish Foreign Minister is the experienced conservative politician Tobias Billström. Ebba Busch, Party Leader of the Christian Democrats, is the new Minister of Energy and Economic Affairs and Deputy Prime Minister. Liberal leader Johan Pehrson is the Labor Market and Integration Minister.

One of the new government’s main projects is to combat escalating gang violence in Sweden. The government also wants to tighten immigration policy and, among other things, significantly reduce the number of quota refugees to 900. “Sweden cannot continue to take on such a great responsibility,” said the new conservative Migration Minister, Maria Malmer Stenergard.

On Monday, Ulf Kristersson was elected Prime Minister. He succeeds Social Democrat Magdalena Andersson after his conservative-right camp won a narrow majority in the Swedish parliamentary election on Sep. 11.

The second-strongest political force, however, was not Kristersson’s Conservatives, but the right-wing Sweden Democrats. In order to achieve a majority, the new three-party coalition will have to rely on the right-wingers. The minority government’s cooperation with the Sweden Democrats, which the parties have set out in a joint agreement, is a new territory in Sweden. dpa

Josep Borrell: EU chief diplomat who offends repeatedly

There were critical voices right at the beginning. One high-ranking EU diplomat heaved a sigh when Josep Borrell was appointed in 2019. Spanish Prime Minister Pedro Sánchez pushed the now 75-year-old through as “EU Foreign Minister” when the heads of state and government agreed on the personnel tableau with Ursula von der Leyen as Commission President and the other top jobs.

By then, Borrell, who took office as High Representative for Foreign Affairs and Security Policy in December, was no longer an unknown quantity on the Brussels stage. The Catalan was elected to the European Parliament in 2004 and immediately took off as Parliamentary President. A parliamentary president has to make a lot of speeches.

So in 2019, it was known, that someone was on his way, who tends to use flowery, powerful language, revels in his own word power, and occasionally overshoots the mark in a completely undiplomatic way. Would you like a sample of his time as Spanish Foreign Minister in the Sánchez cabinet? “Borders are the scars that history has left in the skin of the earth.” That’s what Borrell – a Catalan who positioned himself against secession from Madrid – said regarding the intra-Spanish conflict over independence for the northeastern region.

Problem case in von der Leyen’s team

The first half of the election period in Brussels is now over. Following the resignation of Irish Trade Commissioner Phil Hogan for violating Covid rules, the chief diplomat became a problem in von der Leyen’s team. He is the one who repeatedly makes ill-considered remarks. Those around him are alarmed every time Borrell deviates from the prepared speech text.

In recent weeks, this happened to him particularly frequently. The most recent stumbling block: Josep Borrell gave a speech to young diplomats in Brussels and used a somewhat crude botanical metaphor. He drew a picture of Europe being an idyllic garden and the rest of the world resembling a jungle. He urged the next generation of diplomats to become missionaries. “The gardeners have to go to the jungle,” were his words. “Europeans have to be much more engaged with the rest of the world.” Otherwise, as the apocalyptic warning went, the world would “invade the garden.”

Apart from him, there was hardly anyone surprised by the reactions to the passage: He was accused of colonialist thinking. Canada’s ambassador to the United Nations, Bob Rae, branded Borrell’s words a “terrible analogy.” “History and our own lived experience teach us that no part of the world is free from violence.”

Scholar Mohammadbagher Forough of the Leibniz Institute for Global and Area Studies criticized Borrell for not properly understanding the history of colonization: “Historically, in recent centuries at least, it’s been the ‘garden’ invading/imperializing/colonizing the “jungle.”

Green MEP Anna Cavazzini, Head of the Internal Market Committee, is stunned: “How can the EU’s highest Diplomat use such a colonialist analogy? It’s just wrong.”

Strong criticism followed by clarification

A few days earlier, Borrell already made headlines with an unfortunate formulation: He wanted to call on his own diplomatic corps of the European External Action Service (EEAS) to become faster and more willing to report. And he chose words that did not go down so well: “I should actually be the best-informed person in the world,” he spurred on the career diplomats. The EU maintains so many delegations around the globe. His appeal: “Send a telegram, a cable, a mail – quickly.” Gladly also more tweets, that would become increasingly important.

Josep Borrell is not the first politician to feel compelled to follow up his statements with a clarification. He has enough experience in the business to know that something has gone wrong when clarification is needed. Earlier this week, the criticism of his botany passages was so intense that he had to concede: He may not have expressed himself correctly. His speech had actually been intended as a “message against Fortress Europe.”

He wanted to promote young Europeans going out into the world, getting involved, and promoting EU values and our model of life. “Honestly, I don’t understand and I don’t share the interpretation that this message should be racist and colonialist.”

An EU Commission spokeswoman assured Monday that Borrell has the confidence of Ursula von der Leyen. Ella Joyner