This afternoon, the Commission presents its package against high energy prices. According to a draft, there are plans to set a dynamic price cap for the main benchmark index TTF – a compromise in the debate on the general gas price cap that has been going on for months. According to the draft, which is available to Europe.Table, there are also plans for joint ventures for joint gas purchasing. The Commission and member states are supposed to be represented on a steering committee. Manuel Berkel has details on the Commission’s plans.
Partner, competitor, system rival – that is the triad with which the EU describes its assessment of China. This is not going to change, said EU High Representative for Foreign Affairs Josep Borrell yesterday after the meeting of EU foreign ministers in Luxembourg. But the middle part is becoming increasingly relevant: competitors. The European External Action Service (EEAS) also recommends a much tougher line towards Beijing. The Taiwan issue, in particular, has had “a very disruptive impact on EU-China relations”, according to a new EEAS assessment. Amelie Richter reports on the current European perspective on the People’s Republic.
Ismail Ertug (SPD), the rapporteur for the Alternative Fuel Infrastructure Regulation (AFIR), is not yet satisfied with his report. He would like to see a sanction mechanism to ensure that the member states actually implement the targets for expanding the charging infrastructure. He will bring it back to the plenary for a vote tomorrow because he did not get a majority for this in the Transport Committee. Until then, he will have to convince mainly MEPs from the EPP and the Renew Group. But they fear bureaucracy and a lack of legal certainty, as Lukas Scheid reports.
Despite severe crises, COP27 President-Designate Sameh Shoukry is confident about global efforts to protect the climate. But on many points, he sees developed countries, in particular, in need of upholding their end of the bargain, as you can read in today’s Opinion.
For months, some member states have been lobbying for a general gas price cap in the EU. The Commission now presents the compromise: The Council is to set a dynamic price cap for the main benchmark TTF, according to a draft Council regulation from the Commission, which was available to Europe.Table on Monday. The Commission plans to present the final version this afternoon.
According to the draft, so-called over-the-counter transactions away from the exchanges are to remain explicitly possible. “If the EU agrees on a price cap for the TTF, there is a risk that traders will switch to other marketplaces or trade gas off-exchange,” confirms energy lawyer Catherine Banet of the Centre on Regulation in Europe (Cerre). “However, this depends on the exact wording in long-term supply contracts. If the price is explicitly linked to the TTF and the TTF contract schedule, and not to possible other indices, the buyer has little option to swerve.”
According to the Commission draft, the emergency intervention is to be limited to a maximum of three months. The regulatory agency ACER will also be tasked with creating more transparency about the prices of LNG imports in the short term. Over time, this should lead to the alternative price index that the Commission has been envisaging for some time.
“I don’t see much opportunity for the gas buyer to sue,” Banet says. “With new market mechanisms for the TTF, the EU would not intervene directly in supply contracts between sellers and buyers.”
As announced, the Commission also wants to limit volatility in electricity and gas trading. In a legal act, the Commission wants to lay down rules for price fluctuations within a trading day – with a focus on derivatives for the front month. Traders are also to be given the option of depositing non-cash collateral – including government guarantees. The European Securities and Markets Authority (ESMA) is currently developing corresponding rules.
With the draft law, the Commission wants to strengthen gas conservation. Member states are to be explicitly given the right to reduce the “non-essential needs” of protected customers under certain circumstances. These include households. In German energy law, the distinction between vital and non-vital needs already exists. “Both non-protected and protected customers may have vital needs for gas,” the Federal Network Agency wrote back in early September.
However, the Commission clarifies that the demand of “vulnerable customers” as defined by the Internal Gas Market Directive may not be reduced. The member states determine which these are. Protected customers may also not have their gas supply cut off, according to the draft. The draft also extends the preferential gas supply to power plants that are important for maintaining the power supply. According to an annex to the regulation, by the end of 2023 Germany will be the country that consumes the third-largest quantities of gas for power generation after Italy and Spain.
The draft now provides for more precise rules in the event of a gas shortage if one member state supplies gas to another and neither has previously concluded a solidarity agreement. Among other things, it is now stipulated that the compensation is based on a 30-day average of the gas price in order to level out high fluctuations.
One focus of the package is the energy platform, which will be used to refill gas storage facilities in the coming summer half-year. By “early spring 2023” the temporary mechanism for joint gas procurement is to be installed.
The first step is for a single private service provider to aggregate the demand of gas companies in the EU. In principle, participation is voluntary. However, member states would be required to meet 15 percent of their gas storage obligations through the common platform. For the EU as a whole, this would amount to 13.5 billion cubic meters, the draft states.
In the second step, gas companies that have participated in the demand platform can form joint ventures for joint procurement. The Commission explicitly wants to allow multiple mergers because requirements differed across the community of nations. The Commission and member states are to be represented in a steering committee.
“For joint ventures to procure gas together, the Commission needs to find a way that is compatible with competition law,” says regulatory expert Banet. There are already precedents for joint procurement, for example, during the Covid crisis, she said. “However, the Commission needs to find a mechanism that is less distortive of competition,” Banet says. “To this end, it should be guided by the recent amendments to the horizontal block exemption regulations and the horizontal guidelines, which are currently being revised.”
The Commission is planning further measures, according to the draft, to make optimum use of LNG terminals and pipelines for onward transport within the EU. For example, network operators are to be able to reallocate transit rights more quickly if they are not used. For liquefied natural gas terminals, a regulation from the new internal gas market package is to be brought forward in order to establish a secondary market for unused capacities.
The 20th National Congress of the Chinese Communist Party is meeting in Beijing – and the future orientation of the People’s Republic also plays a key role some 8,000 kilometers to the west. The EU will initially continue to use its familiar triad of “partner-competitor-system-rival” in this form, said EU Foreign Affairs Commissioner Josep Borrell on Monday after the meeting of EU foreign ministers in Luxembourg. The middle part of the term “competitor” will become more important, Borrell said. Because that was how China currently acts, he said. “We cannot pretend that China does not exist,” he stressed.
EU foreign ministers previously discussed the EU-China strategy and a new assessment by the European External Action Service (EEAS) for the first time in some time. The speech of China’s President Xi Jinping was also discussed at the Foreign Council, according to Borrell. The speech had shown how China would continue to “intervene” in world affairs. Last week, the EU foreign chief caused a stir with far harsher statements (China.Table reported). “China and Russia – provided the basis of our prosperity. This is a world that is no longer there,” Borrell warned.
A week later, Borrell sounds less fervent. However, the trend is clear here as well: It moves toward increased confrontation with Beijing. Where possible, however, cooperation must continue, French Foreign Minister Catherine Colonna, among others, stressed after the meeting. On Thursday, relations with Asia will be on the agenda of the EU summit of heads of state and government – but it is not yet clear what part China will play.
It is also still open whether the assessment of the European External Action Service will be discussed at the summit. In the paper, the EEAS recommends a much tougher line toward the People’s Republic, saying it should be viewed entirely as a competitor with only limited areas for potential cooperation. “China has become an even stronger global competitor for the EU, the US and other like-minded partners,” the text states. The EEAS assessment thus underscores the remarkable deterioration in relations between Brussels and Beijing since the 2019 China strategy was drafted.
The Taiwan issue, in particular, has had “a very disruptive impact on EU-China relations.” The solution must be to “focus on de-escalation and deterrence to prevent the erosion of the status quo,” the Foreign Service advises. But China’s “dismantling of ‘one country, two systems’ in Hong Kong,” the crackdown on human rights defenders, and serious human rights violations are also signals of “increased political compartmentalization and state-led interventionism,” the Foreign Service warns.
Brussels should also strengthen its strategy toward third countries, especially in the global South. China believes that the current world order is “not adapted to the reality” of developing countries, the EEAS paper stresses. That means China will support positions “opposite to those of the EU in multilateral forums,” it says. This was already evident in the Shanghai Cooperation Organization (China.Table reported).
In the battle of the narratives, the EU urgently needs to increase its outreach “to point out contradictions and risks” in China’s representations. The Global Gateway infrastructure initiative could be key to this, according to EEAS. “We need to be clear that Chinese offers to its partners continue to have great appeal. The EU should make a better offer by delivering on its own promises,” the paper stresses.
The Foreign Service also makes recommendations that are not entirely new in Brussels: The EU should cooperate more closely with the US and improve its defenses against cyber and hybrid threats. The EEAS has long been awaiting a mandate from the EU Commission to tackle Chinese disinformation with its own task force.
In addition, supply chains need to be more diversified and relationships with countries in the And Pacific region need to be strengthened, the assessment says. The EU’s dependence on China in semiconductors and certain rare earth metals is identified as a “strategic vulnerability” in the paper, which calls for more domestic production and other initiatives, such as better recycling across the EU. The five-page document contains only one paragraph on areas of what it calls “areas of limited potential co-operation” with China: climate, environment and health.
The EU must express a united message to China, the EEAS stressed in its assessment. Observers on Monday also saw this as a hint for Berlin. There, Chancellor Olaf Scholz prepares for his first trip to Beijing. France’s President Emmanuel Macron is also expected to head to the People’s Republic soon. “When it comes to the visits, it is useful to have a common message – even if we do not speak with one voice, it has to be one message,” South China Morning Post quotes an EU diplomat as saying. Whether Berlin will also see China primarily as a “competitor” remains to be seen.
The member states need pressure, urges Ismail Ertug (SPD). Pressure to ensure that they also implement the targets for the expansion of the charging infrastructure that Brussels will set for them. The rapporteur responsible for the Alternative Fuel Infrastructure Regulation (AFIR) is not yet 100 percent satisfied with his report. He did not get a majority in the Transport Committee for the sanction mechanism, which is supposed to exert pressure (Europe.Table reported). He will therefore put it to the vote again in plenary.
Ertug’s penalty mechanism provides for two things: First, progress in building up the loading rates required in the AFIR would be monitored by the Commission. If member states have not met the targets, the Commission should be able to initiate a case against the country before the European Court of Justice in addition to infringement proceedings. For each charging point provided for in the AFIR but not built, a daily penalty of €1,000 would then be due until the charging point is in place.
On the other hand, Ertug also wants to enforce the requirements for charging point operators more strictly. It is a matter of ensuring that charging points also meet the AFIR requirements, among other things in terms of possible means of payment, transparent price information and location. If they fail to do so, the member states should allow for appropriate penalties in their national legislation.
Ertug has the support of the Greens and the Left in the EU Parliament, but he cannot and will not rely on the support of the ultra-conservative ECR and right-wing ID groups. Until the plenary vote on Wednesday (Oct. 19), Ertug will therefore try to convince mainly MEPs from the EPP and the Renew Group in order to achieve a narrow majority.
But EPP shadow rapporteur Jens Gieseke leaves no doubt about his rejection of punitive measures. The CDU politician fears a bureaucracy-intensive and complicated mechanism, as data on the expansion of charging infrastructure would have to be verified and sent to the Commission. Going to an administrative court would also offer the possibility for a legal challenge, making the mechanism highly vulnerable to protracted legal disputes. In his view, the infringement procedure is, therefore, the better legal instrument.
Renew shadow rapporteur Caroline Nagtegaal of the Netherlands doubts the legal feasibility of a sanction mechanism, saying it would require changes to national administrative or even criminal law that are not within EU competence. “Treating companies like criminals is ultimately the wrong starting point for expanding charging infrastructure as quickly as possible.” The money could be better spent, Nagtegaal says.
Ertug’s chances of getting more members of Parliament on his side are limited. It’s also clear that even if he doesn’t get a majority for the sanctions mechanism, his group will by no means reject the report. So he is trying to convince them with rational arguments.
For developing a user-friendly charging network, it is indispensable that all charging points meet the same verifiable requirements, argues the man from the Upper Palatinate. Unlike with oil-based fuels, where you can also help yourself with a gasoline can if necessary, with EVs, he says, you have to rely on the fact that where the charging station is listed, there actually is one where you can charge the required amount with your credit card as usual. “Member states have to make sure that the infrastructure is actually built. If not, they must be sanctioned.”
He has the backing of the Green shadow rapporteur Anna Deparnay-Grunenberg. She knows from experience that the infringement procedures often do not work. That’s why she sees the sanction mechanism as a handout for the member states to be able to refer to the obligations that go along with it as early as the tendering process for charging points.
Wednesday’s vote is likely to be the last chance for the sanctions mechanism. The Commission and the Council had not envisaged any punitive measures for non-compliance with the AFIR, which is why this would no longer be an issue in the trilogue in the event of a rejection in Parliament.
The German government has come under fire for providing up to €200 billion for its energy relief package. In the Covid pandemic, Germany also found itself pilloried in the EU for lavish aid. New figures from the EU Commission have now added some facts to the debate.
Criticism was mainly ignited by the lavish framework of the German aid programs: The German government alone notified the competition regulators in Brussels of more than half of the total €3.1 trillion in aid. But the framework was then far from exhausted, either in Germany or across the EU.
According to the Commission, the 27 member states provided around €940 billion in state aid to companies in 2020 and 2021, equivalent to 3.4 percent of economic output. In absolute terms, Germany and France gave the most. In terms of GDP, however, Italy (6.0 percent) and Spain (5.3 percent) were ahead, followed by Hungary (5.0 percent) and France (4.7 percent). Germany came in at just over three percent.
However, German aid was significantly more generous than those of other EU countries. According to the report, the total amount of aid provided in absolute terms was €63.7 billion in 2020, more than twice as much as in France or Italy. Due to less budgetary leeway, the aid packages there consisted mainly of funds that the companies will have to pay back later.
What’s more, the economies of Italy, Spain and France also suffered a particularly severe slump at the start of the pandemic. Measured by the depth of the recession, the aid was in the middle of the pack in an EU comparison, as was Germany. Measured against this, Poland, Slovenia and Hungary were particularly generous. However, the Commission’s evaluation only takes into account the aid paid. Other programs, such as for short-time work or the reduction of value added tax, are not included. tho
Some fear that this year’s United Nations Climate Change Conference – to be held here on November 6-18 – will be an unintended casualty of the geopolitical tensions and economic challenges the world is facing. I believe the opposite: COP27 represents a unique and timely opportunity for the world to come together, recognize our common interests, and restore multilateral cooperation.
The human cost of climate change is making headlines almost daily. Global warming is no longer a distant or theoretical threat, but an immediate material one – a phenomenon that affects each of us, our families, and our neighbors. No society has been left unscathed by more frequent and intense droughts, wildfires, storms, and floods. Millions of people are already battling for survival.
And that is with temperatures having risen by just 1.1° Celsius, relative to pre-industrial levels. As the Intergovernmental Panel on Climate Change has made clear, every additional tenth of a degree makes matters worse. Yet the changes needed to avert catastrophe are not being made, at least not fast enough, and the developing world is increasingly frustrated with rich countries’ refusal to pay their fair share for a crisis for which they bear overwhelming responsibility.
But there is reason for hope. In my discussions with delegations around the world, I see their determination to make COP27 a success. Already, societies are starting to act. Climate adaptation and new forms of collaboration are gaining traction, and investment in climate tech is booming. This includes new carbon-removal technologies, electric transport solutions, and renewable energies. As a result, clean-energy prices continue to fall: almost two-thirds of renewable power added in G20 countries in 2021 cost less than the cheapest coal-fired options. My country, Egypt, is on track to produce 42% of its energy from renewable resources by 2035.
At the same time, civil society is devising mechanisms for holding companies and governments to account, guarding against greenwashing, and ensuring a just transition. There is a new focus on restoring nature.
More ambition, scale, and speed are needed, and the rules remain unclear or contested. But a process is underway, and there is no going back. Even in countries that might seem to be wavering in their commitments – say, by investing in fossil-fuel infrastructure – officials insist that stopgap measures necessitated by immediate challenges should not be mistaken for long-term strategies. No one doubts the greener road ahead.
The question for those of us who will participate in COP27 is straightforward: How can we seize the opportunity the conference offers to create a sense of common endeavor, prevent backsliding, and inspire an approach based on science, trust, justice, and equity?
At its heart, climate action is a bargain. Developing countries have agreed in good faith to help tackle a crisis they did not cause, on the understanding that support – particularly financial support – would be provided to complement their own efforts, which are often limited due to their scarce resources and competing development needs. Developed countries must uphold their end of that bargain, by supporting both mitigation and adaptation, thus fulfilling their envisaged responsibilities in the Paris agreement.
On the mitigation front, we must move from rhetoric to action in cutting our greenhouse-gas emissions and removing carbon from our atmosphere. All countries must embrace more ambitious Nationally Determined Contributions, and then translate those pledges into programs. We must act now to ensure appropriate resources are available to developing countries to unlock their potential.
At the same time, we must craft a transformative adaptation agenda, so that communities – especially in climate-vulnerable regions – can protect themselves from the effects that are already unavoidable. The bill for this agenda must be divided fairly.
To date, a disproportionate share of climate finance has been directed toward mitigation, leaving developing countries largely to fend for themselves in financing adaptation investment. But even the finance provided for mitigation is far from sufficient and has not been delivered with the appropriate instruments.
In 2009, developed countries pledged to provide $100 billion annually for climate action in the developing world by 2020. This is only a small portion of the more than $5.8 trillion that is needed (up until 2030), according to the UN Framework Convention on Climate Change’s Standing Committee on Finance. And yet this amount has not been delivered. We need an increase in the scale of finance pledges – especially for adaptation – at COP27, compared to those made at COP26 in Glasgow.
Developed countries must also honor the pledge they made last year to double adaptation finance by 2025, and they should provide the assurances needed for the Green Climate Fund’s new replenishment.
And the time has come to address the loss and damage suffered by countries that did not cause the climate crisis. This remains contentious, but I believe that we can approach it constructively, guided by the priorities of developing countries, for the benefit of all.
A just transition must account for the needs of various regions. For example, African countries are committed in principle to adopting renewable energy and refraining from exploiting their fossil-fuel resources. But 600 million people in Africa – 43% of the continent’s population – currently lack electricity, and around 900 million don’t have access to clean cooking fuels. The climate-action bargain demands that this be addressed, and the continent’s broader development needs be met, in sustainable ways.
All of these imperatives must be pursued together, with a carefully designed package of actions, rather than through piecemeal measures. They are the pillars of a just transition. If one is missing, the entire edifice collapses.
Ahead of the 2015 COP in Paris, few believed that an agreement would be reached. Yet delegates from all over the world came together, and through skill and perseverance, reached a groundbreaking deal. In 2022, we face even higher hurdles, so we must work even harder to clear them. If we do, we will usher in a new age of clean energy, innovation exchange, food and water security, and greater climate justice. As daunting as this challenge is, we have no choice but to confront it. We must negotiate with one another, because there can be no negotiating with the climate.
Copyright: Project Syndicate, 2022.
www.project-syndicate.org
This afternoon, the Commission presents its package against high energy prices. According to a draft, there are plans to set a dynamic price cap for the main benchmark index TTF – a compromise in the debate on the general gas price cap that has been going on for months. According to the draft, which is available to Europe.Table, there are also plans for joint ventures for joint gas purchasing. The Commission and member states are supposed to be represented on a steering committee. Manuel Berkel has details on the Commission’s plans.
Partner, competitor, system rival – that is the triad with which the EU describes its assessment of China. This is not going to change, said EU High Representative for Foreign Affairs Josep Borrell yesterday after the meeting of EU foreign ministers in Luxembourg. But the middle part is becoming increasingly relevant: competitors. The European External Action Service (EEAS) also recommends a much tougher line towards Beijing. The Taiwan issue, in particular, has had “a very disruptive impact on EU-China relations”, according to a new EEAS assessment. Amelie Richter reports on the current European perspective on the People’s Republic.
Ismail Ertug (SPD), the rapporteur for the Alternative Fuel Infrastructure Regulation (AFIR), is not yet satisfied with his report. He would like to see a sanction mechanism to ensure that the member states actually implement the targets for expanding the charging infrastructure. He will bring it back to the plenary for a vote tomorrow because he did not get a majority for this in the Transport Committee. Until then, he will have to convince mainly MEPs from the EPP and the Renew Group. But they fear bureaucracy and a lack of legal certainty, as Lukas Scheid reports.
Despite severe crises, COP27 President-Designate Sameh Shoukry is confident about global efforts to protect the climate. But on many points, he sees developed countries, in particular, in need of upholding their end of the bargain, as you can read in today’s Opinion.
For months, some member states have been lobbying for a general gas price cap in the EU. The Commission now presents the compromise: The Council is to set a dynamic price cap for the main benchmark TTF, according to a draft Council regulation from the Commission, which was available to Europe.Table on Monday. The Commission plans to present the final version this afternoon.
According to the draft, so-called over-the-counter transactions away from the exchanges are to remain explicitly possible. “If the EU agrees on a price cap for the TTF, there is a risk that traders will switch to other marketplaces or trade gas off-exchange,” confirms energy lawyer Catherine Banet of the Centre on Regulation in Europe (Cerre). “However, this depends on the exact wording in long-term supply contracts. If the price is explicitly linked to the TTF and the TTF contract schedule, and not to possible other indices, the buyer has little option to swerve.”
According to the Commission draft, the emergency intervention is to be limited to a maximum of three months. The regulatory agency ACER will also be tasked with creating more transparency about the prices of LNG imports in the short term. Over time, this should lead to the alternative price index that the Commission has been envisaging for some time.
“I don’t see much opportunity for the gas buyer to sue,” Banet says. “With new market mechanisms for the TTF, the EU would not intervene directly in supply contracts between sellers and buyers.”
As announced, the Commission also wants to limit volatility in electricity and gas trading. In a legal act, the Commission wants to lay down rules for price fluctuations within a trading day – with a focus on derivatives for the front month. Traders are also to be given the option of depositing non-cash collateral – including government guarantees. The European Securities and Markets Authority (ESMA) is currently developing corresponding rules.
With the draft law, the Commission wants to strengthen gas conservation. Member states are to be explicitly given the right to reduce the “non-essential needs” of protected customers under certain circumstances. These include households. In German energy law, the distinction between vital and non-vital needs already exists. “Both non-protected and protected customers may have vital needs for gas,” the Federal Network Agency wrote back in early September.
However, the Commission clarifies that the demand of “vulnerable customers” as defined by the Internal Gas Market Directive may not be reduced. The member states determine which these are. Protected customers may also not have their gas supply cut off, according to the draft. The draft also extends the preferential gas supply to power plants that are important for maintaining the power supply. According to an annex to the regulation, by the end of 2023 Germany will be the country that consumes the third-largest quantities of gas for power generation after Italy and Spain.
The draft now provides for more precise rules in the event of a gas shortage if one member state supplies gas to another and neither has previously concluded a solidarity agreement. Among other things, it is now stipulated that the compensation is based on a 30-day average of the gas price in order to level out high fluctuations.
One focus of the package is the energy platform, which will be used to refill gas storage facilities in the coming summer half-year. By “early spring 2023” the temporary mechanism for joint gas procurement is to be installed.
The first step is for a single private service provider to aggregate the demand of gas companies in the EU. In principle, participation is voluntary. However, member states would be required to meet 15 percent of their gas storage obligations through the common platform. For the EU as a whole, this would amount to 13.5 billion cubic meters, the draft states.
In the second step, gas companies that have participated in the demand platform can form joint ventures for joint procurement. The Commission explicitly wants to allow multiple mergers because requirements differed across the community of nations. The Commission and member states are to be represented in a steering committee.
“For joint ventures to procure gas together, the Commission needs to find a way that is compatible with competition law,” says regulatory expert Banet. There are already precedents for joint procurement, for example, during the Covid crisis, she said. “However, the Commission needs to find a mechanism that is less distortive of competition,” Banet says. “To this end, it should be guided by the recent amendments to the horizontal block exemption regulations and the horizontal guidelines, which are currently being revised.”
The Commission is planning further measures, according to the draft, to make optimum use of LNG terminals and pipelines for onward transport within the EU. For example, network operators are to be able to reallocate transit rights more quickly if they are not used. For liquefied natural gas terminals, a regulation from the new internal gas market package is to be brought forward in order to establish a secondary market for unused capacities.
The 20th National Congress of the Chinese Communist Party is meeting in Beijing – and the future orientation of the People’s Republic also plays a key role some 8,000 kilometers to the west. The EU will initially continue to use its familiar triad of “partner-competitor-system-rival” in this form, said EU Foreign Affairs Commissioner Josep Borrell on Monday after the meeting of EU foreign ministers in Luxembourg. The middle part of the term “competitor” will become more important, Borrell said. Because that was how China currently acts, he said. “We cannot pretend that China does not exist,” he stressed.
EU foreign ministers previously discussed the EU-China strategy and a new assessment by the European External Action Service (EEAS) for the first time in some time. The speech of China’s President Xi Jinping was also discussed at the Foreign Council, according to Borrell. The speech had shown how China would continue to “intervene” in world affairs. Last week, the EU foreign chief caused a stir with far harsher statements (China.Table reported). “China and Russia – provided the basis of our prosperity. This is a world that is no longer there,” Borrell warned.
A week later, Borrell sounds less fervent. However, the trend is clear here as well: It moves toward increased confrontation with Beijing. Where possible, however, cooperation must continue, French Foreign Minister Catherine Colonna, among others, stressed after the meeting. On Thursday, relations with Asia will be on the agenda of the EU summit of heads of state and government – but it is not yet clear what part China will play.
It is also still open whether the assessment of the European External Action Service will be discussed at the summit. In the paper, the EEAS recommends a much tougher line toward the People’s Republic, saying it should be viewed entirely as a competitor with only limited areas for potential cooperation. “China has become an even stronger global competitor for the EU, the US and other like-minded partners,” the text states. The EEAS assessment thus underscores the remarkable deterioration in relations between Brussels and Beijing since the 2019 China strategy was drafted.
The Taiwan issue, in particular, has had “a very disruptive impact on EU-China relations.” The solution must be to “focus on de-escalation and deterrence to prevent the erosion of the status quo,” the Foreign Service advises. But China’s “dismantling of ‘one country, two systems’ in Hong Kong,” the crackdown on human rights defenders, and serious human rights violations are also signals of “increased political compartmentalization and state-led interventionism,” the Foreign Service warns.
Brussels should also strengthen its strategy toward third countries, especially in the global South. China believes that the current world order is “not adapted to the reality” of developing countries, the EEAS paper stresses. That means China will support positions “opposite to those of the EU in multilateral forums,” it says. This was already evident in the Shanghai Cooperation Organization (China.Table reported).
In the battle of the narratives, the EU urgently needs to increase its outreach “to point out contradictions and risks” in China’s representations. The Global Gateway infrastructure initiative could be key to this, according to EEAS. “We need to be clear that Chinese offers to its partners continue to have great appeal. The EU should make a better offer by delivering on its own promises,” the paper stresses.
The Foreign Service also makes recommendations that are not entirely new in Brussels: The EU should cooperate more closely with the US and improve its defenses against cyber and hybrid threats. The EEAS has long been awaiting a mandate from the EU Commission to tackle Chinese disinformation with its own task force.
In addition, supply chains need to be more diversified and relationships with countries in the And Pacific region need to be strengthened, the assessment says. The EU’s dependence on China in semiconductors and certain rare earth metals is identified as a “strategic vulnerability” in the paper, which calls for more domestic production and other initiatives, such as better recycling across the EU. The five-page document contains only one paragraph on areas of what it calls “areas of limited potential co-operation” with China: climate, environment and health.
The EU must express a united message to China, the EEAS stressed in its assessment. Observers on Monday also saw this as a hint for Berlin. There, Chancellor Olaf Scholz prepares for his first trip to Beijing. France’s President Emmanuel Macron is also expected to head to the People’s Republic soon. “When it comes to the visits, it is useful to have a common message – even if we do not speak with one voice, it has to be one message,” South China Morning Post quotes an EU diplomat as saying. Whether Berlin will also see China primarily as a “competitor” remains to be seen.
The member states need pressure, urges Ismail Ertug (SPD). Pressure to ensure that they also implement the targets for the expansion of the charging infrastructure that Brussels will set for them. The rapporteur responsible for the Alternative Fuel Infrastructure Regulation (AFIR) is not yet 100 percent satisfied with his report. He did not get a majority in the Transport Committee for the sanction mechanism, which is supposed to exert pressure (Europe.Table reported). He will therefore put it to the vote again in plenary.
Ertug’s penalty mechanism provides for two things: First, progress in building up the loading rates required in the AFIR would be monitored by the Commission. If member states have not met the targets, the Commission should be able to initiate a case against the country before the European Court of Justice in addition to infringement proceedings. For each charging point provided for in the AFIR but not built, a daily penalty of €1,000 would then be due until the charging point is in place.
On the other hand, Ertug also wants to enforce the requirements for charging point operators more strictly. It is a matter of ensuring that charging points also meet the AFIR requirements, among other things in terms of possible means of payment, transparent price information and location. If they fail to do so, the member states should allow for appropriate penalties in their national legislation.
Ertug has the support of the Greens and the Left in the EU Parliament, but he cannot and will not rely on the support of the ultra-conservative ECR and right-wing ID groups. Until the plenary vote on Wednesday (Oct. 19), Ertug will therefore try to convince mainly MEPs from the EPP and the Renew Group in order to achieve a narrow majority.
But EPP shadow rapporteur Jens Gieseke leaves no doubt about his rejection of punitive measures. The CDU politician fears a bureaucracy-intensive and complicated mechanism, as data on the expansion of charging infrastructure would have to be verified and sent to the Commission. Going to an administrative court would also offer the possibility for a legal challenge, making the mechanism highly vulnerable to protracted legal disputes. In his view, the infringement procedure is, therefore, the better legal instrument.
Renew shadow rapporteur Caroline Nagtegaal of the Netherlands doubts the legal feasibility of a sanction mechanism, saying it would require changes to national administrative or even criminal law that are not within EU competence. “Treating companies like criminals is ultimately the wrong starting point for expanding charging infrastructure as quickly as possible.” The money could be better spent, Nagtegaal says.
Ertug’s chances of getting more members of Parliament on his side are limited. It’s also clear that even if he doesn’t get a majority for the sanctions mechanism, his group will by no means reject the report. So he is trying to convince them with rational arguments.
For developing a user-friendly charging network, it is indispensable that all charging points meet the same verifiable requirements, argues the man from the Upper Palatinate. Unlike with oil-based fuels, where you can also help yourself with a gasoline can if necessary, with EVs, he says, you have to rely on the fact that where the charging station is listed, there actually is one where you can charge the required amount with your credit card as usual. “Member states have to make sure that the infrastructure is actually built. If not, they must be sanctioned.”
He has the backing of the Green shadow rapporteur Anna Deparnay-Grunenberg. She knows from experience that the infringement procedures often do not work. That’s why she sees the sanction mechanism as a handout for the member states to be able to refer to the obligations that go along with it as early as the tendering process for charging points.
Wednesday’s vote is likely to be the last chance for the sanctions mechanism. The Commission and the Council had not envisaged any punitive measures for non-compliance with the AFIR, which is why this would no longer be an issue in the trilogue in the event of a rejection in Parliament.
The German government has come under fire for providing up to €200 billion for its energy relief package. In the Covid pandemic, Germany also found itself pilloried in the EU for lavish aid. New figures from the EU Commission have now added some facts to the debate.
Criticism was mainly ignited by the lavish framework of the German aid programs: The German government alone notified the competition regulators in Brussels of more than half of the total €3.1 trillion in aid. But the framework was then far from exhausted, either in Germany or across the EU.
According to the Commission, the 27 member states provided around €940 billion in state aid to companies in 2020 and 2021, equivalent to 3.4 percent of economic output. In absolute terms, Germany and France gave the most. In terms of GDP, however, Italy (6.0 percent) and Spain (5.3 percent) were ahead, followed by Hungary (5.0 percent) and France (4.7 percent). Germany came in at just over three percent.
However, German aid was significantly more generous than those of other EU countries. According to the report, the total amount of aid provided in absolute terms was €63.7 billion in 2020, more than twice as much as in France or Italy. Due to less budgetary leeway, the aid packages there consisted mainly of funds that the companies will have to pay back later.
What’s more, the economies of Italy, Spain and France also suffered a particularly severe slump at the start of the pandemic. Measured by the depth of the recession, the aid was in the middle of the pack in an EU comparison, as was Germany. Measured against this, Poland, Slovenia and Hungary were particularly generous. However, the Commission’s evaluation only takes into account the aid paid. Other programs, such as for short-time work or the reduction of value added tax, are not included. tho
Some fear that this year’s United Nations Climate Change Conference – to be held here on November 6-18 – will be an unintended casualty of the geopolitical tensions and economic challenges the world is facing. I believe the opposite: COP27 represents a unique and timely opportunity for the world to come together, recognize our common interests, and restore multilateral cooperation.
The human cost of climate change is making headlines almost daily. Global warming is no longer a distant or theoretical threat, but an immediate material one – a phenomenon that affects each of us, our families, and our neighbors. No society has been left unscathed by more frequent and intense droughts, wildfires, storms, and floods. Millions of people are already battling for survival.
And that is with temperatures having risen by just 1.1° Celsius, relative to pre-industrial levels. As the Intergovernmental Panel on Climate Change has made clear, every additional tenth of a degree makes matters worse. Yet the changes needed to avert catastrophe are not being made, at least not fast enough, and the developing world is increasingly frustrated with rich countries’ refusal to pay their fair share for a crisis for which they bear overwhelming responsibility.
But there is reason for hope. In my discussions with delegations around the world, I see their determination to make COP27 a success. Already, societies are starting to act. Climate adaptation and new forms of collaboration are gaining traction, and investment in climate tech is booming. This includes new carbon-removal technologies, electric transport solutions, and renewable energies. As a result, clean-energy prices continue to fall: almost two-thirds of renewable power added in G20 countries in 2021 cost less than the cheapest coal-fired options. My country, Egypt, is on track to produce 42% of its energy from renewable resources by 2035.
At the same time, civil society is devising mechanisms for holding companies and governments to account, guarding against greenwashing, and ensuring a just transition. There is a new focus on restoring nature.
More ambition, scale, and speed are needed, and the rules remain unclear or contested. But a process is underway, and there is no going back. Even in countries that might seem to be wavering in their commitments – say, by investing in fossil-fuel infrastructure – officials insist that stopgap measures necessitated by immediate challenges should not be mistaken for long-term strategies. No one doubts the greener road ahead.
The question for those of us who will participate in COP27 is straightforward: How can we seize the opportunity the conference offers to create a sense of common endeavor, prevent backsliding, and inspire an approach based on science, trust, justice, and equity?
At its heart, climate action is a bargain. Developing countries have agreed in good faith to help tackle a crisis they did not cause, on the understanding that support – particularly financial support – would be provided to complement their own efforts, which are often limited due to their scarce resources and competing development needs. Developed countries must uphold their end of that bargain, by supporting both mitigation and adaptation, thus fulfilling their envisaged responsibilities in the Paris agreement.
On the mitigation front, we must move from rhetoric to action in cutting our greenhouse-gas emissions and removing carbon from our atmosphere. All countries must embrace more ambitious Nationally Determined Contributions, and then translate those pledges into programs. We must act now to ensure appropriate resources are available to developing countries to unlock their potential.
At the same time, we must craft a transformative adaptation agenda, so that communities – especially in climate-vulnerable regions – can protect themselves from the effects that are already unavoidable. The bill for this agenda must be divided fairly.
To date, a disproportionate share of climate finance has been directed toward mitigation, leaving developing countries largely to fend for themselves in financing adaptation investment. But even the finance provided for mitigation is far from sufficient and has not been delivered with the appropriate instruments.
In 2009, developed countries pledged to provide $100 billion annually for climate action in the developing world by 2020. This is only a small portion of the more than $5.8 trillion that is needed (up until 2030), according to the UN Framework Convention on Climate Change’s Standing Committee on Finance. And yet this amount has not been delivered. We need an increase in the scale of finance pledges – especially for adaptation – at COP27, compared to those made at COP26 in Glasgow.
Developed countries must also honor the pledge they made last year to double adaptation finance by 2025, and they should provide the assurances needed for the Green Climate Fund’s new replenishment.
And the time has come to address the loss and damage suffered by countries that did not cause the climate crisis. This remains contentious, but I believe that we can approach it constructively, guided by the priorities of developing countries, for the benefit of all.
A just transition must account for the needs of various regions. For example, African countries are committed in principle to adopting renewable energy and refraining from exploiting their fossil-fuel resources. But 600 million people in Africa – 43% of the continent’s population – currently lack electricity, and around 900 million don’t have access to clean cooking fuels. The climate-action bargain demands that this be addressed, and the continent’s broader development needs be met, in sustainable ways.
All of these imperatives must be pursued together, with a carefully designed package of actions, rather than through piecemeal measures. They are the pillars of a just transition. If one is missing, the entire edifice collapses.
Ahead of the 2015 COP in Paris, few believed that an agreement would be reached. Yet delegates from all over the world came together, and through skill and perseverance, reached a groundbreaking deal. In 2022, we face even higher hurdles, so we must work even harder to clear them. If we do, we will usher in a new age of clean energy, innovation exchange, food and water security, and greater climate justice. As daunting as this challenge is, we have no choice but to confront it. We must negotiate with one another, because there can be no negotiating with the climate.
Copyright: Project Syndicate, 2022.
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