Electricity market reform + EU think tank + influx for climate club

Dear reader,

Relations between Paris and Berlin have not been the best of late – but both sides are trying to improve them: Emmanuel Macron is to come to Germany for a state visit from July 2 to 4, as our colleagues from “Contexte” and we have learned from circles in both governments. The agenda is still being worked on intensively, they say. There has been a lot of dissent in recent months, especially over the status of nuclear energy in the energy transition.

The still high prices for electricity are to be curbed by a reform of the European electricity market. Experts from the Directorate-General for Energy, science and the energy industry discussed the Commission’s proposal at a Table.Live briefing at the Berlin Energy Days on Wednesday. My colleague Manuel Berkel moderated the briefing. You can read a summary in his analysis.

Do you know about the Joint Research Center? The EU’s own research institute is supposed to supply the Commission with essential data and advise it on decisions. But the center could be better known. That Research Commissioner Mariya Gabriel also reminded the Commission during her visit to consider the institute’s work whenever possible is no wonder. And the institute also wants to make improvements itself, reports Tim Gabel.

Your
Alina Leimbach

Electricity market reform: ‘A long-term hedge against fluctuating prices’

By

Manuel Berkel

The French stance on the electricity market reform has recently repeatedly led to controversy. Céline Pizzotti, Deputy Managing Director of the Franco-German Office for the Energy Transition, thus described the French view in an introductory lecture on Wednesday. France had succeeded in getting nuclear energy included in the rules for support via Contracts for Difference (CfD). Less known is that France has already been promoting renewables via bilateral CfDs since 2017, Pizzotti explained. This provides the state with revenue through skimmed proceeds during the energy crisis, she said. France also introduced state guarantee funds for long-term power purchase agreements (PPAs) – another central point of the upcoming EU reform – earlier this year.

The Commission’s proposal for the European electricity market reform was presented by Michael Schütz, Internal Energy Market Officer from the Directorate-General for Energy. “In the longer term, we will achieve a safeguard for customers against fluctuating electricity prices and thus also electricity prices that fluctuate sharply upwards,” Schütz said. He thus countered criticism from some who would prefer to extend a permanent skimming of excess revenues via two-sided CfDs to existing plants as well. This criticism was voiced, for example, by the Spanish economist Natalia Fabra.

‘Two-page CfDs provide clarity’

“With the increase in renewables that we need by 2040, a large part of the renewables will not be existing plants – especially since the regulations also apply to repowering,” Schütz explained. However, a stronger emphasis on long-term contracts also harbors danger: “This will be a debate in a few years, when the short-term prices are again very low, about why we have such expensive long-term contracts. But well, long-term contracts are insurance, and insurance definitely costs money.”

BDEW was surprisingly relaxed about the push for bilateral CfDs, even though this would mean permanent revenue skimming in times of high market prices. The cap on revenues is clear from the outset in a contract for difference, but there were retroactive interventions in last year’s emergency measures, he said. “The problem is that once you break a taboo, you may be able to do it afterward in much less serious circumstances. And that’s why you have to say the bipartite CfD at least creates clarity,” said Stephan Krieger, Market Design and European Energy Policy Speaker at BDEW.

This statement from an energy association is remarkable because the German Renewable Energy Federation (BEE) has so far always strictly rejected bilateral CfD.

‘PPAs make electricity 30 percent more expensive than contracts for difference’

Karsten Neuhoff, Head of the Climate Policy Department at DIW Berlin, also argued for investor security. A long-term price commitment through CfDs or PPAs creates credibility so that ad hoc market intervention is not necessary in the event of another crisis. It is precisely steps like this, he said, that would be “scary” for investors.

For Neuhoff, CfDs are also the more suitable instrument for driving forward the expansion of renewables and lowering prices. The DIW economist is convinced that “only a fraction of the expansion we want to achieve with renewables by 2030 is possible via PPAs. There are not enough buyers who could subscribe to PPAs and too many risks remained. Hedging via PPAs thus makes each kilowatt-hour of electricity 30 percent more expensive than hedging via CfDs, Neuhoff said.

BDEW warns against distortion of competition

Krieger countered that the attraction of PPAs also depends on the interaction with CfDs. Contracts for difference, he said, are comparable to federal bonds over a 20-year term. “This must not be too interesting, because, otherwise, no one will go the market route,” the BDEW manager said. He said, in this context, it was disappointing that the final version of the Commission no longer contained any criteria like earlier drafts. The whole thing would have to be “narrowed down a bit” to prevent distortions of competition.

In earlier drafts of the Commission’s proposal, CfDs were required to meet primarily local criteria to avoid concentrating renewables in locations where there are favorable generation conditions but wind or solar farms must be frequently curtailed because of grid congestion en route to centers of consumption.

Capacity mechanisms: First reforms, then subsidies

As for subsidies for new gas-fired power plants, Schütz dampened expectations in Berlin. “Our principle is clear, normally market reforms come first, then subsidies, and there will certainly still be discussions with Germany,” said the Directorate General for Energy Official. In this context, Schütz cited the market reform plan under the Single Market Regulation and the Commission’s corresponding statement.

Somewhat polemically, Schütz added: “I can only hope that, unlike sometimes in the past, the European perspective will be taken seriously, will be taken into account, and that it will not necessarily be assumed that when Germany has agreed on something in lengthy processes, all the other 26 member states will then rotate around Germany.”

Joint Research Center: What does the Commission’s think tank do?

By

Tim Gabel

Not everyone is familiar with the EU’s Joint Research Center (JRC). The precursors of this huge research institution have existed since 1959. It was founded in Ispra, Italy, as the nuclear research center of the European Atomic Energy Community (now Euratom), and many institutes and laboratories have been added since then, while some have been closed down or rededicated. The five research centers of the JRC, including the Brussels headquarters, now call themselves the EU Science Hub. Research in Ispra and at the other four sites in Karlsruhe, Petten, Geel and Seville addresses current or future challenges facing the EU.

One who knows the JRC well is Research Commissioner Mariya Gabriel. On Thursday, she visited the facility in Ispra at a congress held as part of the European plan to fight cancer. She dropped in on several institutes, including the European Crisis Management Laboratory, a kind of data lab with storage space for climate change risks, demographic trends and geopolitical challenges.

One of the reasons she came to the research center now, Gabriel said, was “to remind everyone once again that it should be an automatic reflex for everyone to take into account the daily work that is done here.” A reminder, then, to all policymakers to incorporate the JRC’s evidence-based data, facts and analysis into their own policy making.

‘We do research directly for Brussels’

Alessandra Zampieri, head of the Sustainable Resources Division at JRC, emphasized, “As challenges become more complex and systemic – such as epidemics, climate crisis or war – it is becoming increasingly important that policy decisions are based on a broad foundation of data and evidence,” she said. “We do research directly for our colleagues in Brussels.”

JRC Director General Stephen Quest attributes three core tasks to his organization: “Anticipate, integrate and influence.” For this, it has a total of nearly 3,000 employees at its various sites. He says much of the organization’s own research is designed to enable policymakers at the Commission to anticipate challenges facing European society and to set an early course.

In many regions of the EU, for example, we need to prepare for periods of drought, dwindling biodiversity, or the interaction of electromobility and smart grids. The JRC provides the facts for well-founded and thought-out political decisions. In addition, the integration of data and results from different scientific disciplines is important for political decision-making, Quest explains.

Almost half a billion for research and policy advice

For European transport policy, for example, knowledge from the field of artificial intelligence is just as important as the latest findings in climate research. The JRC intends to bundle this knowledge and present it to policymakers in such a way that it has an impact.

“We cover the entire policy cycle. We provide evidence-based knowledge at the stage when proposals are developed and negotiated, we evaluate policy, and, finally, we help adjust policies when targets have been missed,” Quest said.

For this purpose, the JRC receives an annual budget of €380 million from the Commission. In addition, the various directorates-general spend around €80 million on specific research or consulting tasks. A lot of money for research.

Influence is difficult to measure

There is yet no evidence-based data from the joint research center on how the JRC’s work is paying off in concrete terms. In one presentation, there is talk of a “growing influence on central policy decisions. However, an independent evaluation of 50 case studies had shown that the core competence of the JRC was the creation and implementation of guidelines. Only in some cases was a moderate influence on policy decisions measurable.

When asked about the JRC’s concrete impact, the research commissioner sounds very convinced: “It’s the basis of our daily work. She cites the Commission’s plan to fight cancer or the plans for climate-neutral smart cities as current examples. She says there is no proposal or initiative – at least from her house – for which she does not look at the JRC’s data first.

But the JRC also seems to see room for improvement. At the beginning of the year, the research institution revised its strategy. The paper’s goals include stronger networking within and outside the Commission, better leverage of its digital and data expertise, and better communication of its value.

Ammunition for Ukraine: EU ambassadors reach agreement

On Wednesday, the ambassadors of the EU states agreed on the legal text for the so-called Track 2 for the joint procurement of artillery shells and anti-aircraft missiles for Ukraine. The EU intends to finance projectiles, particularly of 155-millimeter caliber, with €1 billion from the European Peace Facility. After the political decision by the heads of state and government, legal implementation had been delayed at the dispute over the definition of “Made in Europe.”

According to EU diplomats, the compromise clarifies that “important parts” of the supply chain must be located in the EU as well as Norway. According to the legal text, artillery shells and missiles largely manufactured and assembled in the EU as well as Norway are eligible for joint procurement with EU funds. The legal text will be published after the written procedure ends.

Track 2 is part of a three-pronged plan by Internal Market Commissioner Thierry Breton and Foreign Affairs Commissioner Josep Borrell. Track 1 calls for EU states to transfer additional artillery shells from their stocks to Ukraine by the end of May. Member states will be compensated up to 60 percent, for which €1 billion will also be available from the Peace Facility.

Track 3 was presented by Breton on Wednesday. Brussels wants to support member states and the defense industry in expanding their production capacities with €500 million from the EU budget. sti

Netherlands and Luxembourg join climate club

In addition to the G7 countries that founded the Climate Club in December, there are now six new members: Argentina, Chile, Indonesia, Colombia, Luxembourg and the Netherlands. More are to be announced later today. The task force of the climate club initiated by Olaf Scholz is meeting for the first time today as a follow-up to the Petersberg Climate Dialogue. Observers assume that in addition to the United Arab Emirates, which will host the World Climate Conference (COP28) this year, other European countries could also join. Possible candidates are said to be Denmark, Norway and Switzerland.

The detailed design as well as the climate club’s mode of operation are still under development. For example, the original idea of a club of countries with the most ambitious climate policies has been discarded in favor of an “all-inclusive” approach. However, this is not meant to be an obstacle but rather to open up co-design opportunities for new members whose decarbonization still needs to catch up. However, the basic idea of the club is clear: Promotion of green lead markets in hard-to-decarbonize industrial sectors by setting uniform standards for industry transformation.

‘Full launch’ at COP28

The task force is chaired by Birgit Schwenk, Head of the Climate Protection Department at the German Federal Ministry for Economic Affairs and Climate Action (BMWK), and her Chilean colleague Julio Cordano. The focus is on fine-tuning the targets and working methods as well as the governance structures of the alliance. The Climate Club should be fully operational and ready to speak by COP28 so that the “full launch” can take place in Dubai in December.

After that, members will meet regularly to discuss future standards for green products and markets and share assessments and strategies for avoiding carbon leakage, explains a BMWK spokesperson. “In this way, the club will enable a focused exchange among developed, emerging and developing countries on frameworks, strategies and mechanisms to accelerate the global decarbonization of industry.”

CBAM exception not provided

In the meantime, it had been discussed whether members of a climate club would facilitate each other’s access to the respective other markets. For example, exceptions to the EU’s recently adopted carbon border adjustment mechanism (CBAM) were also under discussion. This possibility is now off the table. CBAM exemptions or rebates will continue to be reserved only for those countries that have their own carbon price.

Instead, the private sector is to be more involved by allowing members to participate in “voluntary matchmaking” for cooperation and financing instruments to obtain investment from the private sector. To distill potential synergies as well as gaps in the funding landscape, the Climate Club team is to work with the International Energy Agency (IEA) and the Organization for Economic Co-operation and Development (OECD).

EU to empower consumers for green transition

Yesterday, the Council set its negotiating mandate on the March 2022 proposed directive on empowering consumers for the green transition. The Parliament will also vote on its position next week. Trilogue negotiations can then begin.

The directive aims to strengthen the rights of female consumers through amendments to the Unfair Commercial Practices Directive and the Consumer Rights Directive. To enable their contribution to the circular economy, consumers should have better access to information on the sustainability of a product. As such, the directive complements the recently unveiled Green Claims Directive and the Sustainable Consumption of Goods (Right to Repair) Directive.

In its negotiating mandate, the Council proposes to ban general environmental claims such as “environmentally friendly,” “green” or “climate neutral.” Manufacturers should no longer be allowed to use such general terms to advertise their products, processes or companies if the claims cannot be substantiated by a publicly available certification system.

Council wants 24-month implementation period

In the future, only sustainability labels based on official certification schemes or registered as certification marks or established by public authorities will be allowed.

In the amendments to the Consumer Rights Directive, the Commission proposal provides for the introduction of a commercial durability guarantee for manufacturers, i.e. a promise by the manufacturer that the product will retain certain functions or performance for a certain period of time. The Council proposes the creation of a harmonized “graphic format” so that consumers can clearly identify such guarantees.

The Council’s position also requires manufacturers to provide the right to information on products with digital elements. For example, consumers should be informed about how long they can benefit from updates for products.

To give member states sufficient time to adapt, the Council’s position also extends the transposition period from 18 to 24 months. The Parliament will vote on its position next Tuesday. leo

Total sues Greenpeace over emissions report

French oil company Total Energies has sued the environmental organization Greenpeace France and the climate consultancy Factor-X over a report in a Paris court. Total announced the move on Wednesday. The report claims that the company massively underestimated its greenhouse gas emissions for 2019.

Total claims that the November report contains “false and misleading information”. With the civil lawsuit, the company wants to have the publication withdrawn. All references to the report are to be stopped. In case of non-compliance, Total demands compensation of 2,000 euros per day and one euro in symbolic damages.

Greenpeace and Factor-X accused the oil company of emitting around 1.64 billion metric tons of CO2-equivalents in 2019, while only disclosing 455 million metric tons in public statements.

“This is a question of principle, and a judgment from the court will not prevent Greenpeace from continuing to criticize us and our climate strategy if they wish, but will remind them that public debate on issues with such high stakes concerning a listed company require rigor and good faith,” a TotalEnergies spokesperson said.

Greenpeace said the lawsuit was an attempt to muzzle the NGO ahead of the May 26 TotalEnergies general assembly, where activist shareholders will push for stricter climate commitments. nib/rtr

AI rapporteur: discussion on general-purpose AI also needed in Council

Parliament’s co-rapporteur on the AI Act expects that governments in the Council will now also hold a discussion on general-purpose AI (GPAI). Last fall, the Council still thought it was too early to regulate models like ChatGPT, Dragoș Tudorache (Renew) told Table.Media. “I think the reality has changed since the fall and I would venture a guess that there are quite several governments who also share that view.”

This discussion in the Council could possibly help bring the views together in the trilogue, he said. That might even be easier than expected, Tudorache said. “Because I think we were quite reasonable in the regime that we are proposing, and I would not see why these views should not be held by Council.”

AI Act: ‘delicate and fragile’ compromise

However, before trilogue negotiations on the AI Act can begin, votes are scheduled in the Internal Market and Home Affairs (IMCO and LIBE) committees on May 11 and in plenary in June. Tudorache called the compromise negotiated with the shadow rapporteurs “delicate and fragile.” He said the negotiations in Parliament, which ended in a compromise last week, were challenging because of ideological differences between the factions.

During the negotiations, he said, it was tempting to work with variable majorities. But his co-rapporteur Brando Benifei (S&D) and he wanted “a clear majority built around the center.” All sides would have had to make concessions. So, the two hope they will also get the mandate for the trilogue. “There is still an important hurdle to overcome,” Tudorache said.

Difficult discussion with Council expected

In Parliament, he said, discussions on Article 5 (Prohibited Provisions) and Article 6 with Annex III (High-Risk AI Systems) have been the toughest and most protracted. In the upcoming trilogue negotiations, Tudorache expects difficult discussions here as well. For instance, in the area of law enforcement, he said, the Parliament deviated from the Commission’s proposal and the Council’s position. The same applies to migration and border control, he said.

He also “has not yet heard a statement from Council as to whether they will be prepared to move in all directions when it comes to governance,” Tudorache added. As a result, he said he expects there will also be a discussion on enforcement. However, he also sees areas where the Parliament and Council are not so far apart –such as definitions and scope, or compliance.

The Council does not have a strong mandate

It could prove problematic in the negotiations that while the Council found a General Approach in December, the countries – including Germany – certainly still see a need to negotiate. “That’s certainly not so good because we need the presidency on the other side of the table that has a clear mandate as well,” Tudorache said. Still, he hopes to bring the trilogue to a successful conclusion this year. vis

E-Privacy Regulation: sharp criticism of the Council

The rapporteur of the European Parliament, Birgit Sippel (SPD), sees no possibility of an agreement on the E-Privacy Regulation, which has been faltering since 2016, in the foreseeable future: She has repeatedly proposed solutions and discussions to the Council for the E-Privacy Regulation on a political and technical level, Sippel told Table.Media: “Unfortunately, corresponding reactions from the Council have failed to materialize. Instead of taking a clear position, the Council and the Commission are sending the E-Privacy Dossier, which they dislike, to the siding.”

Sippel accuses the Council of allowing gaps in the protection of privacy and confidentiality of communications to develop as a result. “This is unacceptable.” The Council and the Commission must “finally make a clear commitment so that we also have clarity about the future of E-Privacy.”

In an interview with Table.Media, European Data Protection Supervisor Wojciech Wiewiórowski also clearly opposes the Council’s ideas. He said the latest proposals on the E-Privacy Regulation by the Council did not convince him that it would create a coherent data protection law. “It is burdensome for users and regulators that we don’t have an E-Privacy Regulation. But it is more important to have a good E-Privacy Regulation than any regulation.”

The Swedish presidency had cited a solution to the dispute, which has been deadlocked since 2016, as one of its priorities, but had so far been unable to come up with any consensual proposals for a solution. The regulation was supposed to have come as a mirror dossier to the General Data Protection Regulation, which came into force in 2016 and has been effective since May 2018. fst

Commission wants uniform rules against corruption

Brussels wants tougher instruments to fight corruption, within the EU but also globally. Corruption is like cancer, said EU Commission Vice-President Vera Jourova in Brussels on Wednesday. If it is allowed to grow, it will suffocate democratic society and destroy its institutions, she said. Jourova appeared with EU External Relations Commissioner Josep Borrell, Home Affairs Commissioner Ylva Johansson and Commission Vice-President Margaritis Schinas to present the so-called anti-corruption package.

Part of the package is a communication that mainly lists the status quo of the current legislation in the member states and possible improvements. According to Eurobarometer seven out of ten EU citizens are convinced that corruption is widespread in their country. The EU has recently made headlines with corruption in its own house, keyword Katargate. However, EU Commission President Ursula von der Leyen had already announced the package before the affair in the EU Parliament.

In addition to the communication, the Commission is proposing a directive to expand or harmonize definitions, rules and sanctions in the member states. According to the documents the current legislation is fragmented and limited in scope. The corruption offenses covered and the possible sanctions thus vary from one member state to another. This often makes cross-border investigations difficult and creates loopholes for criminals, Jourova said.

Harmonization to close loopholes

In addition, the purchase of political influence, the abuse of political office, illegitimate enrichment in the private and public sectors and obstruction of justice are now to be counted as corruption. For the first time, the rules against corruption in the public and private sectors are to be combined in one legal act. Aggravating and mitigating circumstances in the assessment of penalties would be defined together. Suspects should be easier to prosecute so that corruption offenses do not become time-barred, Jourova said. Common standards are also envisaged when it comes to waiving immunity.

For the global fight, the EU wants to supplement its sanctions regime accordingly, so that in serious cases of corruption, those responsible can be subject to punitive measures. Specifically, assets could be frozen or entry bans imposed: “We are sending a clear message: the EU is not open for business to those who engage in corruption,” said EU Chief Diplomat Borrell. The Commission is responding to calls from the EU Parliament to introduce so-called “Magnitsky sanctions,” following the US example. The proposals still have to be approved by the member states, and the directive also by the EU Parliament.

Green MEP: ‘small milestone’

What the Commission is presenting as a major step forward is, at most, a “small milestone,” said Daniel Freund (Greens), a member of the European Parliament. It was good that oligarchs and criminals who had become billionaires through corruption would soon have to expect sanctions. However, the fight against corruption involves much more than harmonizing definitions or entry bans for Russian oligarchs, said the European parliamentarian.

Freund called on Ursula von der Leyen to use the rule of law mechanism more broadly and not just against Hungary. In addition, the European Public Prosecutor’s Office should be better equipped and an independent ethics body should ensure order in the EU institutions’ house. sti

Despite judicial reform: Hungary still to wait for EU funds

The Hungarian parliament has passed an amendment aimed at strengthening the independence of the judiciary. The bill by Prime Minister Viktor Orbán’s right-wing government was approved by 151 deputies on Wednesday, including 19 from the opposition. There was no vote against it.

With the legislative package, which was fast-tracked through Parliament, Orbán wants to gain access to some of the EU funds currently withheld because of corruption or restrictions on judicial independence. It restores most of the powers of the independent National Judicial Council (OBT), which had been transferred to the government-subordinate National Judicial Office (OBH) by past reforms.

No quick decision on EU funds

The reform could give the government access to €13.2 billion of the €22 billion in EU cohesion funds actually earmarked for Hungary. However, the EU Commission is unlikely to decide on the release before the summer. Before that, it wants to evaluate the concrete implementing regulations for the legislative package, which are still pending.

For the time being, the judicial reform will have little impact on other frozen funds. The Council of Member States had decided in December to freeze €6.3 billion from the EU budget through the conditionality mechanism. To gain access, Orbán would have to implement 17 measures, particularly to fight corruption.

The Commission is also withholding €5.8 billion in grants from the Covid reconstruction program, which are linked to 27 “super-milestones.” The judicial reform addresses only four of these criteria. tho/dpa

Patrick Graichen – State Secretary in the twilight

Patrick Graichen - Staatssekretär im Wirtschaftsministerium — State Secretary at the Federal Ministry for Economic Affairs and Climate Action.

German state secretaries are usually not too much in the spotlight. For Patrick Graichen, it is a different story: The high-ranking official in the German Ministry of Economics now faces allegations of cronyism and calls for his resignation. The designated candidate for chair of the German Energy Agency (Dena) board, Michael Schäfer, is Graichen’s best man. Graichen was involved in the selection process for the Dena chair, although he was aware of Schäfer’s application early on. Graichen speaks of a “mistake that he very much regrets.” He should have withdrawn from the selection committee once Schäfer became a candidate, he says.

The opposition in the Bundestag senses a scandal. The Secretary General of the Christian Social Union (CSU), Martin Huber, spoke of “nepotism,” calling Graichen no longer tenable as state secretary. The Alternative for Germany (AfD) even spoke of “green clan structures.”

The criticism is all the louder because the Schäfer affair is not Graichen’s only close tie. Graichen’s counterpart as State Secretary in the Ministry for Economic Affairs and Climate Action (BMWK) is Michael Kellner, his brother-in-law. Kellner is married to Graichen’s sister Verena – who, like his brother Jakob, works as an energy expert for the Freiburg-based Öko-Institut. The German government also contracts the Öko-Institut. However, these family connections became known in December 2021 and were disclosed by the ministry.

At the time, the BMWK assured it would set up procedures to prevent conflicts of interest. In fact, the number of contracts for the Öko-Institut and the sums paid has decreased since the current German government took office, as the newspaper Süddeutsche Zeitung reported. According to the report, five contracts worth 3.6 million euros were awarded in 2022. In the last year of the Merkel government, 2021, eight contracts were awarded (volume of 2.5 million euros), and in 2019, even eleven contracts with a volume of 9.5 million euros. Graichen is also excluded from tender procedures that involve the Öko-Institut, BUND – Verena Graichen is a member of its board – or Agora Energiewende – his former employer.

Every accusation also affects Habeck

Graichen is a key thinker and manager of Habeck’s energy and climate transition – and, thus, the brains behind upcoming hardships that will hit consumers and some industrial sectors. Whether it is the heating transition, the Climate Change Act, the energy transition or the gas crisis management after the Russian attack on Ukraine – Graichen is in charge of many of the BMWK’s central projects. The law on promoting heat pumps and replacing old heating systems, which was heavily criticized in the media and by some interest groups, can also be traced back to Graichen.

This means that calls for Graichen’s resignation always hit Economy Minster Robert Habeck and his partly unpopular energy and heat transition plans. Graichen himself refuses to resign. His boss has so far stood by his top civil servant. Habeck is trying to defuse the accusations against Graichen by reviewing the Dena chairmanship selection process. According to Stefan Wenzel, chairman of Dena’s supervisory board, the procedure could be repeated altogether.

Even if there was no proof that Graichen committed any direct misconduct, the impression of conflicts of interest remains. The opposition will likely also point to the close ties between Graichen and other important stakeholders when criticizing the energy transition in the future.

Advisor and department head in various governments

Graichen has served various governments of different parties – as is not unusual for political officials. From 2001 to 2006, he was a consultant for international climate action at the German Federal Ministry for the Environment. First under Green Minister Jürgen Trittin and later under Sigmar Gabriel of the Social Democratic Party (SPD). Afterward, he even became head of the department for climate action matters. At that time, the Environment Minister was Norbert Röttgen – a Christian Democrat.

Graichen left the political scene for a time in 2012 and founded the think tank Agora Energiewende with former State Secretary of the BMU and colleague Rainer Baake. When Baake was reappointed State Secretary, Graichen took over as Executive Director and Managing Director of the think tank. During this time, the graduate economist and environmental economist acted more as a watchdog and commentator from the sidelines.

At the time, Graichen supported the coal phase-out and the simultaneous expansion of renewables through external pressure. In 2015, even before the Paris Agreement was signed, he already highlighted the need to reform the energy market design, according to which climate-friendly energy sources must be efficiently promoted and harmful ones priced accordingly. Nico Beckert / Lukas Scheid

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,

Relations between Paris and Berlin have not been the best of late – but both sides are trying to improve them: Emmanuel Macron is to come to Germany for a state visit from July 2 to 4, as our colleagues from “Contexte” and we have learned from circles in both governments. The agenda is still being worked on intensively, they say. There has been a lot of dissent in recent months, especially over the status of nuclear energy in the energy transition.

The still high prices for electricity are to be curbed by a reform of the European electricity market. Experts from the Directorate-General for Energy, science and the energy industry discussed the Commission’s proposal at a Table.Live briefing at the Berlin Energy Days on Wednesday. My colleague Manuel Berkel moderated the briefing. You can read a summary in his analysis.

Do you know about the Joint Research Center? The EU’s own research institute is supposed to supply the Commission with essential data and advise it on decisions. But the center could be better known. That Research Commissioner Mariya Gabriel also reminded the Commission during her visit to consider the institute’s work whenever possible is no wonder. And the institute also wants to make improvements itself, reports Tim Gabel.

Your
Alina Leimbach

Electricity market reform: ‘A long-term hedge against fluctuating prices’

By

Manuel Berkel

The French stance on the electricity market reform has recently repeatedly led to controversy. Céline Pizzotti, Deputy Managing Director of the Franco-German Office for the Energy Transition, thus described the French view in an introductory lecture on Wednesday. France had succeeded in getting nuclear energy included in the rules for support via Contracts for Difference (CfD). Less known is that France has already been promoting renewables via bilateral CfDs since 2017, Pizzotti explained. This provides the state with revenue through skimmed proceeds during the energy crisis, she said. France also introduced state guarantee funds for long-term power purchase agreements (PPAs) – another central point of the upcoming EU reform – earlier this year.

The Commission’s proposal for the European electricity market reform was presented by Michael Schütz, Internal Energy Market Officer from the Directorate-General for Energy. “In the longer term, we will achieve a safeguard for customers against fluctuating electricity prices and thus also electricity prices that fluctuate sharply upwards,” Schütz said. He thus countered criticism from some who would prefer to extend a permanent skimming of excess revenues via two-sided CfDs to existing plants as well. This criticism was voiced, for example, by the Spanish economist Natalia Fabra.

‘Two-page CfDs provide clarity’

“With the increase in renewables that we need by 2040, a large part of the renewables will not be existing plants – especially since the regulations also apply to repowering,” Schütz explained. However, a stronger emphasis on long-term contracts also harbors danger: “This will be a debate in a few years, when the short-term prices are again very low, about why we have such expensive long-term contracts. But well, long-term contracts are insurance, and insurance definitely costs money.”

BDEW was surprisingly relaxed about the push for bilateral CfDs, even though this would mean permanent revenue skimming in times of high market prices. The cap on revenues is clear from the outset in a contract for difference, but there were retroactive interventions in last year’s emergency measures, he said. “The problem is that once you break a taboo, you may be able to do it afterward in much less serious circumstances. And that’s why you have to say the bipartite CfD at least creates clarity,” said Stephan Krieger, Market Design and European Energy Policy Speaker at BDEW.

This statement from an energy association is remarkable because the German Renewable Energy Federation (BEE) has so far always strictly rejected bilateral CfD.

‘PPAs make electricity 30 percent more expensive than contracts for difference’

Karsten Neuhoff, Head of the Climate Policy Department at DIW Berlin, also argued for investor security. A long-term price commitment through CfDs or PPAs creates credibility so that ad hoc market intervention is not necessary in the event of another crisis. It is precisely steps like this, he said, that would be “scary” for investors.

For Neuhoff, CfDs are also the more suitable instrument for driving forward the expansion of renewables and lowering prices. The DIW economist is convinced that “only a fraction of the expansion we want to achieve with renewables by 2030 is possible via PPAs. There are not enough buyers who could subscribe to PPAs and too many risks remained. Hedging via PPAs thus makes each kilowatt-hour of electricity 30 percent more expensive than hedging via CfDs, Neuhoff said.

BDEW warns against distortion of competition

Krieger countered that the attraction of PPAs also depends on the interaction with CfDs. Contracts for difference, he said, are comparable to federal bonds over a 20-year term. “This must not be too interesting, because, otherwise, no one will go the market route,” the BDEW manager said. He said, in this context, it was disappointing that the final version of the Commission no longer contained any criteria like earlier drafts. The whole thing would have to be “narrowed down a bit” to prevent distortions of competition.

In earlier drafts of the Commission’s proposal, CfDs were required to meet primarily local criteria to avoid concentrating renewables in locations where there are favorable generation conditions but wind or solar farms must be frequently curtailed because of grid congestion en route to centers of consumption.

Capacity mechanisms: First reforms, then subsidies

As for subsidies for new gas-fired power plants, Schütz dampened expectations in Berlin. “Our principle is clear, normally market reforms come first, then subsidies, and there will certainly still be discussions with Germany,” said the Directorate General for Energy Official. In this context, Schütz cited the market reform plan under the Single Market Regulation and the Commission’s corresponding statement.

Somewhat polemically, Schütz added: “I can only hope that, unlike sometimes in the past, the European perspective will be taken seriously, will be taken into account, and that it will not necessarily be assumed that when Germany has agreed on something in lengthy processes, all the other 26 member states will then rotate around Germany.”

Joint Research Center: What does the Commission’s think tank do?

By

Tim Gabel

Not everyone is familiar with the EU’s Joint Research Center (JRC). The precursors of this huge research institution have existed since 1959. It was founded in Ispra, Italy, as the nuclear research center of the European Atomic Energy Community (now Euratom), and many institutes and laboratories have been added since then, while some have been closed down or rededicated. The five research centers of the JRC, including the Brussels headquarters, now call themselves the EU Science Hub. Research in Ispra and at the other four sites in Karlsruhe, Petten, Geel and Seville addresses current or future challenges facing the EU.

One who knows the JRC well is Research Commissioner Mariya Gabriel. On Thursday, she visited the facility in Ispra at a congress held as part of the European plan to fight cancer. She dropped in on several institutes, including the European Crisis Management Laboratory, a kind of data lab with storage space for climate change risks, demographic trends and geopolitical challenges.

One of the reasons she came to the research center now, Gabriel said, was “to remind everyone once again that it should be an automatic reflex for everyone to take into account the daily work that is done here.” A reminder, then, to all policymakers to incorporate the JRC’s evidence-based data, facts and analysis into their own policy making.

‘We do research directly for Brussels’

Alessandra Zampieri, head of the Sustainable Resources Division at JRC, emphasized, “As challenges become more complex and systemic – such as epidemics, climate crisis or war – it is becoming increasingly important that policy decisions are based on a broad foundation of data and evidence,” she said. “We do research directly for our colleagues in Brussels.”

JRC Director General Stephen Quest attributes three core tasks to his organization: “Anticipate, integrate and influence.” For this, it has a total of nearly 3,000 employees at its various sites. He says much of the organization’s own research is designed to enable policymakers at the Commission to anticipate challenges facing European society and to set an early course.

In many regions of the EU, for example, we need to prepare for periods of drought, dwindling biodiversity, or the interaction of electromobility and smart grids. The JRC provides the facts for well-founded and thought-out political decisions. In addition, the integration of data and results from different scientific disciplines is important for political decision-making, Quest explains.

Almost half a billion for research and policy advice

For European transport policy, for example, knowledge from the field of artificial intelligence is just as important as the latest findings in climate research. The JRC intends to bundle this knowledge and present it to policymakers in such a way that it has an impact.

“We cover the entire policy cycle. We provide evidence-based knowledge at the stage when proposals are developed and negotiated, we evaluate policy, and, finally, we help adjust policies when targets have been missed,” Quest said.

For this purpose, the JRC receives an annual budget of €380 million from the Commission. In addition, the various directorates-general spend around €80 million on specific research or consulting tasks. A lot of money for research.

Influence is difficult to measure

There is yet no evidence-based data from the joint research center on how the JRC’s work is paying off in concrete terms. In one presentation, there is talk of a “growing influence on central policy decisions. However, an independent evaluation of 50 case studies had shown that the core competence of the JRC was the creation and implementation of guidelines. Only in some cases was a moderate influence on policy decisions measurable.

When asked about the JRC’s concrete impact, the research commissioner sounds very convinced: “It’s the basis of our daily work. She cites the Commission’s plan to fight cancer or the plans for climate-neutral smart cities as current examples. She says there is no proposal or initiative – at least from her house – for which she does not look at the JRC’s data first.

But the JRC also seems to see room for improvement. At the beginning of the year, the research institution revised its strategy. The paper’s goals include stronger networking within and outside the Commission, better leverage of its digital and data expertise, and better communication of its value.

Ammunition for Ukraine: EU ambassadors reach agreement

On Wednesday, the ambassadors of the EU states agreed on the legal text for the so-called Track 2 for the joint procurement of artillery shells and anti-aircraft missiles for Ukraine. The EU intends to finance projectiles, particularly of 155-millimeter caliber, with €1 billion from the European Peace Facility. After the political decision by the heads of state and government, legal implementation had been delayed at the dispute over the definition of “Made in Europe.”

According to EU diplomats, the compromise clarifies that “important parts” of the supply chain must be located in the EU as well as Norway. According to the legal text, artillery shells and missiles largely manufactured and assembled in the EU as well as Norway are eligible for joint procurement with EU funds. The legal text will be published after the written procedure ends.

Track 2 is part of a three-pronged plan by Internal Market Commissioner Thierry Breton and Foreign Affairs Commissioner Josep Borrell. Track 1 calls for EU states to transfer additional artillery shells from their stocks to Ukraine by the end of May. Member states will be compensated up to 60 percent, for which €1 billion will also be available from the Peace Facility.

Track 3 was presented by Breton on Wednesday. Brussels wants to support member states and the defense industry in expanding their production capacities with €500 million from the EU budget. sti

Netherlands and Luxembourg join climate club

In addition to the G7 countries that founded the Climate Club in December, there are now six new members: Argentina, Chile, Indonesia, Colombia, Luxembourg and the Netherlands. More are to be announced later today. The task force of the climate club initiated by Olaf Scholz is meeting for the first time today as a follow-up to the Petersberg Climate Dialogue. Observers assume that in addition to the United Arab Emirates, which will host the World Climate Conference (COP28) this year, other European countries could also join. Possible candidates are said to be Denmark, Norway and Switzerland.

The detailed design as well as the climate club’s mode of operation are still under development. For example, the original idea of a club of countries with the most ambitious climate policies has been discarded in favor of an “all-inclusive” approach. However, this is not meant to be an obstacle but rather to open up co-design opportunities for new members whose decarbonization still needs to catch up. However, the basic idea of the club is clear: Promotion of green lead markets in hard-to-decarbonize industrial sectors by setting uniform standards for industry transformation.

‘Full launch’ at COP28

The task force is chaired by Birgit Schwenk, Head of the Climate Protection Department at the German Federal Ministry for Economic Affairs and Climate Action (BMWK), and her Chilean colleague Julio Cordano. The focus is on fine-tuning the targets and working methods as well as the governance structures of the alliance. The Climate Club should be fully operational and ready to speak by COP28 so that the “full launch” can take place in Dubai in December.

After that, members will meet regularly to discuss future standards for green products and markets and share assessments and strategies for avoiding carbon leakage, explains a BMWK spokesperson. “In this way, the club will enable a focused exchange among developed, emerging and developing countries on frameworks, strategies and mechanisms to accelerate the global decarbonization of industry.”

CBAM exception not provided

In the meantime, it had been discussed whether members of a climate club would facilitate each other’s access to the respective other markets. For example, exceptions to the EU’s recently adopted carbon border adjustment mechanism (CBAM) were also under discussion. This possibility is now off the table. CBAM exemptions or rebates will continue to be reserved only for those countries that have their own carbon price.

Instead, the private sector is to be more involved by allowing members to participate in “voluntary matchmaking” for cooperation and financing instruments to obtain investment from the private sector. To distill potential synergies as well as gaps in the funding landscape, the Climate Club team is to work with the International Energy Agency (IEA) and the Organization for Economic Co-operation and Development (OECD).

EU to empower consumers for green transition

Yesterday, the Council set its negotiating mandate on the March 2022 proposed directive on empowering consumers for the green transition. The Parliament will also vote on its position next week. Trilogue negotiations can then begin.

The directive aims to strengthen the rights of female consumers through amendments to the Unfair Commercial Practices Directive and the Consumer Rights Directive. To enable their contribution to the circular economy, consumers should have better access to information on the sustainability of a product. As such, the directive complements the recently unveiled Green Claims Directive and the Sustainable Consumption of Goods (Right to Repair) Directive.

In its negotiating mandate, the Council proposes to ban general environmental claims such as “environmentally friendly,” “green” or “climate neutral.” Manufacturers should no longer be allowed to use such general terms to advertise their products, processes or companies if the claims cannot be substantiated by a publicly available certification system.

Council wants 24-month implementation period

In the future, only sustainability labels based on official certification schemes or registered as certification marks or established by public authorities will be allowed.

In the amendments to the Consumer Rights Directive, the Commission proposal provides for the introduction of a commercial durability guarantee for manufacturers, i.e. a promise by the manufacturer that the product will retain certain functions or performance for a certain period of time. The Council proposes the creation of a harmonized “graphic format” so that consumers can clearly identify such guarantees.

The Council’s position also requires manufacturers to provide the right to information on products with digital elements. For example, consumers should be informed about how long they can benefit from updates for products.

To give member states sufficient time to adapt, the Council’s position also extends the transposition period from 18 to 24 months. The Parliament will vote on its position next Tuesday. leo

Total sues Greenpeace over emissions report

French oil company Total Energies has sued the environmental organization Greenpeace France and the climate consultancy Factor-X over a report in a Paris court. Total announced the move on Wednesday. The report claims that the company massively underestimated its greenhouse gas emissions for 2019.

Total claims that the November report contains “false and misleading information”. With the civil lawsuit, the company wants to have the publication withdrawn. All references to the report are to be stopped. In case of non-compliance, Total demands compensation of 2,000 euros per day and one euro in symbolic damages.

Greenpeace and Factor-X accused the oil company of emitting around 1.64 billion metric tons of CO2-equivalents in 2019, while only disclosing 455 million metric tons in public statements.

“This is a question of principle, and a judgment from the court will not prevent Greenpeace from continuing to criticize us and our climate strategy if they wish, but will remind them that public debate on issues with such high stakes concerning a listed company require rigor and good faith,” a TotalEnergies spokesperson said.

Greenpeace said the lawsuit was an attempt to muzzle the NGO ahead of the May 26 TotalEnergies general assembly, where activist shareholders will push for stricter climate commitments. nib/rtr

AI rapporteur: discussion on general-purpose AI also needed in Council

Parliament’s co-rapporteur on the AI Act expects that governments in the Council will now also hold a discussion on general-purpose AI (GPAI). Last fall, the Council still thought it was too early to regulate models like ChatGPT, Dragoș Tudorache (Renew) told Table.Media. “I think the reality has changed since the fall and I would venture a guess that there are quite several governments who also share that view.”

This discussion in the Council could possibly help bring the views together in the trilogue, he said. That might even be easier than expected, Tudorache said. “Because I think we were quite reasonable in the regime that we are proposing, and I would not see why these views should not be held by Council.”

AI Act: ‘delicate and fragile’ compromise

However, before trilogue negotiations on the AI Act can begin, votes are scheduled in the Internal Market and Home Affairs (IMCO and LIBE) committees on May 11 and in plenary in June. Tudorache called the compromise negotiated with the shadow rapporteurs “delicate and fragile.” He said the negotiations in Parliament, which ended in a compromise last week, were challenging because of ideological differences between the factions.

During the negotiations, he said, it was tempting to work with variable majorities. But his co-rapporteur Brando Benifei (S&D) and he wanted “a clear majority built around the center.” All sides would have had to make concessions. So, the two hope they will also get the mandate for the trilogue. “There is still an important hurdle to overcome,” Tudorache said.

Difficult discussion with Council expected

In Parliament, he said, discussions on Article 5 (Prohibited Provisions) and Article 6 with Annex III (High-Risk AI Systems) have been the toughest and most protracted. In the upcoming trilogue negotiations, Tudorache expects difficult discussions here as well. For instance, in the area of law enforcement, he said, the Parliament deviated from the Commission’s proposal and the Council’s position. The same applies to migration and border control, he said.

He also “has not yet heard a statement from Council as to whether they will be prepared to move in all directions when it comes to governance,” Tudorache added. As a result, he said he expects there will also be a discussion on enforcement. However, he also sees areas where the Parliament and Council are not so far apart –such as definitions and scope, or compliance.

The Council does not have a strong mandate

It could prove problematic in the negotiations that while the Council found a General Approach in December, the countries – including Germany – certainly still see a need to negotiate. “That’s certainly not so good because we need the presidency on the other side of the table that has a clear mandate as well,” Tudorache said. Still, he hopes to bring the trilogue to a successful conclusion this year. vis

E-Privacy Regulation: sharp criticism of the Council

The rapporteur of the European Parliament, Birgit Sippel (SPD), sees no possibility of an agreement on the E-Privacy Regulation, which has been faltering since 2016, in the foreseeable future: She has repeatedly proposed solutions and discussions to the Council for the E-Privacy Regulation on a political and technical level, Sippel told Table.Media: “Unfortunately, corresponding reactions from the Council have failed to materialize. Instead of taking a clear position, the Council and the Commission are sending the E-Privacy Dossier, which they dislike, to the siding.”

Sippel accuses the Council of allowing gaps in the protection of privacy and confidentiality of communications to develop as a result. “This is unacceptable.” The Council and the Commission must “finally make a clear commitment so that we also have clarity about the future of E-Privacy.”

In an interview with Table.Media, European Data Protection Supervisor Wojciech Wiewiórowski also clearly opposes the Council’s ideas. He said the latest proposals on the E-Privacy Regulation by the Council did not convince him that it would create a coherent data protection law. “It is burdensome for users and regulators that we don’t have an E-Privacy Regulation. But it is more important to have a good E-Privacy Regulation than any regulation.”

The Swedish presidency had cited a solution to the dispute, which has been deadlocked since 2016, as one of its priorities, but had so far been unable to come up with any consensual proposals for a solution. The regulation was supposed to have come as a mirror dossier to the General Data Protection Regulation, which came into force in 2016 and has been effective since May 2018. fst

Commission wants uniform rules against corruption

Brussels wants tougher instruments to fight corruption, within the EU but also globally. Corruption is like cancer, said EU Commission Vice-President Vera Jourova in Brussels on Wednesday. If it is allowed to grow, it will suffocate democratic society and destroy its institutions, she said. Jourova appeared with EU External Relations Commissioner Josep Borrell, Home Affairs Commissioner Ylva Johansson and Commission Vice-President Margaritis Schinas to present the so-called anti-corruption package.

Part of the package is a communication that mainly lists the status quo of the current legislation in the member states and possible improvements. According to Eurobarometer seven out of ten EU citizens are convinced that corruption is widespread in their country. The EU has recently made headlines with corruption in its own house, keyword Katargate. However, EU Commission President Ursula von der Leyen had already announced the package before the affair in the EU Parliament.

In addition to the communication, the Commission is proposing a directive to expand or harmonize definitions, rules and sanctions in the member states. According to the documents the current legislation is fragmented and limited in scope. The corruption offenses covered and the possible sanctions thus vary from one member state to another. This often makes cross-border investigations difficult and creates loopholes for criminals, Jourova said.

Harmonization to close loopholes

In addition, the purchase of political influence, the abuse of political office, illegitimate enrichment in the private and public sectors and obstruction of justice are now to be counted as corruption. For the first time, the rules against corruption in the public and private sectors are to be combined in one legal act. Aggravating and mitigating circumstances in the assessment of penalties would be defined together. Suspects should be easier to prosecute so that corruption offenses do not become time-barred, Jourova said. Common standards are also envisaged when it comes to waiving immunity.

For the global fight, the EU wants to supplement its sanctions regime accordingly, so that in serious cases of corruption, those responsible can be subject to punitive measures. Specifically, assets could be frozen or entry bans imposed: “We are sending a clear message: the EU is not open for business to those who engage in corruption,” said EU Chief Diplomat Borrell. The Commission is responding to calls from the EU Parliament to introduce so-called “Magnitsky sanctions,” following the US example. The proposals still have to be approved by the member states, and the directive also by the EU Parliament.

Green MEP: ‘small milestone’

What the Commission is presenting as a major step forward is, at most, a “small milestone,” said Daniel Freund (Greens), a member of the European Parliament. It was good that oligarchs and criminals who had become billionaires through corruption would soon have to expect sanctions. However, the fight against corruption involves much more than harmonizing definitions or entry bans for Russian oligarchs, said the European parliamentarian.

Freund called on Ursula von der Leyen to use the rule of law mechanism more broadly and not just against Hungary. In addition, the European Public Prosecutor’s Office should be better equipped and an independent ethics body should ensure order in the EU institutions’ house. sti

Despite judicial reform: Hungary still to wait for EU funds

The Hungarian parliament has passed an amendment aimed at strengthening the independence of the judiciary. The bill by Prime Minister Viktor Orbán’s right-wing government was approved by 151 deputies on Wednesday, including 19 from the opposition. There was no vote against it.

With the legislative package, which was fast-tracked through Parliament, Orbán wants to gain access to some of the EU funds currently withheld because of corruption or restrictions on judicial independence. It restores most of the powers of the independent National Judicial Council (OBT), which had been transferred to the government-subordinate National Judicial Office (OBH) by past reforms.

No quick decision on EU funds

The reform could give the government access to €13.2 billion of the €22 billion in EU cohesion funds actually earmarked for Hungary. However, the EU Commission is unlikely to decide on the release before the summer. Before that, it wants to evaluate the concrete implementing regulations for the legislative package, which are still pending.

For the time being, the judicial reform will have little impact on other frozen funds. The Council of Member States had decided in December to freeze €6.3 billion from the EU budget through the conditionality mechanism. To gain access, Orbán would have to implement 17 measures, particularly to fight corruption.

The Commission is also withholding €5.8 billion in grants from the Covid reconstruction program, which are linked to 27 “super-milestones.” The judicial reform addresses only four of these criteria. tho/dpa

Patrick Graichen – State Secretary in the twilight

German state secretaries are usually not too much in the spotlight. For Patrick Graichen, it is a different story: The high-ranking official in the German Ministry of Economics now faces allegations of cronyism and calls for his resignation. The designated candidate for chair of the German Energy Agency (Dena) board, Michael Schäfer, is Graichen’s best man. Graichen was involved in the selection process for the Dena chair, although he was aware of Schäfer’s application early on. Graichen speaks of a “mistake that he very much regrets.” He should have withdrawn from the selection committee once Schäfer became a candidate, he says.

The opposition in the Bundestag senses a scandal. The Secretary General of the Christian Social Union (CSU), Martin Huber, spoke of “nepotism,” calling Graichen no longer tenable as state secretary. The Alternative for Germany (AfD) even spoke of “green clan structures.”

The criticism is all the louder because the Schäfer affair is not Graichen’s only close tie. Graichen’s counterpart as State Secretary in the Ministry for Economic Affairs and Climate Action (BMWK) is Michael Kellner, his brother-in-law. Kellner is married to Graichen’s sister Verena – who, like his brother Jakob, works as an energy expert for the Freiburg-based Öko-Institut. The German government also contracts the Öko-Institut. However, these family connections became known in December 2021 and were disclosed by the ministry.

At the time, the BMWK assured it would set up procedures to prevent conflicts of interest. In fact, the number of contracts for the Öko-Institut and the sums paid has decreased since the current German government took office, as the newspaper Süddeutsche Zeitung reported. According to the report, five contracts worth 3.6 million euros were awarded in 2022. In the last year of the Merkel government, 2021, eight contracts were awarded (volume of 2.5 million euros), and in 2019, even eleven contracts with a volume of 9.5 million euros. Graichen is also excluded from tender procedures that involve the Öko-Institut, BUND – Verena Graichen is a member of its board – or Agora Energiewende – his former employer.

Every accusation also affects Habeck

Graichen is a key thinker and manager of Habeck’s energy and climate transition – and, thus, the brains behind upcoming hardships that will hit consumers and some industrial sectors. Whether it is the heating transition, the Climate Change Act, the energy transition or the gas crisis management after the Russian attack on Ukraine – Graichen is in charge of many of the BMWK’s central projects. The law on promoting heat pumps and replacing old heating systems, which was heavily criticized in the media and by some interest groups, can also be traced back to Graichen.

This means that calls for Graichen’s resignation always hit Economy Minster Robert Habeck and his partly unpopular energy and heat transition plans. Graichen himself refuses to resign. His boss has so far stood by his top civil servant. Habeck is trying to defuse the accusations against Graichen by reviewing the Dena chairmanship selection process. According to Stefan Wenzel, chairman of Dena’s supervisory board, the procedure could be repeated altogether.

Even if there was no proof that Graichen committed any direct misconduct, the impression of conflicts of interest remains. The opposition will likely also point to the close ties between Graichen and other important stakeholders when criticizing the energy transition in the future.

Advisor and department head in various governments

Graichen has served various governments of different parties – as is not unusual for political officials. From 2001 to 2006, he was a consultant for international climate action at the German Federal Ministry for the Environment. First under Green Minister Jürgen Trittin and later under Sigmar Gabriel of the Social Democratic Party (SPD). Afterward, he even became head of the department for climate action matters. At that time, the Environment Minister was Norbert Röttgen – a Christian Democrat.

Graichen left the political scene for a time in 2012 and founded the think tank Agora Energiewende with former State Secretary of the BMU and colleague Rainer Baake. When Baake was reappointed State Secretary, Graichen took over as Executive Director and Managing Director of the think tank. During this time, the graduate economist and environmental economist acted more as a watchdog and commentator from the sidelines.

At the time, Graichen supported the coal phase-out and the simultaneous expansion of renewables through external pressure. In 2015, even before the Paris Agreement was signed, he already highlighted the need to reform the energy market design, according to which climate-friendly energy sources must be efficiently promoted and harmful ones priced accordingly. Nico Beckert / Lukas Scheid

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

Feature

Electricity market reform: ‘A long-term hedge against fluctuating prices’

‘Two-page CfDs provide clarity’

‘PPAs make electricity 30 percent more expensive than contracts for difference’

BDEW warns against distortion of competition

Capacity mechanisms: First reforms, then subsidies

Joint Research Center: What does the Commission’s think tank do?

‘We do research directly for Brussels’

Almost half a billion for research and policy advice

Influence is difficult to measure

Events

News

Ammunition for Ukraine: EU ambassadors reach agreement

Netherlands and Luxembourg join climate club

‘Full launch’ at COP28

CBAM exception not provided

EU to empower consumers for green transition

Council wants 24-month implementation period

Total sues Greenpeace over emissions report

AI rapporteur: discussion on general-purpose AI also needed in Council

AI Act: ‘delicate and fragile’ compromise

Difficult discussion with Council expected

The Council does not have a strong mandate

E-Privacy Regulation: sharp criticism of the Council

Commission wants uniform rules against corruption

Harmonization to close loopholes

Green MEP: ‘small milestone’

Despite judicial reform: Hungary still to wait for EU funds

No quick decision on EU funds

Heads

Patrick Graichen – State Secretary in the twilight

Every accusation also affects Habeck

Advisor and department head in various governments

Europe.Table Editorial Office

EUROPE.TABLE EDITORS

Feature

Electricity market reform: ‘A long-term hedge against fluctuating prices’

‘Two-page CfDs provide clarity’

‘PPAs make electricity 30 percent more expensive than contracts for difference’

BDEW warns against distortion of competition

Capacity mechanisms: First reforms, then subsidies

Joint Research Center: What does the Commission’s think tank do?

‘We do research directly for Brussels’

Almost half a billion for research and policy advice

Influence is difficult to measure

Events

News

Ammunition for Ukraine: EU ambassadors reach agreement

Netherlands and Luxembourg join climate club

‘Full launch’ at COP28

CBAM exception not provided

EU to empower consumers for green transition

Council wants 24-month implementation period

Total sues Greenpeace over emissions report

AI rapporteur: discussion on general-purpose AI also needed in Council

AI Act: ‘delicate and fragile’ compromise

Difficult discussion with Council expected

The Council does not have a strong mandate

E-Privacy Regulation: sharp criticism of the Council

Commission wants uniform rules against corruption

Harmonization to close loopholes

Green MEP: ‘small milestone’

Despite judicial reform: Hungary still to wait for EU funds

No quick decision on EU funds

Heads

Patrick Graichen – State Secretary in the twilight

Every accusation also affects Habeck

Advisor and department head in various governments

Europe.Table Editorial Office

EUROPE.TABLE EDITORS

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