ETS Reform + Commission Solar Strategy + • Table.Briefings

Dear reader,

These are agreements that many had no longer expected: On Tuesday, the rapporteurs of the Environment Committee (ENVI), which has the lead function, took a huge step toward redesigning the European emissions trading system. The most important compromise: ETS 2 for road transport and heating of buildings is coming – albeit with restrictions. However, there is not agreement on all points. Lukas Scheid has the details.

The EU Commission wants the expansion of solar energy in the member states to proceed more quickly. This is the result of a draft for a solar strategy of the Commission. Brussels wants the member states to quickly present subsidy programs that will take effect as early as next year. One of the main goals is to make solar panels pay off their cost more quickly for homeowners in the future. Manuel Berkel analyzes the most important points of the draft.

CDU politicians spoke of a “privileged partnership” with regard to Turkey, Emmanuel Macron calls it a “European Political Community”: the proposal made by France’s president on Europe Day is not new, but is now being debated again: is there a need for a kind of preliminary stage for countries that would like to join the EU but are not yet ready in their eyes? At any rate, the potential accession candidates are reacting suspiciously to the idea, as Till Hoppe and Falk Steiner report.

EU Commissioner for Home Affairs Ylva Johansson has proposed a regulation to improve the protection of children online. Depictions that show the sexual abuse of children are to be removed from the Internet as quickly and permanently as possible. But the measures with which Johansson wants to achieve this are causing criticism. Falk Steiner writes that EU Commission President Ursula von der Leyen has already become acquainted with one of them. One MEP even rages: “Censor-ella is back.”

Your
Sarah Schaefer

ETS Reform: white smoke at the shadow meeting

At just before 17:00 on Tuesday, Green Party shadow rapporteur Michael Bloss announced via Twitter that the deal was done. “We have a deal for EU’s biggest climate toolbox – the EU Emission Trading Scheme!” After days of negotiations between the rapporteurs of the lead Environment Committee (ENVI), agreements were reached on many points that many had no longer expected.

Most important compromise: the second emissions trading scheme for road transport and heating buildings (ETS 2) is coming – but with restrictions. For the time being, it is to apply only to commercially used buildings and heavy-duty vehicles, with a minimum price of €50 per ton of CO2. By 2026, the EU Commission is to examine whether an extension to private households is a possibility in view of the threat of energy and mobility poverty.

The expansion would be completed in 2029 at the earliest, provided energy prices were below the March 2022 average and the Climate Social Fund provided relief to households three years earlier. Companies would only be allowed to pass on half of the rising costs of fuel products to end customers. That means they would have to disclose their price composition.

Waste incineration included in ETS

It has been clear for some time that emissions from municipal waste incineration will be included in the existing ETS from 2026. Aviation within the EU is to pay the full price for its emissions from 2025 and no longer receive free allowances. Shipping is to be included from 2024 and extended to ships weighing 400 gigatons or more by 2027. In addition, from 2027, not only half of the emissions from journeys between EU ports and ports in third countries are to be paid for in the ETS, but all of them.

The distribution of revenues from the ETS is also part of the compromise reached on Tuesday. It was already clear in advance that the Innovation Fund would be replaced by a Climate Investment Fund in order to be able to promote not only new and innovative projects, but also methods that support climate neutrality. Yesterday, the rapporteurs agreed that the fund will be filled with a total of 1.46 billion certificates, the proceeds of which will be used to finance climate protection measures. 12 percent of the fund is reserved for investments in renewable energies.

The Modernization Fund will also be increased by two percent so that in the future four percent of the total auctioned certificates would flow into this fund.

The negotiators also agreed on a few conditions for the use of ETS revenues. At least 12 percent of the revenues must go to climate-friendly public transport, and another 12 percent must go to international climate protection.

Alternative compromise on free allocations and CBAM

However, the deal also has a few loopholes. The disagreements over the introduction of the CO2 border adjustment mechanism (CBAM) could not be resolved even at the last shadow meeting before the vote in the ENVI (May 16-18). A majority outside the EPP around the responsible rapporteur Peter Liese (CDU), for example, no longer wants to issue free CO2 allocations for industry from 2031. Instead, the CBAM is to be fully introduced by then.

This so-called alternative compromise, since it was made without the rapporteur’s consent, should be adopted next week. Whether the majority in the ENVI of Greens, S&D, Renew and Left will remain in the plenary vote in June is questionable. MEPs from the Social Democrats and Liberals in the ITRE committee, together with the EPP, had agreed on 2034 as the end date for free certificates. Liese himself is therefore “99 percent sure” that the alternative ENVI compromise will fail in plenary.

There is also an alternative agreement on the one-off cancellation of surplus allowances. 205 million unused CO2 allowances are to be cancelled in one fell swoop to increase the ambition of the ETS. The Commission had envisaged 110 million, the EPP only wants to raise the Linear Reduction Factor (LRF) from 4.2 to 5.09, i.e. the annual reduction of new allowances released on the market.

States to provide more support for solar installations

When Intersolar Europe begins today in Munich, visitors are likely to take it in good humor: in the future, solar systems on roofs should pay for themselves in less than ten years and the EU member states should align their subsidies accordingly. This is what the Commission demands in a draft of the solar strategy, which “Contexte” published on Tuesday.

In it, the Brussels authority wants member states to set “predictable payback periods of less than 10 years” for solar systems, energy storage and heat pumps. Elsewhere, the report explicitly mentions rooftop systems. Under the current framework conditions in Germany, such rooftop PV systems sometimes only pay off after significantly more than ten years, said a spokeswoman for the German Solar Industry Association (BSW). On average, the payback period for small systems is about 15 years, confirmed the market research institute EUPD Research.

The Commission therefore believes that significantly more attractive framework conditions are needed to sufficiently accelerate the expansion of solar energy. By 2025, the installed PV capacity is to be doubled to 300 gigawatts (GW), and by 2030 it should already be 500 GW. The ten-year mark could become the guideline for the current amendment to the Renewable Energy Sources Act (EEG).

The Commission had publicly consulted on the key points of the solar strategy by mid-April, and received more than 400 comments. It then announced a solar roof initiative in the draft for REPowerEU, with which the EU wants to become less dependent on Russian energy supplies.

Focusing solar subsidies on buildings in need of renovation

To this end, the EU states are to dovetail the expansion of solar systems more closely with the renovation of buildings. The Commission is calling on governments to quickly present national subsidy programs that will take effect as early as 2023. They are to concentrate the promotion of roof systems on the half of all buildings with a below-average energy status (efficiency class D or worse). Energy advice should be organized according to the one-stop-shop principle, i.e. offers that provide information on both solar energy and energy efficiency.

The draft is not clear on the solar roof obligation for new buildings. At one point, there is talk of a requirement for all new properties, while at another point it says that new buildings should only be “solar-ready“. By 2025, however, solar systems are to be installed on all suitable existing public buildings.

On industrial promotion and the EU alliance for the solar industry, the draft is also not yet particularly concrete. In the meantime, the development of European production capacities is a declared goal of the Commission. The SolarPower Europe association had wanted a solar fund of €1 billion, modeled on the chip fund, to leverage private investment of €8 billion by 2025.

However, the Commission merely refers to existing financial instruments and announces a mechanism for coordinating the relevant programs. A separate project of common European interest (IPCEI) for “breakthrough technologies and innovations in the PV value chain” is also being considered.

Hard line only against forced labor

The Commission is also rather diplomatic and cautious when it comes to the sustainability criteria for solar modules. The European industry sees strict requirements as protection against competition from China. SolarPower Europe had called on the Commission to implement criteria for sustainability and circular economy in order to create a level playing field with non-European manufacturers. The TTC talks with the USA could also serve as a forum for this.

The Commission does refer to ongoing work on the ecodesign and energy label regulations. However, it only emphasizes that the new requirements would create comparison possibilities for buyers, which could also be taken into account in tenders for renewable energies. International PV manufacturers are only called upon by the Commission to provide more information on the sustainability and carbon footprint of their products.

However, Brussels wants to draw a clear line at human and labor rights, especially on the issue of forced labor. Several Chinese manufacturers are suspected of producing solar components in the province of Xinjiang and resorting to forced labor.

The European solar industry apparently has a basic confidence in the EU’s plans. By 2026, the Union will once again become the world’s second strongest demand region behind China, SolarPower Europe predicts in its Global Market Outlook presented on Tuesday.

Macron’s “European political community”: preliminary stage or consolation plaster?

In Kiev, Emmanuel Macron’s proposal did not go down well. “If we don’t get candidate status, it means that Europe wants to rip us off,” said Ukraine’s Foreign Minister Dmytro Kuleba in his usual undiplomatic manner. Ukraine will not be satisfied with an associated partnership, he said.

Macron brought such a model into play on Monday. The French president has a “European Political Community” in mind – it would be open to countries that share the EU’s values but are not yet ready to join. The name is new, but the idea is not. Time and again, the community has discussed how it can bind states that want to join the EU to itself without immediately accepting them as full members of the club. For Turkey, for example, CDU politicians coined the term “privileged partnership.”

Neither Ankara then, nor Kiev, nor the aspirants for membership in the Western Balkans today want to settle for second-class membership. The German government knows this, too: Foreign Minister Annalena Baerbock held out the prospect of full membership for Ukraine during her visit to Kiev yesterday. However, there can be “no shortcut” on the way there, the Green politician said. Last week, Chancellor Olaf Scholz had called for Serbia, Albania, northern Macedonia, Montenegro, Kosovo, and Bosnia-Herzegovina to be admitted to the EU as quickly as possible in order to push back the influence of Russia and China there.

The fact that the new proposal comes from the French president fuels mistrust: Paris has long been opposed to further EU enlargement. Macron has not even said what he has in mind, says Nicolai von Ondarza, head of the Europe research group at the German Institute for International and Security Affairs.

War increases pressure to act

It was unclear, for example, whether admission to the Political Community should be an intermediate step toward EU membership or an alternative to it. The president also left open the question of whether the Political Community should have its own organizational form or whether the countries should be docked to the EU as associate members. So far, Macron’s idea is not much more than a line in the text of the speech, an EU diplomat also says.

But Macron’s proposal has triggered an important discussion, says von Ondarza. The EU Commission is also considering how the EU can offer some countries partial integration, even if accession is still many years or even decades away.

The war in Ukraine has put enormous pressure on the Community to act. The Commission is expected to recommend in June that Kiev be given official status as an EU candidate country. It is hard to imagine anything else, given the sacrifices made in the fight against Russia. “We have already paid for our membership in blood,” said Deputy Prime Minister Olha Stefanishyna.

Member states must unanimously approve the recommendation. According to Stefanishyna, some governments still have reservations, including Berlin.

Macron also made it clear that even if the European Council clears the way in June, it will still be several years before the negotiations are concluded. During his visit to Berlin, Belgian Prime Minister Alexander De Croo therefore warned that the focus should not be solely on the enlargement process. This is “a long administrative process that is often very frustrating.

The EU needs to be “much more creative” in helping countries like Ukraine be part of the European family, de Croo said. “This is different from the enlargement process.” Another member state also says it’s time to break out of the binary thinking of membership or not.

Larger EU would need leaner structures

But the admission of new members would at the same time increase the pressure to reform the distribution of competences and decision-making structures within the EU. Macron gave the discussion new momentum on Monday when he spoke out in favor of amending the EU treaties at the end of the conference on the future of Europe. The President-in-Office of the Council wants to have the topic put on the agenda of the summit at the end of June.

In this Macron certainly finds approval, at least in the Berlin traffic light coalition. An expansion of the European Union is in the very own interest of the peace project in Europe, said the chairman of the Europe Committee in the Bundestag, Anton Hofreiter, to Europe.Table. “With increasing enlargement, however, it is also clear that we must adapt our working methods to this.” He welcomed the fact that Macron was now initiating the discussion on this, the Green politician said.

Scholz, on the other hand, takes a more reserved view of the demands for treaty changes, which are being raised above all from the European Parliament. Germany will not put on the brakes, he said. However, a more efficient EU could also be achieved below the level of amendments to the EU treaties. This would include abolishing unanimity in many policy areas, as for which the participants of the Future Conference had called.

In fact, the often crippling constraint of unanimity in the Common Foreign Policy can be circumvented in certain cases by the so-called passerelle clause. This “little bridge” in Article 31 of the EU Treaty allows for a majority decision when the Council is to implement a decision of the heads of state and government, i.e. the position that is already united in principle. However, the majority procedure can be vetoed by any Council member. A majority decision would be taken in the Council in the first step, which would then have to be adopted unanimously by the European Council.

Danger of division

Thu Nguyen, an expert at the Jacques Delors Centre, therefore believes that a treaty change is necessary, at least in the long term, to increase the EU’s ability to act. In the short term, however, the necessary support among the member states is lacking. “Therefore, not all political capital should be invested in this kind of change,” Nguyen said. “Many things can be reformed without treaty changes.”

On Monday, 13 governments had spoken out in a joint paper against initiating a hasty process for constitutional changes now. SWP expert von Ondarza, therefore, warns: “Calling a convention at short notice with a narrow majority would risk splitting the EU at a time when it is struggling for cohesion.”

In any case, the Future Conference alone hardly justifies the time pressure in his view. According to an as yet unpublished SWP analysis, only twelve of the 178 proposals put forward by the citizens’ panels require treaty change. These include, in particular, an expansion of EU competencies in the area of health and social policy and a right of initiative for the European Parliament, which the latter is clamoring for. With Falk Steiner

Johansson’s child protection plan: “Censor-ella is back”

One goal of the measures: depictions of child sexual abuse are to be removed from the web as quickly and permanently as possible. A draft version of Johansson’s plan has now become known. Three plans are likely to be at the core of the criticism:

The obligation for access providers to block Internet sites,
the requirements for service providers to control communications content, and
the establishment of a new authority that is to be endowed with massive rights, but appears to be comparably difficult to control, for example, Europol or Frontex.

The “EU Centre on Child Sexual Abuse, “ according to Chapter 4 of the proposal, is to support the implementation of regulation “regarding the detection, reporting, removal or prevention of accessibility and blocking” and assist in implementation. The EU Commission wants to grant this center the “broadest possible rights” at the national level as well. At the same time, each member state is to designate a coordinating body that is to proceed in coordination with the EU Center and work with it, while at the same time being able to draw on its support.

Detection obligations for service providers

The proposal, which was largely drafted under the responsibility of German cybercrime EU official Cathrin Bauer-Bulst, provides for essential cooperation obligations for providers of hosting services, but also of communication services. Article 7 sets out how the relevant competent coordinating body should be able to compel providers to actively search for images of child sexual abuse by means of a detection order. According to DG Home, it is sufficient for this if a provider is “likely… to be used to a significant extent for the dissemination” of images of child sexual abuse. This is likely to apply to almost all major communications providers.

It should also be possible to oblige providers to cooperate in the detection of previously unknown misrepresentations. This cooperation is to take place, among other things, through the automated detection of content: Article 10 of the draft explicitly stipulates that the obligated parties must install and operate technologies deemed suitable by the EU Center.

Providers are also to be obliged to carry out detection in other cases: namely, if the responsible authorities believe that their services can be used to approach potential victims. It should be sufficient to justify this if the service is an interpersonal communication service that is likely to be used for these purposes and if there have been cases with this or comparable services in the previous year.

Online locks

In 2009, the then Federal Minister for Family Affairs von der Leyen pleaded for “stop signs on the Internet” with demonstrably false claims. Her request was identical to what is now to be introduced by Interior Commissioner Johansson: Internet access service providers are to block websites on which depictions of child sexual abuse can be found. Since these sites should not be known to the public, secret blocking lists are kept for this purpose.

However, analyses of leaked filter lists in the past have repeatedly shown high error rates for such blockade lists. The factually based lack of transparency also makes it difficult to check the blockades. Critics therefore accuse advocates of such systems of establishing an infrastructure of intransparency for any form of censorship by law. In addition, such blockades are technically easy to circumvent.

The “blocking obligations” now provided for in Section 5 of the planned regulation are an attempt to learn lessons from the protests at the time and at the same time still demand such an infrastructure from the member states. Thus, among other things, Article 16 prescribes balancing processes. The actual blocking order must be issued either by an independent competent authority or by the courts. Internet access providers should also be able to take legal action against such blocking orders.

Rights of the data subjects

One proposal that, unlike the foreseeably contentious points, is likely to meet with undivided approval is a planned right to information for those affected: if identified victims of sexual abuse want this, they are to be given a right to information in the future. They would then have the right to be notified if content concerning them was found. In addition, they should also be able to call on support if they want to demand that individual providers remove the content.

FDP and Pirates on collision course with Johansson

Ursula von der Leyen is right that the fight against child abuse materials needs to be stepped up significantly, says Moritz Körner (FDP/Renew). However, he finds the Commission’s proposal unsuitable: “If von der Leyen and her Home Affairs Commissioner Johansson were to come through on this, digital privacy of correspondence would be dead,” Körner rages. “Under the EU Commission’s proposal, private companies would be forced to play police, spy on their customers, and report them to the state – this Stasi 2.0 should be rejected.” Körner reaches for the really big guns: “Zensursula is back.”

Patrick Breyer (Pirates/EFA) had already protested against Johansson’s plans in recent months under the heading of “chat control.” On Monday, Breyer filed a complaint with an Irish court against a filtering mechanism used by the Facebook platform. Breyer speaks of a “Big Brother attack on our cell phones, private messages and photos with the help of error-prone algorithms” that represents a “giant step toward a Chinese-style surveillance state.”

The legislation of today’s EU Commission President Ursula von der Leyen, associated with the derogatory name “Zensursula,” passed in 2009 amid angry protests by Internet freedom activists against the full legislative project: the so-called Access Restriction Act was passed, but never applied, and under the following black-yellow coalition, it was repealed without replacement by a repeal law.

Transport ban on Russian oil apparently off the table for the time being

According to EU sources, the planned ban on the transport of Russian oil is no longer part of the planned sanctions package against Russia for the time being. Further coordination is needed at the international level and in the G7 group, diplomats told Deutsche Presse-Agentur. Greece, Cyprus and Malta, among others, had opposed the measure, fearing that it could unilaterally disadvantage their shipping companies.

A ban on European companies insuring oil tankers carrying Russian oil is still part of the planned sanctions, according to diplomats. This could make it more difficult for Russia to supply oil to other countries.

Discussions about the planned EU sanctions package have been going round in circles for days. Hungary, in particular, is blocking a proposed embargo on Russian oil imports and is demanding far-reaching exemptions. Commission President Ursula von der Leyen returned from talks with Hungarian Prime Minister Viktor Orbán on Monday without any tangible results. “We have made progress, but more work is needed,” she said. A video conference with regional partners on oil supply solutions is to be held in the coming days, but a date has not yet been set.

Waiting for progress

According to diplomatic sources, the sanctions are not expected to be on the agenda of the regular meeting of the permanent representatives of the EU countries today. They are still waiting for progress in talks with the countries that would be particularly affected by the import ban. Countries such as Slovakia and Bulgaria have joined Hungary’s demands.

Bulgarian President Rumen Radev criticized the EU oil embargo: “We must not allow the sanctions to harm our own social and economic systems,” he said after a meeting with his Czech counterpart Miloš Zeman in Prague on Tuesday. He said it was important to take into account the specifics of the individual EU member states.

Last week, the EU Commission had proposed as a compromise to give Hungary and Slovakia until the end of 2024 and the Czech Republic until mid-2024 to fully implement the oil import ban. dpa

EU holds Russia responsible for KA-SAT hack

The attack on the KA-SAT satellite network of US operator Viacom has been classified by EU member states as “harmful cyber activity by the Russian Federation.” This was announced by the EU’s foreign affairs representative Josep Borrell on Tuesday. This is the first time such an assessment has been made by the EU with clear attribution of an attacker – which in principle could also have consequences according to the EU’s Cyber Diplomacy Toolbox. However, such measures would require a unanimous decision by member states.

During the cyberattack one hour before Russian troops attacked previously unoccupied territories of Ukraine on February 24, 2022, KA-SAT was rendered useless in parts. The operation was apparently aimed primarily at cutting off Ukrainian communications links. However, the area covered by this satellite network also includes large parts of Eastern, Central and Western Europe, where damage was also caused, which the attacker apparently took into account.

In Germany, the issue had also caused a stir because, among other things, 5,800 Enercon wind turbines were no longer accessible via satellite network. The modems required for the connection had received a faulty software update via the hacked KA-SAT network. Enercon speaks of a total of 30,000 modems across Europe. Some of these were irreparably damaged by the malware.

A good two months after the cyber attack, according to the wind turbine manufacturer, “almost all affected wind turbines are now back online and integrated into remote monitoring and remote maintenance,” according to a company spokesperson. The manufacturer, which had set up a task force to limit the damage, considers the operators of the wind turbines to be responsible for the IT security of the connection. fst

Meta criticizes Federal Cartel Office before the ECJ

Blowback at the European Court of Justice (ECJ): Facebook’s parent company Meta delivered sharp criticism of the German Federal Cartel Office’s action to put a stop to the comprehensive collection of Facebook users’ data at a hearing at the ECJ in Luxembourg on Tuesday.

The underlying decision by the competition authorities, which dates back to 2019, underscores the growing pressure on US internet companies such as Facebook. However, the specific event also raises the question of whether the antitrust authorities exceeded their authority when dealing with data protection issues.

The German Federal Cartel Office’s order for Facebook’s “far-reaching restrictions” was clearly flawed, Meta lawyer Hans-Georg Kamann told a 15-member ECJ panel of judges. The Bonn-based authority had thus openly violated the provisions of the European General Data Protection Regulation. Kamann accused the antitrust agency of failing to cooperate with the Irish data protection authority, which is responsible for Facebook because of its corporate headquarters in Ireland.

Jörg Nothdurft, a representative of the Federal Cartel Office, rejected this accusation, stating that there had indeed been contacts with the Irish authorities. The German government defended the Cartel Office’s decision to investigate data protection issues in the interest of protecting competition. After all, user data served the tech companies to expand their market power, said the legal representative of the German government, Philipp Krüger.

The Cartel Office had ruled in 2019 that Facebook had abused its market power by collecting certain data from users without their explicit consent. This involved personal data that users leave behind on WhatsApp or Instagram – which also belong to Facebook – and other services. The antitrust office had also prohibited Facebook from combining user data from different sources with reference to data protection. The US group is taking legal action against this. The Düsseldorf Higher Regional Court, which was ultimately responsible for the case, is now initially seeking clarification of key issues from the ECJ. rtr

Waste: EU exports at record levels

EU exports of recyclable raw materials, including waste, scrap and other by-products, reached a record high of 40.6 million tons last year, the EU statistics office Eurostat said yesterday.

Eurostat data show that exports to non-EU countries, almost half of them ferrous metals such as iron and steel, increased by 2.0 million tons in one year and by 80 percent compared to 2004. Turkey was the most important destination for recyclable raw materials from the EU last year, followed by the UK, India and Egypt.

EU imports of recyclable raw materials, mainly organic products and wood, reached 46.8 million tons last year, up 7 percent from 2004 levels. According to Eurostat, Argentina and Brazil were the main source countries for imports.

In addition to metals and organic products such as food scraps, recyclable materials also include paper, textiles, glass, plastics and rubber, according to Eurostat definitions.

The EU is also planning a new concept for waste disposal in the context of its action plan for the circular economy. In November 2021, the EU Commission presented a proposal for a revised Waste Shipment Regulation. In doing so, it aims to facilitate reuse and recycling within the EU and ensure “that the EU does not transfer its waste problems to third countries,” as well as combat illegal shipments of waste, the document says. Today, the Parliament’s ENVI committee is discussing its draft report. leo/ Reuters

Europe’s petrol problem

By Daniel Gros

Daniel Gros, Distinguished Fellow, Centre for European Policy Studies (CEPS), im Portrait des Europe.Table. — Daniel Gros is a board member and Distinguished Fellow of the Centre for European Policy Studies.

In a matter of months, the European Union has reduced its dependence on Russian oil so much that it is now ready to impose an embargo. European Commission President Ursula von der Leyen has announced a plan to ban Russian crude oil imports to most of the EU in the next six months, and refined oil products by the end of the year. Yet, to have a meaningful impact on Russia’s budget, Europe must also end its dependency on Russian gas. This will prove much more difficult to achieve.

Europe has managed to reduce its need for Russian oil quickly for a couple of reasons. Oil can easily be delivered by tanker, not just pipelines, and it is relatively easy to find new supplies on the world market. The problem is that it is also relatively easy to find enough new buyers – and Russia has plenty – to offset a large part of the losses from an EU embargo.

Gas is different. Europe needs natural gas to provide heat in winter and to serve as feedstock for the world’s largest chemical industry, which accounts for a significant share of EU exports. And certain features of the natural-gas market will make it far more difficult and costlier to find alternatives to Russian supplies than it has been for oil

Europe’s nervous energy ministers

For starters, because most natural-gas producers operate on long-term contracts with buyers, there is little spare production capacity outside Russia. While there are spot markets, where one can buy or sell limited quantities of gas, their purpose is to redistribute existing supply or demand across regions, as needed, not to provide additional supply.

Nervous European energy ministers have visited various global gas producers, in the hope of convincing them to increase production. Major gas producers are happy to oblige. Yet they warn that it takes up to four years to launch new projects, and doing so makes commercial sense only if the customer is willing to sign a 20-year contract.

All of this means that, in the short run, the natural-gas supply is close to fixed. So, the only way to make up for a shortfall of Russian gas is through a combination of energy savings and increased imports.

Here, Europe will confront another challenge. Natural gas is costly to transport and difficult to store. Liquefied natural gas (LNG), which can be shipped, offers the main alternative to piped Russian gas, though it raises challenges of its own.

Once gas has been liquefied and loaded onto a special tanker, a few thousand extra miles of travel make little difference. This is the principal reason why the Asian and European LNG markets are integrated, with prices on the two continents usually moving closely together. Gas spot prices reached very high levels already last autumn, months before Russia invaded Ukraine, because a strong recovery in Asia drove up demand.

Floating LNG terminals

Before the war in Ukraine began, Europe was already importing almost as much LNG as piped gas. Yet, if Europe wants to end its dependence on Russian gas, it must vastly increase these LNG imports. This will be costly because it means diverting shipments originally directed to Asia toward Europe. Luckily, this will be technically possible owing to a profound asymmetry in LNG trade: it takes far longer to construct liquefaction facilities than to arrange for “re-gasification.”

When LNG arrives, importing countries merely have to heat up the liquid in the tankers. Energy specialists frequently point out that many countries do not have enough fixed LNG facilities to increase imports. However, floating LNG terminals are also an option, and countries like Germany, France, and Italy are already taking advantage of it, ensuring that they can offload LNG when it arrives.

These flexible gasification facilities, together with a dense network of pipelines connecting most of the EU providers, offer some protection against Russian attempts to pick off individual countries. Europe has already shown solidarity on the issue. When the Russian energy giant Gazprom recently stopped gas deliveries to Poland and Bulgaria, pipelines from Germany and Greece ensured that the two countries got what they needed. The question is whether Europe will show the same resolve when all countries are under pressure.

Hole in Putin’s war chest

Liquefaction facilities, on the other hand, are far more difficult to come by and take much longer to construct, because they require giant refrigerators that cool the gas to -160° Celsius. This has two politically important consequences.

Some hope that the United States can provide much-needed LNG to Europe. However, the US is currently running its existing liquefaction plants at full capacity, and it would take several years to construct new facilities. As long as America’s export capacity is constrained, redirecting US deliveries from Asia to Europe will do nothing to reduce the excess demand in the combined EU-Asia LNG market. For the US this has the advantage that domestic natural-gas prices have remained much lower than in either Europe or Asia.

The challenge of constructing LNG-liquefaction facilities also significantly raises the costs for Russia to try to export the gas Europe is no longer buying. For a number of years, Russia would be unable to sell the 140 billion cubic meters of natural gas that previously went to Europe each year.

If Europe is willing to pay the price of expensive LNG imports, it could thus severely undermine Russia’s ability to earn hard currency via gas exports. That would put a real dent in Vladimir Putin’s war budget.

In cooperation with Project Syndicate. Editing from Nathan French.

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,

These are agreements that many had no longer expected: On Tuesday, the rapporteurs of the Environment Committee (ENVI), which has the lead function, took a huge step toward redesigning the European emissions trading system. The most important compromise: ETS 2 for road transport and heating of buildings is coming – albeit with restrictions. However, there is not agreement on all points. Lukas Scheid has the details.

The EU Commission wants the expansion of solar energy in the member states to proceed more quickly. This is the result of a draft for a solar strategy of the Commission. Brussels wants the member states to quickly present subsidy programs that will take effect as early as next year. One of the main goals is to make solar panels pay off their cost more quickly for homeowners in the future. Manuel Berkel analyzes the most important points of the draft.

CDU politicians spoke of a “privileged partnership” with regard to Turkey, Emmanuel Macron calls it a “European Political Community”: the proposal made by France’s president on Europe Day is not new, but is now being debated again: is there a need for a kind of preliminary stage for countries that would like to join the EU but are not yet ready in their eyes? At any rate, the potential accession candidates are reacting suspiciously to the idea, as Till Hoppe and Falk Steiner report.

EU Commissioner for Home Affairs Ylva Johansson has proposed a regulation to improve the protection of children online. Depictions that show the sexual abuse of children are to be removed from the Internet as quickly and permanently as possible. But the measures with which Johansson wants to achieve this are causing criticism. Falk Steiner writes that EU Commission President Ursula von der Leyen has already become acquainted with one of them. One MEP even rages: “Censor-ella is back.”

Your
Sarah Schaefer

ETS Reform: white smoke at the shadow meeting

At just before 17:00 on Tuesday, Green Party shadow rapporteur Michael Bloss announced via Twitter that the deal was done. “We have a deal for EU’s biggest climate toolbox – the EU Emission Trading Scheme!” After days of negotiations between the rapporteurs of the lead Environment Committee (ENVI), agreements were reached on many points that many had no longer expected.

Most important compromise: the second emissions trading scheme for road transport and heating buildings (ETS 2) is coming – but with restrictions. For the time being, it is to apply only to commercially used buildings and heavy-duty vehicles, with a minimum price of €50 per ton of CO2. By 2026, the EU Commission is to examine whether an extension to private households is a possibility in view of the threat of energy and mobility poverty.

The expansion would be completed in 2029 at the earliest, provided energy prices were below the March 2022 average and the Climate Social Fund provided relief to households three years earlier. Companies would only be allowed to pass on half of the rising costs of fuel products to end customers. That means they would have to disclose their price composition.

Waste incineration included in ETS

It has been clear for some time that emissions from municipal waste incineration will be included in the existing ETS from 2026. Aviation within the EU is to pay the full price for its emissions from 2025 and no longer receive free allowances. Shipping is to be included from 2024 and extended to ships weighing 400 gigatons or more by 2027. In addition, from 2027, not only half of the emissions from journeys between EU ports and ports in third countries are to be paid for in the ETS, but all of them.

The distribution of revenues from the ETS is also part of the compromise reached on Tuesday. It was already clear in advance that the Innovation Fund would be replaced by a Climate Investment Fund in order to be able to promote not only new and innovative projects, but also methods that support climate neutrality. Yesterday, the rapporteurs agreed that the fund will be filled with a total of 1.46 billion certificates, the proceeds of which will be used to finance climate protection measures. 12 percent of the fund is reserved for investments in renewable energies.

The Modernization Fund will also be increased by two percent so that in the future four percent of the total auctioned certificates would flow into this fund.

The negotiators also agreed on a few conditions for the use of ETS revenues. At least 12 percent of the revenues must go to climate-friendly public transport, and another 12 percent must go to international climate protection.

Alternative compromise on free allocations and CBAM

However, the deal also has a few loopholes. The disagreements over the introduction of the CO2 border adjustment mechanism (CBAM) could not be resolved even at the last shadow meeting before the vote in the ENVI (May 16-18). A majority outside the EPP around the responsible rapporteur Peter Liese (CDU), for example, no longer wants to issue free CO2 allocations for industry from 2031. Instead, the CBAM is to be fully introduced by then.

This so-called alternative compromise, since it was made without the rapporteur’s consent, should be adopted next week. Whether the majority in the ENVI of Greens, S&D, Renew and Left will remain in the plenary vote in June is questionable. MEPs from the Social Democrats and Liberals in the ITRE committee, together with the EPP, had agreed on 2034 as the end date for free certificates. Liese himself is therefore “99 percent sure” that the alternative ENVI compromise will fail in plenary.

There is also an alternative agreement on the one-off cancellation of surplus allowances. 205 million unused CO2 allowances are to be cancelled in one fell swoop to increase the ambition of the ETS. The Commission had envisaged 110 million, the EPP only wants to raise the Linear Reduction Factor (LRF) from 4.2 to 5.09, i.e. the annual reduction of new allowances released on the market.

States to provide more support for solar installations

When Intersolar Europe begins today in Munich, visitors are likely to take it in good humor: in the future, solar systems on roofs should pay for themselves in less than ten years and the EU member states should align their subsidies accordingly. This is what the Commission demands in a draft of the solar strategy, which “Contexte” published on Tuesday.

In it, the Brussels authority wants member states to set “predictable payback periods of less than 10 years” for solar systems, energy storage and heat pumps. Elsewhere, the report explicitly mentions rooftop systems. Under the current framework conditions in Germany, such rooftop PV systems sometimes only pay off after significantly more than ten years, said a spokeswoman for the German Solar Industry Association (BSW). On average, the payback period for small systems is about 15 years, confirmed the market research institute EUPD Research.

The Commission therefore believes that significantly more attractive framework conditions are needed to sufficiently accelerate the expansion of solar energy. By 2025, the installed PV capacity is to be doubled to 300 gigawatts (GW), and by 2030 it should already be 500 GW. The ten-year mark could become the guideline for the current amendment to the Renewable Energy Sources Act (EEG).

The Commission had publicly consulted on the key points of the solar strategy by mid-April, and received more than 400 comments. It then announced a solar roof initiative in the draft for REPowerEU, with which the EU wants to become less dependent on Russian energy supplies.

Focusing solar subsidies on buildings in need of renovation

To this end, the EU states are to dovetail the expansion of solar systems more closely with the renovation of buildings. The Commission is calling on governments to quickly present national subsidy programs that will take effect as early as 2023. They are to concentrate the promotion of roof systems on the half of all buildings with a below-average energy status (efficiency class D or worse). Energy advice should be organized according to the one-stop-shop principle, i.e. offers that provide information on both solar energy and energy efficiency.

The draft is not clear on the solar roof obligation for new buildings. At one point, there is talk of a requirement for all new properties, while at another point it says that new buildings should only be “solar-ready“. By 2025, however, solar systems are to be installed on all suitable existing public buildings.

On industrial promotion and the EU alliance for the solar industry, the draft is also not yet particularly concrete. In the meantime, the development of European production capacities is a declared goal of the Commission. The SolarPower Europe association had wanted a solar fund of €1 billion, modeled on the chip fund, to leverage private investment of €8 billion by 2025.

However, the Commission merely refers to existing financial instruments and announces a mechanism for coordinating the relevant programs. A separate project of common European interest (IPCEI) for “breakthrough technologies and innovations in the PV value chain” is also being considered.

Hard line only against forced labor

The Commission is also rather diplomatic and cautious when it comes to the sustainability criteria for solar modules. The European industry sees strict requirements as protection against competition from China. SolarPower Europe had called on the Commission to implement criteria for sustainability and circular economy in order to create a level playing field with non-European manufacturers. The TTC talks with the USA could also serve as a forum for this.

The Commission does refer to ongoing work on the ecodesign and energy label regulations. However, it only emphasizes that the new requirements would create comparison possibilities for buyers, which could also be taken into account in tenders for renewable energies. International PV manufacturers are only called upon by the Commission to provide more information on the sustainability and carbon footprint of their products.

However, Brussels wants to draw a clear line at human and labor rights, especially on the issue of forced labor. Several Chinese manufacturers are suspected of producing solar components in the province of Xinjiang and resorting to forced labor.

The European solar industry apparently has a basic confidence in the EU’s plans. By 2026, the Union will once again become the world’s second strongest demand region behind China, SolarPower Europe predicts in its Global Market Outlook presented on Tuesday.

Macron’s “European political community”: preliminary stage or consolation plaster?

In Kiev, Emmanuel Macron’s proposal did not go down well. “If we don’t get candidate status, it means that Europe wants to rip us off,” said Ukraine’s Foreign Minister Dmytro Kuleba in his usual undiplomatic manner. Ukraine will not be satisfied with an associated partnership, he said.

Macron brought such a model into play on Monday. The French president has a “European Political Community” in mind – it would be open to countries that share the EU’s values but are not yet ready to join. The name is new, but the idea is not. Time and again, the community has discussed how it can bind states that want to join the EU to itself without immediately accepting them as full members of the club. For Turkey, for example, CDU politicians coined the term “privileged partnership.”

Neither Ankara then, nor Kiev, nor the aspirants for membership in the Western Balkans today want to settle for second-class membership. The German government knows this, too: Foreign Minister Annalena Baerbock held out the prospect of full membership for Ukraine during her visit to Kiev yesterday. However, there can be “no shortcut” on the way there, the Green politician said. Last week, Chancellor Olaf Scholz had called for Serbia, Albania, northern Macedonia, Montenegro, Kosovo, and Bosnia-Herzegovina to be admitted to the EU as quickly as possible in order to push back the influence of Russia and China there.

The fact that the new proposal comes from the French president fuels mistrust: Paris has long been opposed to further EU enlargement. Macron has not even said what he has in mind, says Nicolai von Ondarza, head of the Europe research group at the German Institute for International and Security Affairs.

War increases pressure to act

It was unclear, for example, whether admission to the Political Community should be an intermediate step toward EU membership or an alternative to it. The president also left open the question of whether the Political Community should have its own organizational form or whether the countries should be docked to the EU as associate members. So far, Macron’s idea is not much more than a line in the text of the speech, an EU diplomat also says.

But Macron’s proposal has triggered an important discussion, says von Ondarza. The EU Commission is also considering how the EU can offer some countries partial integration, even if accession is still many years or even decades away.

The war in Ukraine has put enormous pressure on the Community to act. The Commission is expected to recommend in June that Kiev be given official status as an EU candidate country. It is hard to imagine anything else, given the sacrifices made in the fight against Russia. “We have already paid for our membership in blood,” said Deputy Prime Minister Olha Stefanishyna.

Member states must unanimously approve the recommendation. According to Stefanishyna, some governments still have reservations, including Berlin.

Macron also made it clear that even if the European Council clears the way in June, it will still be several years before the negotiations are concluded. During his visit to Berlin, Belgian Prime Minister Alexander De Croo therefore warned that the focus should not be solely on the enlargement process. This is “a long administrative process that is often very frustrating.

The EU needs to be “much more creative” in helping countries like Ukraine be part of the European family, de Croo said. “This is different from the enlargement process.” Another member state also says it’s time to break out of the binary thinking of membership or not.

Larger EU would need leaner structures

But the admission of new members would at the same time increase the pressure to reform the distribution of competences and decision-making structures within the EU. Macron gave the discussion new momentum on Monday when he spoke out in favor of amending the EU treaties at the end of the conference on the future of Europe. The President-in-Office of the Council wants to have the topic put on the agenda of the summit at the end of June.

In this Macron certainly finds approval, at least in the Berlin traffic light coalition. An expansion of the European Union is in the very own interest of the peace project in Europe, said the chairman of the Europe Committee in the Bundestag, Anton Hofreiter, to Europe.Table. “With increasing enlargement, however, it is also clear that we must adapt our working methods to this.” He welcomed the fact that Macron was now initiating the discussion on this, the Green politician said.

Scholz, on the other hand, takes a more reserved view of the demands for treaty changes, which are being raised above all from the European Parliament. Germany will not put on the brakes, he said. However, a more efficient EU could also be achieved below the level of amendments to the EU treaties. This would include abolishing unanimity in many policy areas, as for which the participants of the Future Conference had called.

In fact, the often crippling constraint of unanimity in the Common Foreign Policy can be circumvented in certain cases by the so-called passerelle clause. This “little bridge” in Article 31 of the EU Treaty allows for a majority decision when the Council is to implement a decision of the heads of state and government, i.e. the position that is already united in principle. However, the majority procedure can be vetoed by any Council member. A majority decision would be taken in the Council in the first step, which would then have to be adopted unanimously by the European Council.

Danger of division

Thu Nguyen, an expert at the Jacques Delors Centre, therefore believes that a treaty change is necessary, at least in the long term, to increase the EU’s ability to act. In the short term, however, the necessary support among the member states is lacking. “Therefore, not all political capital should be invested in this kind of change,” Nguyen said. “Many things can be reformed without treaty changes.”

On Monday, 13 governments had spoken out in a joint paper against initiating a hasty process for constitutional changes now. SWP expert von Ondarza, therefore, warns: “Calling a convention at short notice with a narrow majority would risk splitting the EU at a time when it is struggling for cohesion.”

In any case, the Future Conference alone hardly justifies the time pressure in his view. According to an as yet unpublished SWP analysis, only twelve of the 178 proposals put forward by the citizens’ panels require treaty change. These include, in particular, an expansion of EU competencies in the area of health and social policy and a right of initiative for the European Parliament, which the latter is clamoring for. With Falk Steiner

Johansson’s child protection plan: “Censor-ella is back”

One goal of the measures: depictions of child sexual abuse are to be removed from the web as quickly and permanently as possible. A draft version of Johansson’s plan has now become known. Three plans are likely to be at the core of the criticism:

The obligation for access providers to block Internet sites,
the requirements for service providers to control communications content, and
the establishment of a new authority that is to be endowed with massive rights, but appears to be comparably difficult to control, for example, Europol or Frontex.

The “EU Centre on Child Sexual Abuse, “ according to Chapter 4 of the proposal, is to support the implementation of regulation “regarding the detection, reporting, removal or prevention of accessibility and blocking” and assist in implementation. The EU Commission wants to grant this center the “broadest possible rights” at the national level as well. At the same time, each member state is to designate a coordinating body that is to proceed in coordination with the EU Center and work with it, while at the same time being able to draw on its support.

Detection obligations for service providers

The proposal, which was largely drafted under the responsibility of German cybercrime EU official Cathrin Bauer-Bulst, provides for essential cooperation obligations for providers of hosting services, but also of communication services. Article 7 sets out how the relevant competent coordinating body should be able to compel providers to actively search for images of child sexual abuse by means of a detection order. According to DG Home, it is sufficient for this if a provider is “likely… to be used to a significant extent for the dissemination” of images of child sexual abuse. This is likely to apply to almost all major communications providers.

It should also be possible to oblige providers to cooperate in the detection of previously unknown misrepresentations. This cooperation is to take place, among other things, through the automated detection of content: Article 10 of the draft explicitly stipulates that the obligated parties must install and operate technologies deemed suitable by the EU Center.

Providers are also to be obliged to carry out detection in other cases: namely, if the responsible authorities believe that their services can be used to approach potential victims. It should be sufficient to justify this if the service is an interpersonal communication service that is likely to be used for these purposes and if there have been cases with this or comparable services in the previous year.

Online locks

In 2009, the then Federal Minister for Family Affairs von der Leyen pleaded for “stop signs on the Internet” with demonstrably false claims. Her request was identical to what is now to be introduced by Interior Commissioner Johansson: Internet access service providers are to block websites on which depictions of child sexual abuse can be found. Since these sites should not be known to the public, secret blocking lists are kept for this purpose.

However, analyses of leaked filter lists in the past have repeatedly shown high error rates for such blockade lists. The factually based lack of transparency also makes it difficult to check the blockades. Critics therefore accuse advocates of such systems of establishing an infrastructure of intransparency for any form of censorship by law. In addition, such blockades are technically easy to circumvent.

The “blocking obligations” now provided for in Section 5 of the planned regulation are an attempt to learn lessons from the protests at the time and at the same time still demand such an infrastructure from the member states. Thus, among other things, Article 16 prescribes balancing processes. The actual blocking order must be issued either by an independent competent authority or by the courts. Internet access providers should also be able to take legal action against such blocking orders.

Rights of the data subjects

One proposal that, unlike the foreseeably contentious points, is likely to meet with undivided approval is a planned right to information for those affected: if identified victims of sexual abuse want this, they are to be given a right to information in the future. They would then have the right to be notified if content concerning them was found. In addition, they should also be able to call on support if they want to demand that individual providers remove the content.

FDP and Pirates on collision course with Johansson

Ursula von der Leyen is right that the fight against child abuse materials needs to be stepped up significantly, says Moritz Körner (FDP/Renew). However, he finds the Commission’s proposal unsuitable: “If von der Leyen and her Home Affairs Commissioner Johansson were to come through on this, digital privacy of correspondence would be dead,” Körner rages. “Under the EU Commission’s proposal, private companies would be forced to play police, spy on their customers, and report them to the state – this Stasi 2.0 should be rejected.” Körner reaches for the really big guns: “Zensursula is back.”

Patrick Breyer (Pirates/EFA) had already protested against Johansson’s plans in recent months under the heading of “chat control.” On Monday, Breyer filed a complaint with an Irish court against a filtering mechanism used by the Facebook platform. Breyer speaks of a “Big Brother attack on our cell phones, private messages and photos with the help of error-prone algorithms” that represents a “giant step toward a Chinese-style surveillance state.”

The legislation of today’s EU Commission President Ursula von der Leyen, associated with the derogatory name “Zensursula,” passed in 2009 amid angry protests by Internet freedom activists against the full legislative project: the so-called Access Restriction Act was passed, but never applied, and under the following black-yellow coalition, it was repealed without replacement by a repeal law.

Transport ban on Russian oil apparently off the table for the time being

According to EU sources, the planned ban on the transport of Russian oil is no longer part of the planned sanctions package against Russia for the time being. Further coordination is needed at the international level and in the G7 group, diplomats told Deutsche Presse-Agentur. Greece, Cyprus and Malta, among others, had opposed the measure, fearing that it could unilaterally disadvantage their shipping companies.

A ban on European companies insuring oil tankers carrying Russian oil is still part of the planned sanctions, according to diplomats. This could make it more difficult for Russia to supply oil to other countries.

Discussions about the planned EU sanctions package have been going round in circles for days. Hungary, in particular, is blocking a proposed embargo on Russian oil imports and is demanding far-reaching exemptions. Commission President Ursula von der Leyen returned from talks with Hungarian Prime Minister Viktor Orbán on Monday without any tangible results. “We have made progress, but more work is needed,” she said. A video conference with regional partners on oil supply solutions is to be held in the coming days, but a date has not yet been set.

Waiting for progress

According to diplomatic sources, the sanctions are not expected to be on the agenda of the regular meeting of the permanent representatives of the EU countries today. They are still waiting for progress in talks with the countries that would be particularly affected by the import ban. Countries such as Slovakia and Bulgaria have joined Hungary’s demands.

Bulgarian President Rumen Radev criticized the EU oil embargo: “We must not allow the sanctions to harm our own social and economic systems,” he said after a meeting with his Czech counterpart Miloš Zeman in Prague on Tuesday. He said it was important to take into account the specifics of the individual EU member states.

Last week, the EU Commission had proposed as a compromise to give Hungary and Slovakia until the end of 2024 and the Czech Republic until mid-2024 to fully implement the oil import ban. dpa

EU holds Russia responsible for KA-SAT hack

The attack on the KA-SAT satellite network of US operator Viacom has been classified by EU member states as “harmful cyber activity by the Russian Federation.” This was announced by the EU’s foreign affairs representative Josep Borrell on Tuesday. This is the first time such an assessment has been made by the EU with clear attribution of an attacker – which in principle could also have consequences according to the EU’s Cyber Diplomacy Toolbox. However, such measures would require a unanimous decision by member states.

During the cyberattack one hour before Russian troops attacked previously unoccupied territories of Ukraine on February 24, 2022, KA-SAT was rendered useless in parts. The operation was apparently aimed primarily at cutting off Ukrainian communications links. However, the area covered by this satellite network also includes large parts of Eastern, Central and Western Europe, where damage was also caused, which the attacker apparently took into account.

In Germany, the issue had also caused a stir because, among other things, 5,800 Enercon wind turbines were no longer accessible via satellite network. The modems required for the connection had received a faulty software update via the hacked KA-SAT network. Enercon speaks of a total of 30,000 modems across Europe. Some of these were irreparably damaged by the malware.

A good two months after the cyber attack, according to the wind turbine manufacturer, “almost all affected wind turbines are now back online and integrated into remote monitoring and remote maintenance,” according to a company spokesperson. The manufacturer, which had set up a task force to limit the damage, considers the operators of the wind turbines to be responsible for the IT security of the connection. fst

Meta criticizes Federal Cartel Office before the ECJ

Blowback at the European Court of Justice (ECJ): Facebook’s parent company Meta delivered sharp criticism of the German Federal Cartel Office’s action to put a stop to the comprehensive collection of Facebook users’ data at a hearing at the ECJ in Luxembourg on Tuesday.

The underlying decision by the competition authorities, which dates back to 2019, underscores the growing pressure on US internet companies such as Facebook. However, the specific event also raises the question of whether the antitrust authorities exceeded their authority when dealing with data protection issues.

The German Federal Cartel Office’s order for Facebook’s “far-reaching restrictions” was clearly flawed, Meta lawyer Hans-Georg Kamann told a 15-member ECJ panel of judges. The Bonn-based authority had thus openly violated the provisions of the European General Data Protection Regulation. Kamann accused the antitrust agency of failing to cooperate with the Irish data protection authority, which is responsible for Facebook because of its corporate headquarters in Ireland.

Jörg Nothdurft, a representative of the Federal Cartel Office, rejected this accusation, stating that there had indeed been contacts with the Irish authorities. The German government defended the Cartel Office’s decision to investigate data protection issues in the interest of protecting competition. After all, user data served the tech companies to expand their market power, said the legal representative of the German government, Philipp Krüger.

The Cartel Office had ruled in 2019 that Facebook had abused its market power by collecting certain data from users without their explicit consent. This involved personal data that users leave behind on WhatsApp or Instagram – which also belong to Facebook – and other services. The antitrust office had also prohibited Facebook from combining user data from different sources with reference to data protection. The US group is taking legal action against this. The Düsseldorf Higher Regional Court, which was ultimately responsible for the case, is now initially seeking clarification of key issues from the ECJ. rtr

Waste: EU exports at record levels

EU exports of recyclable raw materials, including waste, scrap and other by-products, reached a record high of 40.6 million tons last year, the EU statistics office Eurostat said yesterday.

Eurostat data show that exports to non-EU countries, almost half of them ferrous metals such as iron and steel, increased by 2.0 million tons in one year and by 80 percent compared to 2004. Turkey was the most important destination for recyclable raw materials from the EU last year, followed by the UK, India and Egypt.

EU imports of recyclable raw materials, mainly organic products and wood, reached 46.8 million tons last year, up 7 percent from 2004 levels. According to Eurostat, Argentina and Brazil were the main source countries for imports.

In addition to metals and organic products such as food scraps, recyclable materials also include paper, textiles, glass, plastics and rubber, according to Eurostat definitions.

The EU is also planning a new concept for waste disposal in the context of its action plan for the circular economy. In November 2021, the EU Commission presented a proposal for a revised Waste Shipment Regulation. In doing so, it aims to facilitate reuse and recycling within the EU and ensure “that the EU does not transfer its waste problems to third countries,” as well as combat illegal shipments of waste, the document says. Today, the Parliament’s ENVI committee is discussing its draft report. leo/ Reuters

Europe’s petrol problem

By Daniel Gros

In a matter of months, the European Union has reduced its dependence on Russian oil so much that it is now ready to impose an embargo. European Commission President Ursula von der Leyen has announced a plan to ban Russian crude oil imports to most of the EU in the next six months, and refined oil products by the end of the year. Yet, to have a meaningful impact on Russia’s budget, Europe must also end its dependency on Russian gas. This will prove much more difficult to achieve.

Europe has managed to reduce its need for Russian oil quickly for a couple of reasons. Oil can easily be delivered by tanker, not just pipelines, and it is relatively easy to find new supplies on the world market. The problem is that it is also relatively easy to find enough new buyers – and Russia has plenty – to offset a large part of the losses from an EU embargo.

Gas is different. Europe needs natural gas to provide heat in winter and to serve as feedstock for the world’s largest chemical industry, which accounts for a significant share of EU exports. And certain features of the natural-gas market will make it far more difficult and costlier to find alternatives to Russian supplies than it has been for oil

Europe’s nervous energy ministers

For starters, because most natural-gas producers operate on long-term contracts with buyers, there is little spare production capacity outside Russia. While there are spot markets, where one can buy or sell limited quantities of gas, their purpose is to redistribute existing supply or demand across regions, as needed, not to provide additional supply.

Nervous European energy ministers have visited various global gas producers, in the hope of convincing them to increase production. Major gas producers are happy to oblige. Yet they warn that it takes up to four years to launch new projects, and doing so makes commercial sense only if the customer is willing to sign a 20-year contract.

All of this means that, in the short run, the natural-gas supply is close to fixed. So, the only way to make up for a shortfall of Russian gas is through a combination of energy savings and increased imports.

Here, Europe will confront another challenge. Natural gas is costly to transport and difficult to store. Liquefied natural gas (LNG), which can be shipped, offers the main alternative to piped Russian gas, though it raises challenges of its own.

Once gas has been liquefied and loaded onto a special tanker, a few thousand extra miles of travel make little difference. This is the principal reason why the Asian and European LNG markets are integrated, with prices on the two continents usually moving closely together. Gas spot prices reached very high levels already last autumn, months before Russia invaded Ukraine, because a strong recovery in Asia drove up demand.

Floating LNG terminals

Before the war in Ukraine began, Europe was already importing almost as much LNG as piped gas. Yet, if Europe wants to end its dependence on Russian gas, it must vastly increase these LNG imports. This will be costly because it means diverting shipments originally directed to Asia toward Europe. Luckily, this will be technically possible owing to a profound asymmetry in LNG trade: it takes far longer to construct liquefaction facilities than to arrange for “re-gasification.”

When LNG arrives, importing countries merely have to heat up the liquid in the tankers. Energy specialists frequently point out that many countries do not have enough fixed LNG facilities to increase imports. However, floating LNG terminals are also an option, and countries like Germany, France, and Italy are already taking advantage of it, ensuring that they can offload LNG when it arrives.

These flexible gasification facilities, together with a dense network of pipelines connecting most of the EU providers, offer some protection against Russian attempts to pick off individual countries. Europe has already shown solidarity on the issue. When the Russian energy giant Gazprom recently stopped gas deliveries to Poland and Bulgaria, pipelines from Germany and Greece ensured that the two countries got what they needed. The question is whether Europe will show the same resolve when all countries are under pressure.

Hole in Putin’s war chest

Liquefaction facilities, on the other hand, are far more difficult to come by and take much longer to construct, because they require giant refrigerators that cool the gas to -160° Celsius. This has two politically important consequences.

Some hope that the United States can provide much-needed LNG to Europe. However, the US is currently running its existing liquefaction plants at full capacity, and it would take several years to construct new facilities. As long as America’s export capacity is constrained, redirecting US deliveries from Asia to Europe will do nothing to reduce the excess demand in the combined EU-Asia LNG market. For the US this has the advantage that domestic natural-gas prices have remained much lower than in either Europe or Asia.

The challenge of constructing LNG-liquefaction facilities also significantly raises the costs for Russia to try to export the gas Europe is no longer buying. For a number of years, Russia would be unable to sell the 140 billion cubic meters of natural gas that previously went to Europe each year.

If Europe is willing to pay the price of expensive LNG imports, it could thus severely undermine Russia’s ability to earn hard currency via gas exports. That would put a real dent in Vladimir Putin’s war budget.

In cooperation with Project Syndicate. Editing from Nathan French.