Fit for 55 votes in ENVI + Sustainabilit • Table.Briefings

Dear reader,

ETS 2, CBAM, LULUCF Regulation, and the ETS expansion in the aviation sector: These are just some of the items in the Fit for 55 package voted on yesterday by the EU Parliament’s Environment Committee (ENVI). ETS 2, in particular, had caused discord for months, but now, the MEPs proved their ability to compromise. Lukas Scheid and Timo Landenberger summarize the results and initial reactions.

The trilogue negotiations on the Corporate Sustainability Reporting Directive are expected to be completed by the end of the month. It is already clear that the CSRD will bring about major changes in reporting requirements. Due to new criteria, the number of companies that have to publish sustainability data will increase from about 11,000 to about 50,000. A huge challenge, especially for small and medium-sized companies, as Leonie Düngefeld analyzes.

For the spontaneous among you: The Europe.Table team, together with the Jacques Delors Centre, invites you to the Europe.Decisions digital conference today. In 150 minutes, 30 experts will provide insights into the most pressing issues of our time: How should Europe react to the Russian war of aggression in Ukraine? How can we cushion the energy price crisis? These and other questions are on the agenda this morning starting at 10 a.m. You can sign up here.

Your
Sarah Schaefer

Fit for 55 votes in ENVI: many clear, some narrow majorities in the end

In the end, it’s the result that counts. And for the introduction of a second emissions trading scheme for road transport and heating of buildings (ETS 2), an overwhelming majority of 61 voted in favor, 22 against and 5 abstentions in the EU Parliament’s Environment Committee (ENVI) on Tuesday. It is the part of the ETS revision that has caused rifts among negotiators, within political groups and member states for months.

The German government is likely to breathe a sigh of relief, as it looked for a while as if its own party colleagues in Brussels might cause this part of the climate protection package to fail. The German government is also counting on an EU-wide introduction due to its own fuel emissions trading law, which imposes a CO2 price on combustibles and fuels. However, the final compromise, which envisages the introduction of ETS 2 for commercial activities from 2025 and for private activities from 2029 at the earliest – provided that the Commission submits a new legislative proposal after a renewed review – is viewed with enormous criticism in Berlin.

And even the rapporteur mainly responsible for the ETS reform only reluctantly joined the compromise to exclude the private use of combustibles and fuels for heating and driving for the time being. This was due to opposition from the Social Democrats and Greens, as well as many liberals and part of his own group, according to Peter Liese (EPP, CDU). “A step-by-step approach is ultimately better than killing this important instrument outright, as the Social Democrats, Greens, and right-wingers had requested at the beginning of the process.”

Tiemo Wölken, climate policy spokesman for the Socialist Group in the EU Parliament, does not want to let the accusation stand and counters: “The original draft of the CDU rapporteur would have meant forcing social division in the EU in the middle of an energy crisis.

Greens celebrate, environmentalists are disappointed

Green shadow rapporteur Michael Bloss calls the compromise a “win for everyone”, while environmental organizations are rather disappointed by the division between private and commercial activities in ETS 2. This is a “missed opportunity, especially against the backdrop of the current crisis, which makes saving energy more necessary than ever,” comments Anne Gläser, CO2 pricing officer at Germanwatch. Private emissions from transport and building heat should also be given a CO2 price signal across the EU as soon as possible, Gläser continued – “in combination with a well-funded, solidarity-based climate social fund.”

Gläser takes a more positive view of the one-time cancellation of 205 million surplus CO2 allowances in ETS 1, which significantly increases the ambitions of the climate package. This creates the conditions for the emission reduction targets to be achieved.

However, this compromise threatens to fail in three weeks’ time when it is voted on in the plenary session of the EU Parliament. The narrow majority for this alternative compromise of only five votes in the ENVI of Social Democrats, Greens, Liberals, and Leftists could be overturned there.

Slight majority for CBAM

The situation is similar with the earlier phase-out of free allowances for industry and the parallel introduction of the CBAM. The Commission had planned to continue distributing free emission allowances until 2035 and to gradually introduce the CBAM by then. The alternative ENVI compromise, with a majority of only four votes, envisages ending free allocation as early as 2030. The EPP wanted 2034 as the end date, as did the compromise in the ITRE Industry Committee, where it was also supported by the Social Democrats. It is therefore likely that the ITRE line will ultimately prevail in the plenary session or that the negotiators of both committees will find a further compromise.

Critical voices are coming from the industry about the CBAM compromise. Exports from the sectors covered would not be sufficiently taken into account, so there would be a risk of losing jobs in export-oriented industries, comments Markus J. Beyrer, Director General of Business Europe. He fears for the competitiveness of European producers in non-EU markets. “Global emissions will increase as a result of the reduction in the market share of clean European products,” Beyrer said.

In the final vote in ENVI on the report as a whole, there was again a clear majority of 62 votes in favor, 20 against, with 5 abstentions.

LULUCF report also adopted

Another important element of the Fit for 55 package is the revision of the LULUCF (Land Use, Land Use Change and Forests) Regulation. For the first time, this will include binding targets for the capture and storage of CO2 from the atmosphere in addition to the reduction of greenhouse gas emissions. This is because the targeted 55 percent CO2 reduction by 2030 is already a net target that includes the natural sink capacity of the LULUCF sector. By the time climate neutrality is achieved in 2050 at the latest, there will be no alternative to this to compensate for remaining residual emissions. Technical options for storing greenhouse gases have so far been largely excluded from climate legislation.

With 44 votes in favor, 37 against, and 6 abstentions, ENVI MEPs adopted their negotiating position on Tuesday afternoon. In it, ENVI members follow the Commission’s proposal to make reductions in the LULUCF sector to 310 million metric tons of CO2 equivalent by 2030 mandatory for each member state. In addition, additional sinks of another 50 million metric tons of CO2 are to be created, albeit across the EU, in particular through so-called carbon farming in agriculture.

Target controversial

A contested compromise. In his report, LULUCF rapporteur Ville Niinistö (Greens/EFA) from Finland had called for an increase to 490 million tons. For Norbert Lins (CDU), LULUCF rapporteur in the associated Agriculture Committee, on the other hand, the agreement already represents a very ambitious target. After all, this must be in line with sustainable and active forest management. Especially since the storage capacity of natural sinks has been declining for years. In fact, sink capacity in the LULUCF sector declined from 322 to 249 million metric tons across the EU between 2013 and 2019. This trend must now be reversed.

Nevertheless, according to environmental organization WWF, even doubling the Commission’s proposal to 600 million tons is not only possible, but necessary. “The cheapest, most effective and easiest way to increase Europe’s carbon sinks is to protect and restore our forests, peatlands, and other natural ecosystems,” says Alex Mason, head of WWF’s EU climate policy department.

AFOLU column rejected

The creation of an integrated LULUCF and agricultural sector was rejected by the MEPs in the Environment Committee. The EU Commission had proposed combining the sectors in a new AFOLU (Agriculture, Forest and Other Land Use) pillar and aiming for climate neutrality within it by 2035. “This would result in agricultural emissions being offset by CO2 removals from forestry. This would reduce incentives for the agricultural sector to reduce its own emissions,” says Delara Burkhardt, LULUCF shadow rapporteur for the S&D Group.

There will also be new sub-targets for croplands, grasslands, and wetlands to strengthen the role of these ecosystems in removing CO2 from the atmosphere. Until now, the focus of natural sinks has been heavily on forests.

Effort sharing: Commission proposal largely confirmed

The Effort Sharing Regulation (ESR) covers those sectors that are not covered by either the ETS or the LULUCF Regulation. Around 60 percent of all EU emissions are subject to it. The ESR is designed to ensure that member states reduce emissions in all sectors through binding individual reduction targets. The Commission has proposed a total of 40 percent less CO2 emissions by 2030 (comparison year 2005). This target has now also been confirmed in the ENVI with a majority of 61 votes in favor, 20 against, and 6 abstentions.

For Germany, this means an emissions reduction target of 50 percent instead of 38 percent. Bulgaria, on the other hand, previously had no reduction target under the ESR but is to reduce emissions by 10 percent in the future. The individual targets are based mainly on GDP per capita. This is to take into account the different starting situations and capacities of individual member states when sharing the burden among them, says Christine Schneider (CDU), EPP Group rapporteur for the Agriculture Committee opinion. “This will ensure that all member states make their contribution to achieving the goals and that the agricultural sector can still meet the major challenge of food security in view of the war in Ukraine.”

Aviation from 2025 without free certificates

MEPs also voted in favor of extending the ETS in the aviation sector. So far, only flights within the European Economic Area are subject to a carbon price. With 66 votes in favor, 9 against, and 12 abstentions, the ENVI now voted in favor of including all flights that take off within the EEA. This could apply as early as April 30 next year. In addition, free emission allowances for airlines should no longer be allocated from 2025 – two years earlier than envisaged by the Commission. In 2024, the number of free allocations is already to be reduced by 50 percent.

Seventy-five percent of the revenue from the sale of aviation CO2 allowances is to be used to support innovation and new technologies to decarbonize the aviation sector.

The full House vote on all Fit for 55 files adopted yesterday in ENVI is scheduled for the June 6-9 session week. Lukas Scheid and Timo Landenberger

Sustainability reporting requirements pose challenges for SMEs

The trilogue negotiations on the CSRD are expected to be completed by the end of May. Many companies may then have to prepare a sustainability report for the first time next year. The Corporate Sustainability Reporting Directive (CSRD) will significantly change the reporting requirements. The new standards are embedded in the EU’s sustainable finance strategy and are intended to provide investors with more accurate data and thus guide financial flows. Small and medium-sized companies, in particular, are ill-prepared for this, according to industry sources.

The data that companies have been required to provide since 2017 under the Non-Financial Reporting Directive (NFRD) is insufficient for decisions by investors and other stakeholders and is difficult to compare. This is to change with the CSRD. The flow of information on sustainability is to become consistent and coherent along the entire financial value chain – and is to be given just as important a role as financial reporting.

In terms of content, the CSRD expands the reporting requirements in the areas of environment, society, and governance. Instead of referring to a single year, reports are to contain short-, medium- and long-term analyses. Uniform standards (European Sustainability Reporting Standards, ESRS) are being developed for this purpose.

50,000 companies committed

The number of companies required to publish sustainability data will increase from around 6,000 to around 50,000 as a result of new criteria: All European companies with 250 or more employees, irrespective of whether they are capital market-oriented, must report; as well as companies with a balance sheet total of more than €20 million or sales of more than €40 million. In addition, there are small and medium-sized companies with a capital market orientation. The Council wants to go even further and include non-European companies operating in the EU. In Germany, around 15,000 companies will be subject to reporting requirements.

This poses a huge challenge for small and medium-sized companies, in particular, says Frederike Krebs, sustainability officer at the German Mechanical Engineering Industry Association (VDMA). In the VDMA, 70 to 80 companies have been affected so far – the new criteria would mean 700 to 800. “Our companies naturally have an interest in showing that they produce sustainable technologies,” Krebs explains. “But so far, many don’t know how to implement this.”

The reporting requirements are closely linked to the EU taxonomy: Article 8 of the Taxonomy Regulation refers directly to the CSRD and specifies that companies covered by the CSRD must also provide information on their compliance with the environmental objectives of the taxonomy.

Time frame not yet fixed

Frederike Krebs sees mechanical engineering companies at a disadvantage here. Other industries are listed with concrete names and threshold values and therefore have a much easier time showing themselves to be taxonomy-compliant. The technical criteria of the taxonomy do not explicitly list mechanical engineering; it is merely part of a higher-level category that requires a life cycle analysis of the products and certification. In some cases, that’s not even possible, Krebs explains: “For one thing, we have customized, very individual products that can’t be compared.” A life cycle analysis often makes no sense. In addition, certification costs a lot of money. Many companies have therefore had to state that they are not taxonomy-compliant.

Companies will also be more affected because the burden of proof will be passed on to them via buyers and investors, says Krebs. Banks also have a reporting obligation and must indicate how sustainable their investments are. “We are then affected by that in the long term as well.”

The European Council and Parliament are currently still negotiating the timeframe for the reporting obligation. According to the draft, the first set of standards is to come into force on January 1, 2024, companies would then have to report for the 2023 financial year. Both the Council and the shadow rapporteurs had called for this to be delayed by a year. “Even for large companies that already have corresponding structures, the planned lead time is too short,” says Annette Selter, a tax and financial policy officer at the Federation of German Industries (BDI). In smaller companies, these structures first have to be created. Accounting has not yet included any activities that can be used to measure sustainability.

While one year might help companies that have never looked closely at sustainability reporting, says Mirjam Wolfrum of the Carbon Disclosure Project (CDP). “But one year also makes a big difference given the urgency of the climate and nature crisis,” she says. “We need the sustainability information sooner than later.”

Companies can reduce risks

The CDP has been carrying out similar reporting for 20 years. Once a year, the NGO asks for sustainability data from all listed companies via questionnaires – on a voluntary basis, but not without pressure: Whether and how companies disclose the data is perceived by investors. If companies report regularly and completely, they have many advantages as a result, says Wolfrum. Through the annual process, companies can better understand and structure internal processes, identify internal and external stakeholders, and include them in their corporate strategy, goal setting, and action planning.

“Companies need to show in their reporting that they understand what impact their corporate actions have on the climate and the environment – negative and positive.” Initially, it will mostly be negative impact, but they can then reduce it on that basis. In this way, they can also minimize risks: in supply chains, in relation to their investors and to their market value.

The companies that report to CDP are all very well positioned to meet the reporting requirements, Wolfrum says. In addition, there are now many offerings and tools available to help them with data collection and reporting. “Time is of the essence, so a solution-oriented approach is important now,” she says. “You shouldn’t be thinking about what might be too much or too complicated at the first step.” CDP data show: Only one in 20 publicly traded companies has robust targets to reduce emissions, water use, and deforestation, and about 50 percent of reported emissions are not covered by science-based targets that are consistent with the 1.5-degree goal. “This shows how important the European initiative is,” Wolfrum says.

The trilogue negotiations are expected to be concluded at the end of May, after which the respective votes will take several more months. The European Financial Reporting Advisory Group (EFRAG), which drafts the EU Sustainability Reporting Standards (ESRS), recently published an initial set of standards for public consultation by August 8, 2022. It will submit the draft to the commission in November. Leonie Düngefeld

Finnish gas supplier goes to arbitration court

Finnish energy supplier Gasum is suing Gazprom before an arbitration court. Tuesday, the state-owned company said it would not comply with the Russian group’s disputed new payment instructions. “In this situation, Gasum had no other option but to take the contract to arbitration,” CEO Mika Wiljanen said, according to a statement. Gasum’s announcement raises risks Gazprom cutting off supplies soon, ICIS analyst Tom Marzec-Manser commented on Twitter. Replacements would have to come from other EU countries.

On Monday, the Russian utility Inter RAO had already suspended electricity deliveries to Finland because the company had allegedly not been paid. Due to sanctions by the EU and Russian instructions to exchange currencies, there has been uncertainty about supply embargoes for weeks. Russia had already stopped gas sales to Poland and Bulgaria; both states had rejected Russia’s new requirements.

Engie and Uniper continue to pay in euros

The EU Commission has still not been able to provide clarity on sanctions-compliant payments. In an updated handout on Friday, it merely reiterated its stance that Western importers should declare that their obligations were fulfilled with payment in euros or dollars. Moscow, however, had announced that in the future, deliveries would be paid for only after they had been exchanged for rubles.

Meanwhile, economist Benjamin Moll sees the deviation of countries like Poland from the Commission’s line as evidence that the Commission is trying to circumvent its own sanctions.

Other European utilities, however, seem to have found solutions: France’s Engie said it had reached an agreement with Gazprom. An agreement has been reached that also does not violate sanctions imposed by the West, Engie CEO Catherine MacGregor said Tuesday. “We pay in euros, and we are not subject to any currency risk.” Dusseldorf-based utility Uniper also continues to pay for its gas supplies in euros. “We receive the bill in euros. And we pay in euros to a Gazprom Bank account in accordance with the new payment mechanism,” the company said. ber/rtr

Network agency presents criteria for gas emergency shutdowns

The president of the Federal Network Agency has presented criteria for a shutdown in the event of a gas emergency, which large industrial consumers must be prepared for. These include the urgency of the measure and the size of the company, said authority head Klaus Müller in an interview with the “Frankfurter Allgemeine Zeitung” (Wednesday edition) published in advance on Tuesday.

Another aspect is the lead times: Some companies need more time to shut down in an orderly fashion. Also, the economic and business damage. “In the ceramics industry, for example, production equipment freezes and breaks down when the gas is missing. We also take into account the cost and time to restart.”

Against the backdrop of the war in Ukraine, the German Federal Network Agency is preparing for the possibility that Germany will not have enough gas after Russia stops deliveries. While households would continue to be supplied, the focus would be on the economy. An important criterion here is the significance of the supply for the general public, for example, with food or medicines, Müller told the newspaper. Unfortunately, it is not possible to put these criteria in a clear order. “It is a matter of finding the fastest possible solution in the specific situation with the least possible damage. It won’t be easy.”

Gas-fired power plants should be shut down in the event of a gas emergency unless they served grid stability, Müller said in the interview. “I expect that power plant operators can and should use a number of coal-fired power plants again to generate electricity with them instead of gas. That hurts the climate change activist in me, because the greenhouse gas balance worsens.” rtr

Gas storage trilogue goes into extension

After 16 hours, the first trilogue on the new gas storage regulation ended on Tuesday morning without agreement. A conclusion of the negotiations between Parliament, Council and Commission is now expected for Thursday. The regulation is intended to introduce binding minimum filling levels for gas storage facilities throughout the EU to prepare for possible restrictions on Russian gas supplies before winter.

In its draft from the end of March, the Commission proposed a binding storage target of 80 percent this year and 90 percent in subsequent years. This is to be achieved by November 1 or, in exceptional cases, by December 1. For additional months, a non-binding fill path is set for each state that has gas storage. There is a tolerance of two percentage points for interim levels. If they are exceeded, further measures are to follow.

The Parliament’s negotiating group would have liked to increase the storage target for the current year to 90 percent as well. According to information from parliamentary circles, the MEPs and the Council now jointly represent a target of 85 percent. Accordingly, the trilogue negotiators are in agreement that the tolerance threshold in the filling path should be raised to five percent.

Regulators are also to be given more time to certify storage operators. This affects operators of large reservoirs who have allowed their facilities to run empty below a critical mark in the past two winters. The authorities are now to submit their preliminary certification decision after 200 days instead of 100. The new rule is aimed primarily at Gazprom‘s European subsidiaries, but most of them are now already under trusteeship by the Federal Network Agency. The regulator’s administration is limited until September 30. ber

Yellen: EU could combine tariffs on Russian oil with embargo

The European Union could combine import tariffs on Russian oil with the phased oil embargo it is trying to put in place to shrink Russia’s energy revenues, US Treasury Secretary Janet Yellen said on Tuesday.

The tariff concept will be presented at a G7 finance leaders meeting this week as an economically less costly way to siphon away oil revenues from Moscow while producing faster results, US Treasury officials told reporters.

The tariff plan would aim to keep more Russian oil in the global market, limiting price spikes spurred by a full embargo, while limiting the amount of money Russia can earn from exports, the officials said.

Tariff monies could be put into a recovery and reconstruction fund for Ukraine, satisfying a desire to make Moscow pay at least part of a massive rebuilding effort.

Yellen said she discussed a wide range of options for reducing European dependence on Russian energy with European Commission President Ursula von der Leyen. She added that she was supportive of any plan the 27-member EU could agree on, but “it is critically important that they reduce their dependence on Russian oil.”

She also pledged US help to meet the bloc’s energy needs, including working to increase global supplies of oil and gas. rtr/sas

EVs: Companies call for binding targets for charging infrastructure

In an open letter, major car manufacturers and companies from other sectors have called on the EU to set national targets for the charging infrastructure for electric cars. Under an EU Commission proposal, only zero-emission new cars would be allowed to be registered across the EU from 2035. “EU policymakers must also set binding national targets for seamless electric charging infrastructure to meet the growing demand for electric vehicles,” said Stuart Rowley, head of Ford Europe.

A binding and comprehensive expansion of the charging infrastructure in all EU member states is imperative, said Hildegard Müller, President of the German Association of the Automotive Industry (VDA), to the German news agency Deutsche Presse-Agentur. “The success of e-mobility stands and falls with the expansion of the charging infrastructure.”

The EU Commission’s proposal on zero-emission cars is expressly supported by the 27 signatory companies, which include Ford, Volvo, Uber, and Vattenfall. The European Parliament and EU governments are expected to decide on their positions on the Commission’s proposal in June. A final law could be passed in the fall, but before that, lawmakers must agree on a compromise. dpa

Circular economy: demand crucial

Policy measures promote purchasing decisions in line with the circular economy most effectively if they take into account factors influencing the individual behavior of consumers. Therefore, measures such as economic incentives (tax breaks or subsidies), avoiding greenwashing, or strengthening emotional attachment to products should be explored. This is what the European Environment Agency (EEA) proposes in its briefing “Enabling consumer choices for a circular economy” published yesterday.

According to the report, measures taken so far to strengthen the circular economy are primarily aimed at informing consumers about products, for example through eco-labels. However, it would be more effective to make products more economically attractive, for example. So far, manufacturers largely determine demand by defining the type of products put on the market and using targeted marketing strategies.

However, the behavior of consumers in purchasing, using, and disposing of products, which increases the demand for circularly compliant goods and services, plays a more decisive role. Therefore, policies should take into account factors that influence individual behavior: economic factors, the match between demand and supply, information, social factors, and individual consumer preferences and beliefs. leo

New law: London wants to partially undermine Brexit rules for Northern Ireland

The British government wants to partially undermine parts of the special Brexit rules for Northern Ireland with a new law. Foreign Secretary Liz Truss announced a bill in the House of Commons on Tuesday that is intended to dismantle the new trade barriers between Northern Ireland and Great Britain that have arisen since Brexit. In doing so, London is breaking away from the regulations for Northern Ireland negotiated with Brussels, which are enshrined in law in the Brexit agreement.

Goods between Great Britain and Northern Ireland have to be controlled at the Irish Sea since the EU exit, according to the so-called Northern Ireland Protocol, which is part of the Brexit deal. Supporters of close ties between Northern Ireland and the United Kingdom – also known as unionists – fear alienation and disconnection as a result.

So far, the Conservative government’s proposed legislation is merely an announcement; it has not yet been concretely launched. This should happen in the coming weeks, said Truss.

With this offensive, London is reacting to the displeasure of the mostly Protestant unionists. The largest unionist party, the DUP, is currently blocking the formation of a unity government with the Catholic nationalist party Sinn Féin, which emerged as the strongest force from last week’s parliamentary elections. There is a threat of a political blockade lasting months.

Truss assured Brussels that they were still willing to talk and would prefer a negotiated outcome to unilateral action. However, “we cannot afford to wait any longer,” the minister said. The action is in line with international law and will not cause any harm to the EU, she stressed.

The dispute between London and Brussels over special rules for Northern Ireland has been simmering for a long time. Truss and EU Commission Vice-President Maroš Šefčovič met regularly for talks – but without any significant success. dpa

Élisabeth Borne: the reasonable choice

Élisabeth Borne is France’s new prime minister.

When President Emmanuel Macron ran for his second term, he promised “renewal”. It was not to be a simple continuation of his first term. At the same time, he announced that he would continue his reforms, which were interrupted by the yellow vest protests and the pandemic. To mark this change, Macron sent a strong signal. He chose Élisabeth Borne, a woman, as prime minister. This is the second time since Edith Cresson 31 years ago that a woman has held the office, after two prime ministers who came from the conservative camp, now a politician from the left wing of Macron’s LREM movement.

Immediately after the presidential elections, the 61-year-old’s name circulated. But then rivals emerged from the right and from the left. Borne, however, is the ideal person for Macron, loyal and experienced in government. She is seen as a strong woman who can push through reforms. Borne comes from the Socialists, she worked under former Socialist Prime Minister Lionel Jospin and Culture Minister Jack Lang, who is still popular today. France’s media said Macron had found his “Swiss Army knife” for prime minister, saying it was “the reasonable choice”. With her, Macron is not taking any risks. The fact that a woman was given the post was welcomed everywhere.

Minister of transport, environment and labor

From the political opposition from the right and left there was immediate criticism of the selection. Macron continues his “social plunder”, “an entrepreneur in the service of the president’s project”, or “the social and environmental abuse continues”, they said. Conclusion of the critics: It’s business as usual. No sign of renewal, but continuity with a prime minister who held several ministerial posts under Macron. Borne’s confidants explained that she was by no means lacking in courage and that she was hands-on.

Born in Paris, Borne has stubbornly worked her way up. She lost her father at an early age and grew up in difficult circumstances under state care, yet attended elite engineering schools. Before joining Macron, she was president of the Paris transport authority RATP. She thus recommended herself in 2017 as minister of transport, later of the environment, and then labor. When she took office, she declared that she stood for “social justice” and “equal opportunities” and demanded to be called “Madame la Première ministre” (Madame Prime Minister).

Her main task is to give the president another majority in the parliamentary elections in June. In the coming days, the government team is to be changed for this purpose – and tactics are called for. Borne is expected to take the wind out of the sails of Jean-Luc Mélenchon, who has united th e left around him and would like to become prime minister himself. As a woman, Borne embodies renewal and also stands for a social economic policy. She should succeed in convincing left-wing, environmentally conscious voters to vote for Macron and at the same time not scare off right-wing voters.

Technocrat from the left

In recent years, Macron has always been criticized for being the “president of the rich”, for being too aloof and not social enough. There is a need to catch up here. Borne also has the trust of the unions, which regard her as a pragmatic technocrat, merciless but fair – a doer. The conservative daily Le Figaro calls her a “techno from the left”. At the same time, the president beats Mélenchon in the field of the environment because Borne used to be environment minister and knows the challenges in the field of climate change.

While Macron, as is traditional in France, concentrates on foreign issues and Europe, Borne is to become the strong woman for domestic policy. Previously, the president had hijacked almost everything. Prime Minister Jean Castex looked pale. Borne, on the other hand, is to move more into the spotlight – without, of course, overshadowing Macron. Her main task will be to convince the French that purchasing power is an important concern for the government. According to surveys, the issue is the biggest concern for the French, especially in times of inflation.

In France, it is considered likely that a large part of the government team will be replaced, as a sign that a new era has begun. If Macron wins a majority in the June 12-19 parliamentary elections, the way would also be further open for Borne. Several challenges await her. First of all, pension reform and raising the retirement age from 62 to 64 or 65, a project Macron had to postpone because of the pandemic.

Environmental issues decisive

When it comes to reforms, Borne has demonstrated her capacity for dialogue and tenacity. As transport minister, she pushed through the rail reform, and abolished privileges for railroad workers, especially retirement regulations. As labor minister, she was responsible for the labor market reforms that Macron successfully pushed through in his first term. Faced with the power of the street, which made many of her predecessors buckle, she showed herself undaunted. However, the controversial labor market reform tarnished her image as being rather left of center.

Another major point of criticism of her from the French point of view is her environmental policy. Under her as environment minister, the demands of the Citizens’ Climate Fund were established. In the end, however, many of the demands were dropped, and implementation was seen as half-hearted. The daily newspapers “Le Monde” and “Libération” judged that she had not succeeded in placing “the protection of the environment at the center of the government’s decisions”.

However, it lacked scope for implementation. When he was re-elected, Macron announced that environmental policy would become a major concern for which the prime minister would be responsible. Borne must prove that she can be convincing on environmental issues, also to beat Mélenchon out of the field with his environmental program. Tanja Kuchenbecker

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,

ETS 2, CBAM, LULUCF Regulation, and the ETS expansion in the aviation sector: These are just some of the items in the Fit for 55 package voted on yesterday by the EU Parliament’s Environment Committee (ENVI). ETS 2, in particular, had caused discord for months, but now, the MEPs proved their ability to compromise. Lukas Scheid and Timo Landenberger summarize the results and initial reactions.

The trilogue negotiations on the Corporate Sustainability Reporting Directive are expected to be completed by the end of the month. It is already clear that the CSRD will bring about major changes in reporting requirements. Due to new criteria, the number of companies that have to publish sustainability data will increase from about 11,000 to about 50,000. A huge challenge, especially for small and medium-sized companies, as Leonie Düngefeld analyzes.

For the spontaneous among you: The Europe.Table team, together with the Jacques Delors Centre, invites you to the Europe.Decisions digital conference today. In 150 minutes, 30 experts will provide insights into the most pressing issues of our time: How should Europe react to the Russian war of aggression in Ukraine? How can we cushion the energy price crisis? These and other questions are on the agenda this morning starting at 10 a.m. You can sign up here.

Your
Sarah Schaefer

Fit for 55 votes in ENVI: many clear, some narrow majorities in the end

In the end, it’s the result that counts. And for the introduction of a second emissions trading scheme for road transport and heating of buildings (ETS 2), an overwhelming majority of 61 voted in favor, 22 against and 5 abstentions in the EU Parliament’s Environment Committee (ENVI) on Tuesday. It is the part of the ETS revision that has caused rifts among negotiators, within political groups and member states for months.

The German government is likely to breathe a sigh of relief, as it looked for a while as if its own party colleagues in Brussels might cause this part of the climate protection package to fail. The German government is also counting on an EU-wide introduction due to its own fuel emissions trading law, which imposes a CO2 price on combustibles and fuels. However, the final compromise, which envisages the introduction of ETS 2 for commercial activities from 2025 and for private activities from 2029 at the earliest – provided that the Commission submits a new legislative proposal after a renewed review – is viewed with enormous criticism in Berlin.

And even the rapporteur mainly responsible for the ETS reform only reluctantly joined the compromise to exclude the private use of combustibles and fuels for heating and driving for the time being. This was due to opposition from the Social Democrats and Greens, as well as many liberals and part of his own group, according to Peter Liese (EPP, CDU). “A step-by-step approach is ultimately better than killing this important instrument outright, as the Social Democrats, Greens, and right-wingers had requested at the beginning of the process.”

Tiemo Wölken, climate policy spokesman for the Socialist Group in the EU Parliament, does not want to let the accusation stand and counters: “The original draft of the CDU rapporteur would have meant forcing social division in the EU in the middle of an energy crisis.

Greens celebrate, environmentalists are disappointed

Green shadow rapporteur Michael Bloss calls the compromise a “win for everyone”, while environmental organizations are rather disappointed by the division between private and commercial activities in ETS 2. This is a “missed opportunity, especially against the backdrop of the current crisis, which makes saving energy more necessary than ever,” comments Anne Gläser, CO2 pricing officer at Germanwatch. Private emissions from transport and building heat should also be given a CO2 price signal across the EU as soon as possible, Gläser continued – “in combination with a well-funded, solidarity-based climate social fund.”

Gläser takes a more positive view of the one-time cancellation of 205 million surplus CO2 allowances in ETS 1, which significantly increases the ambitions of the climate package. This creates the conditions for the emission reduction targets to be achieved.

However, this compromise threatens to fail in three weeks’ time when it is voted on in the plenary session of the EU Parliament. The narrow majority for this alternative compromise of only five votes in the ENVI of Social Democrats, Greens, Liberals, and Leftists could be overturned there.

Slight majority for CBAM

The situation is similar with the earlier phase-out of free allowances for industry and the parallel introduction of the CBAM. The Commission had planned to continue distributing free emission allowances until 2035 and to gradually introduce the CBAM by then. The alternative ENVI compromise, with a majority of only four votes, envisages ending free allocation as early as 2030. The EPP wanted 2034 as the end date, as did the compromise in the ITRE Industry Committee, where it was also supported by the Social Democrats. It is therefore likely that the ITRE line will ultimately prevail in the plenary session or that the negotiators of both committees will find a further compromise.

Critical voices are coming from the industry about the CBAM compromise. Exports from the sectors covered would not be sufficiently taken into account, so there would be a risk of losing jobs in export-oriented industries, comments Markus J. Beyrer, Director General of Business Europe. He fears for the competitiveness of European producers in non-EU markets. “Global emissions will increase as a result of the reduction in the market share of clean European products,” Beyrer said.

In the final vote in ENVI on the report as a whole, there was again a clear majority of 62 votes in favor, 20 against, with 5 abstentions.

LULUCF report also adopted

Another important element of the Fit for 55 package is the revision of the LULUCF (Land Use, Land Use Change and Forests) Regulation. For the first time, this will include binding targets for the capture and storage of CO2 from the atmosphere in addition to the reduction of greenhouse gas emissions. This is because the targeted 55 percent CO2 reduction by 2030 is already a net target that includes the natural sink capacity of the LULUCF sector. By the time climate neutrality is achieved in 2050 at the latest, there will be no alternative to this to compensate for remaining residual emissions. Technical options for storing greenhouse gases have so far been largely excluded from climate legislation.

With 44 votes in favor, 37 against, and 6 abstentions, ENVI MEPs adopted their negotiating position on Tuesday afternoon. In it, ENVI members follow the Commission’s proposal to make reductions in the LULUCF sector to 310 million metric tons of CO2 equivalent by 2030 mandatory for each member state. In addition, additional sinks of another 50 million metric tons of CO2 are to be created, albeit across the EU, in particular through so-called carbon farming in agriculture.

Target controversial

A contested compromise. In his report, LULUCF rapporteur Ville Niinistö (Greens/EFA) from Finland had called for an increase to 490 million tons. For Norbert Lins (CDU), LULUCF rapporteur in the associated Agriculture Committee, on the other hand, the agreement already represents a very ambitious target. After all, this must be in line with sustainable and active forest management. Especially since the storage capacity of natural sinks has been declining for years. In fact, sink capacity in the LULUCF sector declined from 322 to 249 million metric tons across the EU between 2013 and 2019. This trend must now be reversed.

Nevertheless, according to environmental organization WWF, even doubling the Commission’s proposal to 600 million tons is not only possible, but necessary. “The cheapest, most effective and easiest way to increase Europe’s carbon sinks is to protect and restore our forests, peatlands, and other natural ecosystems,” says Alex Mason, head of WWF’s EU climate policy department.

AFOLU column rejected

The creation of an integrated LULUCF and agricultural sector was rejected by the MEPs in the Environment Committee. The EU Commission had proposed combining the sectors in a new AFOLU (Agriculture, Forest and Other Land Use) pillar and aiming for climate neutrality within it by 2035. “This would result in agricultural emissions being offset by CO2 removals from forestry. This would reduce incentives for the agricultural sector to reduce its own emissions,” says Delara Burkhardt, LULUCF shadow rapporteur for the S&D Group.

There will also be new sub-targets for croplands, grasslands, and wetlands to strengthen the role of these ecosystems in removing CO2 from the atmosphere. Until now, the focus of natural sinks has been heavily on forests.

Effort sharing: Commission proposal largely confirmed

The Effort Sharing Regulation (ESR) covers those sectors that are not covered by either the ETS or the LULUCF Regulation. Around 60 percent of all EU emissions are subject to it. The ESR is designed to ensure that member states reduce emissions in all sectors through binding individual reduction targets. The Commission has proposed a total of 40 percent less CO2 emissions by 2030 (comparison year 2005). This target has now also been confirmed in the ENVI with a majority of 61 votes in favor, 20 against, and 6 abstentions.

For Germany, this means an emissions reduction target of 50 percent instead of 38 percent. Bulgaria, on the other hand, previously had no reduction target under the ESR but is to reduce emissions by 10 percent in the future. The individual targets are based mainly on GDP per capita. This is to take into account the different starting situations and capacities of individual member states when sharing the burden among them, says Christine Schneider (CDU), EPP Group rapporteur for the Agriculture Committee opinion. “This will ensure that all member states make their contribution to achieving the goals and that the agricultural sector can still meet the major challenge of food security in view of the war in Ukraine.”

Aviation from 2025 without free certificates

MEPs also voted in favor of extending the ETS in the aviation sector. So far, only flights within the European Economic Area are subject to a carbon price. With 66 votes in favor, 9 against, and 12 abstentions, the ENVI now voted in favor of including all flights that take off within the EEA. This could apply as early as April 30 next year. In addition, free emission allowances for airlines should no longer be allocated from 2025 – two years earlier than envisaged by the Commission. In 2024, the number of free allocations is already to be reduced by 50 percent.

Seventy-five percent of the revenue from the sale of aviation CO2 allowances is to be used to support innovation and new technologies to decarbonize the aviation sector.

The full House vote on all Fit for 55 files adopted yesterday in ENVI is scheduled for the June 6-9 session week. Lukas Scheid and Timo Landenberger

Sustainability reporting requirements pose challenges for SMEs

The trilogue negotiations on the CSRD are expected to be completed by the end of May. Many companies may then have to prepare a sustainability report for the first time next year. The Corporate Sustainability Reporting Directive (CSRD) will significantly change the reporting requirements. The new standards are embedded in the EU’s sustainable finance strategy and are intended to provide investors with more accurate data and thus guide financial flows. Small and medium-sized companies, in particular, are ill-prepared for this, according to industry sources.

The data that companies have been required to provide since 2017 under the Non-Financial Reporting Directive (NFRD) is insufficient for decisions by investors and other stakeholders and is difficult to compare. This is to change with the CSRD. The flow of information on sustainability is to become consistent and coherent along the entire financial value chain – and is to be given just as important a role as financial reporting.

In terms of content, the CSRD expands the reporting requirements in the areas of environment, society, and governance. Instead of referring to a single year, reports are to contain short-, medium- and long-term analyses. Uniform standards (European Sustainability Reporting Standards, ESRS) are being developed for this purpose.

50,000 companies committed

The number of companies required to publish sustainability data will increase from around 6,000 to around 50,000 as a result of new criteria: All European companies with 250 or more employees, irrespective of whether they are capital market-oriented, must report; as well as companies with a balance sheet total of more than €20 million or sales of more than €40 million. In addition, there are small and medium-sized companies with a capital market orientation. The Council wants to go even further and include non-European companies operating in the EU. In Germany, around 15,000 companies will be subject to reporting requirements.

This poses a huge challenge for small and medium-sized companies, in particular, says Frederike Krebs, sustainability officer at the German Mechanical Engineering Industry Association (VDMA). In the VDMA, 70 to 80 companies have been affected so far – the new criteria would mean 700 to 800. “Our companies naturally have an interest in showing that they produce sustainable technologies,” Krebs explains. “But so far, many don’t know how to implement this.”

The reporting requirements are closely linked to the EU taxonomy: Article 8 of the Taxonomy Regulation refers directly to the CSRD and specifies that companies covered by the CSRD must also provide information on their compliance with the environmental objectives of the taxonomy.

Time frame not yet fixed

Frederike Krebs sees mechanical engineering companies at a disadvantage here. Other industries are listed with concrete names and threshold values and therefore have a much easier time showing themselves to be taxonomy-compliant. The technical criteria of the taxonomy do not explicitly list mechanical engineering; it is merely part of a higher-level category that requires a life cycle analysis of the products and certification. In some cases, that’s not even possible, Krebs explains: “For one thing, we have customized, very individual products that can’t be compared.” A life cycle analysis often makes no sense. In addition, certification costs a lot of money. Many companies have therefore had to state that they are not taxonomy-compliant.

Companies will also be more affected because the burden of proof will be passed on to them via buyers and investors, says Krebs. Banks also have a reporting obligation and must indicate how sustainable their investments are. “We are then affected by that in the long term as well.”

The European Council and Parliament are currently still negotiating the timeframe for the reporting obligation. According to the draft, the first set of standards is to come into force on January 1, 2024, companies would then have to report for the 2023 financial year. Both the Council and the shadow rapporteurs had called for this to be delayed by a year. “Even for large companies that already have corresponding structures, the planned lead time is too short,” says Annette Selter, a tax and financial policy officer at the Federation of German Industries (BDI). In smaller companies, these structures first have to be created. Accounting has not yet included any activities that can be used to measure sustainability.

While one year might help companies that have never looked closely at sustainability reporting, says Mirjam Wolfrum of the Carbon Disclosure Project (CDP). “But one year also makes a big difference given the urgency of the climate and nature crisis,” she says. “We need the sustainability information sooner than later.”

Companies can reduce risks

The CDP has been carrying out similar reporting for 20 years. Once a year, the NGO asks for sustainability data from all listed companies via questionnaires – on a voluntary basis, but not without pressure: Whether and how companies disclose the data is perceived by investors. If companies report regularly and completely, they have many advantages as a result, says Wolfrum. Through the annual process, companies can better understand and structure internal processes, identify internal and external stakeholders, and include them in their corporate strategy, goal setting, and action planning.

“Companies need to show in their reporting that they understand what impact their corporate actions have on the climate and the environment – negative and positive.” Initially, it will mostly be negative impact, but they can then reduce it on that basis. In this way, they can also minimize risks: in supply chains, in relation to their investors and to their market value.

The companies that report to CDP are all very well positioned to meet the reporting requirements, Wolfrum says. In addition, there are now many offerings and tools available to help them with data collection and reporting. “Time is of the essence, so a solution-oriented approach is important now,” she says. “You shouldn’t be thinking about what might be too much or too complicated at the first step.” CDP data show: Only one in 20 publicly traded companies has robust targets to reduce emissions, water use, and deforestation, and about 50 percent of reported emissions are not covered by science-based targets that are consistent with the 1.5-degree goal. “This shows how important the European initiative is,” Wolfrum says.

The trilogue negotiations are expected to be concluded at the end of May, after which the respective votes will take several more months. The European Financial Reporting Advisory Group (EFRAG), which drafts the EU Sustainability Reporting Standards (ESRS), recently published an initial set of standards for public consultation by August 8, 2022. It will submit the draft to the commission in November. Leonie Düngefeld

Finnish gas supplier goes to arbitration court

Finnish energy supplier Gasum is suing Gazprom before an arbitration court. Tuesday, the state-owned company said it would not comply with the Russian group’s disputed new payment instructions. “In this situation, Gasum had no other option but to take the contract to arbitration,” CEO Mika Wiljanen said, according to a statement. Gasum’s announcement raises risks Gazprom cutting off supplies soon, ICIS analyst Tom Marzec-Manser commented on Twitter. Replacements would have to come from other EU countries.

On Monday, the Russian utility Inter RAO had already suspended electricity deliveries to Finland because the company had allegedly not been paid. Due to sanctions by the EU and Russian instructions to exchange currencies, there has been uncertainty about supply embargoes for weeks. Russia had already stopped gas sales to Poland and Bulgaria; both states had rejected Russia’s new requirements.

Engie and Uniper continue to pay in euros

The EU Commission has still not been able to provide clarity on sanctions-compliant payments. In an updated handout on Friday, it merely reiterated its stance that Western importers should declare that their obligations were fulfilled with payment in euros or dollars. Moscow, however, had announced that in the future, deliveries would be paid for only after they had been exchanged for rubles.

Meanwhile, economist Benjamin Moll sees the deviation of countries like Poland from the Commission’s line as evidence that the Commission is trying to circumvent its own sanctions.

Other European utilities, however, seem to have found solutions: France’s Engie said it had reached an agreement with Gazprom. An agreement has been reached that also does not violate sanctions imposed by the West, Engie CEO Catherine MacGregor said Tuesday. “We pay in euros, and we are not subject to any currency risk.” Dusseldorf-based utility Uniper also continues to pay for its gas supplies in euros. “We receive the bill in euros. And we pay in euros to a Gazprom Bank account in accordance with the new payment mechanism,” the company said. ber/rtr

Network agency presents criteria for gas emergency shutdowns

The president of the Federal Network Agency has presented criteria for a shutdown in the event of a gas emergency, which large industrial consumers must be prepared for. These include the urgency of the measure and the size of the company, said authority head Klaus Müller in an interview with the “Frankfurter Allgemeine Zeitung” (Wednesday edition) published in advance on Tuesday.

Another aspect is the lead times: Some companies need more time to shut down in an orderly fashion. Also, the economic and business damage. “In the ceramics industry, for example, production equipment freezes and breaks down when the gas is missing. We also take into account the cost and time to restart.”

Against the backdrop of the war in Ukraine, the German Federal Network Agency is preparing for the possibility that Germany will not have enough gas after Russia stops deliveries. While households would continue to be supplied, the focus would be on the economy. An important criterion here is the significance of the supply for the general public, for example, with food or medicines, Müller told the newspaper. Unfortunately, it is not possible to put these criteria in a clear order. “It is a matter of finding the fastest possible solution in the specific situation with the least possible damage. It won’t be easy.”

Gas-fired power plants should be shut down in the event of a gas emergency unless they served grid stability, Müller said in the interview. “I expect that power plant operators can and should use a number of coal-fired power plants again to generate electricity with them instead of gas. That hurts the climate change activist in me, because the greenhouse gas balance worsens.” rtr

Gas storage trilogue goes into extension

After 16 hours, the first trilogue on the new gas storage regulation ended on Tuesday morning without agreement. A conclusion of the negotiations between Parliament, Council and Commission is now expected for Thursday. The regulation is intended to introduce binding minimum filling levels for gas storage facilities throughout the EU to prepare for possible restrictions on Russian gas supplies before winter.

In its draft from the end of March, the Commission proposed a binding storage target of 80 percent this year and 90 percent in subsequent years. This is to be achieved by November 1 or, in exceptional cases, by December 1. For additional months, a non-binding fill path is set for each state that has gas storage. There is a tolerance of two percentage points for interim levels. If they are exceeded, further measures are to follow.

The Parliament’s negotiating group would have liked to increase the storage target for the current year to 90 percent as well. According to information from parliamentary circles, the MEPs and the Council now jointly represent a target of 85 percent. Accordingly, the trilogue negotiators are in agreement that the tolerance threshold in the filling path should be raised to five percent.

Regulators are also to be given more time to certify storage operators. This affects operators of large reservoirs who have allowed their facilities to run empty below a critical mark in the past two winters. The authorities are now to submit their preliminary certification decision after 200 days instead of 100. The new rule is aimed primarily at Gazprom‘s European subsidiaries, but most of them are now already under trusteeship by the Federal Network Agency. The regulator’s administration is limited until September 30. ber

Yellen: EU could combine tariffs on Russian oil with embargo

The European Union could combine import tariffs on Russian oil with the phased oil embargo it is trying to put in place to shrink Russia’s energy revenues, US Treasury Secretary Janet Yellen said on Tuesday.

The tariff concept will be presented at a G7 finance leaders meeting this week as an economically less costly way to siphon away oil revenues from Moscow while producing faster results, US Treasury officials told reporters.

The tariff plan would aim to keep more Russian oil in the global market, limiting price spikes spurred by a full embargo, while limiting the amount of money Russia can earn from exports, the officials said.

Tariff monies could be put into a recovery and reconstruction fund for Ukraine, satisfying a desire to make Moscow pay at least part of a massive rebuilding effort.

Yellen said she discussed a wide range of options for reducing European dependence on Russian energy with European Commission President Ursula von der Leyen. She added that she was supportive of any plan the 27-member EU could agree on, but “it is critically important that they reduce their dependence on Russian oil.”

She also pledged US help to meet the bloc’s energy needs, including working to increase global supplies of oil and gas. rtr/sas

EVs: Companies call for binding targets for charging infrastructure

In an open letter, major car manufacturers and companies from other sectors have called on the EU to set national targets for the charging infrastructure for electric cars. Under an EU Commission proposal, only zero-emission new cars would be allowed to be registered across the EU from 2035. “EU policymakers must also set binding national targets for seamless electric charging infrastructure to meet the growing demand for electric vehicles,” said Stuart Rowley, head of Ford Europe.

A binding and comprehensive expansion of the charging infrastructure in all EU member states is imperative, said Hildegard Müller, President of the German Association of the Automotive Industry (VDA), to the German news agency Deutsche Presse-Agentur. “The success of e-mobility stands and falls with the expansion of the charging infrastructure.”

The EU Commission’s proposal on zero-emission cars is expressly supported by the 27 signatory companies, which include Ford, Volvo, Uber, and Vattenfall. The European Parliament and EU governments are expected to decide on their positions on the Commission’s proposal in June. A final law could be passed in the fall, but before that, lawmakers must agree on a compromise. dpa

Circular economy: demand crucial

Policy measures promote purchasing decisions in line with the circular economy most effectively if they take into account factors influencing the individual behavior of consumers. Therefore, measures such as economic incentives (tax breaks or subsidies), avoiding greenwashing, or strengthening emotional attachment to products should be explored. This is what the European Environment Agency (EEA) proposes in its briefing “Enabling consumer choices for a circular economy” published yesterday.

According to the report, measures taken so far to strengthen the circular economy are primarily aimed at informing consumers about products, for example through eco-labels. However, it would be more effective to make products more economically attractive, for example. So far, manufacturers largely determine demand by defining the type of products put on the market and using targeted marketing strategies.

However, the behavior of consumers in purchasing, using, and disposing of products, which increases the demand for circularly compliant goods and services, plays a more decisive role. Therefore, policies should take into account factors that influence individual behavior: economic factors, the match between demand and supply, information, social factors, and individual consumer preferences and beliefs. leo

New law: London wants to partially undermine Brexit rules for Northern Ireland

The British government wants to partially undermine parts of the special Brexit rules for Northern Ireland with a new law. Foreign Secretary Liz Truss announced a bill in the House of Commons on Tuesday that is intended to dismantle the new trade barriers between Northern Ireland and Great Britain that have arisen since Brexit. In doing so, London is breaking away from the regulations for Northern Ireland negotiated with Brussels, which are enshrined in law in the Brexit agreement.

Goods between Great Britain and Northern Ireland have to be controlled at the Irish Sea since the EU exit, according to the so-called Northern Ireland Protocol, which is part of the Brexit deal. Supporters of close ties between Northern Ireland and the United Kingdom – also known as unionists – fear alienation and disconnection as a result.

So far, the Conservative government’s proposed legislation is merely an announcement; it has not yet been concretely launched. This should happen in the coming weeks, said Truss.

With this offensive, London is reacting to the displeasure of the mostly Protestant unionists. The largest unionist party, the DUP, is currently blocking the formation of a unity government with the Catholic nationalist party Sinn Féin, which emerged as the strongest force from last week’s parliamentary elections. There is a threat of a political blockade lasting months.

Truss assured Brussels that they were still willing to talk and would prefer a negotiated outcome to unilateral action. However, “we cannot afford to wait any longer,” the minister said. The action is in line with international law and will not cause any harm to the EU, she stressed.

The dispute between London and Brussels over special rules for Northern Ireland has been simmering for a long time. Truss and EU Commission Vice-President Maroš Šefčovič met regularly for talks – but without any significant success. dpa

Élisabeth Borne: the reasonable choice

When President Emmanuel Macron ran for his second term, he promised “renewal”. It was not to be a simple continuation of his first term. At the same time, he announced that he would continue his reforms, which were interrupted by the yellow vest protests and the pandemic. To mark this change, Macron sent a strong signal. He chose Élisabeth Borne, a woman, as prime minister. This is the second time since Edith Cresson 31 years ago that a woman has held the office, after two prime ministers who came from the conservative camp, now a politician from the left wing of Macron’s LREM movement.

Immediately after the presidential elections, the 61-year-old’s name circulated. But then rivals emerged from the right and from the left. Borne, however, is the ideal person for Macron, loyal and experienced in government. She is seen as a strong woman who can push through reforms. Borne comes from the Socialists, she worked under former Socialist Prime Minister Lionel Jospin and Culture Minister Jack Lang, who is still popular today. France’s media said Macron had found his “Swiss Army knife” for prime minister, saying it was “the reasonable choice”. With her, Macron is not taking any risks. The fact that a woman was given the post was welcomed everywhere.

Minister of transport, environment and labor

From the political opposition from the right and left there was immediate criticism of the selection. Macron continues his “social plunder”, “an entrepreneur in the service of the president’s project”, or “the social and environmental abuse continues”, they said. Conclusion of the critics: It’s business as usual. No sign of renewal, but continuity with a prime minister who held several ministerial posts under Macron. Borne’s confidants explained that she was by no means lacking in courage and that she was hands-on.

Born in Paris, Borne has stubbornly worked her way up. She lost her father at an early age and grew up in difficult circumstances under state care, yet attended elite engineering schools. Before joining Macron, she was president of the Paris transport authority RATP. She thus recommended herself in 2017 as minister of transport, later of the environment, and then labor. When she took office, she declared that she stood for “social justice” and “equal opportunities” and demanded to be called “Madame la Première ministre” (Madame Prime Minister).

Her main task is to give the president another majority in the parliamentary elections in June. In the coming days, the government team is to be changed for this purpose – and tactics are called for. Borne is expected to take the wind out of the sails of Jean-Luc Mélenchon, who has united th e left around him and would like to become prime minister himself. As a woman, Borne embodies renewal and also stands for a social economic policy. She should succeed in convincing left-wing, environmentally conscious voters to vote for Macron and at the same time not scare off right-wing voters.

Technocrat from the left

In recent years, Macron has always been criticized for being the “president of the rich”, for being too aloof and not social enough. There is a need to catch up here. Borne also has the trust of the unions, which regard her as a pragmatic technocrat, merciless but fair – a doer. The conservative daily Le Figaro calls her a “techno from the left”. At the same time, the president beats Mélenchon in the field of the environment because Borne used to be environment minister and knows the challenges in the field of climate change.

While Macron, as is traditional in France, concentrates on foreign issues and Europe, Borne is to become the strong woman for domestic policy. Previously, the president had hijacked almost everything. Prime Minister Jean Castex looked pale. Borne, on the other hand, is to move more into the spotlight – without, of course, overshadowing Macron. Her main task will be to convince the French that purchasing power is an important concern for the government. According to surveys, the issue is the biggest concern for the French, especially in times of inflation.

In France, it is considered likely that a large part of the government team will be replaced, as a sign that a new era has begun. If Macron wins a majority in the June 12-19 parliamentary elections, the way would also be further open for Borne. Several challenges await her. First of all, pension reform and raising the retirement age from 62 to 64 or 65, a project Macron had to postpone because of the pandemic.

Environmental issues decisive

When it comes to reforms, Borne has demonstrated her capacity for dialogue and tenacity. As transport minister, she pushed through the rail reform, and abolished privileges for railroad workers, especially retirement regulations. As labor minister, she was responsible for the labor market reforms that Macron successfully pushed through in his first term. Faced with the power of the street, which made many of her predecessors buckle, she showed herself undaunted. However, the controversial labor market reform tarnished her image as being rather left of center.

Another major point of criticism of her from the French point of view is her environmental policy. Under her as environment minister, the demands of the Citizens’ Climate Fund were established. In the end, however, many of the demands were dropped, and implementation was seen as half-hearted. The daily newspapers “Le Monde” and “Libération” judged that she had not succeeded in placing “the protection of the environment at the center of the government’s decisions”.

However, it lacked scope for implementation. When he was re-elected, Macron announced that environmental policy would become a major concern for which the prime minister would be responsible. Borne must prove that she can be convincing on environmental issues, also to beat Mélenchon out of the field with his environmental program. Tanja Kuchenbecker