Gas reserves + Taxonomy opponents in par • Table.Briefings

Dear reader,

“Putting sensitive gas infrastructure in Germany in the hands of Gazprom was not a smart policy,” says Reinhard Bütikofer, foreign policy coordinator of the Greens/EFA group in the European Parliament, referring to skyrocketing energy prices and historically empty gas storage facilities. Germany and the EU want to position themselves better in the future. Timo Landenberger analyzes to what extent strategic gas reserves or minimum storage requirements can be a solution.

It comes as no great surprise that the Greens in the EU Parliament are opposed to the Commission’s draft taxonomy. However, in the meantime, there is resistance across the parliamentary groups. We have already reported on the letter from some EPP members to Commission President Ursula von der Leyen, in which they express “strong reservations” about the draft. There is also strong dissatisfaction among the S&D Social Democrats, and clear criticism is also coming from the Renew Group. Lukas Scheid summarizes the mood in parliament.

The German government wants to push ahead rapidly with the expansion of renewable energies, and a 2-percent target for wind power has been set for the federal states. However, wind turbines can be a danger to animals. Unclear requirements for the protection of red kites and osprey, for example, make the expansion of wind energy more difficult. In the coalition agreement, the CDU/CSU has therefore agreed to work for clarification and legal certainty – also at the EU level. However, according to parliamentarians, changes in EU nature conservation law have little chance of success for the time being, reports Manuel Berkel. However, there is room to maneuver.

Your
Sarah Schaefer

Energy crisis: high prices, empty gas storage facilities and the role of Gazprom

By

Timo Landenberger

The liberalized European gas market is undergoing an inventory check: For weeks, consumers and industry alike have been suffering from prices at record levels, with no end in sight. Several gas discounters have already gone bankrupt because they could no longer afford the price difference between the spot market and their long-term contracts. Gas storage facilities are at historically low levels, and the icy atmosphere between the West and its most important energy supplier, Russia, is an additional cause for concern.

The European Union covers around a third of its demand with Russian Gas, Germany even about half. Part of this is secured on a permanent basis via long-term contracts, while the rest is purchased on a short-term basis via the spot market in order to remain flexible. However, these additional volumes have not materialized since last fall.

It is true that the current crisis already began in the summer. The economic recovery after the COVID-related cuts drove up global demand for fossil fuels and deliveries to Europe were lower. Prices rose.

Still, according to a report by the Oxford Institute for Energy Studies, the real shock to the market came in the fourth quarter of the year, when gas flows from Russia via the northern Yamal-Europe route dropped dramatically to less than a third of normal levels.

Gazprom: between geopolitics and market economy

Fatih Birol, the head of the International Energy Agency (IEA), also blames Russia for Europe’s energy crisis. He accused the country of cutting gas supplies to Europe at a time of “heightened geopolitical tensions.” This, he said, indicates that Moscow provoked an energy crisis for political purposes.

“It can’t be that after three quarters of a year of gas crisis, Russia is not able to deliver more, if they wanted to,” says Christian Egenhofer, energy expert at the Centre for European Policy Studies in Brussels (CEPS). The only credible justification, he says, is geopolitical motivation.

Jacopo Pepe of the Stiftung Wissenschaft und Politik (German Institute for International and Security Affairs), on the other hand, sees only a slight connection here. The connection is obvious. But the Russian energy company Gazprom is not only an instrument of the Kremlin. “It is also a company that operates in an environment determined by the criteria of a market economy.”

Gazprom cleverly used certain mechanisms that the Europeans had introduced themselves by liberalizing the gas market. “That went well for a while because spot market prices were lower than long-term contracts, and that’s when Gazprom had to adjust the contracts. Now the tide is turning, and of course the corporation has an interest in keeping prices high.”

Reinhard Buetikofer, foreign policy coordinator of the Greens/EFA Group in the European Parliament, sees things differently: “Gazprom can dress itself up however it wants. But the company remains a geopolitical instrument in the hands of the Kremlin. Putting sensitive gas infrastructure in Germany in Gazprom’s hands was not a smart policy.”

Storage levels at historic low

With this, the MEP also alludes to gas storage. For example, among several others, the largest gas storage facility in Europe belongs to the Gazprom subsidiary Astora. The huge underground facility is located in Rehen in Lower Saxony, comprises almost 20 percent of Germany’s total gas storage capacity, and has been practically empty since last fall.

However, there may also be market reasons for this. After all, the other 46 storage facilities in Germany are also currently only filled to an average of around 40 percent and are therefore at a historic low. Even before the start of winter, the fill level was only 76 percent, compared to 95 percent the year before.

As a result of the liberalization of the gas market, storage facilities have been largely politically deregulated. And there was no incentive for private-sector operators to fill the storage facilities because of the high prices in the summer. Nevertheless, gas supplies in Germany are secure, emphasizes a spokeswoman for the German Federal Ministry of Economic Affairs and Climate Protection.

Germany has the highest storage capacity in the EU, followed by Italy and the Netherlands. “The low gas storage levels must be closely monitored,” says Nicola Beer (FDP), Vice President of the EU Parliament. The need for action cannot be ruled out, she said, because natural gas has a key role to play as transitional energy.

Minimum storage requirements

In the short term, the simplest solution is to introduce minimum storage obligations for member states, says Christian Egenhofer. This could be solved via state gas reserves, regulatory requirements for companies, or by the private sector, for example by passing on the costs of storage to the gas bill.

On average, storage tanks are filled to about 85 percent before winter. “90 percent would certainly be better,” the CEPS expert said. “So four to five percent compared to the average that would be covered by public money or requirements. We’re not talking about gigantic sums here. Prices would still be high, but it would somewhat mitigate the situation.”

Jacopo Pepe also considers specifications for the minimum capacity that operators must maintain to be a possible interim solution. However, private gas storage facilities are not intended as strategic reserves. Pepe, therefore, advocates the introduction of an additional state reserve.

“Minimum storage volumes should be available and thus national, state gas reserves should also be addressed,” says Nina Scheer, energy policy spokeswoman for the SPD parliamentary group. This would also take into account the character of energy supply as part of the provision of public services.

The German government had already announced its intention to evaluate the options regarding minimum storage volumes and strategic reserves. At the most recent meeting of EU energy ministers, the participants also spoke out in favor of “optimized use of European storage capacities” and “more mutual solidarity”.

The European Commission also wants to do justice to this with its gas market package, which was presented in December. The aim is to make gas storage more efficient and better coordinate storage within the EU, according to a Commission spokesman. The proposals also allow member states to build up strategic gas reserves by buying gas jointly with other member states who wish to do so.

Taxonomy: resistance grows in the EU parliament

By

Lukas Knigge

The fact that the Greens in the European Parliament reject the inclusion of natural gas and nuclear power in the taxonomy is hardly surprising. There has long been agreement that neither gas nor nuclear power deserves the label of a sustainable energy source. In the meantime, however, criticism is growing louder in other parliamentary groups as well. Many MEPs are demanding that the EU Commission make changes to its proposal. Even a majority against the legislation is no longer considered out of the question.

Among Social Democrats, there are country-specific views, Joachim Schuster, economic and financial policy spokesman for the SPD MEPs told Europe.Table. But the dissatisfaction is widespread: “The main concern is that this political classification, which is not based on scientific evidence, jeopardizes the very essence of the taxonomy.” The taxonomy would thus no longer provide an orientation function on the capital markets, fears Schuster.

Therefore, the S&D Group proposes that nuclear power and gas be listed in a third category under strict criteria and as transitional technologies. However, this would not be classified as sustainable. “If the EU Commission does not follow this, a large part of the S&D will oppose the Commission’s proposal,” says Schuster. He states that he hears similar things from the ranks of the liberal Renew Group and the Christian-conservative EPP.

Critical voices also from EPP and Renew

And indeed: Peter Liese, environmental spokesman for the EPP, recently told rbb Inforadio that he was more certain every day that the proposal would definitely not be adopted in its current from. It is also possible that it will be rejected entirely. Liese said there had been many discussions with representatives of all parliamentary groups, in which a “large majority” had said they were very critical of it.

The problem is that not only modern nuclear power plants are taxonomy compliant, but also retrofitted old reactors. Although there are specifications for retrofitting, he does not believe that these power plants can be made safe at all, Liese said. In addition, he criticized the fact that building permits for new nuclear power plants could still be issued in 2045 and that the disposal of nuclear waste would not have to be regulated until 2050, even though nuclear energy is only supposed to be a transitional technology according to the Commission.

Some EPP members had expressed “strong concerns” about the draft in a letter to Commission President Ursula von der Leyen last week. Now, according to Peter Liese, they have also called for more time to examine the Commission’s draft. He believes it would be best to scrap the delegated act to include gas and nuclear energy in the taxonomy regulation altogether.

The Renew Group has also voiced its opposition to the Commission’s draft. However, they are more directed against the legislative process. According to EP Vice-President Nicola Beer (FDP), it would have been better to initiate a proper legislative procedure instead of a delegated act, thus allowing amendments to be introduced. “I would have some amendments, but this way we can only accept or reject the text in its entirety, which does not do justice to the political complexity,” Beer said. Now we face a dilemma: “if we reject the delegated act, nothing is gained. We will then lack the necessary frame of reference and will be empty-handed when it comes to the necessary green transformation.”

Commission rules out fundamental changes

It is doubtful that the Commission will adjust its draft in response to the criticism, some of which has been strong, from member states, other EU bodies, and the scientific community (Europe.Table reported). The responsible financial market commissioner, Mairead McGuinness, has meanwhile even ruled out a fundamental revision of the EU classifications for sustainable energy. The proposal could be improved in certain places and thus some objections could be taken into account, McGuinness told the “FAZ”. “But we actually have limited room to maneuver.”

The Commission’s plans have met with a mixed response from investors. In a survey by Reuters of 16 funds collectively managing around six trillion euros in assets, five stated that gas and nuclear power were not sustainable energy sources. Four rated only one of the two energy sources as sustainable. Five, in turn, considered both gas and nuclear power “green” under certain conditions. In Germany, the fund sector had also recently expressed criticism. In collaboration with Timo Landenberger and rtr

Wind power expansion: EU guidelines could help

Some of the biggest obstacles to wind energy are unclear requirements for the protection of red kites and osprey. The danger of wind turbines is that the birds could collide with the rotor blades in flight. According to the Birds Directive, European bird species may only be killed under narrowly defined exceptions. However, the exact interpretation has puzzled local authorities and courts for years.

One point of contention: May single individuals of a species be killed as long as the preservation of entire populations is not endangered? The traffic light coalition agreement promised a remedy: “We will work for a stronger focus on population protection, clarification of the relationship between species and climate protection, and more standardization and legal certainty, including in Union law.”

At the EU level, MEPs do not believe there will be any changes, at least until 2024. The Juncker Commission had subjected nature conservation law to a fitness check as recently as 2016. “The Commission concluded that the directives work and do not need any changes. No changes were announced in the Green Deal either,” SPD parliamentarian Delara Burkhardt told Europe.Table. “Reform proposals of the Birds and Habitats Directives by the Commission are thus not foreseeable at least until the end of the current European legislative period.”

Green Party MEP Jutta Paulus also refers to the fitness check. “Our European nature conservation law is a milestone of species protection that must not be watered down,” says the parliamentarian. A revision of the directives on flora-fauna habitats (FFH) and bird protection is also not at all necessary to accelerate the expansion of renewable energies. “The protection approach of the Habitats and Birds Directives allows for exceptions under strict criteria to be interpreted by the ECJ. The Commission could support the Member States by providing guidelines for good practice, in particular for the nature-compatible expansion of wind power.”

Exemptions of the birds directive for wind power

So far, the Berlin coalition leaders have not explicitly announced their commitment to European guidelines. The Commission wanted to develop guidelines on nature conservation law by 2019, but a guideline on the Habitats Directive was not published until October 2021. However, the legal act on bird protection is clearly more important for wind farms.

The German government is counting on national harmonization with the directive. It is only against this background that a new attempt at legal clarification can be explained. The coalition agreement states that green power plants serve public safety – precisely this is listed as a reason for the exemption in Article 9 of the Birds Directive. However, the connection between public safety and the security of supply has not yet been decided under European law.

“There are currently differing opinions among legal experts whether the security of power supply is part of public safety and whether wind turbines fall under this regulation,” explains Silke Christiansen, head of legal at the Competence Center for Nature Conservation and Energy Transition (KNE). “This is precisely a question that German courts could submit to the ECJ in preliminary ruling proceedings.”

Only the ECJ can therefore ultimately create further legal certainty. Lawyers had recently placed high expectations in a case concerning the logging of a Swedish forest. In its decision of March 4, 2021 (C-473/19), however, the Court of Justice relied primarily on the provisions for FFH areas; the hoped-for interpretation of the Birds Directive failed to materialize for the time being.

There are two different approaches for clarifications in national law. The environmental ministers of the federal states had attempted to concretize the significance approach developed by the Federal Administrative Court, which finally found its way into §44 of the Federal Nature Conservation Act. According to this, construction projects are compatible with species protection if the risk of killing is not significantly increased. However, authorities and courts repeatedly dispute where the threshold lies. At the end of 2020, the Conference of Environment Ministers adopted a significance framework. In the opinion of the energy associations, however, this does not bring any decisive relief for the expansion of wind energy.

Standardization in bird protection has limits

The second path is pursued by a proposal of the Climate Neutrality Foundation from May 2021, which aims to concretize the exceptions regulated in Article 9 of the directive and §45 of the Federal Nature Conservation Act. In the Netherlands, for example, many wind turbines are approved via exemptions.

The foundation’s experts used probabilistic methods to estimate blanket protection distances around nests for a fixed catalog of bird species so as not to endanger the preservation of populations. In certain radii, wind turbines would not be approved at all or only with certain conditions, such as anti-collision systems that throttle rotors when a bird approaches. Elaborate case-by-case reviews, which are still the rule today, could be largely eliminated, according to the foundation. Only for frequent flyers – white-tailed eagles, osprey, red kites and white storks – would flight corridors to feeding areas have to be analyzed, if necessary.

Environmental lawyer Wolfgang Koeck also sees limits to standardization in bird protection: “For atypical cases, a uniform federal regulation must continue to allow for case-by-case assessments. Otherwise, courts could overturn the regulation,” says the member of the German Advisory Council on the Environment (SRU).

On February 4th, the SRU plans to publish a statement on the expansion of wind energy. In an impulse paper from last October, the Council had still been ambiguous. On the one hand, it wants to maintain strict individual protection instead of the population approach. On the other hand, the scientists advocated species programs in connection with exemptions, which also found their way into the coalition agreement. Manuel Berkel

Commission presents declaration on digital rights and principles

“What is illegal offline should also be illegal online” – that’s the European Commission’s credo for the two key platform laws Digital Services Act and Digital Markets Act. It also forms the basis for the declaration on digital rights and principles that the authority presented on Wednesday: “The declaration makes it clear: The rights we have offline, we also have online,” said Executive Vice President Margrethe Vestager. The project is part of the Communication on the “Digital Decade” presented by the Commission in March 2021 to shape the digital transformation in the EU by 2030.

The declaration essentially provides for these six digital rights and principles:

People at the center of the digital transformation: Digital technologies should protect human rights, strengthen democracy and ensure that all digital players act responsibly. The EU should also advocate this vision vis-à-vis international partners.
Solidarity and inclusion: Technology should connect people, rather than divide them. Everyone should have access to affordable and fast internet, digital skills, digital public services, and fair working conditions.
Freedom of choice: People should be able to decide for themselves which online services they use through objective, transparent and reliable information and be safe from illegal and harmful content. The use of artificial intelligence should be transparent and algorithmic systems should be based on appropriate data sets to avoid discrimination.
Participation in the digital public sphere: Fundamental rights and in particular freedom of expression and freedom of information should be upheld, and very large online platforms should support free democratic debate in the online environment.
Safety, security and empowerment: The digital space should be safe for everyone, including children and the elderly. Digital identity should be protected and everyone should have control over how their personal data is used and shared in the online environment.
Sustainability: Digital devices should be designed, produced, used, disposed of and recycled in a way that minimizes their negative environmental and social impact. Users should have access to information about the environmental impact and energy consumption of their devices.

Declaration is not intended to create new rights and principles

To specifically address the needs of Europeans, the Commission included the results of a special Eurobarometer survey conducted in December 2021 in the declaration. “This is a gold mine of interesting findings,” Vestager said. She felt particularly encouraged by this fact: According to the survey, almost 40 percent of EU citizens are not aware that rights such as freedom of expression, privacy, or non-discrimination must also be respected online.

Vestager expressly emphasized that the Commission does not want to create new rights and principles with the declaration. Fundamental rights already apply online today and are being implemented through the General Data Protection Regulation and the Digital Services Act and Digital Markets Act currently under negotiation.

Instead, the declaration is intended to define the existing rights and principles to ensure that they are respected. It should serve as a guideline for politicians, companies, and users alike.

MEP Angelika Niebler (CSU/EPP) sees the declaration as a helpful point of reference for citizens concerning digitization in Europe. However, she warns against using the declaration to push the real obstacles to digitization into the background: “we simply have to speed up the expansion of the digital infrastructure, especially in the areas of cloud computing and 5G. Without the appropriate infrastructure, citizens simply won’t be able to use their digital rights,” Niebler says.

Commission to assess progress in annual report

The European Consumer Organisation (BEUC) calls for the declaration to have a concrete impact on legislation: “The EU institutions must now ensure that the principles are a guiding light for all regulatory initiatives, including those already under negotiation, such as the Digital Services Act or the AI Regulation,” says David Martin, BEUC team leader for digital policy.

“Just because it is a political declaration does not make it toothless,” Vestager stressed. The Commission will also closely monitor how the member states implement the declaration: In an annual report “on the state of the Digital Decade,” the Commission wants to assess progress and gaps and make recommendations. Nevertheless, the declaration is not legally binding.

The European Parliament and the Council are expected to give their green light for the text by the summer in order for it to be officially adopted. The Commission was initially unable to answer Europe.Table’s question about the specific level at which the co-legislators will discuss the declaration. koj

Competition proceedings: Intel wins against Commission

The European Court of Justice has declared invalid a fine of €1.06 billion imposed by the EU Commission in May 2009 for competition violations against chip manufacturer Intel. The judges of the lower two chambers of the European court found that the Commission had not sufficiently proven that Intel had violated European competition law with its rebate practice for computer manufacturers.

This marks another chapter in one of the most protracted competition proceedings in history: In July 2007, the EU Commission opened proceedings against chip manufacturer Intel. The suspicion: an abuse of its market dominance in the segment for x86 processors, which have been found in desktop PCs, notebooks, and servers for decades and continue to form the basic architecture for current PC processors.

Starting in 2002, Intel had indisputably granted loyalty rebates to PC manufacturers Dell, Lenovo, HP, and NEC, which brought the majority of their products to market with CPUs from this one manufacturer. Intel’s goal, the commission found at the time: to drive competitors out of the market, especially Advanced Micro Devices (AMD). Intel was also accused of entering into an exclusive agreement with the Ingolstadt-based Media-Saturn-Holding (Media Markt and Saturn) to drive competitors out of the market.

An initial ruling by the EU Court of Justice in 2014, which dismissed Intel’s action against the Commission’s decision, was overturned by the European Court of Justice (ECJ) on appeal in 2017. The ECJ criticized the fact that the EU Commission, in its function as competition supervisor, had to address substantive objections raised by the company concerned and include them in its own decision. The investigation of the facts was therefore incorrect and so was the assessment of the penalty.

Intel process of great importance for further cases

This line of the ECJ was now also followed by the First Chamber in its new decision. It is true that “a system of discounts set up by an undertaking holding a dominant position on the market may be classified as a restriction of competition if, by its nature, it may be presumed to have restrictive effects on competition.”

However, upon request, the Commission is obliged to examine whether the objectionable discount system is actually suitable for forcing competitors out of the market, according to the judges in Luxembourg. For this reason, among others, the “as-efficient-competitor test” (AEC) was incorrectly applied here. However, the European Court did not completely acquit Intel of all charges. However, the judges saw themselves unable to determine what level of penalty would have been justified. Therefore, the judges annulled the 1.06 billion fine in its entirety, while one-third of the costs of the proceedings must be borne by Intel.

Although the Intel case dates back 15 years, the effects of the proceedings could hardly be more topical. The EU Commission has recently imposed fines or initiated proceedings in several cases against digital companies for anti-competitive behavior.

Yesterday’s decision can be appealed to the European Court of Justice. In an initial reaction, EU Commission Vice President Margrethe Vestager, who is responsible for competition procedures, announced that the Directorate-General for Competition and the Legal Service would now first study the ruling. “We need to look in detail at what we can take from the ECJ ruling, where the balance is between where we won, where we lost, and how we deal with the nullity of the penalty,” Vestager said. fst

Bas Eickhout: linking climate and finance

What he doesn’t want is to sound like another Rudi Carrell, says Bas Eickhout, Vice Chairman of the Greens/EFA in the European Parliament. That’s why the 45-year-old Dutchman doesn’t like to speak German in public, although he knows it a bit, as well as French and Italian, and English, of course.

Hints of this can be found on his Twitter profile, where he sometimes retweets the Deutscher Naturschutzring, sometimes an Italian article, and sometimes a meme poking fun at Macron’s narcissism. “I think that when you make European policy, you should also try to follow the debates in the different countries,” he says.

It was also his ability to think outside the box that brought him to the European Parliament. He moved in for the first time in 2009; before that, the chemist and environmental scientist did research on climate change, but eventually reached the limits. “The big messages around climate change were clear even then. I felt I had to try it from the other side – and that was more on the political level.”

Today, Eickhout is a member of delegations on cooperation with China, the US and the United Kingdom, vice-chairman of the Committee on the Environment, Public Health, and Food Safety (ENVI), and deputy in committees on economic and monetary affairs and budgetary control. Fiscal policy is close to his heart, and he wants to make it more sustainable.

Green investments and unsustainable investments

“We’ve built a fossil fuel economy in 150 years, and now we want to transform the fossil fuel economy into a carbon-neutral economy in 30 years. That’s a big task,” he says. What’s good, he says, is that in the past decade, many have realized that climate affects the stability of the financial system. “All financial players need to look at redirecting financial flows.” This involves private financial flows, he said, but the European Central Bank should also look at it, according to Eickhout. “At all these points, climate and finance are becoming more and more interlinked.”

Investors should not be spared in the process. “We need to take a much more critical look at whether investors who invest a lot in fossil fuels should be more regulated because those investments can do harm.”

That could also affect the taxonomy. “I think at some point we should define not only what is a green investment, but also what is an unsustainable investment.”

That sounds quite diplomatic. For loud sounds, he prefers to sit down at the drums, if he can find the time. When he’s in his office reading texts, he often wears headphones and drums on his desk. Gabriel Bub

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,

“Putting sensitive gas infrastructure in Germany in the hands of Gazprom was not a smart policy,” says Reinhard Bütikofer, foreign policy coordinator of the Greens/EFA group in the European Parliament, referring to skyrocketing energy prices and historically empty gas storage facilities. Germany and the EU want to position themselves better in the future. Timo Landenberger analyzes to what extent strategic gas reserves or minimum storage requirements can be a solution.

It comes as no great surprise that the Greens in the EU Parliament are opposed to the Commission’s draft taxonomy. However, in the meantime, there is resistance across the parliamentary groups. We have already reported on the letter from some EPP members to Commission President Ursula von der Leyen, in which they express “strong reservations” about the draft. There is also strong dissatisfaction among the S&D Social Democrats, and clear criticism is also coming from the Renew Group. Lukas Scheid summarizes the mood in parliament.

The German government wants to push ahead rapidly with the expansion of renewable energies, and a 2-percent target for wind power has been set for the federal states. However, wind turbines can be a danger to animals. Unclear requirements for the protection of red kites and osprey, for example, make the expansion of wind energy more difficult. In the coalition agreement, the CDU/CSU has therefore agreed to work for clarification and legal certainty – also at the EU level. However, according to parliamentarians, changes in EU nature conservation law have little chance of success for the time being, reports Manuel Berkel. However, there is room to maneuver.

Your
Sarah Schaefer

Energy crisis: high prices, empty gas storage facilities and the role of Gazprom

By

Timo Landenberger

The liberalized European gas market is undergoing an inventory check: For weeks, consumers and industry alike have been suffering from prices at record levels, with no end in sight. Several gas discounters have already gone bankrupt because they could no longer afford the price difference between the spot market and their long-term contracts. Gas storage facilities are at historically low levels, and the icy atmosphere between the West and its most important energy supplier, Russia, is an additional cause for concern.

The European Union covers around a third of its demand with Russian Gas, Germany even about half. Part of this is secured on a permanent basis via long-term contracts, while the rest is purchased on a short-term basis via the spot market in order to remain flexible. However, these additional volumes have not materialized since last fall.

It is true that the current crisis already began in the summer. The economic recovery after the COVID-related cuts drove up global demand for fossil fuels and deliveries to Europe were lower. Prices rose.

Still, according to a report by the Oxford Institute for Energy Studies, the real shock to the market came in the fourth quarter of the year, when gas flows from Russia via the northern Yamal-Europe route dropped dramatically to less than a third of normal levels.

Gazprom: between geopolitics and market economy

Fatih Birol, the head of the International Energy Agency (IEA), also blames Russia for Europe’s energy crisis. He accused the country of cutting gas supplies to Europe at a time of “heightened geopolitical tensions.” This, he said, indicates that Moscow provoked an energy crisis for political purposes.

“It can’t be that after three quarters of a year of gas crisis, Russia is not able to deliver more, if they wanted to,” says Christian Egenhofer, energy expert at the Centre for European Policy Studies in Brussels (CEPS). The only credible justification, he says, is geopolitical motivation.

Jacopo Pepe of the Stiftung Wissenschaft und Politik (German Institute for International and Security Affairs), on the other hand, sees only a slight connection here. The connection is obvious. But the Russian energy company Gazprom is not only an instrument of the Kremlin. “It is also a company that operates in an environment determined by the criteria of a market economy.”

Gazprom cleverly used certain mechanisms that the Europeans had introduced themselves by liberalizing the gas market. “That went well for a while because spot market prices were lower than long-term contracts, and that’s when Gazprom had to adjust the contracts. Now the tide is turning, and of course the corporation has an interest in keeping prices high.”

Reinhard Buetikofer, foreign policy coordinator of the Greens/EFA Group in the European Parliament, sees things differently: “Gazprom can dress itself up however it wants. But the company remains a geopolitical instrument in the hands of the Kremlin. Putting sensitive gas infrastructure in Germany in Gazprom’s hands was not a smart policy.”

Storage levels at historic low

With this, the MEP also alludes to gas storage. For example, among several others, the largest gas storage facility in Europe belongs to the Gazprom subsidiary Astora. The huge underground facility is located in Rehen in Lower Saxony, comprises almost 20 percent of Germany’s total gas storage capacity, and has been practically empty since last fall.

However, there may also be market reasons for this. After all, the other 46 storage facilities in Germany are also currently only filled to an average of around 40 percent and are therefore at a historic low. Even before the start of winter, the fill level was only 76 percent, compared to 95 percent the year before.

As a result of the liberalization of the gas market, storage facilities have been largely politically deregulated. And there was no incentive for private-sector operators to fill the storage facilities because of the high prices in the summer. Nevertheless, gas supplies in Germany are secure, emphasizes a spokeswoman for the German Federal Ministry of Economic Affairs and Climate Protection.

Germany has the highest storage capacity in the EU, followed by Italy and the Netherlands. “The low gas storage levels must be closely monitored,” says Nicola Beer (FDP), Vice President of the EU Parliament. The need for action cannot be ruled out, she said, because natural gas has a key role to play as transitional energy.

Minimum storage requirements

In the short term, the simplest solution is to introduce minimum storage obligations for member states, says Christian Egenhofer. This could be solved via state gas reserves, regulatory requirements for companies, or by the private sector, for example by passing on the costs of storage to the gas bill.

On average, storage tanks are filled to about 85 percent before winter. “90 percent would certainly be better,” the CEPS expert said. “So four to five percent compared to the average that would be covered by public money or requirements. We’re not talking about gigantic sums here. Prices would still be high, but it would somewhat mitigate the situation.”

Jacopo Pepe also considers specifications for the minimum capacity that operators must maintain to be a possible interim solution. However, private gas storage facilities are not intended as strategic reserves. Pepe, therefore, advocates the introduction of an additional state reserve.

“Minimum storage volumes should be available and thus national, state gas reserves should also be addressed,” says Nina Scheer, energy policy spokeswoman for the SPD parliamentary group. This would also take into account the character of energy supply as part of the provision of public services.

The German government had already announced its intention to evaluate the options regarding minimum storage volumes and strategic reserves. At the most recent meeting of EU energy ministers, the participants also spoke out in favor of “optimized use of European storage capacities” and “more mutual solidarity”.

The European Commission also wants to do justice to this with its gas market package, which was presented in December. The aim is to make gas storage more efficient and better coordinate storage within the EU, according to a Commission spokesman. The proposals also allow member states to build up strategic gas reserves by buying gas jointly with other member states who wish to do so.

Taxonomy: resistance grows in the EU parliament

By

Lukas Knigge

The fact that the Greens in the European Parliament reject the inclusion of natural gas and nuclear power in the taxonomy is hardly surprising. There has long been agreement that neither gas nor nuclear power deserves the label of a sustainable energy source. In the meantime, however, criticism is growing louder in other parliamentary groups as well. Many MEPs are demanding that the EU Commission make changes to its proposal. Even a majority against the legislation is no longer considered out of the question.

Among Social Democrats, there are country-specific views, Joachim Schuster, economic and financial policy spokesman for the SPD MEPs told Europe.Table. But the dissatisfaction is widespread: “The main concern is that this political classification, which is not based on scientific evidence, jeopardizes the very essence of the taxonomy.” The taxonomy would thus no longer provide an orientation function on the capital markets, fears Schuster.

Therefore, the S&D Group proposes that nuclear power and gas be listed in a third category under strict criteria and as transitional technologies. However, this would not be classified as sustainable. “If the EU Commission does not follow this, a large part of the S&D will oppose the Commission’s proposal,” says Schuster. He states that he hears similar things from the ranks of the liberal Renew Group and the Christian-conservative EPP.

Critical voices also from EPP and Renew

And indeed: Peter Liese, environmental spokesman for the EPP, recently told rbb Inforadio that he was more certain every day that the proposal would definitely not be adopted in its current from. It is also possible that it will be rejected entirely. Liese said there had been many discussions with representatives of all parliamentary groups, in which a “large majority” had said they were very critical of it.

The problem is that not only modern nuclear power plants are taxonomy compliant, but also retrofitted old reactors. Although there are specifications for retrofitting, he does not believe that these power plants can be made safe at all, Liese said. In addition, he criticized the fact that building permits for new nuclear power plants could still be issued in 2045 and that the disposal of nuclear waste would not have to be regulated until 2050, even though nuclear energy is only supposed to be a transitional technology according to the Commission.

Some EPP members had expressed “strong concerns” about the draft in a letter to Commission President Ursula von der Leyen last week. Now, according to Peter Liese, they have also called for more time to examine the Commission’s draft. He believes it would be best to scrap the delegated act to include gas and nuclear energy in the taxonomy regulation altogether.

The Renew Group has also voiced its opposition to the Commission’s draft. However, they are more directed against the legislative process. According to EP Vice-President Nicola Beer (FDP), it would have been better to initiate a proper legislative procedure instead of a delegated act, thus allowing amendments to be introduced. “I would have some amendments, but this way we can only accept or reject the text in its entirety, which does not do justice to the political complexity,” Beer said. Now we face a dilemma: “if we reject the delegated act, nothing is gained. We will then lack the necessary frame of reference and will be empty-handed when it comes to the necessary green transformation.”

Commission rules out fundamental changes

It is doubtful that the Commission will adjust its draft in response to the criticism, some of which has been strong, from member states, other EU bodies, and the scientific community (Europe.Table reported). The responsible financial market commissioner, Mairead McGuinness, has meanwhile even ruled out a fundamental revision of the EU classifications for sustainable energy. The proposal could be improved in certain places and thus some objections could be taken into account, McGuinness told the “FAZ”. “But we actually have limited room to maneuver.”

The Commission’s plans have met with a mixed response from investors. In a survey by Reuters of 16 funds collectively managing around six trillion euros in assets, five stated that gas and nuclear power were not sustainable energy sources. Four rated only one of the two energy sources as sustainable. Five, in turn, considered both gas and nuclear power “green” under certain conditions. In Germany, the fund sector had also recently expressed criticism. In collaboration with Timo Landenberger and rtr

Wind power expansion: EU guidelines could help

Some of the biggest obstacles to wind energy are unclear requirements for the protection of red kites and osprey. The danger of wind turbines is that the birds could collide with the rotor blades in flight. According to the Birds Directive, European bird species may only be killed under narrowly defined exceptions. However, the exact interpretation has puzzled local authorities and courts for years.

One point of contention: May single individuals of a species be killed as long as the preservation of entire populations is not endangered? The traffic light coalition agreement promised a remedy: “We will work for a stronger focus on population protection, clarification of the relationship between species and climate protection, and more standardization and legal certainty, including in Union law.”

At the EU level, MEPs do not believe there will be any changes, at least until 2024. The Juncker Commission had subjected nature conservation law to a fitness check as recently as 2016. “The Commission concluded that the directives work and do not need any changes. No changes were announced in the Green Deal either,” SPD parliamentarian Delara Burkhardt told Europe.Table. “Reform proposals of the Birds and Habitats Directives by the Commission are thus not foreseeable at least until the end of the current European legislative period.”

Green Party MEP Jutta Paulus also refers to the fitness check. “Our European nature conservation law is a milestone of species protection that must not be watered down,” says the parliamentarian. A revision of the directives on flora-fauna habitats (FFH) and bird protection is also not at all necessary to accelerate the expansion of renewable energies. “The protection approach of the Habitats and Birds Directives allows for exceptions under strict criteria to be interpreted by the ECJ. The Commission could support the Member States by providing guidelines for good practice, in particular for the nature-compatible expansion of wind power.”

Exemptions of the birds directive for wind power

So far, the Berlin coalition leaders have not explicitly announced their commitment to European guidelines. The Commission wanted to develop guidelines on nature conservation law by 2019, but a guideline on the Habitats Directive was not published until October 2021. However, the legal act on bird protection is clearly more important for wind farms.

The German government is counting on national harmonization with the directive. It is only against this background that a new attempt at legal clarification can be explained. The coalition agreement states that green power plants serve public safety – precisely this is listed as a reason for the exemption in Article 9 of the Birds Directive. However, the connection between public safety and the security of supply has not yet been decided under European law.

“There are currently differing opinions among legal experts whether the security of power supply is part of public safety and whether wind turbines fall under this regulation,” explains Silke Christiansen, head of legal at the Competence Center for Nature Conservation and Energy Transition (KNE). “This is precisely a question that German courts could submit to the ECJ in preliminary ruling proceedings.”

Only the ECJ can therefore ultimately create further legal certainty. Lawyers had recently placed high expectations in a case concerning the logging of a Swedish forest. In its decision of March 4, 2021 (C-473/19), however, the Court of Justice relied primarily on the provisions for FFH areas; the hoped-for interpretation of the Birds Directive failed to materialize for the time being.

There are two different approaches for clarifications in national law. The environmental ministers of the federal states had attempted to concretize the significance approach developed by the Federal Administrative Court, which finally found its way into §44 of the Federal Nature Conservation Act. According to this, construction projects are compatible with species protection if the risk of killing is not significantly increased. However, authorities and courts repeatedly dispute where the threshold lies. At the end of 2020, the Conference of Environment Ministers adopted a significance framework. In the opinion of the energy associations, however, this does not bring any decisive relief for the expansion of wind energy.

Standardization in bird protection has limits

The second path is pursued by a proposal of the Climate Neutrality Foundation from May 2021, which aims to concretize the exceptions regulated in Article 9 of the directive and §45 of the Federal Nature Conservation Act. In the Netherlands, for example, many wind turbines are approved via exemptions.

The foundation’s experts used probabilistic methods to estimate blanket protection distances around nests for a fixed catalog of bird species so as not to endanger the preservation of populations. In certain radii, wind turbines would not be approved at all or only with certain conditions, such as anti-collision systems that throttle rotors when a bird approaches. Elaborate case-by-case reviews, which are still the rule today, could be largely eliminated, according to the foundation. Only for frequent flyers – white-tailed eagles, osprey, red kites and white storks – would flight corridors to feeding areas have to be analyzed, if necessary.

Environmental lawyer Wolfgang Koeck also sees limits to standardization in bird protection: “For atypical cases, a uniform federal regulation must continue to allow for case-by-case assessments. Otherwise, courts could overturn the regulation,” says the member of the German Advisory Council on the Environment (SRU).

On February 4th, the SRU plans to publish a statement on the expansion of wind energy. In an impulse paper from last October, the Council had still been ambiguous. On the one hand, it wants to maintain strict individual protection instead of the population approach. On the other hand, the scientists advocated species programs in connection with exemptions, which also found their way into the coalition agreement. Manuel Berkel

Commission presents declaration on digital rights and principles

“What is illegal offline should also be illegal online” – that’s the European Commission’s credo for the two key platform laws Digital Services Act and Digital Markets Act. It also forms the basis for the declaration on digital rights and principles that the authority presented on Wednesday: “The declaration makes it clear: The rights we have offline, we also have online,” said Executive Vice President Margrethe Vestager. The project is part of the Communication on the “Digital Decade” presented by the Commission in March 2021 to shape the digital transformation in the EU by 2030.

The declaration essentially provides for these six digital rights and principles:

People at the center of the digital transformation: Digital technologies should protect human rights, strengthen democracy and ensure that all digital players act responsibly. The EU should also advocate this vision vis-à-vis international partners.
Solidarity and inclusion: Technology should connect people, rather than divide them. Everyone should have access to affordable and fast internet, digital skills, digital public services, and fair working conditions.
Freedom of choice: People should be able to decide for themselves which online services they use through objective, transparent and reliable information and be safe from illegal and harmful content. The use of artificial intelligence should be transparent and algorithmic systems should be based on appropriate data sets to avoid discrimination.
Participation in the digital public sphere: Fundamental rights and in particular freedom of expression and freedom of information should be upheld, and very large online platforms should support free democratic debate in the online environment.
Safety, security and empowerment: The digital space should be safe for everyone, including children and the elderly. Digital identity should be protected and everyone should have control over how their personal data is used and shared in the online environment.
Sustainability: Digital devices should be designed, produced, used, disposed of and recycled in a way that minimizes their negative environmental and social impact. Users should have access to information about the environmental impact and energy consumption of their devices.

Declaration is not intended to create new rights and principles

To specifically address the needs of Europeans, the Commission included the results of a special Eurobarometer survey conducted in December 2021 in the declaration. “This is a gold mine of interesting findings,” Vestager said. She felt particularly encouraged by this fact: According to the survey, almost 40 percent of EU citizens are not aware that rights such as freedom of expression, privacy, or non-discrimination must also be respected online.

Vestager expressly emphasized that the Commission does not want to create new rights and principles with the declaration. Fundamental rights already apply online today and are being implemented through the General Data Protection Regulation and the Digital Services Act and Digital Markets Act currently under negotiation.

Instead, the declaration is intended to define the existing rights and principles to ensure that they are respected. It should serve as a guideline for politicians, companies, and users alike.

MEP Angelika Niebler (CSU/EPP) sees the declaration as a helpful point of reference for citizens concerning digitization in Europe. However, she warns against using the declaration to push the real obstacles to digitization into the background: “we simply have to speed up the expansion of the digital infrastructure, especially in the areas of cloud computing and 5G. Without the appropriate infrastructure, citizens simply won’t be able to use their digital rights,” Niebler says.

Commission to assess progress in annual report

The European Consumer Organisation (BEUC) calls for the declaration to have a concrete impact on legislation: “The EU institutions must now ensure that the principles are a guiding light for all regulatory initiatives, including those already under negotiation, such as the Digital Services Act or the AI Regulation,” says David Martin, BEUC team leader for digital policy.

“Just because it is a political declaration does not make it toothless,” Vestager stressed. The Commission will also closely monitor how the member states implement the declaration: In an annual report “on the state of the Digital Decade,” the Commission wants to assess progress and gaps and make recommendations. Nevertheless, the declaration is not legally binding.

The European Parliament and the Council are expected to give their green light for the text by the summer in order for it to be officially adopted. The Commission was initially unable to answer Europe.Table’s question about the specific level at which the co-legislators will discuss the declaration. koj

Competition proceedings: Intel wins against Commission

The European Court of Justice has declared invalid a fine of €1.06 billion imposed by the EU Commission in May 2009 for competition violations against chip manufacturer Intel. The judges of the lower two chambers of the European court found that the Commission had not sufficiently proven that Intel had violated European competition law with its rebate practice for computer manufacturers.

This marks another chapter in one of the most protracted competition proceedings in history: In July 2007, the EU Commission opened proceedings against chip manufacturer Intel. The suspicion: an abuse of its market dominance in the segment for x86 processors, which have been found in desktop PCs, notebooks, and servers for decades and continue to form the basic architecture for current PC processors.

Starting in 2002, Intel had indisputably granted loyalty rebates to PC manufacturers Dell, Lenovo, HP, and NEC, which brought the majority of their products to market with CPUs from this one manufacturer. Intel’s goal, the commission found at the time: to drive competitors out of the market, especially Advanced Micro Devices (AMD). Intel was also accused of entering into an exclusive agreement with the Ingolstadt-based Media-Saturn-Holding (Media Markt and Saturn) to drive competitors out of the market.

An initial ruling by the EU Court of Justice in 2014, which dismissed Intel’s action against the Commission’s decision, was overturned by the European Court of Justice (ECJ) on appeal in 2017. The ECJ criticized the fact that the EU Commission, in its function as competition supervisor, had to address substantive objections raised by the company concerned and include them in its own decision. The investigation of the facts was therefore incorrect and so was the assessment of the penalty.

Intel process of great importance for further cases

This line of the ECJ was now also followed by the First Chamber in its new decision. It is true that “a system of discounts set up by an undertaking holding a dominant position on the market may be classified as a restriction of competition if, by its nature, it may be presumed to have restrictive effects on competition.”

However, upon request, the Commission is obliged to examine whether the objectionable discount system is actually suitable for forcing competitors out of the market, according to the judges in Luxembourg. For this reason, among others, the “as-efficient-competitor test” (AEC) was incorrectly applied here. However, the European Court did not completely acquit Intel of all charges. However, the judges saw themselves unable to determine what level of penalty would have been justified. Therefore, the judges annulled the 1.06 billion fine in its entirety, while one-third of the costs of the proceedings must be borne by Intel.

Although the Intel case dates back 15 years, the effects of the proceedings could hardly be more topical. The EU Commission has recently imposed fines or initiated proceedings in several cases against digital companies for anti-competitive behavior.

Yesterday’s decision can be appealed to the European Court of Justice. In an initial reaction, EU Commission Vice President Margrethe Vestager, who is responsible for competition procedures, announced that the Directorate-General for Competition and the Legal Service would now first study the ruling. “We need to look in detail at what we can take from the ECJ ruling, where the balance is between where we won, where we lost, and how we deal with the nullity of the penalty,” Vestager said. fst

Bas Eickhout: linking climate and finance

What he doesn’t want is to sound like another Rudi Carrell, says Bas Eickhout, Vice Chairman of the Greens/EFA in the European Parliament. That’s why the 45-year-old Dutchman doesn’t like to speak German in public, although he knows it a bit, as well as French and Italian, and English, of course.

Hints of this can be found on his Twitter profile, where he sometimes retweets the Deutscher Naturschutzring, sometimes an Italian article, and sometimes a meme poking fun at Macron’s narcissism. “I think that when you make European policy, you should also try to follow the debates in the different countries,” he says.

It was also his ability to think outside the box that brought him to the European Parliament. He moved in for the first time in 2009; before that, the chemist and environmental scientist did research on climate change, but eventually reached the limits. “The big messages around climate change were clear even then. I felt I had to try it from the other side – and that was more on the political level.”

Today, Eickhout is a member of delegations on cooperation with China, the US and the United Kingdom, vice-chairman of the Committee on the Environment, Public Health, and Food Safety (ENVI), and deputy in committees on economic and monetary affairs and budgetary control. Fiscal policy is close to his heart, and he wants to make it more sustainable.

Green investments and unsustainable investments

“We’ve built a fossil fuel economy in 150 years, and now we want to transform the fossil fuel economy into a carbon-neutral economy in 30 years. That’s a big task,” he says. What’s good, he says, is that in the past decade, many have realized that climate affects the stability of the financial system. “All financial players need to look at redirecting financial flows.” This involves private financial flows, he said, but the European Central Bank should also look at it, according to Eickhout. “At all these points, climate and finance are becoming more and more interlinked.”

Investors should not be spared in the process. “We need to take a much more critical look at whether investors who invest a lot in fossil fuels should be more regulated because those investments can do harm.”

That could also affect the taxonomy. “I think at some point we should define not only what is a green investment, but also what is an unsustainable investment.”

That sounds quite diplomatic. For loud sounds, he prefers to sit down at the drums, if he can find the time. When he’s in his office reading texts, he often wears headphones and drums on his desk. Gabriel Bub