Your contact for new licenses
Five major German business associations have written a letter to Robert Habeck in which they ask the Federal Minister of Economics to “intervene at the highest level of the EU Commission at short notice”. They oppose new regulations on the carbon footprint of electric car batteries. Manuel Berkel, Leonie Düngefeld and Markus Grabitz write that this marks the start of a power struggle over which EU countries will benefit economically from the Green Deal in the coming years.
What is the newly elected European Parliament’s position on Beijing? The appointments to key positions give an initial indication of how the Parliament’s China policy is likely to be oriented in the future. In her analysis, Amelie Richter takes a look at the key committees – the powerful Trade Committee in particular includes MEPs who are highly critical of China.
In today’s News, you can find out, among other things, why Volker Wissing is warning that millions of diesel cars in Germany could be taken out of service and what the situation is regarding investment in the European deep-tech sector.
I wish you a pleasant start to the weekend.
German industry is starting a power struggle over which EU countries will benefit economically from the Green Deal in the coming years and decades. The dispute is being sparked by the European Battery Regulation – after all, batteries are responsible for a large part of the future added value for the automotive sector and other important industries. A delegated act to determine the carbon footprint of batteries, which the Commission is proposing, is controversial. Parliament and member states can stop it after the upcoming publication.
In a letter to Minister Robert Habeck, which is available to Table.Briefings, five business associations warn that German industry will no longer be able to effectively decarbonize its global supply chains and activities “if the most efficient instruments for this are no longer recognized”.
“We therefore urge you to intervene at the highest level of the EU Commission at short notice in the interests of German industry and global climate protection”, the letter to Habeck reads. It was signed by members of the management of the Federation of German Industries (BDI), the German Association of the Automotive Industry (VDA), the German Chemical Industry Association (VCI), the German Engineering Federation (VDMA) and the German Electrical and Digital Manufacturers’ Association (ZVEI).
The background to this is obviously the still high proportion of coal-fired power in the German electricity mix. Other economies in the EU already have a clear head start in switching to renewable energies – or continue to rely on nuclear power. Last year, the CO2 intensity of German electricity amounted to 381 grams of CO2 per kilowatt hour. In Sweden and France, on the other hand, it was only 41 and 56 grams respectively.
The industry will feel Germany’s shortfall by 2028 at the latest, when electric vehicle batteries will have to comply with maximum values for carbon dioxide emissions generated during production under the new Battery Regulation. The delegated regulation that the Commission is working on is intended to regulate the method for measuring the CO2 footprint. In their letter to Habeck, the associations criticize the draft: “In the proposed methodology, power purchase agreements (PPAs) and renewable energy certificates (RECs) are no longer recognized as permissible.”
According to the associations, the battery legislation could become a blueprint for other industrial goods – with massive consequences: “This is the worst possible news for climate protection and also for the reputation of German companies in the eyes of the public, ratings and investors. It also reduces Germany’s attractiveness as an industrial location.”
The EU Battery Regulation came into force in August 2023 and – following a six-month transition period – has been in force in the EU member states since February. It replaces the previous Battery Directive and is intended to be a blueprint for further product regulations: The regulation establishes standards for a more sustainable design of batteries, is intended to boost the material cycle and strengthen the battery and recycling industry. Batteries are the first product in the EU to be subject to a binding carbon footprint.
According to the associations, the Commission only wants to take into account the CO2 intensity of the national electricity grid of a manufacturing country in the subsequent legal act – with the exception of renewable energy generation plants directly connected to factories, the letter continues. “The latter is not an option for most locations worldwide due to site suitability, approval procedures, reliability of constant power supply and space requirements.”
Cell production accounts for the largest share of the CO2 footprint of a battery for electric cars. The supply chains for batteries for electric cars are global, and the construction of a large number of cell factories is planned worldwide. Germany is an important market for cell production in Europe. Many cell factories are being planned or are currently being built, often in cooperation with or under the direction of e-car manufacturers. According to Battery News with data from May, there are plans to build 353 GWh of capacity in Germany by 2030.
Tesla has announced the construction of a factory with a capacity of 100 GWh at the Grünheide site. Northvolt wants to build a factory with a capacity of 60 GWh in Heide. The fear is that the legal act for calculating the carbon footprint will call into question investment decisions that have already been made and make it more difficult or impossible to locate here in the future.
However, the instruments propagated by the associations have similar problems to those they criticize – and more. Guarantees of origin (HKN) are an established instrument for proving green electricity status. However, the industry would operate according to the “left pocket, right pocket” principle. The green electricity purchased by individual companies would be lost to other electricity consumers – from a national or even European perspective, it would be a zero-sum game. “Guarantees of origin are not suitable for proving the additionality of green electricity”, says Mathilde Crêpy from the Brussels-based NGO Ecos.
The Commission has therefore already adopted a delegated act for the electrolysis of green hydrogen, which requires producers to prove that the electricity comes from additional – i.e. newly built for their production – electricity and wind farms. The industry had been up in arms against the complicated rules.
If the Commission now focuses on the national electricity mix or directly connected green electricity parks, it actually simplifies the verification process. However, this is obviously also a disciplinary measure to ensure that each EU country expands renewable energies in its own country as quickly as possible. According to the NGO T&E, taking the national electricity mix into account also has the advantage that the method is easily comparable internationally and, above all, verifiable. “When using guarantees of origin, on the other hand, there would have to be a big question mark over global enforceability”, says Alex Keynes from T&E.
From the perspective of the internal market, the associations’ second proposal is initially plausible. The companies want to conclude long-term direct purchase agreements with offshore wind farms, for example. However, such PPAs have so far mainly been the domain of large corporations – and supposedly a method of securing cheap green electricity before other energy consumers. BASF has already concluded contracts for energy projects in several EU countries.
However, the PPAs would also have to be concluded with additional plants. In the opinion of Ecos and T&E, they should follow the same strict methodology as the legal act for hydrogen – which would certainly not be in the interests of the industry. However, another hurdle for the associations’ PPA proposal is the poorly developed European electricity grid.
After all, is a German manufacturer’s battery really green if the electricity from its cheap Spanish wind farm does not even reach the German factory? The faltering grid expansion would, therefore, limit the availability of cheap green electricity for many years to come.
German manufacturers can still take comfort in the fact that the CO2 rules from the Battery Regulation will also apply to imported batteries. Electricity in China, for example, is still dirtier than in Europe, with specific emissions of 582 grams. Although China has already established a strong position, the battery market there is currently consolidating.
According to a recent analysis by Rystad, global investment in new battery production capacity is therefore likely to fall this year for the first time since 2020. However, according to forecasts by the World Economic Forum, global demand for batteries will increase 19-fold by 2030 compared to 2019. The automotive industry will account for the majority of this.
After the EU elections in early June, the newly elected European Parliament is taking shape, with key positions in the committees being filled. Some positions remain with experienced hands, making a significant shift in the EU Parliament’s stance on China unlikely.
Last week, SPD MEP Bernd Lange was re-elected as the chair of the influential Trade Committee. During the last legislative period, Lange significantly advanced the EU’s Anti-Coercion Instrument (ACI) against economic coercion, which is still awaiting its first application. “We have a lot planned for the next five years: In the context of the increasing global competition between the USA and China, we need to set our own course,” Lange emphasized after his election.
For Lange, greater independence from Chinese goods is part of this strategy. He advocates offering non-Western partners an attractive package that includes market access, investments through the EU’s Global Gateway infrastructure initiative and opportunities for sustainable economic development. “It makes no sense to continue a practice where almost all raw materials are distributed worldwide but refined by or in China,” the SPD politician stated. Diversification and offering a genuine alternative to exploitative practices are crucial.
Lange supports a “fitness test” of economic defense instruments, citing the Foreign Subsidies Regulation (FSR) as an example. He believes it should be examined to see if it aligns with the EU’s green transition ambitions. The FSR was recently heavily criticized by China.
Alongside Lange, the Trade Committee will be led by Vice-Chairs including French MEP Manon Aubry (Left), Hungarian conservative Iuliu Winkler (EPP), Swedish MEP Karin Karlsbro (liberal Renew) and Belgian MEP Kathleen van Brempt (S&D). The committee also includes MEPs sanctioned by China, such as Raphaël Glucksmann and Miriam Lexmann. AfD MEP Maximilian Krah is also a member; his parliamentary assistant was arrested before the European elections on suspicion of spying for China.
The Foreign Affairs Committee is similarly composed of members critical of China: Mika Aaltola from Finland has repeatedly called Beijing an “imperialistic and autocratic threat”. Lithuanian Petras Auštrevičius is part of the Inter-Parliamentary Alliance on China (IPAC), an organization critical of Beijing, comprising members from over two dozen parliaments worldwide. French MEP Glucksmann is also a member. CDU MEP David McAllister was re-elected as the chair.
Green politician Anna Cavazzini will again chair the Committee on Internal Market and Consumer Protection. Cavazzini was a driving force behind the EU Parliament’s import ban on products made with forced labor, primarily affecting goods from Xinjiang, and the EU Supply Chain Act. She recently supported additional tariffs on Chinese electric vehicles.
Marie-Agnes Strack-Zimmermann (FDP) is the new chair of the Defense Committee in the EU Parliament. “The conflicts in our neighborhood and the shifting geopolitical tides mean we need a change in European security to take control of our destiny,” Strack-Zimmermann emphasized upon her election. The EU Parliament had already advocated for enhanced EU-NATO cooperation in the last legislative period. Strack-Zimmermann has repeatedly called for China to influence Moscow.
The Subcommittee on Human Rights will be chaired by French Green MEP Mounir Satouri. The subcommittee has been involved in several resolutions regarding Hong Kong and Xinjiang in the past. Satouri has so far focused less on China, with his primary focus on the Middle East.
In addition to the committees, the delegations are important for the European Parliament’s work on China. The China Delegation remains the largest with 38 members. The chair will be decided on September 19 in Strasbourg. Besides China, there will be delegations for Japan (24 members), India (24 members), ASEAN (27 members), the Korean Peninsula (13 members), Central Asia (19 members) and South Asia (15 members).
The European Taiwan Friendship Group, an informal group of EU MEPs, will continue to be led by CDU MEP Michael Gahler.
In a world of trained lawyers, economists and political scientists, Andreas Baler’s background stands out. Before he went into politics, he was a shift worker. “I got up at five in the morning and worked on the filling machine in a mineral water factory”, he says. Last year, he was surprisingly elected leader of the Austrian Social Democratic Party (SPÖ). The media describe him as an “underdog”, but many see him as the hope of the Austrian left.
Andreas Babler only completed a degree in political communication as a second chance at education. He remains a worker at heart. “Andi”, as his supporters call him, knows: “My way of doing politics has a lot to do with my own history.” His role model is former SPÖ Chancellor Bruno Kreisky with his “modern and progressive politics”, which the 51-year-old would like to re-establish in Austria.
It therefore also offers an alternative to conservative and populist positions, which have increased in recent years. “Many young people are no longer familiar with progressive politics”, says Babler. His own work as mayor of Traiskirchen in Lower Austria, on the other hand, has already shown in the past “how social democracy can improve people’s living conditions in a very concrete way”. What he means are rent caps and free school meals. If Babler becomes Austrian chancellor in the fall, he would like to continue this type of policy.
He is calling for a tax on the rich and is also clearly distancing himself from Herbert Kickl and the right-wing populist FPÖ on the issue of migration. In doing so, he is confronting the party, which is leading the polls for the national elections in the fall with just under 30 percent. “With me, there will be no talk of building walls to seal us off”, says Babler. Instead, he wants to remain an open country for refugees and combat the causes of flight.
Andreas Babler has caused irritation in the past with his statements on the EU. His statements in which he openly supported Austria leaving the EU still have an impact today. As recently as 2020, he described the EU as an “imperialist project” that was “worse than NATO”. Today, he says these sentences were “exaggerated”. “The European Union is an achievement and an important lever for the implementation of social democratic ideas”, Babler said in an interview with Table.Briefings. Nevertheless, he must continue to make his loyalty to the European treaties credible.
At the same time, Babler calls for a fundamental reform of the EU to make it more democratic, social and sustainable as an institution. Among other things, the powers of the European Parliament need to be expanded, for example by giving it a direct right of initiative. “We need to pull out all the stops to achieve this”, he says.
Austria needs a “reform chancellorship”, says Babler, for which he is positioning himself. Would he take on this role with the conservative ÖVP if necessary? He seems skeptical. “A lot of china has been broken in the cooperation with the ÖVP at the federal level in recent years”, he says. He believes that a lot will become clearer before the election. Jasper Bennink
Five major German business associations have written a letter to Robert Habeck in which they ask the Federal Minister of Economics to “intervene at the highest level of the EU Commission at short notice”. They oppose new regulations on the carbon footprint of electric car batteries. Manuel Berkel, Leonie Düngefeld and Markus Grabitz write that this marks the start of a power struggle over which EU countries will benefit economically from the Green Deal in the coming years.
What is the newly elected European Parliament’s position on Beijing? The appointments to key positions give an initial indication of how the Parliament’s China policy is likely to be oriented in the future. In her analysis, Amelie Richter takes a look at the key committees – the powerful Trade Committee in particular includes MEPs who are highly critical of China.
In today’s News, you can find out, among other things, why Volker Wissing is warning that millions of diesel cars in Germany could be taken out of service and what the situation is regarding investment in the European deep-tech sector.
I wish you a pleasant start to the weekend.
German industry is starting a power struggle over which EU countries will benefit economically from the Green Deal in the coming years and decades. The dispute is being sparked by the European Battery Regulation – after all, batteries are responsible for a large part of the future added value for the automotive sector and other important industries. A delegated act to determine the carbon footprint of batteries, which the Commission is proposing, is controversial. Parliament and member states can stop it after the upcoming publication.
In a letter to Minister Robert Habeck, which is available to Table.Briefings, five business associations warn that German industry will no longer be able to effectively decarbonize its global supply chains and activities “if the most efficient instruments for this are no longer recognized”.
“We therefore urge you to intervene at the highest level of the EU Commission at short notice in the interests of German industry and global climate protection”, the letter to Habeck reads. It was signed by members of the management of the Federation of German Industries (BDI), the German Association of the Automotive Industry (VDA), the German Chemical Industry Association (VCI), the German Engineering Federation (VDMA) and the German Electrical and Digital Manufacturers’ Association (ZVEI).
The background to this is obviously the still high proportion of coal-fired power in the German electricity mix. Other economies in the EU already have a clear head start in switching to renewable energies – or continue to rely on nuclear power. Last year, the CO2 intensity of German electricity amounted to 381 grams of CO2 per kilowatt hour. In Sweden and France, on the other hand, it was only 41 and 56 grams respectively.
The industry will feel Germany’s shortfall by 2028 at the latest, when electric vehicle batteries will have to comply with maximum values for carbon dioxide emissions generated during production under the new Battery Regulation. The delegated regulation that the Commission is working on is intended to regulate the method for measuring the CO2 footprint. In their letter to Habeck, the associations criticize the draft: “In the proposed methodology, power purchase agreements (PPAs) and renewable energy certificates (RECs) are no longer recognized as permissible.”
According to the associations, the battery legislation could become a blueprint for other industrial goods – with massive consequences: “This is the worst possible news for climate protection and also for the reputation of German companies in the eyes of the public, ratings and investors. It also reduces Germany’s attractiveness as an industrial location.”
The EU Battery Regulation came into force in August 2023 and – following a six-month transition period – has been in force in the EU member states since February. It replaces the previous Battery Directive and is intended to be a blueprint for further product regulations: The regulation establishes standards for a more sustainable design of batteries, is intended to boost the material cycle and strengthen the battery and recycling industry. Batteries are the first product in the EU to be subject to a binding carbon footprint.
According to the associations, the Commission only wants to take into account the CO2 intensity of the national electricity grid of a manufacturing country in the subsequent legal act – with the exception of renewable energy generation plants directly connected to factories, the letter continues. “The latter is not an option for most locations worldwide due to site suitability, approval procedures, reliability of constant power supply and space requirements.”
Cell production accounts for the largest share of the CO2 footprint of a battery for electric cars. The supply chains for batteries for electric cars are global, and the construction of a large number of cell factories is planned worldwide. Germany is an important market for cell production in Europe. Many cell factories are being planned or are currently being built, often in cooperation with or under the direction of e-car manufacturers. According to Battery News with data from May, there are plans to build 353 GWh of capacity in Germany by 2030.
Tesla has announced the construction of a factory with a capacity of 100 GWh at the Grünheide site. Northvolt wants to build a factory with a capacity of 60 GWh in Heide. The fear is that the legal act for calculating the carbon footprint will call into question investment decisions that have already been made and make it more difficult or impossible to locate here in the future.
However, the instruments propagated by the associations have similar problems to those they criticize – and more. Guarantees of origin (HKN) are an established instrument for proving green electricity status. However, the industry would operate according to the “left pocket, right pocket” principle. The green electricity purchased by individual companies would be lost to other electricity consumers – from a national or even European perspective, it would be a zero-sum game. “Guarantees of origin are not suitable for proving the additionality of green electricity”, says Mathilde Crêpy from the Brussels-based NGO Ecos.
The Commission has therefore already adopted a delegated act for the electrolysis of green hydrogen, which requires producers to prove that the electricity comes from additional – i.e. newly built for their production – electricity and wind farms. The industry had been up in arms against the complicated rules.
If the Commission now focuses on the national electricity mix or directly connected green electricity parks, it actually simplifies the verification process. However, this is obviously also a disciplinary measure to ensure that each EU country expands renewable energies in its own country as quickly as possible. According to the NGO T&E, taking the national electricity mix into account also has the advantage that the method is easily comparable internationally and, above all, verifiable. “When using guarantees of origin, on the other hand, there would have to be a big question mark over global enforceability”, says Alex Keynes from T&E.
From the perspective of the internal market, the associations’ second proposal is initially plausible. The companies want to conclude long-term direct purchase agreements with offshore wind farms, for example. However, such PPAs have so far mainly been the domain of large corporations – and supposedly a method of securing cheap green electricity before other energy consumers. BASF has already concluded contracts for energy projects in several EU countries.
However, the PPAs would also have to be concluded with additional plants. In the opinion of Ecos and T&E, they should follow the same strict methodology as the legal act for hydrogen – which would certainly not be in the interests of the industry. However, another hurdle for the associations’ PPA proposal is the poorly developed European electricity grid.
After all, is a German manufacturer’s battery really green if the electricity from its cheap Spanish wind farm does not even reach the German factory? The faltering grid expansion would, therefore, limit the availability of cheap green electricity for many years to come.
German manufacturers can still take comfort in the fact that the CO2 rules from the Battery Regulation will also apply to imported batteries. Electricity in China, for example, is still dirtier than in Europe, with specific emissions of 582 grams. Although China has already established a strong position, the battery market there is currently consolidating.
According to a recent analysis by Rystad, global investment in new battery production capacity is therefore likely to fall this year for the first time since 2020. However, according to forecasts by the World Economic Forum, global demand for batteries will increase 19-fold by 2030 compared to 2019. The automotive industry will account for the majority of this.
After the EU elections in early June, the newly elected European Parliament is taking shape, with key positions in the committees being filled. Some positions remain with experienced hands, making a significant shift in the EU Parliament’s stance on China unlikely.
Last week, SPD MEP Bernd Lange was re-elected as the chair of the influential Trade Committee. During the last legislative period, Lange significantly advanced the EU’s Anti-Coercion Instrument (ACI) against economic coercion, which is still awaiting its first application. “We have a lot planned for the next five years: In the context of the increasing global competition between the USA and China, we need to set our own course,” Lange emphasized after his election.
For Lange, greater independence from Chinese goods is part of this strategy. He advocates offering non-Western partners an attractive package that includes market access, investments through the EU’s Global Gateway infrastructure initiative and opportunities for sustainable economic development. “It makes no sense to continue a practice where almost all raw materials are distributed worldwide but refined by or in China,” the SPD politician stated. Diversification and offering a genuine alternative to exploitative practices are crucial.
Lange supports a “fitness test” of economic defense instruments, citing the Foreign Subsidies Regulation (FSR) as an example. He believes it should be examined to see if it aligns with the EU’s green transition ambitions. The FSR was recently heavily criticized by China.
Alongside Lange, the Trade Committee will be led by Vice-Chairs including French MEP Manon Aubry (Left), Hungarian conservative Iuliu Winkler (EPP), Swedish MEP Karin Karlsbro (liberal Renew) and Belgian MEP Kathleen van Brempt (S&D). The committee also includes MEPs sanctioned by China, such as Raphaël Glucksmann and Miriam Lexmann. AfD MEP Maximilian Krah is also a member; his parliamentary assistant was arrested before the European elections on suspicion of spying for China.
The Foreign Affairs Committee is similarly composed of members critical of China: Mika Aaltola from Finland has repeatedly called Beijing an “imperialistic and autocratic threat”. Lithuanian Petras Auštrevičius is part of the Inter-Parliamentary Alliance on China (IPAC), an organization critical of Beijing, comprising members from over two dozen parliaments worldwide. French MEP Glucksmann is also a member. CDU MEP David McAllister was re-elected as the chair.
Green politician Anna Cavazzini will again chair the Committee on Internal Market and Consumer Protection. Cavazzini was a driving force behind the EU Parliament’s import ban on products made with forced labor, primarily affecting goods from Xinjiang, and the EU Supply Chain Act. She recently supported additional tariffs on Chinese electric vehicles.
Marie-Agnes Strack-Zimmermann (FDP) is the new chair of the Defense Committee in the EU Parliament. “The conflicts in our neighborhood and the shifting geopolitical tides mean we need a change in European security to take control of our destiny,” Strack-Zimmermann emphasized upon her election. The EU Parliament had already advocated for enhanced EU-NATO cooperation in the last legislative period. Strack-Zimmermann has repeatedly called for China to influence Moscow.
The Subcommittee on Human Rights will be chaired by French Green MEP Mounir Satouri. The subcommittee has been involved in several resolutions regarding Hong Kong and Xinjiang in the past. Satouri has so far focused less on China, with his primary focus on the Middle East.
In addition to the committees, the delegations are important for the European Parliament’s work on China. The China Delegation remains the largest with 38 members. The chair will be decided on September 19 in Strasbourg. Besides China, there will be delegations for Japan (24 members), India (24 members), ASEAN (27 members), the Korean Peninsula (13 members), Central Asia (19 members) and South Asia (15 members).
The European Taiwan Friendship Group, an informal group of EU MEPs, will continue to be led by CDU MEP Michael Gahler.
In a world of trained lawyers, economists and political scientists, Andreas Baler’s background stands out. Before he went into politics, he was a shift worker. “I got up at five in the morning and worked on the filling machine in a mineral water factory”, he says. Last year, he was surprisingly elected leader of the Austrian Social Democratic Party (SPÖ). The media describe him as an “underdog”, but many see him as the hope of the Austrian left.
Andreas Babler only completed a degree in political communication as a second chance at education. He remains a worker at heart. “Andi”, as his supporters call him, knows: “My way of doing politics has a lot to do with my own history.” His role model is former SPÖ Chancellor Bruno Kreisky with his “modern and progressive politics”, which the 51-year-old would like to re-establish in Austria.
It therefore also offers an alternative to conservative and populist positions, which have increased in recent years. “Many young people are no longer familiar with progressive politics”, says Babler. His own work as mayor of Traiskirchen in Lower Austria, on the other hand, has already shown in the past “how social democracy can improve people’s living conditions in a very concrete way”. What he means are rent caps and free school meals. If Babler becomes Austrian chancellor in the fall, he would like to continue this type of policy.
He is calling for a tax on the rich and is also clearly distancing himself from Herbert Kickl and the right-wing populist FPÖ on the issue of migration. In doing so, he is confronting the party, which is leading the polls for the national elections in the fall with just under 30 percent. “With me, there will be no talk of building walls to seal us off”, says Babler. Instead, he wants to remain an open country for refugees and combat the causes of flight.
Andreas Babler has caused irritation in the past with his statements on the EU. His statements in which he openly supported Austria leaving the EU still have an impact today. As recently as 2020, he described the EU as an “imperialist project” that was “worse than NATO”. Today, he says these sentences were “exaggerated”. “The European Union is an achievement and an important lever for the implementation of social democratic ideas”, Babler said in an interview with Table.Briefings. Nevertheless, he must continue to make his loyalty to the European treaties credible.
At the same time, Babler calls for a fundamental reform of the EU to make it more democratic, social and sustainable as an institution. Among other things, the powers of the European Parliament need to be expanded, for example by giving it a direct right of initiative. “We need to pull out all the stops to achieve this”, he says.
Austria needs a “reform chancellorship”, says Babler, for which he is positioning himself. Would he take on this role with the conservative ÖVP if necessary? He seems skeptical. “A lot of china has been broken in the cooperation with the ÖVP at the federal level in recent years”, he says. He believes that a lot will become clearer before the election. Jasper Bennink