For US President Joe Biden, the passage of the Inflation Reduction Act in the summer of 2022 was an unexpected success. In Europe, on the other hand, some IRA regulations are viewed with concern. Germany’s Minister for Economic Affairs Habeck and France’s Economy Minister Le Maire are now working on ways out of the dispute with their US counterparts. They are offering closer cooperation on green tech and supply chains. In this way, a “green bridge across the Atlantic” is to be built. Bernhard Pötter reports from Washington.
Beijing is reacting to the US subsidy program in its own way – at least that is how an upcoming decision likely to have far-reaching consequences for the solar industry can be interpreted: China wants to impose an export ban on key solar manufacturing technologies. If the ban is implemented, it will hurt the Western industry, analyzes Nico Beckert. The People’s Republic is a global leader in both the manufacture of solar precursors and production equipment. According to experts, it is “almost impossible” to build a solar industry in Western countries without Chinese equipment.
The Parliament is making speed: Tomorrow, the MEPs in the lead Industry Committee will vote on the compromise on the Data Act. Observers expect a clear majority, as the major groups support the proposal by rapporteur Pilar del Castillo Vera (EPP) – albeit in part reluctantly, as in the case of shadow rapporteur Damian Boeselager (Greens/EFA). The industry, on the other hand, criticizes the compromise clearly. They say one of the main design flaws of the Data Act is that it does not make an appropriate distinction between B2C and B2B business relationships. Corinna Visser has the details.
The EU and the US want to cooperate more closely on the exchange of green goods. “We discuss whether common markets can be created through common standards and standard setting in green industries,” said Federal Minister for Economic Affairs Robert Habeck at the end of his visit to Washington on Tuesday. This is supposed to be achieved by the already existing expert group between the US and the EU, the Trade Technology Council (TTC).
He said the talks were not about a comprehensive free trade agreement but about practical agreements: For example, products approved in the US market could automatically be approved in Europe – and vice versa, Habeck said. This way, a “green bridge across the Atlantic” will be built.
The move shows how the US and the EU intend to move carefully toward each other in the dispute over subsidies for green US products. On Tuesday, Habeck came to Washington with French Economy and Finance Minister Bruno Le Maire to register European interests and sound out room for maneuver with the US government. In “close consultation with the EU Commission,” which is leading the negotiations, as was repeatedly emphasized.
Both ministers completed a day of talks in Washington: Habeck visited Secretary of Energy Jennifer Granholm, Secretary of State Antony Blinken, Treasury Secretary Janet Yellen, Secretary of Commerce Gina Raimondo and Trade Representative Katherine Tai, and US President Biden’s IRA advisor John Podesta.
Habeck praised the Inflation Reduction Act (IRA) repeatedly, through which the US Congress cleared the way last summer for massive investments, including in green technologies: Some 370 billion dollars will be spent over ten years on renewable energies, green hydrogen, clean mobility, battery production and carbon storage (CCS), among other things. The package is intended to help reduce carbon emissions in the USA by one billion metric tons a year by 2030. According to a comprehensive study, it thus achieves two-thirds of the reduction needed to bring the US to net-zero emissions by 2050 as agreed.
The IRA is particularly important in the US because:
For US President Joe Biden, the passage of the IRA in the summer of 2022 was a great and surprising success. The subsidy package was also a key topic of his address to the nation Tuesday night.
“We have been pushing the US to get serious about climate protection for a long time, and the IRA is a great thing,” Habeck said. Le Maire also stressed that a strong European industry cooperates best with a strong American industry. According to Habeck, European industries such as plant engineering would also benefit greatly from the IRA and the demand for products.
However, Le Maire also stressed the need for fairness in mutual dealings. This statement refers to provisions in the IRA, according to which about 60 percent of all tax incentives include a “local content” clause. This means products must be made in whole or in part in the US or originate in Canada or Mexico, with which the US has free trade agreements. The EU announced that it would also streamline its state aid rules in response to the IRA.
Europe pushes for changes in the IRA, particularly in the following areas:
Habeck and Le Maire emphasized that they did not expect the IRA to be changed again as a legislative package. They said it was now about progress in implementing provisions.
A new study by the German Institute for Economic Research (DIW) shows the importance of supply chains for green growth in the USA. According to the study, 76 percent of critical raw materials so far come from countries that do not have a free trade agreement with the US. In the case of critical green techs such as photovoltaics, wind turbines or lithium batteries, more than half of the raw materials come from non-free trade countries.
“With the Inflation Reduction Act, the US primarily wants to support its domestic economy, make it more resilient to supply bottlenecks, and position itself as a technology leader. But their strong dependence on raw materials and technology could mean they continue to rely on countries without free trade agreements,” explains study author Josefin Meyer.
It is a minor announcement that could have a major impact: China wants to place an export ban on important technologies for the production of solar systems. A final decision on this is still pending. A public consultation was open until the end of January. But all China experts consulted are certain that the export restrictions will come. Once a consultation period is over, China rarely reverses major changes to regulations, says Rebecca Arcesati, an analyst at the German China think tank Merics.
If the plan goes through, the export of solar production technologies will only be possible with the approval of the authorities. “It will not be easy to obtain such permits,” says trade expert Wan-Hsin Liu of the Kiel Institute for the World Economy. The application is said to be a complicated process.
First, a request has to be submitted, which is then reviewed based on, for example, security and industrial policy aspects. “Only then are companies allowed to negotiate the deals with potential buyers,” Liu says. If buyer and seller agree on the deal, a second export license must be applied for “with further documents”.
The export restrictions will “definitely” slow down the development of own production capacities in western countries, says Johannes Bernreuter, an expert on solar supply chains. The know-how still exists, even outside China. But “the production capacities are tiny and not price-competitive”.
Chinese production plants are much cheaper than Western ones – partly due to years of government subsidies for the sector, says the expert, who runs his own consulting agency. Due to the lack of price competitiveness, Western manufacturers of production equipment have withdrawn from the market. The Chinese export ban will therefore hit the Western industry at a critical weak point, Bernreuter says.
The export restrictions would affect:
The People’s Republic is the global leader in the production of these solar precursors. 97 percent of the solar wafers and ingots produced worldwide come from China.
In solar production equipment, too, China is the global market leader. Developing a solar industry in the West without using Chinese equipment is “almost impossible”, write the analysts of the think tank Bloomberg NEF. The barriers to entry for the production of wafers and ingots are very high, they say. “The bleeding-edge knowledge” of photovoltaic manufacturing is in China, say the BNEF analysts.
These export restrictions do not come at a surprising juncture. The USA recently earmarked billions in subsidies for the development of green industries under the Inflation Reduction Act. The EU also wants to catch up in green technologies. And India is taking big steps to build up its own solar industry.
So China sees its dominance in the sector threatened. The solar sector is an important economic sector:
Restricting solar manufacturing tech exports is also politically motivated. “Beijing wants to keep Western countries dependent on China whenever possible and shore up dominance over the tech supply chains it controls,” says Merics analyst Arcesati. The country has built its export control system in recent years “to defend its security, economic, technological and industrial interests”. Accordingly, China’s decision should also be understood as a response to the US Inflation Reduction Act and the EU’s efforts to build its own green supply chains, the analyst says.
The explosive nature of the decision is also evident from the other goods that China has already placed on its “export restriction list” in the past. The list was first published in 2008. Technologies for the extraction and processing of rare earths were placed on the list early on, meaning that exports of these technologies are prohibited. China is also the world leader in mining and export of rare earths and had in the meantime almost established a monopoly position.
Beijing used its dominance in rare earths in a territorial dispute against Japan in 2010. It imposed an export ban and put massive pressure on Japan. China has built up its export control system in recent years “to defend its security, economic, technological and industrial interests,” says Arcesati of Merics.
However, it is uncertain whether China will not in fact hurt itself in the long run with these export restrictions. “Threats of controlling solar tech will make others increase efforts to diversify,” speculates energy expert Lauri Myllyvirta of the Centre for Research on Energy and Clean Air on Twitter. A similar case was observed with the Chinese rare-earth embargo against Japan. The neighboring country stepped up its efforts to diversify its supply sources.
Unlike with the AI Act, this time, it is the Parliament that is setting the pace. The Council is still far from a general direction on the Data Act. However, this Thursday, MEPs in the lead industry committee (ITRE) are already voting on a compromise. The paper is available to Table.Media.
Observers expect the proposal to find a clear majority as the major political groups EPP, S&D, Renew, Greens/EFA, and ECR support the compromise of rapporteur Pilar del Castillo Vera (EPP). Opposition comes from the industry, which warns of negative consequences for the competitiveness of European companies. The other committees involved have already issued their opinions. The plenary vote is scheduled for March 13.
The Parliament made several changes to the dossier proposed by Internal Market Commissioner Thierry Breton in February 2022. Among them:
Shadow rapporteur Damian Boeselager (Greens/EFA) is not satisfied, for example, when it comes to the definition of data. This is because manufacturers would be offered countless opportunities to restrict the data access rights of users, i.e. the owners of networked devices.
These include trade secrets, security-related data, and data collected based on complex proprietary algorithms and anti-competition clauses. All restrictions made data sharing more legally uncertain. And they mean that the data economy is not sufficiently developed, says Boeselager. Overall, however, he and his group support the compromise.
It is “a good start for a data sharing economy,” even if it still falls short of its possibilities, comments Nicola Beer (Renew), Vice President of the European Parliament, on the compromise. Her group colleague, shadow rapporteur Alin Mituța, even sees the Data Act as a core instrument. The compromise “creates the conditions for European companies, including SMEs, to have more access to data and innovation.”
Mituța finds that the Parliament achieved clarity on many provisions, including definitions and scope. “It is a balanced approach because it introduces safeguards to protect our companies’ intellectual property rights while ensuring that companies do not strategically use the trade secrets exception to circumvent their data sharing obligations.”
Angelika Niebler (CSU) sees the main challenge with the Data Act as finding a balance between the different interests of data users and data owners. It was also important to better delineate which product data have to be shared – and which do not, such as data from prototypes. “It is also true that the Commission must now evaluate in its review whether it is economically attractive to collect high-quality and innovative data sets”, says Niebler.
When it comes to the protection of trade secrets, Niebler would have liked to see more legal certainty for companies. She said it is clear that trade secret owners can suspend the sharing of such data in the event of a breach of the protective measures. “However, it would be better if the trade secret owner could also refuse to share such data in advance if these measures are not complied with,” Niebler says. “This is where improvements need to be made down the road.”
European and German industries also see a need for improvement. “The specific requirements of the Data Act pose considerable risks for the digitization of industry and Europe as an industrial location,” criticizes the German Engineering Federation (VDMA). It calls on the EU Parliament not to intervene in business relationships without good reason and to provide scope in the Data Act that is absolutely necessary for data exchange between companies.
A central design flaw of the Data Act would be that it does not distinguish appropriately between B2C and B2B business relationships. But this fundamental distinction is elementary, it said, because no consumer needs to be protected in B2B relationships. The VDMA finds that “there are companies facing each other that can freely arrange the exchange of data in a way that is satisfactory for both sides.”
The German Confederation of Skilled Crafts (ZDH) for its part is calling on members of the parliament to focus on the users of the products. “For their work, skilled crafts businesses depend on fair access to data generated from heating systems, smart homes, and vehicles,” says ZDH Secretary General Holger Schwannecke. The association fears a catalog of obligations difficult for craft businesses to keep track of. The result would be that data use and processing would become too risky for the companies.
Nicola Beer expects the trilogue negotiations to be difficult. “There are also many national interests at play here,” she explains. “We thus have to make sure we don’t lose sight of the goal: It’s about a data-sharing economy that should promote innovation through improved access to raw data.” This, she says, helps SMEs and startups, in particular, to thrive. “In the trilogue, it will be important to follow through with the SME perspective and not buckle before the interests of the national champions.”
During the phone call, Florian Rothenberg is wrapped in a wool blanket. The energy crisis does not only concern him in his profession – he is an emissions trading analyst at the information service Independent Commodity Intelligence Services (ICIS) in Karlsruhe. The high energy prices are also an issue for him in his private life: Because he wants to win the energy-saving challenge of the Karlsruhe municipal utility company and reduce his consumption by at least 20 percent, he hardly heats at all and showers cold. And he wears warm clothes while working in his home office.
In his job, Rothenberg is currently focusing on how Russia’s invasion of Ukraine will affect European emissions trading and the energy markets.
At the beginning of the crisis, many market participants, including Rothenberg’s clients, had feared that politicians would drop emissions trading – the prices for energy and pollution rights had simply risen too high. “But trust is very important in the market,” says Rothenberg. After all, if an industrial company buys certificates for the next ten years, it needs to be able to rely on the fact that the emissions trading system will still exist.
In the end, there was a compromise: frontloading. Companies can buy more certificates in the short term but fewer in the future. As a result, emissions trading has not become collateral damage of the energy crisis, says the expert. “Compared to other markets such as the electricity or gas market, it got off lightly.”
Rothenberg, 28, has been working at ICIS for six years, and “it doesn’t get boring.” He studied industrial engineering in Karlsruhe, Germany, where it is normal to hear about ICIS at some point. “Emissions trading remains a niche, which is why not all students are familiar with ICIS,” Rothenberg says. “But anyone who studies energy economics stumbles across us.”
The analyst’s central topics are energy markets and decarbonization. Rothenberg is also constantly learning about trends that could affect the markets. He finds that exciting: “The carbon issue is everywhere. I need to understand very quickly where energy is needed and consumed – and how that affects emissions trading.”
For this, he collects data on the demand and supply of pollution allowances, among other things. He studies how prices are formed and why they fall or rise. He records his analyses in mathematical models and discusses the results with colleagues and then with his clients.
The EU’s Green Deal is currently an important issue for him. “The big question is at what carbon price Europe can achieve Net-Zero,” says Florian Rothenberg. This is not about a specific amount of money, but a price path. Because that is one of the most important decision-making factors for industrial companies to invest in climate protection.
Climate researchers criticize that the EU’s targets do not go far enough. “That is probably true, but more ambitious targets should have been initiated five to ten years ago,” says Rothenberg. “For the economy to cut EU emissions by 55 percent by 2030 is a huge step because it takes an incredibly long time to transform.”
His own carbon footprint, Rothenberg admits, is “probably significantly worse than the world average.” That’s because he likes to travel and flies by plane. At least he takes the train to save on emissions when he travels on business. “I believe everyone can and should do a small part to combat climate change.” Patricia Hoffhaus
For US President Joe Biden, the passage of the Inflation Reduction Act in the summer of 2022 was an unexpected success. In Europe, on the other hand, some IRA regulations are viewed with concern. Germany’s Minister for Economic Affairs Habeck and France’s Economy Minister Le Maire are now working on ways out of the dispute with their US counterparts. They are offering closer cooperation on green tech and supply chains. In this way, a “green bridge across the Atlantic” is to be built. Bernhard Pötter reports from Washington.
Beijing is reacting to the US subsidy program in its own way – at least that is how an upcoming decision likely to have far-reaching consequences for the solar industry can be interpreted: China wants to impose an export ban on key solar manufacturing technologies. If the ban is implemented, it will hurt the Western industry, analyzes Nico Beckert. The People’s Republic is a global leader in both the manufacture of solar precursors and production equipment. According to experts, it is “almost impossible” to build a solar industry in Western countries without Chinese equipment.
The Parliament is making speed: Tomorrow, the MEPs in the lead Industry Committee will vote on the compromise on the Data Act. Observers expect a clear majority, as the major groups support the proposal by rapporteur Pilar del Castillo Vera (EPP) – albeit in part reluctantly, as in the case of shadow rapporteur Damian Boeselager (Greens/EFA). The industry, on the other hand, criticizes the compromise clearly. They say one of the main design flaws of the Data Act is that it does not make an appropriate distinction between B2C and B2B business relationships. Corinna Visser has the details.
The EU and the US want to cooperate more closely on the exchange of green goods. “We discuss whether common markets can be created through common standards and standard setting in green industries,” said Federal Minister for Economic Affairs Robert Habeck at the end of his visit to Washington on Tuesday. This is supposed to be achieved by the already existing expert group between the US and the EU, the Trade Technology Council (TTC).
He said the talks were not about a comprehensive free trade agreement but about practical agreements: For example, products approved in the US market could automatically be approved in Europe – and vice versa, Habeck said. This way, a “green bridge across the Atlantic” will be built.
The move shows how the US and the EU intend to move carefully toward each other in the dispute over subsidies for green US products. On Tuesday, Habeck came to Washington with French Economy and Finance Minister Bruno Le Maire to register European interests and sound out room for maneuver with the US government. In “close consultation with the EU Commission,” which is leading the negotiations, as was repeatedly emphasized.
Both ministers completed a day of talks in Washington: Habeck visited Secretary of Energy Jennifer Granholm, Secretary of State Antony Blinken, Treasury Secretary Janet Yellen, Secretary of Commerce Gina Raimondo and Trade Representative Katherine Tai, and US President Biden’s IRA advisor John Podesta.
Habeck praised the Inflation Reduction Act (IRA) repeatedly, through which the US Congress cleared the way last summer for massive investments, including in green technologies: Some 370 billion dollars will be spent over ten years on renewable energies, green hydrogen, clean mobility, battery production and carbon storage (CCS), among other things. The package is intended to help reduce carbon emissions in the USA by one billion metric tons a year by 2030. According to a comprehensive study, it thus achieves two-thirds of the reduction needed to bring the US to net-zero emissions by 2050 as agreed.
The IRA is particularly important in the US because:
For US President Joe Biden, the passage of the IRA in the summer of 2022 was a great and surprising success. The subsidy package was also a key topic of his address to the nation Tuesday night.
“We have been pushing the US to get serious about climate protection for a long time, and the IRA is a great thing,” Habeck said. Le Maire also stressed that a strong European industry cooperates best with a strong American industry. According to Habeck, European industries such as plant engineering would also benefit greatly from the IRA and the demand for products.
However, Le Maire also stressed the need for fairness in mutual dealings. This statement refers to provisions in the IRA, according to which about 60 percent of all tax incentives include a “local content” clause. This means products must be made in whole or in part in the US or originate in Canada or Mexico, with which the US has free trade agreements. The EU announced that it would also streamline its state aid rules in response to the IRA.
Europe pushes for changes in the IRA, particularly in the following areas:
Habeck and Le Maire emphasized that they did not expect the IRA to be changed again as a legislative package. They said it was now about progress in implementing provisions.
A new study by the German Institute for Economic Research (DIW) shows the importance of supply chains for green growth in the USA. According to the study, 76 percent of critical raw materials so far come from countries that do not have a free trade agreement with the US. In the case of critical green techs such as photovoltaics, wind turbines or lithium batteries, more than half of the raw materials come from non-free trade countries.
“With the Inflation Reduction Act, the US primarily wants to support its domestic economy, make it more resilient to supply bottlenecks, and position itself as a technology leader. But their strong dependence on raw materials and technology could mean they continue to rely on countries without free trade agreements,” explains study author Josefin Meyer.
It is a minor announcement that could have a major impact: China wants to place an export ban on important technologies for the production of solar systems. A final decision on this is still pending. A public consultation was open until the end of January. But all China experts consulted are certain that the export restrictions will come. Once a consultation period is over, China rarely reverses major changes to regulations, says Rebecca Arcesati, an analyst at the German China think tank Merics.
If the plan goes through, the export of solar production technologies will only be possible with the approval of the authorities. “It will not be easy to obtain such permits,” says trade expert Wan-Hsin Liu of the Kiel Institute for the World Economy. The application is said to be a complicated process.
First, a request has to be submitted, which is then reviewed based on, for example, security and industrial policy aspects. “Only then are companies allowed to negotiate the deals with potential buyers,” Liu says. If buyer and seller agree on the deal, a second export license must be applied for “with further documents”.
The export restrictions will “definitely” slow down the development of own production capacities in western countries, says Johannes Bernreuter, an expert on solar supply chains. The know-how still exists, even outside China. But “the production capacities are tiny and not price-competitive”.
Chinese production plants are much cheaper than Western ones – partly due to years of government subsidies for the sector, says the expert, who runs his own consulting agency. Due to the lack of price competitiveness, Western manufacturers of production equipment have withdrawn from the market. The Chinese export ban will therefore hit the Western industry at a critical weak point, Bernreuter says.
The export restrictions would affect:
The People’s Republic is the global leader in the production of these solar precursors. 97 percent of the solar wafers and ingots produced worldwide come from China.
In solar production equipment, too, China is the global market leader. Developing a solar industry in the West without using Chinese equipment is “almost impossible”, write the analysts of the think tank Bloomberg NEF. The barriers to entry for the production of wafers and ingots are very high, they say. “The bleeding-edge knowledge” of photovoltaic manufacturing is in China, say the BNEF analysts.
These export restrictions do not come at a surprising juncture. The USA recently earmarked billions in subsidies for the development of green industries under the Inflation Reduction Act. The EU also wants to catch up in green technologies. And India is taking big steps to build up its own solar industry.
So China sees its dominance in the sector threatened. The solar sector is an important economic sector:
Restricting solar manufacturing tech exports is also politically motivated. “Beijing wants to keep Western countries dependent on China whenever possible and shore up dominance over the tech supply chains it controls,” says Merics analyst Arcesati. The country has built its export control system in recent years “to defend its security, economic, technological and industrial interests”. Accordingly, China’s decision should also be understood as a response to the US Inflation Reduction Act and the EU’s efforts to build its own green supply chains, the analyst says.
The explosive nature of the decision is also evident from the other goods that China has already placed on its “export restriction list” in the past. The list was first published in 2008. Technologies for the extraction and processing of rare earths were placed on the list early on, meaning that exports of these technologies are prohibited. China is also the world leader in mining and export of rare earths and had in the meantime almost established a monopoly position.
Beijing used its dominance in rare earths in a territorial dispute against Japan in 2010. It imposed an export ban and put massive pressure on Japan. China has built up its export control system in recent years “to defend its security, economic, technological and industrial interests,” says Arcesati of Merics.
However, it is uncertain whether China will not in fact hurt itself in the long run with these export restrictions. “Threats of controlling solar tech will make others increase efforts to diversify,” speculates energy expert Lauri Myllyvirta of the Centre for Research on Energy and Clean Air on Twitter. A similar case was observed with the Chinese rare-earth embargo against Japan. The neighboring country stepped up its efforts to diversify its supply sources.
Unlike with the AI Act, this time, it is the Parliament that is setting the pace. The Council is still far from a general direction on the Data Act. However, this Thursday, MEPs in the lead industry committee (ITRE) are already voting on a compromise. The paper is available to Table.Media.
Observers expect the proposal to find a clear majority as the major political groups EPP, S&D, Renew, Greens/EFA, and ECR support the compromise of rapporteur Pilar del Castillo Vera (EPP). Opposition comes from the industry, which warns of negative consequences for the competitiveness of European companies. The other committees involved have already issued their opinions. The plenary vote is scheduled for March 13.
The Parliament made several changes to the dossier proposed by Internal Market Commissioner Thierry Breton in February 2022. Among them:
Shadow rapporteur Damian Boeselager (Greens/EFA) is not satisfied, for example, when it comes to the definition of data. This is because manufacturers would be offered countless opportunities to restrict the data access rights of users, i.e. the owners of networked devices.
These include trade secrets, security-related data, and data collected based on complex proprietary algorithms and anti-competition clauses. All restrictions made data sharing more legally uncertain. And they mean that the data economy is not sufficiently developed, says Boeselager. Overall, however, he and his group support the compromise.
It is “a good start for a data sharing economy,” even if it still falls short of its possibilities, comments Nicola Beer (Renew), Vice President of the European Parliament, on the compromise. Her group colleague, shadow rapporteur Alin Mituța, even sees the Data Act as a core instrument. The compromise “creates the conditions for European companies, including SMEs, to have more access to data and innovation.”
Mituța finds that the Parliament achieved clarity on many provisions, including definitions and scope. “It is a balanced approach because it introduces safeguards to protect our companies’ intellectual property rights while ensuring that companies do not strategically use the trade secrets exception to circumvent their data sharing obligations.”
Angelika Niebler (CSU) sees the main challenge with the Data Act as finding a balance between the different interests of data users and data owners. It was also important to better delineate which product data have to be shared – and which do not, such as data from prototypes. “It is also true that the Commission must now evaluate in its review whether it is economically attractive to collect high-quality and innovative data sets”, says Niebler.
When it comes to the protection of trade secrets, Niebler would have liked to see more legal certainty for companies. She said it is clear that trade secret owners can suspend the sharing of such data in the event of a breach of the protective measures. “However, it would be better if the trade secret owner could also refuse to share such data in advance if these measures are not complied with,” Niebler says. “This is where improvements need to be made down the road.”
European and German industries also see a need for improvement. “The specific requirements of the Data Act pose considerable risks for the digitization of industry and Europe as an industrial location,” criticizes the German Engineering Federation (VDMA). It calls on the EU Parliament not to intervene in business relationships without good reason and to provide scope in the Data Act that is absolutely necessary for data exchange between companies.
A central design flaw of the Data Act would be that it does not distinguish appropriately between B2C and B2B business relationships. But this fundamental distinction is elementary, it said, because no consumer needs to be protected in B2B relationships. The VDMA finds that “there are companies facing each other that can freely arrange the exchange of data in a way that is satisfactory for both sides.”
The German Confederation of Skilled Crafts (ZDH) for its part is calling on members of the parliament to focus on the users of the products. “For their work, skilled crafts businesses depend on fair access to data generated from heating systems, smart homes, and vehicles,” says ZDH Secretary General Holger Schwannecke. The association fears a catalog of obligations difficult for craft businesses to keep track of. The result would be that data use and processing would become too risky for the companies.
Nicola Beer expects the trilogue negotiations to be difficult. “There are also many national interests at play here,” she explains. “We thus have to make sure we don’t lose sight of the goal: It’s about a data-sharing economy that should promote innovation through improved access to raw data.” This, she says, helps SMEs and startups, in particular, to thrive. “In the trilogue, it will be important to follow through with the SME perspective and not buckle before the interests of the national champions.”
During the phone call, Florian Rothenberg is wrapped in a wool blanket. The energy crisis does not only concern him in his profession – he is an emissions trading analyst at the information service Independent Commodity Intelligence Services (ICIS) in Karlsruhe. The high energy prices are also an issue for him in his private life: Because he wants to win the energy-saving challenge of the Karlsruhe municipal utility company and reduce his consumption by at least 20 percent, he hardly heats at all and showers cold. And he wears warm clothes while working in his home office.
In his job, Rothenberg is currently focusing on how Russia’s invasion of Ukraine will affect European emissions trading and the energy markets.
At the beginning of the crisis, many market participants, including Rothenberg’s clients, had feared that politicians would drop emissions trading – the prices for energy and pollution rights had simply risen too high. “But trust is very important in the market,” says Rothenberg. After all, if an industrial company buys certificates for the next ten years, it needs to be able to rely on the fact that the emissions trading system will still exist.
In the end, there was a compromise: frontloading. Companies can buy more certificates in the short term but fewer in the future. As a result, emissions trading has not become collateral damage of the energy crisis, says the expert. “Compared to other markets such as the electricity or gas market, it got off lightly.”
Rothenberg, 28, has been working at ICIS for six years, and “it doesn’t get boring.” He studied industrial engineering in Karlsruhe, Germany, where it is normal to hear about ICIS at some point. “Emissions trading remains a niche, which is why not all students are familiar with ICIS,” Rothenberg says. “But anyone who studies energy economics stumbles across us.”
The analyst’s central topics are energy markets and decarbonization. Rothenberg is also constantly learning about trends that could affect the markets. He finds that exciting: “The carbon issue is everywhere. I need to understand very quickly where energy is needed and consumed – and how that affects emissions trading.”
For this, he collects data on the demand and supply of pollution allowances, among other things. He studies how prices are formed and why they fall or rise. He records his analyses in mathematical models and discusses the results with colleagues and then with his clients.
The EU’s Green Deal is currently an important issue for him. “The big question is at what carbon price Europe can achieve Net-Zero,” says Florian Rothenberg. This is not about a specific amount of money, but a price path. Because that is one of the most important decision-making factors for industrial companies to invest in climate protection.
Climate researchers criticize that the EU’s targets do not go far enough. “That is probably true, but more ambitious targets should have been initiated five to ten years ago,” says Rothenberg. “For the economy to cut EU emissions by 55 percent by 2030 is a huge step because it takes an incredibly long time to transform.”
His own carbon footprint, Rothenberg admits, is “probably significantly worse than the world average.” That’s because he likes to travel and flies by plane. At least he takes the train to save on emissions when he travels on business. “I believe everyone can and should do a small part to combat climate change.” Patricia Hoffhaus
