Interview with VDA head Müller + Digital policy outlook
Hildegard Müller (VDA): ‘Getting out of China is no solution’
Digital policy: this fall’s agenda
Lithuania’s prime minister appeals to Europeans’ perseverance
Ukraine: 13 ships launched with 282,500 tons of grain
Electricity market: Germany follows EU proposal
Ecodesign requirements and repair labels: Commission presents first drafts
Opinion: Carbon Farming – A horse saddled with the wrong bridle
Dear reader,
The EU’s legislative process for car-related dossiers is not yet finished, but the end of the internal combustion engine by 2035 and a stalling of synthetic fuels are already emerging. Interviewed by Lukas Scheid and me, Hildegard Müller, President of the German Association of the Automotive Industry (VDA), takes an early look at the resulting consequences for manufacturers and suppliers. It would hit suppliers hard in particular, with jobs at risk in the six-digit range.
She also has serious concerns about whether the Commission’s proposal for a minimum number of public charging stations (AFIR) will remain. Europe does not have an announcement problem, but an implementation problem, she says. In the next stage of emissions regulation (Euro 7), the players are not the member states, but the industry. Here, Müller calls for a “moderate” proposal. Otherwise, she says, the internal combustion engine could become too expensive, even way before the political will kills it off.
The summer break is now over in Brussels, Strasbourg and Luxembourg. The Czech EU Council Presidency wants to drive forward the legislative projects in digital policy. In their thematic outlook, Corinna Visser and Falk Steiner outline what is on the agenda here this fall and who the players are.
On Friday, the economy ministers of the 27 member states plan to pass concrete resolutions at their meeting on how to stop the price increase for gas and electricity. The German government presented its third relief package on Sunday and wants to ensure that “windfall profits” from electricity producers are skimmed off. In doing so, the German government follows the course proposed by the EU Commission last week.
Your Markus Grabitz
Feature
Hildegard Müller: ‘Simply leaving China is not the solution’
Hildegard Müller is president of the industry association VDA.
Ms. Müller, The end of the internal combustion engine in 2035 is practically certain. BMW, Mercedes, and VW are prepared to drive mainly EVs by the end of the decade. So are the industry’s groans more like phantom pain?
It is too early to make a final assessment. After all, the trilogue is still pending. However, I urgently warn against pushing the ambition level even higher in the EU legislative process. Instead, we need to create the right conditions to ensure that the ambitious targets can be achieved and that people are involved in the transformation process.
At the same time, one thing is certain: The industry will succeed in bringing the EV to relevant markets. The automotive industry has accepted the challenge of transformation. It is investing around €220 billion in research and development until 2026, primarily in electric mobility. In addition, at least another €100 billion will be spent on converting plants by 2030. So no one can accuse the auto industry of failing because of us. We want the ramp-up and are driving the transformation.
And what about the suppliers?
Suppliers are probably facing their biggest business challenge yet. Many have to develop a new business model while still building components for the combustion engine. We know from studies that around half of the jobs in the German automotive industry are still tied to the combustion engine. According to the ifo Institute, at least 215,000 jobs will be affected by the transformation by 2030. Not all of them will be eliminated, but they are up for grabs. The supplier industry is therefore facing an extraordinary challenge, and I see it facing up to this change every day with all its innovative strength and responsibility for its employees. At the same time, they are currently suffering particularly under the massive increases in raw material and energy prices. On top of that, they face taxonomy and ESG requirements that make the necessary funding for transformation harder to obtain. To put it plainly, yes, times are tough for many suppliers and their employees.
The EU wants to put the brakes on synthetic fuels for cars. After the Council of Ministers, the window is only ajar. Do you still expect a substantial proposal?
There is a clear mandate from the Council of Ministers that the Commission must deliver. It is not about Frans Timmermans, the Commissioner responsible, nurturing his opinions, but about implementing what the member states want him to do – and now rightly expect him to do. To date, the EU has not made any substantial proposal as to how the existing fleet can be decarbonized. In doing so, it is willingly accepting that Europe will fail to meet its climate targets in the transport sector. We are currently talking about around 280 million vehicles in the EU and 1.5 billion vehicles worldwide. Carbon neutrality cannot be achieved without a solution for the existing fleet. And synthetic fuels are a promising option here. An option that must now be resolutely made feasible and appropriately advanced.
The EU is working on the regulation for a minimum number of public charging points in all member states. Are the plans for the “AFIR” regulation going in the right direction?
The EU needs to be much more ambitious here. The industry is responsible for getting the cars onto the market. The state is required to provide the framework for the charging infrastructure. But what the states have planned so far is nowhere near enough. The charging capacity per vehicle is set too low. We need 3 KW of charging power per pure electric vehicle and 2 KW per plug-in hybrid. And: The maximum distances between charging points are set too far. Instead of 60 kilometers, we are calling for a maximum of 40 kilometers. In addition, the power supply per charging station must be doubled compared with what is proposed. We also need at least one point with 350 KW per charging station; so far, only 150 KW have been provided. So there is still a lot of room for improvement.
However, it should also be ensured that the countries do their homework…
The fact is that the EU generally does not have an announcement, but an implementation problem. That is why there needs to be regular monitoring of whether the expansion is on track. You only need to look at the current numbers of public charging points to see how dramatic the situation is: Hamburg has twice as many charging points as all of Greece. Brandenburg has more charging points than all of Ireland. Half of all charging points in the EU are in the Netherlands and Germany – and we need to significantly step up our own expansion ourselves. That is why the EU must make mandatory how political adjustments are to be made if the targets are missed. Networking with the energy industry must also be ensured so that there is sufficient electricity available for charging and the grids are expanded accordingly – this is where it still fails far too often.
The Commission is presenting its proposal for the next stage of emissions regulation (Euro 7) on October 12. Is this still necessary? The internal combustion engine will be phased out anyway…
No, the industry is prepared to continue contributing to improving air quality. We want to keep developing the car. Also given the trend toward electric cars, innovation needs to be in reasonable proportion to the costs. The initial proposals would also have led to a ban on internal-combustion vehicles through the back door. If the emission limits had to be met in all driving situations, we would end up with a regulation that could no longer be handled with legal certainty. It makes sense to further develop Euro 6 in a measured and swift manner, also in order to finally have planning security. The key is to ensure that it is not overly complex and can actually be implemented. Consumers will continue to be able to buy a car made in Europe at a reasonable cost.
The economic landscape is becoming bleaker…
Forecasts predict that a recession may set in. This goes hand in hand with a loss of jobs. And this, of course, has an impact on consumers’ purchasing power and spending mood. All the more reason for the Commission to keep an eye on the question: How expensive can the transformation we are asking citizens to accept become? We must not forget: If this transformation fails in Europe, Europe will also lose its function as a role model for climate protection vis-à-vis other economic regions. In Africa, for example, people are watching very closely to see whether the Green Deal in Europe works. Only if our approach is copied worldwide will we make global progress on climate protection.
Keyword China: Manufacturers are doubly dependent on China today. BMW, Mercedes and VW are also fundamentally dependent on China, both as a sales market and supplier. Has the industry made itself too dependent on China?
The question of the relationship with China goes far beyond the auto industry. Overall, we are observing fundamental changes around the world: Until now, economics has accompanied, supported and stabilized political change. Now we are seeing geo-economics being used as a political strategy by some. This is a change whose consequences we are only just becoming aware of in Europe.
What is the consequence of this?
The answer cannot and must not be a rejection of globalization. On the contrary, Putin’s war of aggression means that we must talk and cooperate with even more countries. In doing so, we must of course diversify more and reduce dependencies. I will never tire of repeating that we need more raw materials, energy, and trade agreements. We can’t spend 15 years negotiating CETA with Canada and then renegotiate it again when everything is ready. We need an offensive for more legally secure agreements. Other countries are very active when it comes to securing access to raw materials and energy. We are too often not involved, we are much too slow, and we are increasingly weakening the competitive conditions for Europe and thus also for our industry. Europe’s future prosperity is at stake.
And what about corporate engagement?
Companies are doing all they can to become more diversified and resilient, finding alternative suppliers for raw materials and inputs wherever possible and signing contracts. Trade agreements provide the framework within which these contracts can be concluded with legal certainty. The other issue is sales markets. Of course, China is very important for our industry in this respect. The revenue we make there, too, feeds into the profits that pay for the transition. Incidentally, China is also interested in our involvement.
What does that mean?
I would like to see more support from policymakers. We need an integrated China strategy. But I see a lot of stagnation here, both at the national and EU levels. Simply leaving China is not the solution. The country and its economic importance are too big for that. We cannot isolate China. That would be naïve – and fatal, both politically and economically.
The chip crisis has cost manufacturers a lot of business. Does it make more sense to produce the chips at a higher price here instead of importing them from Asia with a certain risk?
When it comes to chips, we do not have a system dominated solely by the laws of the market. On the contrary, some states have actively pursued industrial policies and provided a lot of subsidies to ensure that factories were established. Europe has long rejected this. Slowly, it is waking up. It is high time to adapt the EU competition rules to the changing geostrategic conditions. Here, what could strengthen Europe globally is quickly seen as illegal aid.
What does that mean?
The EU has made a course correction and launched numerous IPCEIs for chip production. This is the right way to go in this case: I think production in Europe is important to make the industry more resilient.
Autoindustrie
Automotive Industry
E-Fuels
Digital policy (1): this fall’s agenda
The EU has already passed several milestones of its digital strategy. The Digital Services Act (DSA) and the Digital Markets Act (DMA) have been signed and sealed. But with the Artificial Intelligence Act (AI Act) and the Data Act, two more important and far-reaching regulations are pending. The AI regulation is the first attempt ever to pass horizontal regulation on AI. Europe hopes to take a pioneering role here. But time is short, as the competition from the US or China are pressing hard.
Artificial Intelligence Act (AI)
Commission proposal: April 21, 2021
Actors: Lead committees in the European Parliament are IMCO and LIBE; rapporteurs are Brando Benifei (IT, S&D) and Dragoş Tudorache (RO, Renew).
Content: The Commission has adopted a risk-based approach to regulating artificial intelligence. The main part of the regulation deals with high-risk systems. They are to be approved, but have to meet a set of requirements and obligations to gain access to the EU market. Important discussion points in Parliament and Council are the definition of AI systems, the list of prohibited AI systems, the strengthening of enforcement and legal remedy mechanisms, as well as the guarantee of adequate democratic control in the design and implementation of the regulation.
Timetable: The rapporteurs submitted their draft report in late April. The vote in the two committees IMCO and LIBE is scheduled for the end of October, and the vote in the plenum for November. Due to the more than 3,000 amendments and the shared responsibilities, the voting schedules could still be postponed. The technical meetings are currently underway.
On July 15, the Czech Council Presidencyreleased a compromise text consolidating the positions of the member states. Changes were made to the four discussion points mentioned above. The member states had until September 2 to provide their feedback. The aim is to reach a general orientation by the time the Council of Telecommunications Ministers meets on December 6.
Content: The Commission has already announced the legal act on AI liability issues with the AI Act. In October 2021, it launched a public consultation on the rules for compensation for damage caused by defective products. A particular focus was placed on the application of AI in products and services. There were initial considerations to combine AI liability and the revised product liability into one legislative act, but now there will be two.
The reason for a separate AI liability law is that the safety of products and services depends not only on their design and production, but also on software updates, data flows and algorithms. And the question is who should be held liable for damages. This is a particularly hot issue when it comes to general-purpose AI, because a company cannot know for exactly what purpose its system will be used. The rules should tie in with the AI Act to find effective solutions for liability and “ensure effective compensation for victims,” a commission spokesman said.
Data Act
Commission proposal: February 23, 2022
Actors: Lead committee is ITRE, Rapporteur Pilar del Castillo Vera (ES, EPP).
Content: The aim of the Data Act is to promote the flow of data between companies, between companies and governments, and in the public sector. It deals, for example, with the obligations when companies must share data with other companies and when they must transmit data to authorities, as well as cloud switching and interoperability. The IMCO Committee is responsible for the latter.
The industry welcomes the fact that there are now to be clear rules for this, but notes: “We must be careful in Europe that regulation does not take precedence over innovation,” says Bitkom President Achim Berg. Companies are already criticizing that technological developments are being slowed down because of a lack of data and data availability. “The Data Act must therefore provide more clarity on data sharing and at the same time better protect company secrets – and the planned rules for cloud services sometimes overshoot the mark by far,” says Berg.
Schedule: The ITRE draft report is expected for September 8. A first debate is scheduled for September 26, and the deadline for amendments is October 17 – but both could be postponed to the end of October. After the two committees, ITRE and IMCO initially argued about their competencies, there is now disagreement about the schedule. The vote in ITRE is scheduled for February 2023 and the vote in plenary for March 2023.
The Czech Presidency has already reached partial compromises in July and August. The next debate on this in the Council Working Party is today, Monday. The aim is to have a first complete compromise text by the end of the Council presidency. A general orientation will probably not be reached until the upcoming Swedish Council presidency.
Regulation on electronic identification and trust services (eIDAS)
Commission proposal: June 3, 2021
Actors: Lead committee is ITRE, rapporteur Romana Jerković (HR, S&D).
Content: The current 2014 regulations on electronic identification and trust services for electronic transactions in the single market (eIDAS) aim to make national eID systems interoperable across Europe to facilitate access to online services. In its digital strategy, the Commission has announced that it will review the eIDAS Regulation to improve its effectiveness and increase its use. In short, so far there is no obligation for member states to introduce digital proofs of identity; this is set to change.
Above all, member states are to be obliged to offer a secure EU identity wallet for smartphones. This includes a sovereign eID and the obligation to accept digital proof of identification.
Timeline: The Industry Committee is expected to vote on its report in October 2022. A general direction from the Council is expected for December.
Union Secure Connectivity Program
Commission proposal: February 15, 2022
Actors: Lead committee is ITRE, rapporteur Christophe Grudler (FR, Renew).
Content: Many experts believe that the war in Ukraine has once again shown that Europe not only needs a secure space-based communications infrastructure, but also its own. One that operates reliably not only in times of war and crisis, but also in the event of disasters such as the one in Germany’s Ahr Valley. Strategic sovereignty is therefore a core objective of the Secure Connectivity Program, with which the EU aims not only to advance the digitization of the economy and society, but also to counter the growing geopolitical cybersecurity threats. The mega-constellation in low-Earth orbit is intended to complement the European space projects Galileo and Copernicus.
The proposal for the program came from Internal Market Commissioner Thierry Breton. The French are pressing ahead with the plan because they hope to win major contracts for their aerospace industry. Germany, on the other hand, is keen to ensure that SMEs and, above all, innovative start-ups also get a chance to participate in both development and construction.
Timeline: Grudler submitted his draft report on May 30, 2022. The rapporteurs will convene again on September 13 in Brussels; they plan to discuss the timeframe and funding. The Council of the EU accepted its negotiating mandate on June 22, 2022, to allow the Presidency to start negotiations with the Parliament.
Cyber Resilience Act
Commission proposal: 13.09.2022 (tbc)
Actors: Thierry Breton, DG Connect
Content: The Commission presents its proposal for a regulation with the working title Cyber Resilience Act, which aims to improve the cybersecurity level of digital products and so-called ancillary services.
In preparation of the legal act, the Commission held a consultation with stakeholders. It did not specify whether this was to be merely a consolidation of existing regulations supplemented by voluntary certifications and measures, or whether it was to be horizontal regulatory measures. Here, for example, minimum requirements could be imposed on providers with regard to security qualities and thus, among other things, update obligations. The scope has also remained unclear so far: Whether all software supplied as an ancillary service to products should be included, or only software classified as critical.
NIS2 – Network and Information Security Directive revision
Final vote: Expected October 2022
Actors: Parliament, Council, Implementation German Government and Parliament
Content: Political consensus on the revision of the Network and Information Security Directive (NIS) had already been reached in May, and the Council published the corresponding four-column document in June. Since then, the final touches have been made, so that Parliament and the Council can adopt NIS2 – which should happen in the next few weeks.
The key differences to the current NIS Directive, in addition to the harmonization of threshold values, are the expansion of its scope: Here, among other things, certain areas in healthcare, and in digital infrastructure, cloud providers and content delivery networks, among others, will also be covered by the European rules in the future. In the energy sector, the hydrogen industry will also be considered critical. In addition, public administration, the wastewater sector and parts of space infrastructures will also be covered. The NIS was closely coordinated with the RCE Directive, which is being negotiated in parallel and focuses on the general availability of critical providers.
Experts consider the need for German lawmakers to adapt to NIS2 to be minimal; the revisions to the IT Security Act have already anticipated many of the changes to the EU revision. The 21-month implementation period will begin from the date of promulgation in the government gazette. Germany’s Federal Ministry of the Interior expects (assuming the directive is adopted soon) that the corresponding amendments to the IT Security Act (ITSig) and BSI Act will “probably be implemented by summer/fall 2024“.
Connectivity Infrastructure Act (tbc)
Commission proposal: Not scheduled
Actors: Thierry Breton, Margrethe Vestager, Member States, BEREC
The debate deals with the possible changes to payment models on the Internet, which would affect data traffic-intensive providers in particular, and has been going on intensively publicly and behind the scenes for several months. In the course of the review of the Broadband Cost Reduction Directive (BCRD), however, the Commission could submit proposals here in the coming months – while the European telecommunications regulators recently wanted to conduct further market investigations and consultations first.
Some member states are pushing for rapid changes to make the major providers pay even beyond their own networks. Breton and Vestager got the ball rolling on this issue (Europe.Table reported), but so far they have not come up with specifics.
Media Freedom Act
Commission proposal: 13.09.2022 (tbc)
Actors: Vera Jourová, Thierry Breton
Content: It is not yet clear whether the date of the proposal can be maintained. The Media Freedom Act is actually intended to ensure the independence of the media and protect them from unruly political influence, excessive concentration of power and possible discrimination in individual member states. At the same time, however, the proposal is also to address certain forms of dependency – for example, overpowering players in the advertising sector or online news gatekeepers.
It is hardly to be expected that a rigorous proposal to protect against state interference will meet with unlimited enthusiasm in countries like Hungary or Poland. Member states like Austria, with their controversial state media support practices, are not necessarily easy to bring on board either.
The Federal Council has already expressed completely different concerns: It warned Brussels not to exceed EU competencies and not to jeopardize the state autonomy of media control, which is also covered by European law, by establishing European supervisory institutions. By Corinna Visser and Falk Steiner
CRA
Data Act
Digitization
News
Lithuania’s Prime Minister appeals to Europeans’ perseverance
In light of Russia’s ongoing war of aggression against Ukraine, Lithuanian Prime Minister Ingrida Šimonytė has called on the EU to show perseverance. “Europe is still stronger than a single autocrat and capable of making decisions,” she said at a press briefing in Berlin yesterday. People in most European countries are worried about higher energy prices. Compared to conditions in Ukraine, however, this is merely a loss of comfort, she said. “It is nothing compared to the people who die every day in Ukraine, whose houses are destroyed or who no longer have a roof over their heads.”
Šimonytės appeals to the EU’s crisis resilience, which has proven itself many times in history. “I hope that Europe will not only endure this, but also emerge stronger, as is usual for the EU,” she said. “Ukrainians show no signs of fatigue in their struggle, and neither should we.”
Šimonytė does not see the EU’s unified line and sanctions against Russia at risk, despite some “shaky” member states. The Bulgarian interim government had announced that it would resume negotiations with Gazprom; moreover, a Putin-friendly government could be elected in Italy at the end of September. Nevertheless, Šimonytė remained unconcerned: “One good thing about the sanctions is that you can only get rid of them unanimously. So this will not be easy”.
Unified line as the only chance
Her outlook on further sanctions against Russia, as already proposed by German Foreign Minister Annalena Baerbock, is also optimistic: “All decisions on sanctions have gone through so far, although here, too, unanimity is the prerequisite.” She expressed confidence in the EU’s ability to make decisions. There will be challenging debates in national politics. But Europe would have no other chance than to maintain a common line.
Together with Estonian Prime Minister Kaja Kallas and Latvian Prime Minister Arturs Krišjānis Kariņš, Šimonytė received the International Prize of the Friedrich August von Hayek Foundation yesterday in Berlin for “their exemplary and courageous commitment to a free economic and social order as well as to sound budgetary and free-market economic policies.” Thanks to good governance, the three Baltic states have become shining examples in education, information technology, digitization and competitiveness since their independence, the foundation said in its statement.
“I hope that the success stories of the Baltic states will give us the strength to continue the fight for a world where individual and economic freedoms flourish,” Šimonytė said.
Energy efficiency should come first
For Lithuania, the biggest problem in the energy crisis at the moment is not security of supply, but the massive price hikes. Back in 2010, the Lithuanian government already decided to build an LNG terminal to break free from the dependence on Gazprom that many EU member states had fallen into. “But even those countries that are not so dependent on Russia for their energy supply are now having to bear the consequences in the form of very high market prices.” The remaining states should also not only focus on finding alternative suppliers of natural gas. In the long term, the focus should be much more on energy efficiency, she said.
Šimonytė called for a coordinated approach at the European level to reduce energy consumption in the long term and a quicker transition to renewables. “We must not only think about how to compensate energy sources, because this is only a short-term issue.”
Ukraine: a total of 13 ships with 282,500 tons of grain
According to Ukrainian information, 13 ships loaded with 282,500 tons of grain have departed from Ukrainian ports across the Black Sea. It is said to be the largest ship convoy since the agreement negotiated with the help of the UN and Turkey came into force. The cargo ships, which are to call at eight countries, left from the ports of Odessa, Chornomorsk and Pivdennyi. The ports had been blockaded by Russian forces since the start of the war and until the deal on July 22.
Since July 22, 68 cargo ships are reported to have already left ports of the invaded country. According to the Ukrainian Ministry of Agriculture, these vessels had loaded two million tons of agricultural products bound for 19 recipient countries.
In the wake of the Russian war of aggression, prices for grain and other foodstuffs have risen sharply. Concerns about food shortages are spreading in Africa and the Middle East. Ukraine hopes to export 60 million tons of grain over the next nine months, the president’s economic adviser, Oleh Ustenko, said in July. If ports failed to operate properly, this could take up to 24 months, he said. rtr
Cereals
Energy market: Germany follows EU proposal
German Economy Minister Robert Habeck wants to advance the skimming of windfall profits in the energy sector at meetings at the EU level. In doing so, the German government is following up on a proposal made by the EU Commission last week. The skimming off of windfall profits, as well as the planned electricity price cap for basic consumption, will be a topic at the consultations of the EU energy ministers next Friday, the Green politician said yesterday after the German governing coalition adopted a third relief package with a volume of €65 billion.
The plans are to be quickly spelled out in Brussels. However, unlike the Greens’ demand, the approach will not be via an additional tax. According to Reuters, the EU economic ministers also want to discuss credit lines that could be granted to players on the energy market.
In the meantime, the Russian state-owned company Gazprom announced that it would not be sending any more gas through the Nord Stream 1 Baltic Sea pipeline until further notice, citing a technical defect at the Portovaya compressor station.
Meanwhile, Ukraine wants to support Germany on the way out of its dependence on Russian energy by supplying nuclear power. “Currently, Ukraine exports its electricity to Moldova, Romania, Slovakia and Poland. But we are quite ready to expand our exports to Germany,” Ukrainian Prime Minister Denys Shmyhal told Deutsche Presse-Agentur. “We have a sufficient amount of electricity in Ukraine thanks to our nuclear power plants.” rtr/dpa
EU
European Commission
Ecodesign requirements and repair labels: Commission presents first drafts
The European Commission has published a first draft each for new ecodesign requirements and for a repair and energy label for cell phones, smartphones and tablets. These are available for public consultation until the end of September. At the end of November, the Commission plans to present the final drafts as part of the second circular economy package.
The draft ecodesign regulation includes requirements intended to reduce the environmental impact of the three device groups through product design. Manufacturers are to design the devices in such a way that individual parts such as batteries can be dismantled and replaced, and software updates are to be made available for longer and free of charge. Products should be able to be dropped hundreds of times without losing functionality, and screens and batteries are to be more robust and durable. The commission proposes specifications on the availability, delivery time and prices of spare parts. Commercial repairers should also have better access to information on repair and maintenance.
For the first time, manufacturers are also to disclose information about the materials used in electrical devices: The proportion of certain critical raw materials such as cobalt in the battery or neodymium in the loudspeaker must be stated, as well as the rate of their recyclability and the proportion of the product’s material that came from recycling. Plastic parts weighing more than 50 grams must also be labeled by name.
New label for energy efficiency and repairability
In the second draft, the Commission proposes a new, multi-part label for smartphones and tablets. It is intended to indicate how energy-efficient, repairable and robust against fall damage the respective product is. The energy efficiency value is based on the Energy Efficiency Index (EEI) already used for other devices, with a range of grades from A to G. The label is also to include information on battery life and the device’s resistance to dust and water.
Initial reactions were positive. “The repair index and the new energy label will be game changers for the mobile phone and tablet markets,” said Mathieu Rama of the European Coalition on Standards (ECOS). Durability will thus become a decisive criterion when buying such devices. Just like price and features, the lifespan of an electrical device will be comparable across all models. The proposal could herald the end of the era of throwaway appliances.
As the first member state, France already introduced a repairability label at the beginning of 2021. Other countries such as Spain, Belgium and Germany have planned similar requirements, but first wanted to wait for the Commission’s proposal.
However, ECOS criticizes the Commission for contrasting the repairability and reliability of products. According to the proposal, manufacturers have the choice of offering durable batteries or providing batteries to consumers as spare parts. The availability period of spare parts and software updates was also criticized as too short. In addition, smartphones and tablets with flexible displays would be exempt from these obligations. According to ECOS, this could lead to such devices becoming the norm for manufacturers willing to ignore the design requirements imposed by the EU.
Until September 28, it is possible to submit feedback on the proposals on the ecodesign requirements and the energy and repair label on the Commission’s website. leo
Opinion
Carbon farming: a horse saddled with the wrong bridle
By Sarah Wiener
Sarah Wiener is an organic farmer, chef and MEP for the Austrian Green Party.
“Carbon farming” is the new buzzword for a supposedly eco-friendly form of agriculture. As part of the Farm to Fork strategy, the EU Commission also announced an initiative in this area. It was published in the spring of 2022 and is part of the EU’s strategy for sustainable carbon cycles. To achieve the goal of storing more greenhouse gases than emitted by 2050, half of the carbon dioxide is to be stored artificially and the other half naturally.
Part of these “natural solutions” are the rewetting of peatlands and carbon allowances for the storage of carbon in arable farming. However, the highly technical approach and the narrow focus on storage, despite the low climate relevance of certain practices, turn what initially sounds like a good idea into a horse bridled the wrong way.
Problems with measurement and remuneration
In its Carbon Farming Initiative, the EU Commission points out the biological, technical and legal difficulties of storage, measurement and remuneration in agriculture in great detail. Yet, it advocates precisely the instrument of measuring and remunerating stored carbon in the soil via CO2 allowances – and favors this instrument over rewarding sustainable land management practices that benefit both humus build-up and other ecosystem services. The Commission fails to provide a convincing rationale for this.
However, in the Soil Conservation Strategy, also presented in 2022, one reads, “The banking and financial sectors are increasingly interested in investing in farmers who adopt sustainable practices and increase soil carbon levels, and in creating market-based incentives for carbon storage.” It is not hard to tell where this is going.
If we want to achieve safe emission reductions in agriculture as well, then we must first and foremost move away from the use of synthetic fertilizers. This would reduce greenhouse gas emissions in agriculture much faster and more reliably than carbon farming, because agriculture’s biggest contribution to climate change comes from the extremely energy-intensive production and application of synthetic nitrogen fertilizer.
Reduction of livestock
With a reduction of the livestock population tied to land area and pasture husbandry, agriculture’s second-largest share in climate change could be significantly improved. This is because pasture farming in particular contributes to climate change mitigation due to the humus stored under grassland. Apart from soils in permafrost regions, peatlands and grasslands contain the majority of carbon stored in the soil. Protecting these biomes must therefore be a top priority.
Aside from forests, grassland is the largest biome on our planet, covering about 40 percent of the vegetated land area. But ruminants are needed to protect grassland, because only grazed grassland persists, and the more regularly it is grazed, the more humus is built up. Against this background, ruminants must therefore also be evaluated differently than just by their methane emissions, because they are active climate protectors when grazing.
Particularly questionable with regard to the planned carbon storage in the soil is the use of biochar: Increasing the carbon level in the soil via this approach is not equivalent to a sustainable agricultural model and the build-up of high-quality humus. If the focus is on the stability of carbon in the soil, then this is at odds with promoting an active soil life. This urgently requires degradable carbon substrates to maintain soil functions. An active soil life means humus build-up, but always also conversion and decomposition.
No soil improvement through biochar
To have an impact on the climate, huge amounts of plant carbon would also have to be used: For example, to achieve about one percent of Germany’s 2030 greenhouse gas reduction target, all of Germany’s available biomass would have to be processed into biochar. An unrealistic scenario. Moreover, regardless of the feedstock, polycyclic aromatic hydrocarbons (PAHs) are formed in the charring process, which are carcinogenic and mutagenic – truly not a soil improver.
Also, foregoing the plow is still equated with carbon storage, although this has long been disproven (increase only near the surface and decrease in the subsoil). The study “Greenwashing & viel Technik! Vermeintlich nachhaltige Lösungen für die Landwirtschaft” exposes this well.
We need to approach sustainable, climate-friendly agriculture systemically instead of abusing soils as carbon storage sites. This can be done via compost application and agroforestry. But the main factor is the roots, which are the biggest humus producers. Therefore, diversity on and in the soil is paramount, it promotes all ecological functions. The one-sided focus on carbon storage completely overlooks the fact that soil management is about maintaining ecosystem functions, biodiversity, cycling, water storage, water purification, evaporation, cooling, healthy plants, healthy food, and much more.
Hildegard Müller (VDA): ‘Getting out of China is no solution’
Digital policy: this fall’s agenda
Lithuania’s prime minister appeals to Europeans’ perseverance
Ukraine: 13 ships launched with 282,500 tons of grain
Electricity market: Germany follows EU proposal
Ecodesign requirements and repair labels: Commission presents first drafts
Opinion: Carbon Farming – A horse saddled with the wrong bridle
Dear reader,
The EU’s legislative process for car-related dossiers is not yet finished, but the end of the internal combustion engine by 2035 and a stalling of synthetic fuels are already emerging. Interviewed by Lukas Scheid and me, Hildegard Müller, President of the German Association of the Automotive Industry (VDA), takes an early look at the resulting consequences for manufacturers and suppliers. It would hit suppliers hard in particular, with jobs at risk in the six-digit range.
She also has serious concerns about whether the Commission’s proposal for a minimum number of public charging stations (AFIR) will remain. Europe does not have an announcement problem, but an implementation problem, she says. In the next stage of emissions regulation (Euro 7), the players are not the member states, but the industry. Here, Müller calls for a “moderate” proposal. Otherwise, she says, the internal combustion engine could become too expensive, even way before the political will kills it off.
The summer break is now over in Brussels, Strasbourg and Luxembourg. The Czech EU Council Presidency wants to drive forward the legislative projects in digital policy. In their thematic outlook, Corinna Visser and Falk Steiner outline what is on the agenda here this fall and who the players are.
On Friday, the economy ministers of the 27 member states plan to pass concrete resolutions at their meeting on how to stop the price increase for gas and electricity. The German government presented its third relief package on Sunday and wants to ensure that “windfall profits” from electricity producers are skimmed off. In doing so, the German government follows the course proposed by the EU Commission last week.
Your Markus Grabitz
Feature
Hildegard Müller: ‘Simply leaving China is not the solution’
Hildegard Müller is president of the industry association VDA.
Ms. Müller, The end of the internal combustion engine in 2035 is practically certain. BMW, Mercedes, and VW are prepared to drive mainly EVs by the end of the decade. So are the industry’s groans more like phantom pain?
It is too early to make a final assessment. After all, the trilogue is still pending. However, I urgently warn against pushing the ambition level even higher in the EU legislative process. Instead, we need to create the right conditions to ensure that the ambitious targets can be achieved and that people are involved in the transformation process.
At the same time, one thing is certain: The industry will succeed in bringing the EV to relevant markets. The automotive industry has accepted the challenge of transformation. It is investing around €220 billion in research and development until 2026, primarily in electric mobility. In addition, at least another €100 billion will be spent on converting plants by 2030. So no one can accuse the auto industry of failing because of us. We want the ramp-up and are driving the transformation.
And what about the suppliers?
Suppliers are probably facing their biggest business challenge yet. Many have to develop a new business model while still building components for the combustion engine. We know from studies that around half of the jobs in the German automotive industry are still tied to the combustion engine. According to the ifo Institute, at least 215,000 jobs will be affected by the transformation by 2030. Not all of them will be eliminated, but they are up for grabs. The supplier industry is therefore facing an extraordinary challenge, and I see it facing up to this change every day with all its innovative strength and responsibility for its employees. At the same time, they are currently suffering particularly under the massive increases in raw material and energy prices. On top of that, they face taxonomy and ESG requirements that make the necessary funding for transformation harder to obtain. To put it plainly, yes, times are tough for many suppliers and their employees.
The EU wants to put the brakes on synthetic fuels for cars. After the Council of Ministers, the window is only ajar. Do you still expect a substantial proposal?
There is a clear mandate from the Council of Ministers that the Commission must deliver. It is not about Frans Timmermans, the Commissioner responsible, nurturing his opinions, but about implementing what the member states want him to do – and now rightly expect him to do. To date, the EU has not made any substantial proposal as to how the existing fleet can be decarbonized. In doing so, it is willingly accepting that Europe will fail to meet its climate targets in the transport sector. We are currently talking about around 280 million vehicles in the EU and 1.5 billion vehicles worldwide. Carbon neutrality cannot be achieved without a solution for the existing fleet. And synthetic fuels are a promising option here. An option that must now be resolutely made feasible and appropriately advanced.
The EU is working on the regulation for a minimum number of public charging points in all member states. Are the plans for the “AFIR” regulation going in the right direction?
The EU needs to be much more ambitious here. The industry is responsible for getting the cars onto the market. The state is required to provide the framework for the charging infrastructure. But what the states have planned so far is nowhere near enough. The charging capacity per vehicle is set too low. We need 3 KW of charging power per pure electric vehicle and 2 KW per plug-in hybrid. And: The maximum distances between charging points are set too far. Instead of 60 kilometers, we are calling for a maximum of 40 kilometers. In addition, the power supply per charging station must be doubled compared with what is proposed. We also need at least one point with 350 KW per charging station; so far, only 150 KW have been provided. So there is still a lot of room for improvement.
However, it should also be ensured that the countries do their homework…
The fact is that the EU generally does not have an announcement, but an implementation problem. That is why there needs to be regular monitoring of whether the expansion is on track. You only need to look at the current numbers of public charging points to see how dramatic the situation is: Hamburg has twice as many charging points as all of Greece. Brandenburg has more charging points than all of Ireland. Half of all charging points in the EU are in the Netherlands and Germany – and we need to significantly step up our own expansion ourselves. That is why the EU must make mandatory how political adjustments are to be made if the targets are missed. Networking with the energy industry must also be ensured so that there is sufficient electricity available for charging and the grids are expanded accordingly – this is where it still fails far too often.
The Commission is presenting its proposal for the next stage of emissions regulation (Euro 7) on October 12. Is this still necessary? The internal combustion engine will be phased out anyway…
No, the industry is prepared to continue contributing to improving air quality. We want to keep developing the car. Also given the trend toward electric cars, innovation needs to be in reasonable proportion to the costs. The initial proposals would also have led to a ban on internal-combustion vehicles through the back door. If the emission limits had to be met in all driving situations, we would end up with a regulation that could no longer be handled with legal certainty. It makes sense to further develop Euro 6 in a measured and swift manner, also in order to finally have planning security. The key is to ensure that it is not overly complex and can actually be implemented. Consumers will continue to be able to buy a car made in Europe at a reasonable cost.
The economic landscape is becoming bleaker…
Forecasts predict that a recession may set in. This goes hand in hand with a loss of jobs. And this, of course, has an impact on consumers’ purchasing power and spending mood. All the more reason for the Commission to keep an eye on the question: How expensive can the transformation we are asking citizens to accept become? We must not forget: If this transformation fails in Europe, Europe will also lose its function as a role model for climate protection vis-à-vis other economic regions. In Africa, for example, people are watching very closely to see whether the Green Deal in Europe works. Only if our approach is copied worldwide will we make global progress on climate protection.
Keyword China: Manufacturers are doubly dependent on China today. BMW, Mercedes and VW are also fundamentally dependent on China, both as a sales market and supplier. Has the industry made itself too dependent on China?
The question of the relationship with China goes far beyond the auto industry. Overall, we are observing fundamental changes around the world: Until now, economics has accompanied, supported and stabilized political change. Now we are seeing geo-economics being used as a political strategy by some. This is a change whose consequences we are only just becoming aware of in Europe.
What is the consequence of this?
The answer cannot and must not be a rejection of globalization. On the contrary, Putin’s war of aggression means that we must talk and cooperate with even more countries. In doing so, we must of course diversify more and reduce dependencies. I will never tire of repeating that we need more raw materials, energy, and trade agreements. We can’t spend 15 years negotiating CETA with Canada and then renegotiate it again when everything is ready. We need an offensive for more legally secure agreements. Other countries are very active when it comes to securing access to raw materials and energy. We are too often not involved, we are much too slow, and we are increasingly weakening the competitive conditions for Europe and thus also for our industry. Europe’s future prosperity is at stake.
And what about corporate engagement?
Companies are doing all they can to become more diversified and resilient, finding alternative suppliers for raw materials and inputs wherever possible and signing contracts. Trade agreements provide the framework within which these contracts can be concluded with legal certainty. The other issue is sales markets. Of course, China is very important for our industry in this respect. The revenue we make there, too, feeds into the profits that pay for the transition. Incidentally, China is also interested in our involvement.
What does that mean?
I would like to see more support from policymakers. We need an integrated China strategy. But I see a lot of stagnation here, both at the national and EU levels. Simply leaving China is not the solution. The country and its economic importance are too big for that. We cannot isolate China. That would be naïve – and fatal, both politically and economically.
The chip crisis has cost manufacturers a lot of business. Does it make more sense to produce the chips at a higher price here instead of importing them from Asia with a certain risk?
When it comes to chips, we do not have a system dominated solely by the laws of the market. On the contrary, some states have actively pursued industrial policies and provided a lot of subsidies to ensure that factories were established. Europe has long rejected this. Slowly, it is waking up. It is high time to adapt the EU competition rules to the changing geostrategic conditions. Here, what could strengthen Europe globally is quickly seen as illegal aid.
What does that mean?
The EU has made a course correction and launched numerous IPCEIs for chip production. This is the right way to go in this case: I think production in Europe is important to make the industry more resilient.
Autoindustrie
Automotive Industry
E-Fuels
Digital policy (1): this fall’s agenda
The EU has already passed several milestones of its digital strategy. The Digital Services Act (DSA) and the Digital Markets Act (DMA) have been signed and sealed. But with the Artificial Intelligence Act (AI Act) and the Data Act, two more important and far-reaching regulations are pending. The AI regulation is the first attempt ever to pass horizontal regulation on AI. Europe hopes to take a pioneering role here. But time is short, as the competition from the US or China are pressing hard.
Artificial Intelligence Act (AI)
Commission proposal: April 21, 2021
Actors: Lead committees in the European Parliament are IMCO and LIBE; rapporteurs are Brando Benifei (IT, S&D) and Dragoş Tudorache (RO, Renew).
Content: The Commission has adopted a risk-based approach to regulating artificial intelligence. The main part of the regulation deals with high-risk systems. They are to be approved, but have to meet a set of requirements and obligations to gain access to the EU market. Important discussion points in Parliament and Council are the definition of AI systems, the list of prohibited AI systems, the strengthening of enforcement and legal remedy mechanisms, as well as the guarantee of adequate democratic control in the design and implementation of the regulation.
Timetable: The rapporteurs submitted their draft report in late April. The vote in the two committees IMCO and LIBE is scheduled for the end of October, and the vote in the plenum for November. Due to the more than 3,000 amendments and the shared responsibilities, the voting schedules could still be postponed. The technical meetings are currently underway.
On July 15, the Czech Council Presidencyreleased a compromise text consolidating the positions of the member states. Changes were made to the four discussion points mentioned above. The member states had until September 2 to provide their feedback. The aim is to reach a general orientation by the time the Council of Telecommunications Ministers meets on December 6.
Content: The Commission has already announced the legal act on AI liability issues with the AI Act. In October 2021, it launched a public consultation on the rules for compensation for damage caused by defective products. A particular focus was placed on the application of AI in products and services. There were initial considerations to combine AI liability and the revised product liability into one legislative act, but now there will be two.
The reason for a separate AI liability law is that the safety of products and services depends not only on their design and production, but also on software updates, data flows and algorithms. And the question is who should be held liable for damages. This is a particularly hot issue when it comes to general-purpose AI, because a company cannot know for exactly what purpose its system will be used. The rules should tie in with the AI Act to find effective solutions for liability and “ensure effective compensation for victims,” a commission spokesman said.
Data Act
Commission proposal: February 23, 2022
Actors: Lead committee is ITRE, Rapporteur Pilar del Castillo Vera (ES, EPP).
Content: The aim of the Data Act is to promote the flow of data between companies, between companies and governments, and in the public sector. It deals, for example, with the obligations when companies must share data with other companies and when they must transmit data to authorities, as well as cloud switching and interoperability. The IMCO Committee is responsible for the latter.
The industry welcomes the fact that there are now to be clear rules for this, but notes: “We must be careful in Europe that regulation does not take precedence over innovation,” says Bitkom President Achim Berg. Companies are already criticizing that technological developments are being slowed down because of a lack of data and data availability. “The Data Act must therefore provide more clarity on data sharing and at the same time better protect company secrets – and the planned rules for cloud services sometimes overshoot the mark by far,” says Berg.
Schedule: The ITRE draft report is expected for September 8. A first debate is scheduled for September 26, and the deadline for amendments is October 17 – but both could be postponed to the end of October. After the two committees, ITRE and IMCO initially argued about their competencies, there is now disagreement about the schedule. The vote in ITRE is scheduled for February 2023 and the vote in plenary for March 2023.
The Czech Presidency has already reached partial compromises in July and August. The next debate on this in the Council Working Party is today, Monday. The aim is to have a first complete compromise text by the end of the Council presidency. A general orientation will probably not be reached until the upcoming Swedish Council presidency.
Regulation on electronic identification and trust services (eIDAS)
Commission proposal: June 3, 2021
Actors: Lead committee is ITRE, rapporteur Romana Jerković (HR, S&D).
Content: The current 2014 regulations on electronic identification and trust services for electronic transactions in the single market (eIDAS) aim to make national eID systems interoperable across Europe to facilitate access to online services. In its digital strategy, the Commission has announced that it will review the eIDAS Regulation to improve its effectiveness and increase its use. In short, so far there is no obligation for member states to introduce digital proofs of identity; this is set to change.
Above all, member states are to be obliged to offer a secure EU identity wallet for smartphones. This includes a sovereign eID and the obligation to accept digital proof of identification.
Timeline: The Industry Committee is expected to vote on its report in October 2022. A general direction from the Council is expected for December.
Union Secure Connectivity Program
Commission proposal: February 15, 2022
Actors: Lead committee is ITRE, rapporteur Christophe Grudler (FR, Renew).
Content: Many experts believe that the war in Ukraine has once again shown that Europe not only needs a secure space-based communications infrastructure, but also its own. One that operates reliably not only in times of war and crisis, but also in the event of disasters such as the one in Germany’s Ahr Valley. Strategic sovereignty is therefore a core objective of the Secure Connectivity Program, with which the EU aims not only to advance the digitization of the economy and society, but also to counter the growing geopolitical cybersecurity threats. The mega-constellation in low-Earth orbit is intended to complement the European space projects Galileo and Copernicus.
The proposal for the program came from Internal Market Commissioner Thierry Breton. The French are pressing ahead with the plan because they hope to win major contracts for their aerospace industry. Germany, on the other hand, is keen to ensure that SMEs and, above all, innovative start-ups also get a chance to participate in both development and construction.
Timeline: Grudler submitted his draft report on May 30, 2022. The rapporteurs will convene again on September 13 in Brussels; they plan to discuss the timeframe and funding. The Council of the EU accepted its negotiating mandate on June 22, 2022, to allow the Presidency to start negotiations with the Parliament.
Cyber Resilience Act
Commission proposal: 13.09.2022 (tbc)
Actors: Thierry Breton, DG Connect
Content: The Commission presents its proposal for a regulation with the working title Cyber Resilience Act, which aims to improve the cybersecurity level of digital products and so-called ancillary services.
In preparation of the legal act, the Commission held a consultation with stakeholders. It did not specify whether this was to be merely a consolidation of existing regulations supplemented by voluntary certifications and measures, or whether it was to be horizontal regulatory measures. Here, for example, minimum requirements could be imposed on providers with regard to security qualities and thus, among other things, update obligations. The scope has also remained unclear so far: Whether all software supplied as an ancillary service to products should be included, or only software classified as critical.
NIS2 – Network and Information Security Directive revision
Final vote: Expected October 2022
Actors: Parliament, Council, Implementation German Government and Parliament
Content: Political consensus on the revision of the Network and Information Security Directive (NIS) had already been reached in May, and the Council published the corresponding four-column document in June. Since then, the final touches have been made, so that Parliament and the Council can adopt NIS2 – which should happen in the next few weeks.
The key differences to the current NIS Directive, in addition to the harmonization of threshold values, are the expansion of its scope: Here, among other things, certain areas in healthcare, and in digital infrastructure, cloud providers and content delivery networks, among others, will also be covered by the European rules in the future. In the energy sector, the hydrogen industry will also be considered critical. In addition, public administration, the wastewater sector and parts of space infrastructures will also be covered. The NIS was closely coordinated with the RCE Directive, which is being negotiated in parallel and focuses on the general availability of critical providers.
Experts consider the need for German lawmakers to adapt to NIS2 to be minimal; the revisions to the IT Security Act have already anticipated many of the changes to the EU revision. The 21-month implementation period will begin from the date of promulgation in the government gazette. Germany’s Federal Ministry of the Interior expects (assuming the directive is adopted soon) that the corresponding amendments to the IT Security Act (ITSig) and BSI Act will “probably be implemented by summer/fall 2024“.
Connectivity Infrastructure Act (tbc)
Commission proposal: Not scheduled
Actors: Thierry Breton, Margrethe Vestager, Member States, BEREC
The debate deals with the possible changes to payment models on the Internet, which would affect data traffic-intensive providers in particular, and has been going on intensively publicly and behind the scenes for several months. In the course of the review of the Broadband Cost Reduction Directive (BCRD), however, the Commission could submit proposals here in the coming months – while the European telecommunications regulators recently wanted to conduct further market investigations and consultations first.
Some member states are pushing for rapid changes to make the major providers pay even beyond their own networks. Breton and Vestager got the ball rolling on this issue (Europe.Table reported), but so far they have not come up with specifics.
Media Freedom Act
Commission proposal: 13.09.2022 (tbc)
Actors: Vera Jourová, Thierry Breton
Content: It is not yet clear whether the date of the proposal can be maintained. The Media Freedom Act is actually intended to ensure the independence of the media and protect them from unruly political influence, excessive concentration of power and possible discrimination in individual member states. At the same time, however, the proposal is also to address certain forms of dependency – for example, overpowering players in the advertising sector or online news gatekeepers.
It is hardly to be expected that a rigorous proposal to protect against state interference will meet with unlimited enthusiasm in countries like Hungary or Poland. Member states like Austria, with their controversial state media support practices, are not necessarily easy to bring on board either.
The Federal Council has already expressed completely different concerns: It warned Brussels not to exceed EU competencies and not to jeopardize the state autonomy of media control, which is also covered by European law, by establishing European supervisory institutions. By Corinna Visser and Falk Steiner
CRA
Data Act
Digitization
News
Lithuania’s Prime Minister appeals to Europeans’ perseverance
In light of Russia’s ongoing war of aggression against Ukraine, Lithuanian Prime Minister Ingrida Šimonytė has called on the EU to show perseverance. “Europe is still stronger than a single autocrat and capable of making decisions,” she said at a press briefing in Berlin yesterday. People in most European countries are worried about higher energy prices. Compared to conditions in Ukraine, however, this is merely a loss of comfort, she said. “It is nothing compared to the people who die every day in Ukraine, whose houses are destroyed or who no longer have a roof over their heads.”
Šimonytės appeals to the EU’s crisis resilience, which has proven itself many times in history. “I hope that Europe will not only endure this, but also emerge stronger, as is usual for the EU,” she said. “Ukrainians show no signs of fatigue in their struggle, and neither should we.”
Šimonytė does not see the EU’s unified line and sanctions against Russia at risk, despite some “shaky” member states. The Bulgarian interim government had announced that it would resume negotiations with Gazprom; moreover, a Putin-friendly government could be elected in Italy at the end of September. Nevertheless, Šimonytė remained unconcerned: “One good thing about the sanctions is that you can only get rid of them unanimously. So this will not be easy”.
Unified line as the only chance
Her outlook on further sanctions against Russia, as already proposed by German Foreign Minister Annalena Baerbock, is also optimistic: “All decisions on sanctions have gone through so far, although here, too, unanimity is the prerequisite.” She expressed confidence in the EU’s ability to make decisions. There will be challenging debates in national politics. But Europe would have no other chance than to maintain a common line.
Together with Estonian Prime Minister Kaja Kallas and Latvian Prime Minister Arturs Krišjānis Kariņš, Šimonytė received the International Prize of the Friedrich August von Hayek Foundation yesterday in Berlin for “their exemplary and courageous commitment to a free economic and social order as well as to sound budgetary and free-market economic policies.” Thanks to good governance, the three Baltic states have become shining examples in education, information technology, digitization and competitiveness since their independence, the foundation said in its statement.
“I hope that the success stories of the Baltic states will give us the strength to continue the fight for a world where individual and economic freedoms flourish,” Šimonytė said.
Energy efficiency should come first
For Lithuania, the biggest problem in the energy crisis at the moment is not security of supply, but the massive price hikes. Back in 2010, the Lithuanian government already decided to build an LNG terminal to break free from the dependence on Gazprom that many EU member states had fallen into. “But even those countries that are not so dependent on Russia for their energy supply are now having to bear the consequences in the form of very high market prices.” The remaining states should also not only focus on finding alternative suppliers of natural gas. In the long term, the focus should be much more on energy efficiency, she said.
Šimonytė called for a coordinated approach at the European level to reduce energy consumption in the long term and a quicker transition to renewables. “We must not only think about how to compensate energy sources, because this is only a short-term issue.”
Ukraine: a total of 13 ships with 282,500 tons of grain
According to Ukrainian information, 13 ships loaded with 282,500 tons of grain have departed from Ukrainian ports across the Black Sea. It is said to be the largest ship convoy since the agreement negotiated with the help of the UN and Turkey came into force. The cargo ships, which are to call at eight countries, left from the ports of Odessa, Chornomorsk and Pivdennyi. The ports had been blockaded by Russian forces since the start of the war and until the deal on July 22.
Since July 22, 68 cargo ships are reported to have already left ports of the invaded country. According to the Ukrainian Ministry of Agriculture, these vessels had loaded two million tons of agricultural products bound for 19 recipient countries.
In the wake of the Russian war of aggression, prices for grain and other foodstuffs have risen sharply. Concerns about food shortages are spreading in Africa and the Middle East. Ukraine hopes to export 60 million tons of grain over the next nine months, the president’s economic adviser, Oleh Ustenko, said in July. If ports failed to operate properly, this could take up to 24 months, he said. rtr
Cereals
Energy market: Germany follows EU proposal
German Economy Minister Robert Habeck wants to advance the skimming of windfall profits in the energy sector at meetings at the EU level. In doing so, the German government is following up on a proposal made by the EU Commission last week. The skimming off of windfall profits, as well as the planned electricity price cap for basic consumption, will be a topic at the consultations of the EU energy ministers next Friday, the Green politician said yesterday after the German governing coalition adopted a third relief package with a volume of €65 billion.
The plans are to be quickly spelled out in Brussels. However, unlike the Greens’ demand, the approach will not be via an additional tax. According to Reuters, the EU economic ministers also want to discuss credit lines that could be granted to players on the energy market.
In the meantime, the Russian state-owned company Gazprom announced that it would not be sending any more gas through the Nord Stream 1 Baltic Sea pipeline until further notice, citing a technical defect at the Portovaya compressor station.
Meanwhile, Ukraine wants to support Germany on the way out of its dependence on Russian energy by supplying nuclear power. “Currently, Ukraine exports its electricity to Moldova, Romania, Slovakia and Poland. But we are quite ready to expand our exports to Germany,” Ukrainian Prime Minister Denys Shmyhal told Deutsche Presse-Agentur. “We have a sufficient amount of electricity in Ukraine thanks to our nuclear power plants.” rtr/dpa
EU
European Commission
Ecodesign requirements and repair labels: Commission presents first drafts
The European Commission has published a first draft each for new ecodesign requirements and for a repair and energy label for cell phones, smartphones and tablets. These are available for public consultation until the end of September. At the end of November, the Commission plans to present the final drafts as part of the second circular economy package.
The draft ecodesign regulation includes requirements intended to reduce the environmental impact of the three device groups through product design. Manufacturers are to design the devices in such a way that individual parts such as batteries can be dismantled and replaced, and software updates are to be made available for longer and free of charge. Products should be able to be dropped hundreds of times without losing functionality, and screens and batteries are to be more robust and durable. The commission proposes specifications on the availability, delivery time and prices of spare parts. Commercial repairers should also have better access to information on repair and maintenance.
For the first time, manufacturers are also to disclose information about the materials used in electrical devices: The proportion of certain critical raw materials such as cobalt in the battery or neodymium in the loudspeaker must be stated, as well as the rate of their recyclability and the proportion of the product’s material that came from recycling. Plastic parts weighing more than 50 grams must also be labeled by name.
New label for energy efficiency and repairability
In the second draft, the Commission proposes a new, multi-part label for smartphones and tablets. It is intended to indicate how energy-efficient, repairable and robust against fall damage the respective product is. The energy efficiency value is based on the Energy Efficiency Index (EEI) already used for other devices, with a range of grades from A to G. The label is also to include information on battery life and the device’s resistance to dust and water.
Initial reactions were positive. “The repair index and the new energy label will be game changers for the mobile phone and tablet markets,” said Mathieu Rama of the European Coalition on Standards (ECOS). Durability will thus become a decisive criterion when buying such devices. Just like price and features, the lifespan of an electrical device will be comparable across all models. The proposal could herald the end of the era of throwaway appliances.
As the first member state, France already introduced a repairability label at the beginning of 2021. Other countries such as Spain, Belgium and Germany have planned similar requirements, but first wanted to wait for the Commission’s proposal.
However, ECOS criticizes the Commission for contrasting the repairability and reliability of products. According to the proposal, manufacturers have the choice of offering durable batteries or providing batteries to consumers as spare parts. The availability period of spare parts and software updates was also criticized as too short. In addition, smartphones and tablets with flexible displays would be exempt from these obligations. According to ECOS, this could lead to such devices becoming the norm for manufacturers willing to ignore the design requirements imposed by the EU.
Until September 28, it is possible to submit feedback on the proposals on the ecodesign requirements and the energy and repair label on the Commission’s website. leo
Opinion
Carbon farming: a horse saddled with the wrong bridle
By Sarah Wiener
Sarah Wiener is an organic farmer, chef and MEP for the Austrian Green Party.
“Carbon farming” is the new buzzword for a supposedly eco-friendly form of agriculture. As part of the Farm to Fork strategy, the EU Commission also announced an initiative in this area. It was published in the spring of 2022 and is part of the EU’s strategy for sustainable carbon cycles. To achieve the goal of storing more greenhouse gases than emitted by 2050, half of the carbon dioxide is to be stored artificially and the other half naturally.
Part of these “natural solutions” are the rewetting of peatlands and carbon allowances for the storage of carbon in arable farming. However, the highly technical approach and the narrow focus on storage, despite the low climate relevance of certain practices, turn what initially sounds like a good idea into a horse bridled the wrong way.
Problems with measurement and remuneration
In its Carbon Farming Initiative, the EU Commission points out the biological, technical and legal difficulties of storage, measurement and remuneration in agriculture in great detail. Yet, it advocates precisely the instrument of measuring and remunerating stored carbon in the soil via CO2 allowances – and favors this instrument over rewarding sustainable land management practices that benefit both humus build-up and other ecosystem services. The Commission fails to provide a convincing rationale for this.
However, in the Soil Conservation Strategy, also presented in 2022, one reads, “The banking and financial sectors are increasingly interested in investing in farmers who adopt sustainable practices and increase soil carbon levels, and in creating market-based incentives for carbon storage.” It is not hard to tell where this is going.
If we want to achieve safe emission reductions in agriculture as well, then we must first and foremost move away from the use of synthetic fertilizers. This would reduce greenhouse gas emissions in agriculture much faster and more reliably than carbon farming, because agriculture’s biggest contribution to climate change comes from the extremely energy-intensive production and application of synthetic nitrogen fertilizer.
Reduction of livestock
With a reduction of the livestock population tied to land area and pasture husbandry, agriculture’s second-largest share in climate change could be significantly improved. This is because pasture farming in particular contributes to climate change mitigation due to the humus stored under grassland. Apart from soils in permafrost regions, peatlands and grasslands contain the majority of carbon stored in the soil. Protecting these biomes must therefore be a top priority.
Aside from forests, grassland is the largest biome on our planet, covering about 40 percent of the vegetated land area. But ruminants are needed to protect grassland, because only grazed grassland persists, and the more regularly it is grazed, the more humus is built up. Against this background, ruminants must therefore also be evaluated differently than just by their methane emissions, because they are active climate protectors when grazing.
Particularly questionable with regard to the planned carbon storage in the soil is the use of biochar: Increasing the carbon level in the soil via this approach is not equivalent to a sustainable agricultural model and the build-up of high-quality humus. If the focus is on the stability of carbon in the soil, then this is at odds with promoting an active soil life. This urgently requires degradable carbon substrates to maintain soil functions. An active soil life means humus build-up, but always also conversion and decomposition.
No soil improvement through biochar
To have an impact on the climate, huge amounts of plant carbon would also have to be used: For example, to achieve about one percent of Germany’s 2030 greenhouse gas reduction target, all of Germany’s available biomass would have to be processed into biochar. An unrealistic scenario. Moreover, regardless of the feedstock, polycyclic aromatic hydrocarbons (PAHs) are formed in the charring process, which are carcinogenic and mutagenic – truly not a soil improver.
Also, foregoing the plow is still equated with carbon storage, although this has long been disproven (increase only near the surface and decrease in the subsoil). The study “Greenwashing & viel Technik! Vermeintlich nachhaltige Lösungen für die Landwirtschaft” exposes this well.
We need to approach sustainable, climate-friendly agriculture systemically instead of abusing soils as carbon storage sites. This can be done via compost application and agroforestry. But the main factor is the roots, which are the biggest humus producers. Therefore, diversity on and in the soil is paramount, it promotes all ecological functions. The one-sided focus on carbon storage completely overlooks the fact that soil management is about maintaining ecosystem functions, biodiversity, cycling, water storage, water purification, evaporation, cooling, healthy plants, healthy food, and much more.
