Table.Briefing: Europe

Lobbying battle over e-fuels + Fragile grain agreement + Relationship with Turkey

  • Truck fleet limits: lobby battle over e-fuels begins
  • Jan Jänsch on grain agreement: ‘We can’t relinquish anything’
  • Von der Leyen announces €210 million for food aid
  • Scholz meets French Prime Minister Borne
  • Iran: EU sanctions against IT company Arvan Cloud
  • AI Act: Council prepares general approach
  • Climate Protection Index 2023: EU climate policy in 19th place
  • Due diligence: Trade committee wants to tighten up
  • Study: Circular economy strategies enable secure raw material supply
  • ITRE Committee gives green light to RED IV compromise
  • Commission highlights Turkey’s strategic role in gas supply
  • Heads: Jens Geier – ‘energy’ as a heartfelt topic
Dear reader,

“In 2035, it will be 47 percent more expensive to run a truck on e-fuels than to use a battery-electric truck” – that is the central message of a study published today by the environmental organization Transport and Environment (T+E). At the same time, T+E warns the EU against installing an incentive system for synthetic fuels in trucks. Strong criticism of the study comes from the Karlsruhe Institute of Technology (KIT). This is the start of the lobbyists’ dispute over e-fuels, as Markus Grabitz writes – a few weeks before the Commission is due to present its proposal for a phase-out of internal combustion engines for commercial vehicles.

The grain agreement between Russia and Ukraine expires at the end of the week. As fragile as the agreement is, there is no better solution, says Jan Jänsch. In an interview with Timo Landenberger, the head of grain trading at the Baywa Group talks about deliveries to rich countries, the consequences of Russia’s tactical games and the production capacities of domestic agriculture.

In order to secure European gas supplies, the Commission also wants to focus more on transit countries – such as Turkey, through which the southern gas corridor passes, through which gas from Azerbaijan already flows into the EU. For EU security of supply, developing relations with Turkey “could be a very important priority,” DG Energy Deputy Director General Matthew Baldwin told ITRE on Monday night. Read more in the News.

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Sarah Schaefer
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Feature

Truck fleet limits: lobby battle over e-fuels begins

The Commission plans to present its proposal for phasing out internal combustion engines and CO2 fleet limits for commercial vehicles in early 2023. In the run-up to the decision, the lobbyists are now beginning to argue about fuels that are produced in a virtually CO2-neutral manner – so-called e-fuels.

“By 2035, it will be 47 percent more expensive to run a truck on e-fuels than to use a battery electric truck.” That’s the gist of a study published today by T+E, which was previewed by Europe.Table. T+E stands for Transport and Environment and is the umbrella organization of European environmental associations, of which Deutsche Umwelthilfe (DUH) is also a member.

When considering the total cost of ownership, a brand-new truck with a diesel engine that is refueled with e-fuels costs 70 cents per kilometer driven. In the most favorable scenario, a brand-new battery-electric truck costs 48 cents per kilometer. In a worse scenario, in which higher energy costs are assumed, the battery-electric truck would cost 50 cents per kilometer. A used truck with a diesel engine fueled by e-fuels would still only cost 58 cents due to lower acquisition costs.

The lower prices for battery charging and maintenance and repair offset the higher purchase prices of battery-electric trucks, T+E argues. The authors of the study assumed that synthetic diesel fuels would be 52 percent more expensive than fossil diesel in 2035.

In addition, T+E claims that a truck powered by e-fuels and therefore running 100 percent CO2-free still produces 41 percent more greenhouse gases than a battery-electric truck powered by electricity from renewable sources. A battery-electric truck emits 86 percent less CO2 when charged with the 2035 electricity mix than a truck fueled with fossil diesel, T+E claims.

T+E warns the EU not to install an incentive system for synthetic fuels in trucks: Green hydrogen for near-zero CO2 production of e-fuels will remain scarce, they say: “Diverting e-fuels to trucks would mean hindering the transformation to zero-CO2 fuels in aircraft and cargo ships.”

Strong opposition from KIT

The Karlsruhe Institute of Technology (KIT) has strongly criticized the study. The decisive factor is the cost comparison of different technologies taking into account identical tax revenues for the public sector. Today, internal combustion engine drive systems of cars and trucks contribute well over €60 billion in tax revenues in Germany each year through energy, value-added, motor vehicle, and CO2 taxes. The T+E study does not even begin to reflect this tax burden on fuels, which is why there is no serious cost analysis.

Olaf Toedter, head of new technologies and ignition systems at the institute for piston engines at the KIT, has analyzed the study and draws the following conclusion: “T+E cites lower costs for energy and maintenance as reasons for the cost advantage of the battery-electric truck, but this statement is highly speculative.” In terms of energy costs, T+E works with values of 17 and 22 cents per kilowatt hour, respectively. “Today’s prices are already well above that,” Toedter said. “To believe such prices to be realistic at fast-charging stations, I think that’s completely utopian.”

E-fuels could be produced at a cost price of less than one euro if industrially manufactured in locations with favorable conditions for energy from renewable sources, making them competitive. Moreover, Toedter says he does not expect prices for battery-electric drives to continue to fall sharply. On the contrary: “I expect production and supply bottlenecks for the significantly higher requirements of nickel, copper and rare earths and therefore significantly rising prices.”

Toedter, an expert in energy balances, also criticizes the calculation of the CO2 expenditure for battery production. “This deliberately conceals the fact that even in 2035, energy from the sun and wind cannot completely guarantee the supply of electricity.” He also criticizes T+E’s demand to produce only e-fuels for ships and aircraft: “The laws of production in refineries dictate that, in addition to kerosene for aircraft and diesel for ship engines, diesel for trucks is also produced. It would be uneconomical not to use diesel for trucks.”

  • Car Industry
  • Climate & Environment
  • Climate protection
  • Green Deal
  • Mobility

Jan Jänsch on grain agreement: ‘We can’t relinquish anything’

Jan Jänsch, Head of Grain Trading at Baywa.

National and international trade in agricultural goods and supply chain management are among the core businesses of Baywa AG. Under the management of Jan Jänsch, the group moves around two million tons of grain a month, mainly in northeastern Europe, but also all over the world from the export ports there.

Mr. Jänsch, where were you on February 24 when you learned of Russia’s attack on Ukraine?

In the office, I remember that quite clearly. That was good, too, because at least I was in an environment where I was capable of acting.

You had already expected these serious consequences?

Not immediately. At the beginning, I also hoped that it would be over very quickly. After the first week, we realized that it could last longer and that the consequences were more extreme than we had thought. The prices for grain on the stock exchanges in Paris and Chicago have exploded and continued to rise, and the problem is that the world simply cannot afford these high grain prices.

How important is the grain agreement between Ukraine and Russia in this context?

For this, you need to consider the figures: Ukraine exported about five million tons of grain per month before the war. In March, it was almost zero, hence the price shock. Smaller quantities could then be brought out of the country via alternative routes. But commodity flows can’t be established quickly; they become established. And in Ukraine, everything is geared toward the major Black Sea ports. From there, the destinations with the greatest demand – including North Africa, Saudi Arabia and the Middle East – can be reached most quickly. In August, 1.5 million tons of grain were exported by sea through the grain corridor, and by October that figure had risen to four million tons. So the agreement is having a huge impact.

Grain for rich countries

However, the agreement only regulates that grain can be re-exported via the sea route, but does not prescribe a destination. Around half of the grain exported via the corridor went to rich countries, including many EU states, and not to Africa or the Middle East. Why not?

Ukraine produces not only wheat for poorer countries, but also corn and sunflower seeds, and of course the goods that are available and can or must be exported leave the country. In the process, corn has also gone to Spain, but the world is so interconnected that I don’t condemn that. It was right before and it is right now. Because it’s the only way to free up grain in the world balance sheet for other countries. These balances are so tight that we desperately need all the products. It simply doesn’t work without the corn from the Black Sea.

The grain could also have been transported directly to where it was needed most. Nevertheless, far fewer World Food Program ships have called at Ukrainian ports than before the war.

Of course, there are interests. The initiator of the agreement is Turkey, and many of the ships have landed in Turkey. Ukrainian farmers also have interests and first try to sell the high-priced goods to ensure their liquidity. Moreover, it is a question of logistics. Initially, the ships that were already loaded with corn were handled, there was a lot of corn stored at the port, and the EU is also one of the buyers. We stepped in and handled a large volume of exports, especially from Germany, France and the Baltic States, and delivered wheat. The flow of goods balances out internationally.

Who benefits from this compensation? The European grain traders and thus also Baywa?

This compensation is not about profit. It is about responsibility to ensure the supply of countries that rely on grain imports.

Alternative routes: ‘a disaster’

Russia uses the agreement to exert pressure, backs out and comes back in again, and repeatedly attaches conditions to its continuation. How much does this back and forth affect the market?

We can see this immediately in a price difference of around $20. And the corridor does not work well. If the ships are docked 20 days in Istanbul for inspection, that costs a lot of money, and a country like Egypt can’t afford that. It’s even more true for the alternative routes. It’s a disaster how badly they work. 60,000 tons on a ship is still better than 25 tons on a truck.

But no one knows for sure whether the agreement will hold beyond Nov. 19 and what Russia intends to do. The sea route thus remains fragile. Are the alternative export routes via the land route or the Danube still important?

This is a drop in the bucket and is obviously more politics and a show of solidarity than actually achieving anything. At the moment it helps a little, but the political and logistical obstacles are too great. To date, it takes several days to process trucks at the border. The rail infrastructure in Eastern Europe, but also in Germany, is too poor and not designed for grain transport – not to mention the different train track gauges in Ukraine and the EU.

To this end, Germany and the EU have increased their own export volumes.

Classically, in the past, we could not contribute much to the export volume after the harvest. This time was different because we anticipated what was going to go through the Black Sea. So within this season, the ratios were somewhat shifted. But that’s based on the hope that the Black Sea corridor remains open, otherwise, it’s going to be really dramatic in April when we have to say, “Sorry, we’re sold out.”

‘Commitment to the world’

Against this background, a controversial debate is underway in Brussels about the production capacities of domestic agriculture.

In Germany and the EU, a lot is being implemented politically right now, which is hindering agricultural production in this globally essential situation. In fact, farmers should be given everything they need to be able to produce at their best. Every ton is needed in the world, and here in Germany, we have the best conditions for producing ten tons of wheat per hectare in good quality. This is not available everywhere and is an obligation to the world to practice the best possible agriculture.

What needs to happen in the long term to reduce dependencies and mitigate the effects of crises?

This will not work. In Germany, conditions are ideal for wheat, in Ukraine more so for corn and sunflowers, and in South America for soybeans. It’s not so easy to produce that somewhere else. We are in such short supply in the world that we have no chance of relinquishing anything. Accordingly, every crisis has an impact. Without Ukraine and Russia, it won’t work in the long run. Therefore, we have to keep our fingers crossed that the war will end soon and the flow of goods will work again. That is the only way.

  • Cereals

Events

Nov. 16, 2022; 2-2:40 p.m., online
FSR, Discussion Meeting Africa’s Energy and Climate Goals
The Florence School of Regulation (FSR) discusses the priority areas for Africa in preparation to meet the climate and development goals. INFO & REGISTRATION

Nov. 17, 2022; 2-6 p.m., Brussels (Belgium)
EBU, Conference Role of Inland Waterway Transport (IWT) in the Framework of EU’s Mobility and Supply Policy
The European Barge Union (EBU) addresses the need for sufficient waterway maintenance on the major European waterways. INFO & REGISTRATION

Nov. 17, 2022; 3:45-5:15 p.m., Sharm el-Sheikh (Egypt)/online
EAERE, Panel Discussion COP27 Side Event: Launching a European Climate Science Assessment Mechanism for Policy Support
The European Association of Environmental and Resource Economists (EAERE) addresses the causes and consequences of climate change as manifested by the recent extreme drought during the summer of 2022. INFO & REGISTRATION

News

Von der Leyen announces €210 million for food aid

EU Commission President Ursula von der Leyen has pledged an additional €210 million to support countries facing food supply problems at the start of the G20 summit in Indonesia. “Russia’s war in Ukraine is having a significant impact on global food supplies,” she said Monday ahead of deliberations among leaders of the group of major economies (G20). Action is needed to prevent famine in some of the world’s poorest regions, she said.

According to the EU Commission, at least 205 million people are affected by acute food insecurity this year, more than ever before. The fresh money will go to 15 countries such as Afghanistan, Yemen, Venezuela and Sudan, according to the EU Commission. dpa

  • Foreign Policy
  • G20
  • Ursula von der Leyen

Scholz meets French Prime Minister Borne

Chancellor Olaf Scholz will receive French Prime Minister Élisabeth Borne in Berlin on Nov. 25. This was announced on Monday from government circles in Berlin and Paris. Borne is thus making up for her inaugural visit, which was originally scheduled for Sep. 29, but had to be postponed because of the COVID infection of the Chancellor.

The visit is likely to be followed with great attention, because relations between Berlin and Paris are currently tense. The two sides are at loggerheads on a number of issues, including a gas price cap, armaments policy and questions about EU reform. The Franco-German Council of Ministers, which had actually been scheduled for the end of October, was postponed because of the differences of opinion.

Scholz and President Emmanuel Macron also tried to clear up atmospheric disturbances at a dinner. In Berlin government circles, it is conceded that communication could have been improved in some areas. Both sides are now looking for a common theme to get the proverbial Franco-German engine running again.

Considered a candidate response to the US government’s Inflation Reduction Act, Berlin and Paris share concerns that the support program for climate-friendly technologies will come at the expense of investments in Europe. So far, however, the two governments are pursuing different approaches: The German government is initially relying on talks with Washington, while Paris is pushing for its own subsidy programs and possibly proceedings before the World Trade Organization. tho

  • Climate protection
  • European policy
  • France
  • Germany

Iran: EU sanctions against IT company Arvan Cloud

The EU is breaking new ground in its sanctions policy. The latest sanctions package, which the EU foreign ministers adopted in Brussels on Monday in response to the ongoing wave of repression and serious human rights violations in Iran, also includes punitive measures against an IT company with ties to Germany for the first time.

Specifically, it is about Arvan Cloud, which is said to play an important role in restricting the Internet in Iran and apparently cooperates with the company Softqloud in Meerbusch near Düsseldorf. The “Meerbusch-Iran connection” had been uncovered by “Correctiv”, “Taz” and “Netzpolitik.org”. It had also alerted German security authorities.

The new sanctions list, which includes 29 individuals and three institutions, also includes members of the Islamic Revolutionary Guard Corps. The penalties hit “the inner circle of power of the Islamic Revolutionary Guard Corps,” said Foreign Minister Annalena Baerbock. “We are sending a renewed and indeed unmistakable signal to the Iranian regime.”

Draft for new Russia strategy

This is the second time within a month that the EU has imposed sanctions on Iran. A total of 126 individuals and eleven institutions are now affected. Essentially, the sanctions involve entry bans and the freezing of assets in the EU. In addition, it is forbidden to do business with the listed individuals and institutions.

Regardless of the penalties, talks on a nuclear agreement with Iran continued, said EU foreign affairs chief Josep Borrell. The controversial agreement, which the US pulled out from under former President Donald Trump, was “still there” and “going its way,” said the Spaniard, who is coordinating the negotiations. However, most EU states no longer believe in the deal.

Borrell also presented a draft for a new Russia strategy. The EU approach is based on “isolating Russia internationally, imposing and enforcing restrictive measures against Russia and preventing their circumvention,” according to the draft, which has been made available to Europe.Table.

The bill is intended to replace an outdated strategy adopted by the EU before the war. However, the discussion is still in its early stages and no decision has been taken. ebo

  • Geopolitics
  • Iran

AI Act: Council prepares general approach

The Council is fully on schedule on AI regulation. On Friday, taking into account the latest written comments from member states, the Czech Presidency sent out the final version of the compromise text on the AI Act, which is available to Europe.Table. Now the Permanent Representatives Committee is asked to consider the text for a general approach and endorse it on Nov. 18. Ministers will then meet at the Telecommunications Council on Dec. 6 to set a general direction.

As part of the final fine-tuning of the compromise text, the Czech Presidency made the following changes:

  • A clarification with regard to critical infrastructure safety components to ensure alignment with the regulation on mechanical engineering products (recital 34),
  • an addition to clarify the notion of own use in relation to the defined exemption for micro and small enterprises (at the end of recital 37),
  • adjustments to clarify the independence of the competent national authorities or bodies monitoring the application of EU law protecting fundamental rights (at the beginning of recital 79a),
  • a clarification that the Commission, when issuing guidelines, should also address issues related to the consistency of enforcement of the AI Act and other relevant Union legislation (Article 58a(VI)),
  • a clarification that for both the risk assessment use case and the pricing use case, only health and life insurance are covered (Annex III(5)(d)).

The House, on the other hand, is still far from a finished compromise version of the AI Act. vis

  • Artificial intelligence
  • Digital policy
  • Technology

Climate Protection Index 2023: EU climate policy in 19th place

To keep the 1.5-degree target within reach, industrialized and emerging countries in particular must reduce their greenhouse gas emissions. A new analysis by Germanwatch and the New Climate Institute shows that the 60 largest GHG emitters are missing this target. It also shows where countries still need to catch up.

Europe can count itself among the best performers in climate protection – but only partially. According to the Climate Protection Index 2023, which was presented on Monday at the COP27 in Sharm el-Sheikh, the EU as a bloc is only in the upper midfield with 19th place – three places higher than last year. But with Denmark and Sweden, the best-ranked countries come from Europe.

The index is compiled on the basis of objective criteria and expert surveys. A country’s greenhouse gas emissions (40 percent), the amount of renewables (20 percent), energy efficiency (20 percent), and national and international climate policy (10 percent each) are included. Traditionally, the first three places in the index remain vacant, as no country scores “very high” in all categories.

Germany slips

European climate policy is highlighted in particular. Here, the EU lands in 4th place – 1st place (Denmark) and 3rd place (Netherlands) are also EU members. But because per capita emissions remain high (24th) and renewable expansion is faltering (26th), the EU’s rank declines. Hungary (53rd) and Poland (54th), on the other hand, receive a “very low” rating.

The countries surveyed are the 59 largest emitters worldwide; Ukraine was not surveyed this year in view of the war. Germany descends three places to 16th place compared to last year. The reason for this is the slowdown in renewable expansion until 2020 and the sharp increase in emissions in the transport sector in 2021, according to the explanation of the index.

Of the 59 countries surveyed (+ EU), China is only 51st. Although the index gives credit to the fact that the country is massively expanding its renewable energies, it is still not reducing its greenhouse gas emissions fast enough. Compared to last year, China has even dropped 13 places.

As usual, the USA also scores poorly (52nd). The main problem is that the USA does not stop producing fossil fuels in its own country and continues to subsidize fossil fuels. When it comes to the expansion of renewables, the USA comes in fifth to last. luk

  • Climate & Environment
  • Climate protection

Due diligence: Trade committee wants to tighten up

After Lara Wolters (S&D) released her report on corporate due diligence last week, the issue was on the agenda of the International Trademark Association (INTA) yesterday. “We need radical action to change the way companies do business. Companies are not sustainable per se,” Barry Andrews stressed. The Renew MEP is rapporteur for the opinion on the Due Diligence Act. Similar to Lara Wolters (Europe.Table reported), Barry Andrews also calls for a stricter law than the Commission proposes. For example, significantly more companies are to be covered by the regulation, namely companies with 250 employees or more and annual sales of €40 million. In high-risk sectors, companies with 50 or more employees and €700,000 annual sales in the EU should also be subject to due diligence.

On the last point, Barry Andrews goes further than Lara Wolters: Wolters’ proposal is for €8 million annual sales for companies in high-risk sectors. However, Andrews is more accommodating to small and medium-sized companies: They should not have to bear liability under the directive.

Andrews wants to focus on supply chains

Andrews’ proposal differs from both Wolters’ approach and the Commission’s proposal in another crucial respect: The regulation would apply only to supply chains (i.e., upstream activities), not the entire value chain (upstream and downstream activities). “The legal definition of ‘value chain’ is fuzzy. The law is stronger and safer if we focus on supply chains,” was the statement of the INTA rapporteur.

Andrews’ proposal received overall support, but S&D, Left and Greens in particular argue for inclusion of the entire value chain. They call for a risk-based approach, according to which due diligence would apply not to “established business relationships” but wherever there is a risk to human rights and the environment.

The EPP will probably not go this way and will not introduce any amendments in the sense of a tightening of the Commission’s proposal: A practical law is needed that does not overburden companies, said EPP shadow rapporteur Angelika Winzig. “Companies need legal certainty. We must not put additional administrative burdens on them.” MEPs have until today to submit their amendments. cw

  • European policy
  • Supply chains
  • Trade
  • Trade Policy

Study: Circular economy strategies enable secure raw material supply

To guarantee a secure and sustainable supply of raw materials for the energy transition, policymakers and industry need to drive circular economy strategies on a large scale. This is the conclusion of a new study by sustainability consultancy Systemiq, with support from the European Climate Foundation, presented yesterday at the launch of EU Raw Materials Week. It summarizes previously published research on the interdependencies in the EU’s global value chains and concludes: Circular economy strategies hold great potential, but also urgent need for research and action.

The study highlights four demand-side approaches and provides examples and policy recommendations:

  • “Rethink”: Rethink the way we use products and materials (example: promote car sharing services).
  • “Reduce”: Achieve more with reduced material use (example: Tesla reduces use of cobalt).
  • “Reuse”: Reuse products and materials to keep raw materials in use longer (example: second use of lithium-ion batteries for stationary energy storage systems).
  • “Recycle”: Enable high-quality material cycles, especially for raw materials imported from outside Europe (for example, recycling of lithium-ion batteries).

Reduction of demand must be the focus

“When we talk about the circular economy, very often the focus is on recycling,” said Ben Dixon, head of materials and circular economy at Systemiq. However, he said, if products have a long life cycle, then the ability to recycle the materials is correspondingly delayed. A battery for an electric vehicle, for example, can only be recycled after about 15 years. Therefore the other areas of the circular economy also need more attention. “Recycling is an important piece of the puzzle, but we need to think much more broadly and also consider the area of absolute demand reduction.”

The energy transition will bring about a significant reduction in the total demand for primary resources, the study says. An electrically powered medium-sized passenger car, for example, needs 106 times fewer primary raw materials than its counterpart with an internal combustion engine. However, in a carbon-neutral energy system, the demand for individual raw materials such as lithium, cobalt and rare earths would increase, posing other challenges. “Even in really ambitious and optimistic scenarios, we would still expect our demand for primary battery metals to increase by the mid-2030s,” Dixon said. leo

  • Battery
  • Circular Economy
  • Raw materials

ITRE Committee gives green light to RED IV compromise

The Industry, Research and Energy Committee (ITRE) adopted the compromise amendments to the revisions of the Renewable Energy Directive (RED IV). Of the 60 members of the committee, 49 EU parliamentarians voted in favor, eight abstained and three voted against. The ITRE vote yesterday (Monday) paves the way for the plenary vote, which will take place next December. The amendments were negotiated by rapporteur and parliamentary director of the CDU/CSU group Markus Pieper (EPP).

RED III and RED IV are legislative revisions of the REPowerEU plan presented by the European Commission in May. It aims in particular to speed up the approval process for renewable energy projects. The MEPs now want to shorten the deadline to nine months. The Commission had proposed a deadline of one year. For power plants or new installations with a capacity of less than 150 kW, it should even be six months. Outside these areas, the compromise sets a maximum procedure duration of 18 months, whereas the European Commission had proposed two years.

Simple reporting procedure for small installations

The ITRE proposal also calls for permits for the installation of solar energy systems on buildings to be issued within three months. For smaller systems under 50 kW, a simple notification process would suffice. The installation of solar plants would be exempt from the requirement to carry out an environmental impact assessment, MEPs said.

Both revisions also aim to raise the EU’s renewable energy expansion target to 45 percent. As this increase is already part of the European Parliament’s negotiating position for the ongoing trilogue negotiations on the third revision of the Renewable Energy Directive (RED III), ITRE parliamentarians focused on the permitting procedures in yesterday’s vote.

Markus Pieper said he was “very satisfied” with the result. “It’s about accelerating and simplifying the use of renewable energy,” he said. A single compromise amendment was not adopted yesterday. It concerns the inclusion of Natura 2000 sites in the so-called “go-to areas,” which will now be renamed “Renewable Acceleration Areas” (RAA) – special areas for faster renewable energy development. Which renewable energy projects will be given access to the “go-to areas” will be decided by the Committee on Environment, Public Health and Food Safety (ENVI). cst

  • Energy
  • Energy policy
  • European Parliament
  • Renewable energies
  • REPowerEU

Commission emphasizes Turkey’s strategic role in gas supply

When it comes to securing Europe’s gas supply, the Commission wants to focus more on transit countries. “In terms of security of supply, developing the mutually beneficial relationship with Turkey could be a very important priority,” DG Energy Deputy Director General Matthew Baldwin told ITRE on Monday night. He said the EU must keep in mind that transit countries also want to secure their supplies and may claim some additional gas supplies for themselves.

The southern gas corridor, through which gas from Azerbaijan already flows to the EU, passes through Turkey. By 2027, Azerbaijan wants to double the annual volume through the pipeline to 20 billion cubic meters (bcm) per year. Turkey secured part of the total volume some time ago.

An additional eight bcm is expected to flow into the EU from Algeria in 2023, up from an additional four bcm this year, Baldwin said. In the next 18 months, the EU could also receive two to five bcm from Israel via a detour through Egypt, he added. In the years after that, the amount could increase to seven bcm. “We are turning over every stone in the quest for gas,” Baldwin said.

Federal government nationalizes former Gazprom Germania

A delegation will travel to Trinidad and Tobago the week after next. For the coming year, an energy dialogue with Asian countries is planned for the first time. In Malaysia, there will be a conference with possible suppliers of natural gas and hydrogen. Plans for a ministerial conference with Japan and South Korea, but also the USA and Norway, had already become known at the last EU Council of Ministers in Luxembourg.

Currently, small amounts of Russian gas are still flowing to the EU via Turkey and Ukraine. The most favorable strategic moment for Moscow to interrupt transit via Ukraine could be in January or February, warned Klaus-Dieter Borchardt of Baker McKenzie yesterday at a discussion held by think tank Epico. With the current high temperatures, it would make no sense to interrupt it now, the former commission official said.

The former Gazprom Germania could also participate in the EU’s joint gas procurement. In the draft of the latest emergency regulation, the Council had included a passage that would also allow former Russian companies to participate in the planned energy platform. Yesterday, the German government nationalized the company, which now operates as Securing Energy for Europe (Sefe). The Ministry for Economic Affairs justified corresponding capital measures with the threat of insolvency, which would endanger the security of supply in Germany. ber

  • Energy Prices
  • Natural gas

Heads

Heads: Jens Geier – ‘energy’ as a heartfelt topic

Jens Geier is a member of the European Parliament and chairman of the European SPD.

“I don’t know yet whether I’ll stay with Twitter,” says Jens Geier, when asked about the takeover by Elon Musk. “EuropaJens, as Geier calls himself on the platform, has been there since 2009. At some point during the election campaign for the European Parliament, he set up his profile. The SPD politician succeeded in moving in. He enjoys his role as an MEP, and says that Brussels and Strasbourg are particularly free places: “Here, I can work with whomever I want. There is less need to fit into opposition and government blocs than in national parliaments.”

Instead, he says, it’s all about the cause. And there is a lot to do right now. The 61-year-old sits on the European Parliament’s Industry, Research and Energy Committee (ITRE), where he is the rapporteur for the revision of the gas directive. Energy is a subject close to Geier’s heart, who grew up in the Ruhr region: “I want to help determine the framework conditions under which decarbonization takes place.” The goal must be for Germany to make the transition with all its industry involved.

Actually, Geier did not want to become a politician, but a historian. He studied history, literature and politics in Bochum, and at the same time became involved with the Jusos. In 1989, he graduated from university and became Deputy Federal Chairman of the SPD youth organization. That year also marked his entry into European politics. A friend of his became an MEP and was looking for a research assistant. Jens Geier took the job and found his calling. “At that time, I said to myself: If I ever aspire to a mandate, this is it.”

Preserving Europe’s industrial base

But it took a few more years before he became a member of parliament himself. Geier made the most of the time, learning about politics at the federal and state level. In 2001, he took a step out of the SPD cosmos. At the Business Metropole Ruhr (BMR) development agency, he worked on the joint image of the industrial region. Later, he worked for the consulting firm Deloitte. When he was elected as an MEP, he returned to the heart of Europe. For the past five years, he has also been Chairman of the SPD in the EU Parliament.

This gives him a good connection to Berlin. Geier is a regular guest on the SPD presidium. The fact that Olaf Scholz’s German “double whammy” billion-euro package has irritated many in Europe is something he can understand. “Germany needs to think more about what this means in terms of European policy in the policies we pursue nationally.”

In order to master challenges such as the restructuring of the energy supply, a lot of mutual understanding is needed. And it has to happen quickly, he said. “After all, it’s about maintaining the industrial base in Europe.” Paul Meerkamp

  • Energy
  • Energy policy
  • European policy
  • Natural gas
  • SPD

Europe.Table Editorial Office

EUROPE.TABLE EDITORS

Licenses:
    • Truck fleet limits: lobby battle over e-fuels begins
    • Jan Jänsch on grain agreement: ‘We can’t relinquish anything’
    • Von der Leyen announces €210 million for food aid
    • Scholz meets French Prime Minister Borne
    • Iran: EU sanctions against IT company Arvan Cloud
    • AI Act: Council prepares general approach
    • Climate Protection Index 2023: EU climate policy in 19th place
    • Due diligence: Trade committee wants to tighten up
    • Study: Circular economy strategies enable secure raw material supply
    • ITRE Committee gives green light to RED IV compromise
    • Commission highlights Turkey’s strategic role in gas supply
    • Heads: Jens Geier – ‘energy’ as a heartfelt topic
    Dear reader,

    “In 2035, it will be 47 percent more expensive to run a truck on e-fuels than to use a battery-electric truck” – that is the central message of a study published today by the environmental organization Transport and Environment (T+E). At the same time, T+E warns the EU against installing an incentive system for synthetic fuels in trucks. Strong criticism of the study comes from the Karlsruhe Institute of Technology (KIT). This is the start of the lobbyists’ dispute over e-fuels, as Markus Grabitz writes – a few weeks before the Commission is due to present its proposal for a phase-out of internal combustion engines for commercial vehicles.

    The grain agreement between Russia and Ukraine expires at the end of the week. As fragile as the agreement is, there is no better solution, says Jan Jänsch. In an interview with Timo Landenberger, the head of grain trading at the Baywa Group talks about deliveries to rich countries, the consequences of Russia’s tactical games and the production capacities of domestic agriculture.

    In order to secure European gas supplies, the Commission also wants to focus more on transit countries – such as Turkey, through which the southern gas corridor passes, through which gas from Azerbaijan already flows into the EU. For EU security of supply, developing relations with Turkey “could be a very important priority,” DG Energy Deputy Director General Matthew Baldwin told ITRE on Monday night. Read more in the News.

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    Sarah Schaefer
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    Feature

    Truck fleet limits: lobby battle over e-fuels begins

    The Commission plans to present its proposal for phasing out internal combustion engines and CO2 fleet limits for commercial vehicles in early 2023. In the run-up to the decision, the lobbyists are now beginning to argue about fuels that are produced in a virtually CO2-neutral manner – so-called e-fuels.

    “By 2035, it will be 47 percent more expensive to run a truck on e-fuels than to use a battery electric truck.” That’s the gist of a study published today by T+E, which was previewed by Europe.Table. T+E stands for Transport and Environment and is the umbrella organization of European environmental associations, of which Deutsche Umwelthilfe (DUH) is also a member.

    When considering the total cost of ownership, a brand-new truck with a diesel engine that is refueled with e-fuels costs 70 cents per kilometer driven. In the most favorable scenario, a brand-new battery-electric truck costs 48 cents per kilometer. In a worse scenario, in which higher energy costs are assumed, the battery-electric truck would cost 50 cents per kilometer. A used truck with a diesel engine fueled by e-fuels would still only cost 58 cents due to lower acquisition costs.

    The lower prices for battery charging and maintenance and repair offset the higher purchase prices of battery-electric trucks, T+E argues. The authors of the study assumed that synthetic diesel fuels would be 52 percent more expensive than fossil diesel in 2035.

    In addition, T+E claims that a truck powered by e-fuels and therefore running 100 percent CO2-free still produces 41 percent more greenhouse gases than a battery-electric truck powered by electricity from renewable sources. A battery-electric truck emits 86 percent less CO2 when charged with the 2035 electricity mix than a truck fueled with fossil diesel, T+E claims.

    T+E warns the EU not to install an incentive system for synthetic fuels in trucks: Green hydrogen for near-zero CO2 production of e-fuels will remain scarce, they say: “Diverting e-fuels to trucks would mean hindering the transformation to zero-CO2 fuels in aircraft and cargo ships.”

    Strong opposition from KIT

    The Karlsruhe Institute of Technology (KIT) has strongly criticized the study. The decisive factor is the cost comparison of different technologies taking into account identical tax revenues for the public sector. Today, internal combustion engine drive systems of cars and trucks contribute well over €60 billion in tax revenues in Germany each year through energy, value-added, motor vehicle, and CO2 taxes. The T+E study does not even begin to reflect this tax burden on fuels, which is why there is no serious cost analysis.

    Olaf Toedter, head of new technologies and ignition systems at the institute for piston engines at the KIT, has analyzed the study and draws the following conclusion: “T+E cites lower costs for energy and maintenance as reasons for the cost advantage of the battery-electric truck, but this statement is highly speculative.” In terms of energy costs, T+E works with values of 17 and 22 cents per kilowatt hour, respectively. “Today’s prices are already well above that,” Toedter said. “To believe such prices to be realistic at fast-charging stations, I think that’s completely utopian.”

    E-fuels could be produced at a cost price of less than one euro if industrially manufactured in locations with favorable conditions for energy from renewable sources, making them competitive. Moreover, Toedter says he does not expect prices for battery-electric drives to continue to fall sharply. On the contrary: “I expect production and supply bottlenecks for the significantly higher requirements of nickel, copper and rare earths and therefore significantly rising prices.”

    Toedter, an expert in energy balances, also criticizes the calculation of the CO2 expenditure for battery production. “This deliberately conceals the fact that even in 2035, energy from the sun and wind cannot completely guarantee the supply of electricity.” He also criticizes T+E’s demand to produce only e-fuels for ships and aircraft: “The laws of production in refineries dictate that, in addition to kerosene for aircraft and diesel for ship engines, diesel for trucks is also produced. It would be uneconomical not to use diesel for trucks.”

    • Car Industry
    • Climate & Environment
    • Climate protection
    • Green Deal
    • Mobility

    Jan Jänsch on grain agreement: ‘We can’t relinquish anything’

    Jan Jänsch, Head of Grain Trading at Baywa.

    National and international trade in agricultural goods and supply chain management are among the core businesses of Baywa AG. Under the management of Jan Jänsch, the group moves around two million tons of grain a month, mainly in northeastern Europe, but also all over the world from the export ports there.

    Mr. Jänsch, where were you on February 24 when you learned of Russia’s attack on Ukraine?

    In the office, I remember that quite clearly. That was good, too, because at least I was in an environment where I was capable of acting.

    You had already expected these serious consequences?

    Not immediately. At the beginning, I also hoped that it would be over very quickly. After the first week, we realized that it could last longer and that the consequences were more extreme than we had thought. The prices for grain on the stock exchanges in Paris and Chicago have exploded and continued to rise, and the problem is that the world simply cannot afford these high grain prices.

    How important is the grain agreement between Ukraine and Russia in this context?

    For this, you need to consider the figures: Ukraine exported about five million tons of grain per month before the war. In March, it was almost zero, hence the price shock. Smaller quantities could then be brought out of the country via alternative routes. But commodity flows can’t be established quickly; they become established. And in Ukraine, everything is geared toward the major Black Sea ports. From there, the destinations with the greatest demand – including North Africa, Saudi Arabia and the Middle East – can be reached most quickly. In August, 1.5 million tons of grain were exported by sea through the grain corridor, and by October that figure had risen to four million tons. So the agreement is having a huge impact.

    Grain for rich countries

    However, the agreement only regulates that grain can be re-exported via the sea route, but does not prescribe a destination. Around half of the grain exported via the corridor went to rich countries, including many EU states, and not to Africa or the Middle East. Why not?

    Ukraine produces not only wheat for poorer countries, but also corn and sunflower seeds, and of course the goods that are available and can or must be exported leave the country. In the process, corn has also gone to Spain, but the world is so interconnected that I don’t condemn that. It was right before and it is right now. Because it’s the only way to free up grain in the world balance sheet for other countries. These balances are so tight that we desperately need all the products. It simply doesn’t work without the corn from the Black Sea.

    The grain could also have been transported directly to where it was needed most. Nevertheless, far fewer World Food Program ships have called at Ukrainian ports than before the war.

    Of course, there are interests. The initiator of the agreement is Turkey, and many of the ships have landed in Turkey. Ukrainian farmers also have interests and first try to sell the high-priced goods to ensure their liquidity. Moreover, it is a question of logistics. Initially, the ships that were already loaded with corn were handled, there was a lot of corn stored at the port, and the EU is also one of the buyers. We stepped in and handled a large volume of exports, especially from Germany, France and the Baltic States, and delivered wheat. The flow of goods balances out internationally.

    Who benefits from this compensation? The European grain traders and thus also Baywa?

    This compensation is not about profit. It is about responsibility to ensure the supply of countries that rely on grain imports.

    Alternative routes: ‘a disaster’

    Russia uses the agreement to exert pressure, backs out and comes back in again, and repeatedly attaches conditions to its continuation. How much does this back and forth affect the market?

    We can see this immediately in a price difference of around $20. And the corridor does not work well. If the ships are docked 20 days in Istanbul for inspection, that costs a lot of money, and a country like Egypt can’t afford that. It’s even more true for the alternative routes. It’s a disaster how badly they work. 60,000 tons on a ship is still better than 25 tons on a truck.

    But no one knows for sure whether the agreement will hold beyond Nov. 19 and what Russia intends to do. The sea route thus remains fragile. Are the alternative export routes via the land route or the Danube still important?

    This is a drop in the bucket and is obviously more politics and a show of solidarity than actually achieving anything. At the moment it helps a little, but the political and logistical obstacles are too great. To date, it takes several days to process trucks at the border. The rail infrastructure in Eastern Europe, but also in Germany, is too poor and not designed for grain transport – not to mention the different train track gauges in Ukraine and the EU.

    To this end, Germany and the EU have increased their own export volumes.

    Classically, in the past, we could not contribute much to the export volume after the harvest. This time was different because we anticipated what was going to go through the Black Sea. So within this season, the ratios were somewhat shifted. But that’s based on the hope that the Black Sea corridor remains open, otherwise, it’s going to be really dramatic in April when we have to say, “Sorry, we’re sold out.”

    ‘Commitment to the world’

    Against this background, a controversial debate is underway in Brussels about the production capacities of domestic agriculture.

    In Germany and the EU, a lot is being implemented politically right now, which is hindering agricultural production in this globally essential situation. In fact, farmers should be given everything they need to be able to produce at their best. Every ton is needed in the world, and here in Germany, we have the best conditions for producing ten tons of wheat per hectare in good quality. This is not available everywhere and is an obligation to the world to practice the best possible agriculture.

    What needs to happen in the long term to reduce dependencies and mitigate the effects of crises?

    This will not work. In Germany, conditions are ideal for wheat, in Ukraine more so for corn and sunflowers, and in South America for soybeans. It’s not so easy to produce that somewhere else. We are in such short supply in the world that we have no chance of relinquishing anything. Accordingly, every crisis has an impact. Without Ukraine and Russia, it won’t work in the long run. Therefore, we have to keep our fingers crossed that the war will end soon and the flow of goods will work again. That is the only way.

    • Cereals

    Events

    Nov. 16, 2022; 2-2:40 p.m., online
    FSR, Discussion Meeting Africa’s Energy and Climate Goals
    The Florence School of Regulation (FSR) discusses the priority areas for Africa in preparation to meet the climate and development goals. INFO & REGISTRATION

    Nov. 17, 2022; 2-6 p.m., Brussels (Belgium)
    EBU, Conference Role of Inland Waterway Transport (IWT) in the Framework of EU’s Mobility and Supply Policy
    The European Barge Union (EBU) addresses the need for sufficient waterway maintenance on the major European waterways. INFO & REGISTRATION

    Nov. 17, 2022; 3:45-5:15 p.m., Sharm el-Sheikh (Egypt)/online
    EAERE, Panel Discussion COP27 Side Event: Launching a European Climate Science Assessment Mechanism for Policy Support
    The European Association of Environmental and Resource Economists (EAERE) addresses the causes and consequences of climate change as manifested by the recent extreme drought during the summer of 2022. INFO & REGISTRATION

    News

    Von der Leyen announces €210 million for food aid

    EU Commission President Ursula von der Leyen has pledged an additional €210 million to support countries facing food supply problems at the start of the G20 summit in Indonesia. “Russia’s war in Ukraine is having a significant impact on global food supplies,” she said Monday ahead of deliberations among leaders of the group of major economies (G20). Action is needed to prevent famine in some of the world’s poorest regions, she said.

    According to the EU Commission, at least 205 million people are affected by acute food insecurity this year, more than ever before. The fresh money will go to 15 countries such as Afghanistan, Yemen, Venezuela and Sudan, according to the EU Commission. dpa

    • Foreign Policy
    • G20
    • Ursula von der Leyen

    Scholz meets French Prime Minister Borne

    Chancellor Olaf Scholz will receive French Prime Minister Élisabeth Borne in Berlin on Nov. 25. This was announced on Monday from government circles in Berlin and Paris. Borne is thus making up for her inaugural visit, which was originally scheduled for Sep. 29, but had to be postponed because of the COVID infection of the Chancellor.

    The visit is likely to be followed with great attention, because relations between Berlin and Paris are currently tense. The two sides are at loggerheads on a number of issues, including a gas price cap, armaments policy and questions about EU reform. The Franco-German Council of Ministers, which had actually been scheduled for the end of October, was postponed because of the differences of opinion.

    Scholz and President Emmanuel Macron also tried to clear up atmospheric disturbances at a dinner. In Berlin government circles, it is conceded that communication could have been improved in some areas. Both sides are now looking for a common theme to get the proverbial Franco-German engine running again.

    Considered a candidate response to the US government’s Inflation Reduction Act, Berlin and Paris share concerns that the support program for climate-friendly technologies will come at the expense of investments in Europe. So far, however, the two governments are pursuing different approaches: The German government is initially relying on talks with Washington, while Paris is pushing for its own subsidy programs and possibly proceedings before the World Trade Organization. tho

    • Climate protection
    • European policy
    • France
    • Germany

    Iran: EU sanctions against IT company Arvan Cloud

    The EU is breaking new ground in its sanctions policy. The latest sanctions package, which the EU foreign ministers adopted in Brussels on Monday in response to the ongoing wave of repression and serious human rights violations in Iran, also includes punitive measures against an IT company with ties to Germany for the first time.

    Specifically, it is about Arvan Cloud, which is said to play an important role in restricting the Internet in Iran and apparently cooperates with the company Softqloud in Meerbusch near Düsseldorf. The “Meerbusch-Iran connection” had been uncovered by “Correctiv”, “Taz” and “Netzpolitik.org”. It had also alerted German security authorities.

    The new sanctions list, which includes 29 individuals and three institutions, also includes members of the Islamic Revolutionary Guard Corps. The penalties hit “the inner circle of power of the Islamic Revolutionary Guard Corps,” said Foreign Minister Annalena Baerbock. “We are sending a renewed and indeed unmistakable signal to the Iranian regime.”

    Draft for new Russia strategy

    This is the second time within a month that the EU has imposed sanctions on Iran. A total of 126 individuals and eleven institutions are now affected. Essentially, the sanctions involve entry bans and the freezing of assets in the EU. In addition, it is forbidden to do business with the listed individuals and institutions.

    Regardless of the penalties, talks on a nuclear agreement with Iran continued, said EU foreign affairs chief Josep Borrell. The controversial agreement, which the US pulled out from under former President Donald Trump, was “still there” and “going its way,” said the Spaniard, who is coordinating the negotiations. However, most EU states no longer believe in the deal.

    Borrell also presented a draft for a new Russia strategy. The EU approach is based on “isolating Russia internationally, imposing and enforcing restrictive measures against Russia and preventing their circumvention,” according to the draft, which has been made available to Europe.Table.

    The bill is intended to replace an outdated strategy adopted by the EU before the war. However, the discussion is still in its early stages and no decision has been taken. ebo

    • Geopolitics
    • Iran

    AI Act: Council prepares general approach

    The Council is fully on schedule on AI regulation. On Friday, taking into account the latest written comments from member states, the Czech Presidency sent out the final version of the compromise text on the AI Act, which is available to Europe.Table. Now the Permanent Representatives Committee is asked to consider the text for a general approach and endorse it on Nov. 18. Ministers will then meet at the Telecommunications Council on Dec. 6 to set a general direction.

    As part of the final fine-tuning of the compromise text, the Czech Presidency made the following changes:

    • A clarification with regard to critical infrastructure safety components to ensure alignment with the regulation on mechanical engineering products (recital 34),
    • an addition to clarify the notion of own use in relation to the defined exemption for micro and small enterprises (at the end of recital 37),
    • adjustments to clarify the independence of the competent national authorities or bodies monitoring the application of EU law protecting fundamental rights (at the beginning of recital 79a),
    • a clarification that the Commission, when issuing guidelines, should also address issues related to the consistency of enforcement of the AI Act and other relevant Union legislation (Article 58a(VI)),
    • a clarification that for both the risk assessment use case and the pricing use case, only health and life insurance are covered (Annex III(5)(d)).

    The House, on the other hand, is still far from a finished compromise version of the AI Act. vis

    • Artificial intelligence
    • Digital policy
    • Technology

    Climate Protection Index 2023: EU climate policy in 19th place

    To keep the 1.5-degree target within reach, industrialized and emerging countries in particular must reduce their greenhouse gas emissions. A new analysis by Germanwatch and the New Climate Institute shows that the 60 largest GHG emitters are missing this target. It also shows where countries still need to catch up.

    Europe can count itself among the best performers in climate protection – but only partially. According to the Climate Protection Index 2023, which was presented on Monday at the COP27 in Sharm el-Sheikh, the EU as a bloc is only in the upper midfield with 19th place – three places higher than last year. But with Denmark and Sweden, the best-ranked countries come from Europe.

    The index is compiled on the basis of objective criteria and expert surveys. A country’s greenhouse gas emissions (40 percent), the amount of renewables (20 percent), energy efficiency (20 percent), and national and international climate policy (10 percent each) are included. Traditionally, the first three places in the index remain vacant, as no country scores “very high” in all categories.

    Germany slips

    European climate policy is highlighted in particular. Here, the EU lands in 4th place – 1st place (Denmark) and 3rd place (Netherlands) are also EU members. But because per capita emissions remain high (24th) and renewable expansion is faltering (26th), the EU’s rank declines. Hungary (53rd) and Poland (54th), on the other hand, receive a “very low” rating.

    The countries surveyed are the 59 largest emitters worldwide; Ukraine was not surveyed this year in view of the war. Germany descends three places to 16th place compared to last year. The reason for this is the slowdown in renewable expansion until 2020 and the sharp increase in emissions in the transport sector in 2021, according to the explanation of the index.

    Of the 59 countries surveyed (+ EU), China is only 51st. Although the index gives credit to the fact that the country is massively expanding its renewable energies, it is still not reducing its greenhouse gas emissions fast enough. Compared to last year, China has even dropped 13 places.

    As usual, the USA also scores poorly (52nd). The main problem is that the USA does not stop producing fossil fuels in its own country and continues to subsidize fossil fuels. When it comes to the expansion of renewables, the USA comes in fifth to last. luk

    • Climate & Environment
    • Climate protection

    Due diligence: Trade committee wants to tighten up

    After Lara Wolters (S&D) released her report on corporate due diligence last week, the issue was on the agenda of the International Trademark Association (INTA) yesterday. “We need radical action to change the way companies do business. Companies are not sustainable per se,” Barry Andrews stressed. The Renew MEP is rapporteur for the opinion on the Due Diligence Act. Similar to Lara Wolters (Europe.Table reported), Barry Andrews also calls for a stricter law than the Commission proposes. For example, significantly more companies are to be covered by the regulation, namely companies with 250 employees or more and annual sales of €40 million. In high-risk sectors, companies with 50 or more employees and €700,000 annual sales in the EU should also be subject to due diligence.

    On the last point, Barry Andrews goes further than Lara Wolters: Wolters’ proposal is for €8 million annual sales for companies in high-risk sectors. However, Andrews is more accommodating to small and medium-sized companies: They should not have to bear liability under the directive.

    Andrews wants to focus on supply chains

    Andrews’ proposal differs from both Wolters’ approach and the Commission’s proposal in another crucial respect: The regulation would apply only to supply chains (i.e., upstream activities), not the entire value chain (upstream and downstream activities). “The legal definition of ‘value chain’ is fuzzy. The law is stronger and safer if we focus on supply chains,” was the statement of the INTA rapporteur.

    Andrews’ proposal received overall support, but S&D, Left and Greens in particular argue for inclusion of the entire value chain. They call for a risk-based approach, according to which due diligence would apply not to “established business relationships” but wherever there is a risk to human rights and the environment.

    The EPP will probably not go this way and will not introduce any amendments in the sense of a tightening of the Commission’s proposal: A practical law is needed that does not overburden companies, said EPP shadow rapporteur Angelika Winzig. “Companies need legal certainty. We must not put additional administrative burdens on them.” MEPs have until today to submit their amendments. cw

    • European policy
    • Supply chains
    • Trade
    • Trade Policy

    Study: Circular economy strategies enable secure raw material supply

    To guarantee a secure and sustainable supply of raw materials for the energy transition, policymakers and industry need to drive circular economy strategies on a large scale. This is the conclusion of a new study by sustainability consultancy Systemiq, with support from the European Climate Foundation, presented yesterday at the launch of EU Raw Materials Week. It summarizes previously published research on the interdependencies in the EU’s global value chains and concludes: Circular economy strategies hold great potential, but also urgent need for research and action.

    The study highlights four demand-side approaches and provides examples and policy recommendations:

    • “Rethink”: Rethink the way we use products and materials (example: promote car sharing services).
    • “Reduce”: Achieve more with reduced material use (example: Tesla reduces use of cobalt).
    • “Reuse”: Reuse products and materials to keep raw materials in use longer (example: second use of lithium-ion batteries for stationary energy storage systems).
    • “Recycle”: Enable high-quality material cycles, especially for raw materials imported from outside Europe (for example, recycling of lithium-ion batteries).

    Reduction of demand must be the focus

    “When we talk about the circular economy, very often the focus is on recycling,” said Ben Dixon, head of materials and circular economy at Systemiq. However, he said, if products have a long life cycle, then the ability to recycle the materials is correspondingly delayed. A battery for an electric vehicle, for example, can only be recycled after about 15 years. Therefore the other areas of the circular economy also need more attention. “Recycling is an important piece of the puzzle, but we need to think much more broadly and also consider the area of absolute demand reduction.”

    The energy transition will bring about a significant reduction in the total demand for primary resources, the study says. An electrically powered medium-sized passenger car, for example, needs 106 times fewer primary raw materials than its counterpart with an internal combustion engine. However, in a carbon-neutral energy system, the demand for individual raw materials such as lithium, cobalt and rare earths would increase, posing other challenges. “Even in really ambitious and optimistic scenarios, we would still expect our demand for primary battery metals to increase by the mid-2030s,” Dixon said. leo

    • Battery
    • Circular Economy
    • Raw materials

    ITRE Committee gives green light to RED IV compromise

    The Industry, Research and Energy Committee (ITRE) adopted the compromise amendments to the revisions of the Renewable Energy Directive (RED IV). Of the 60 members of the committee, 49 EU parliamentarians voted in favor, eight abstained and three voted against. The ITRE vote yesterday (Monday) paves the way for the plenary vote, which will take place next December. The amendments were negotiated by rapporteur and parliamentary director of the CDU/CSU group Markus Pieper (EPP).

    RED III and RED IV are legislative revisions of the REPowerEU plan presented by the European Commission in May. It aims in particular to speed up the approval process for renewable energy projects. The MEPs now want to shorten the deadline to nine months. The Commission had proposed a deadline of one year. For power plants or new installations with a capacity of less than 150 kW, it should even be six months. Outside these areas, the compromise sets a maximum procedure duration of 18 months, whereas the European Commission had proposed two years.

    Simple reporting procedure for small installations

    The ITRE proposal also calls for permits for the installation of solar energy systems on buildings to be issued within three months. For smaller systems under 50 kW, a simple notification process would suffice. The installation of solar plants would be exempt from the requirement to carry out an environmental impact assessment, MEPs said.

    Both revisions also aim to raise the EU’s renewable energy expansion target to 45 percent. As this increase is already part of the European Parliament’s negotiating position for the ongoing trilogue negotiations on the third revision of the Renewable Energy Directive (RED III), ITRE parliamentarians focused on the permitting procedures in yesterday’s vote.

    Markus Pieper said he was “very satisfied” with the result. “It’s about accelerating and simplifying the use of renewable energy,” he said. A single compromise amendment was not adopted yesterday. It concerns the inclusion of Natura 2000 sites in the so-called “go-to areas,” which will now be renamed “Renewable Acceleration Areas” (RAA) – special areas for faster renewable energy development. Which renewable energy projects will be given access to the “go-to areas” will be decided by the Committee on Environment, Public Health and Food Safety (ENVI). cst

    • Energy
    • Energy policy
    • European Parliament
    • Renewable energies
    • REPowerEU

    Commission emphasizes Turkey’s strategic role in gas supply

    When it comes to securing Europe’s gas supply, the Commission wants to focus more on transit countries. “In terms of security of supply, developing the mutually beneficial relationship with Turkey could be a very important priority,” DG Energy Deputy Director General Matthew Baldwin told ITRE on Monday night. He said the EU must keep in mind that transit countries also want to secure their supplies and may claim some additional gas supplies for themselves.

    The southern gas corridor, through which gas from Azerbaijan already flows to the EU, passes through Turkey. By 2027, Azerbaijan wants to double the annual volume through the pipeline to 20 billion cubic meters (bcm) per year. Turkey secured part of the total volume some time ago.

    An additional eight bcm is expected to flow into the EU from Algeria in 2023, up from an additional four bcm this year, Baldwin said. In the next 18 months, the EU could also receive two to five bcm from Israel via a detour through Egypt, he added. In the years after that, the amount could increase to seven bcm. “We are turning over every stone in the quest for gas,” Baldwin said.

    Federal government nationalizes former Gazprom Germania

    A delegation will travel to Trinidad and Tobago the week after next. For the coming year, an energy dialogue with Asian countries is planned for the first time. In Malaysia, there will be a conference with possible suppliers of natural gas and hydrogen. Plans for a ministerial conference with Japan and South Korea, but also the USA and Norway, had already become known at the last EU Council of Ministers in Luxembourg.

    Currently, small amounts of Russian gas are still flowing to the EU via Turkey and Ukraine. The most favorable strategic moment for Moscow to interrupt transit via Ukraine could be in January or February, warned Klaus-Dieter Borchardt of Baker McKenzie yesterday at a discussion held by think tank Epico. With the current high temperatures, it would make no sense to interrupt it now, the former commission official said.

    The former Gazprom Germania could also participate in the EU’s joint gas procurement. In the draft of the latest emergency regulation, the Council had included a passage that would also allow former Russian companies to participate in the planned energy platform. Yesterday, the German government nationalized the company, which now operates as Securing Energy for Europe (Sefe). The Ministry for Economic Affairs justified corresponding capital measures with the threat of insolvency, which would endanger the security of supply in Germany. ber

    • Energy Prices
    • Natural gas

    Heads

    Heads: Jens Geier – ‘energy’ as a heartfelt topic

    Jens Geier is a member of the European Parliament and chairman of the European SPD.

    “I don’t know yet whether I’ll stay with Twitter,” says Jens Geier, when asked about the takeover by Elon Musk. “EuropaJens, as Geier calls himself on the platform, has been there since 2009. At some point during the election campaign for the European Parliament, he set up his profile. The SPD politician succeeded in moving in. He enjoys his role as an MEP, and says that Brussels and Strasbourg are particularly free places: “Here, I can work with whomever I want. There is less need to fit into opposition and government blocs than in national parliaments.”

    Instead, he says, it’s all about the cause. And there is a lot to do right now. The 61-year-old sits on the European Parliament’s Industry, Research and Energy Committee (ITRE), where he is the rapporteur for the revision of the gas directive. Energy is a subject close to Geier’s heart, who grew up in the Ruhr region: “I want to help determine the framework conditions under which decarbonization takes place.” The goal must be for Germany to make the transition with all its industry involved.

    Actually, Geier did not want to become a politician, but a historian. He studied history, literature and politics in Bochum, and at the same time became involved with the Jusos. In 1989, he graduated from university and became Deputy Federal Chairman of the SPD youth organization. That year also marked his entry into European politics. A friend of his became an MEP and was looking for a research assistant. Jens Geier took the job and found his calling. “At that time, I said to myself: If I ever aspire to a mandate, this is it.”

    Preserving Europe’s industrial base

    But it took a few more years before he became a member of parliament himself. Geier made the most of the time, learning about politics at the federal and state level. In 2001, he took a step out of the SPD cosmos. At the Business Metropole Ruhr (BMR) development agency, he worked on the joint image of the industrial region. Later, he worked for the consulting firm Deloitte. When he was elected as an MEP, he returned to the heart of Europe. For the past five years, he has also been Chairman of the SPD in the EU Parliament.

    This gives him a good connection to Berlin. Geier is a regular guest on the SPD presidium. The fact that Olaf Scholz’s German “double whammy” billion-euro package has irritated many in Europe is something he can understand. “Germany needs to think more about what this means in terms of European policy in the policies we pursue nationally.”

    In order to master challenges such as the restructuring of the energy supply, a lot of mutual understanding is needed. And it has to happen quickly, he said. “After all, it’s about maintaining the industrial base in Europe.” Paul Meerkamp

    • Energy
    • Energy policy
    • European policy
    • Natural gas
    • SPD

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