Logistics aid for grain from Ukraine + R • Table.Briefings

Dear reader,

The war in Ukraine continues to drive the global food crisis. Up to 20 million tons of wheat are currently stuck there and cannot be exported due to Russian port blockades. The European Commission has therefore launched an action plan to get the urgently needed goods out of the country by truck and rail. But different track widths and non-approved exhaust standards are just two of the many challenges, as Timo Landenberger analyzes.

It is only a small part of the investment sum for REPowerEU, but it attracts the most criticism: Europe’s energy independence is also supposed to be financed by selling CO2 certificates from the reserve. Critics fear a precedent. “Once Pandora’s box is open, it’s hard to close it again,” says climate policy researcher Emil Dimanchev. Lukas Scheid has the details.

In the past, Europe dominated the markets with its mining industry. Those days are over, but now domestic mining is being rediscovered. The EU wants to free itself from problematic dependencies, including in the area of critical raw materials. The problem is that mining pollutes the climate and the environment. Experts are therefore calling for a “responsible mining sector” in Europe. Read more about the discussion in Leonie Düngefeld‘s Feature.

The consequences of the Russian war of aggression on Ukraine also impact the German education landscape. According to EU law, all refugee children have a right to education. They must not be placed in a worse position than German pupils. However, this overburdens the German school system, according to our colleagues from Bildung.Table. Take a look.

Your
Sarah Schaefer

Logistics aid for Ukraine: EU action plan aims to save millions of tons of grain

By

Timo Landenberger

Up to 20 million tons of grain are currently stored in Ukraine and can only be exported with difficulty because Russia is blockading the seaports on the Black Sea. This has brought the country’s main export industry to a virtual standstill. Domestic farmers are barely generating any income from the surplus, while the price of wheat is skyrocketing on the world market. This is because Ukraine is one of the most important producing countries.

90 percent of Ukrainian grain exports were handled by ship before the war began – up to five million tons per month. This is roughly equivalent to Germany’s annual grain export volume. According to the International Chamber of Shipping (ICS), around 80 merchant ships are now stranded in Ukrainian ports, particularly in Mykolaiv, Odessa, and Kherson.

The European Union, therefore, wants to provide logistics support with an action plan. Alternative transport routes, known as solidarity lanes, are to be used to transport the grain by truck and rail from the country and via Poland and Romania to the European Black Sea, Mediterranean, and North Sea ports.

“By getting the wheat out of Ukraine, we can provide much-needed revenue for Ukrainians and equally much-needed food for the World Food Program,” EU Commission President Ursula von der Leyen said on Tuesday at the World Economic Forum in Davos, adding that she also wanted to enter into dialogue with Moscow. It cannot be in Russia’s interest to be responsible for starving people, von der Leyen said in an interview with the Reuters news agency.

Using ‘rail bridge’

Through a newly established logistics platform, there is a close exchange between the EU and the member states, the Ukrainian authorities, logistics companies, and financial institutions, a Commission spokeswoman said. The German government supports the plan. The EU has a “massive responsibility to help Ukraine move grain out of the country,” Agriculture Minister Cem Özdemir (Greens) said on the sidelines of Tuesday’s meeting of EU agriculture ministers in Brussels. Özdemir called on all member states to support Ukraine and its European neighbors “quickly and unbureaucratically”.

Transport Minister Volker Wissing (FDP) also welcomed the move. “A joint European initiative is a strong sign of solidarity and increases the effectiveness of the measures,” Wissing said last week at a meeting with EU Transport Commissioner Adina Vălean. He added that rail, in particular, was of great importance in this regard. For example, together with the rail subsidiary DB Cargo, the “rail bridge” set up for aid shipments to Ukraine is being upgraded to enable it to transport large quantities of agricultural goods out of the country.

Different track widths

A DB Cargo spokeswoman confirmed when asked: “We already run several trains a day with grain through Europe to various seaports with our European DB Cargo subsidiaries in Poland and Romania.” Now, the goal is to expand these agricultural exports, but that is proving difficult.

For example, the track width in Ukraine is different from that in the EU. The loads must therefore be reloaded onto other trains at the border, which means an immense second effort. It is also completely unclear exactly how much grain is where in the country, says agricultural economist Bettina Rudloff of the German Institute for International and Security Affairs. “In addition to the stocks in the ports, a large part is still in decentralized transshipment warehouses and also on farms spread across Ukraine. And that, of course, makes a big difference to the question of how we get it out of the country.”

For this reason, and because of the partly destroyed infrastructure in the country, trucks have to be used in many cases. And time is pressing: The new harvest begins as early as the beginning of July, and sufficient storage capacity must be available in Ukraine by then. Otherwise, the grain will spoil in the fields, which would further exacerbate the already existing crisis.

Kilometers of traffic jams at the border

However, to get one million tons of grain out of the country by road, 40,000 trucks are already needed, according to Ludwig Striewe, a member of the management board of ATR-Landhandel. The agricultural and logistics expert lived in Ukraine for many years and worked for the Ukrainian government as part of the German Economic Advisory Group.

However, there is neither enough diesel nor enough trucks. Most of them are stuck in kilometer-long traffic jams at the border crossings. “It currently takes trucks three days to get out of Ukraine and another three days to get back in,” Striewe criticizes. That has to happen faster. The fact that the EU last week suspended import duties on Ukrainian products for a year was long overdue. Others must now follow quickly, Striewe demands. These include increasing the number of border guards and installing provisional and temporary crossings.

The EU is also looking into temporarily allowing Ukrainian trucks on European roads. Most of the vehicles comply with the Euro 2 emissions standard and are not allowed to drive through to the ports, which in turn makes it necessary to reload the grain.

But even then, it remains questionable whether the warehouses can really be emptied by the beginning of July. Experts, therefore, suggest that, parallel to export support, the construction of additional storage capacities in Ukraine should begin now. For example, in the form of so-called silo bags: long plastic tubes that are easy to transport and can be set up directly in the field.

“Such decentralized storage would have the added advantage that stocks could not be destroyed or seized all at once in the event of Russian attacks,” says Ludwig Striewe. However, the focus must remain on simplifying exports.

Famines threaten

This is because they account for twelve percent of global grain exports. Numerous countries, especially African ones, are heavily dependent on the supplies. Russia and Belarus are also important exporting countries and have largely stopped their deliveries. In addition, major agricultural countries such as India and Argentina have reacted by halting exports to secure their own supplies.

This has a strong impact on the world market, where the already very high cost of food continues to rise. Experts, the G7 community, and the United Nations have already warned of impending famine for millions of people.

“The market is very inelastic. You can’t increase supply at the push of a button; that requires a longer lead time. Demand is also inelastic because we have to eat. That’s where the rapid and high price swings come from, even with small drops in volume,” says SWP agricultural expert Rudloff. Even before the outbreak of the war, there were more than 800 million hungry people in the world. The current situation, therefore, creates an additional problem that needs to be solved. However, the basic problem is a systematic one.

REPowerEU funding through ETS: a Pandora’s box

By

Lukas Knigge

In recent months, discussions about the European Emissions Trading Scheme (ETS) reform have often focused on planning security for companies and preventing price shocks for consumers and industry. Price spikes like the one last fall had fueled suspicions of external market manipulation and lent weight to calls for more control of the market (Europe.Table reported). It was hoped that a stable carbon market would make it easier for ETS sectors and other market participants to comply with the new rules.

For the same reason, when presenting the Fit for 55 package last summer, the Commission had proposed removing a much smaller quantity of unused emission allowances from the market (around 110 million allowances) than environmentalists had demanded. Instead, twice the amount of allowances is to be temporarily transferred to the Market Stability Reserve (MSR) – 24 instead of 12 percent of the total available emission allowances. As defined by the Commission, the MSR is intended to improve the resilience of the ETS to major shocks by adjusting the number of allowances to be auctioned.

The announcement was followed by the price shock

The plan published by the Commission last week to mobilize around €20 billion by the end of 2026 to finance the REPowerEU program through the sale of emission allowances from the MSR is correspondingly surprising. That’s because the announcement of the proposal last Wednesday alone caused a price shock. The European CO2 price has since fallen from over €90 to under €80 (as of May 24, 2022).

This is due to uncertainty in the market, says Emil Dimanchev, climate policy researcher and former carbon markets analyst. Market participants are reducing their risk exposure because of uncertainty about how the market will develop. That ultimately caused the price drop, Dimanchev believes. This means that the Commission’s proposal has caused exactly what the MSR is supposed to prevent.

Considering REPowerEU’s total investment of around €300 billion, the part financed by the MSR would be small, but the idea nevertheless shows that the Commission is ready to intervene in the market if external circumstances demand it from Brussels’ point of view. “This creates a precedent,” Dimanchev says. It goes against the original idea of the MSR. “This is not so much about the number of allowances but about the principle.”

Commission contradicts own reform proposals

There are no clear rules at what point in a crisis such a move is allowed. “Once Pandora’s box is open, it’s hard to close it again,” the climate policy researcher said. If the Commission decides on its own when this point is reached, that is dangerous because it shakes the reliability of the market and the confidence of traders.

Such unpredictability in the ETS should actually be prevented by its reform. Market stability is a prerequisite for the ETS to function properly and achieve its targets, the Commission wrote in mid-July when presenting its ETS reform proposal. In doing so, the MSR should address outdated imbalances between supply and demand and make the ETS more resilient to major imbalances, it added. “The mechanism must provide a reliable regulatory framework and long-term planning certainty.”

So now, the Commission is contradicting its own vision of better predictability on the market. If the plans are actually implemented, the CO2 price is likely to fall further due to the additional emission allowances that become available. It would therefore not be at all clear how many certificates would be needed from the reserve to achieve the target of €20 billion. At a CO2 price of €100 per ton, 200 million certificates would be needed; at a price of €80, 250 million certificates would be needed.

Threatening domino effect

The crux of the matter is also the threat of a domino effect. If the price per ton of CO2 falls, more certificates would be needed to reach the 20 billion mark. Thus, even more allowances would have to be flushed onto the market, which in turn would further depress the price. “The market stability reserve would become the market instability reserve,” Dimanchev says.

Instead, the EU Commission should ensure that the current revenues from the ETS are used more effectively to contribute to Europe’s energy independence from Russia, the carbon market expert demands. Instead of inflating the cake, it needs to be better divided up. Billions are collected every year through the sale of CO2 allowances, Dimanchev said. From his time as an ETS analyst, he reports that every year about a quarter of the revenue is not even used for climate protection measures. Exactly what this quarter is used for is not known, as member states are only required to report climate protection and energy investments.

In 2019, there were €4 billion in ETS revenues used for purposes other than climate protection or energy supply. In 2020, when the average CO2 price was still around €24 per ton, it was already €5 billion and 28 percent of total ETS revenues. Dimanchev, therefore, argues that this money should now be used for energy independence from Russia and to finance the REPowerEU plans. With an average CO2 price of over €50 per ton, the expert says it will take less than two years to raise the targeted €20 billion that the Commission hopes to collect through MSR allowances.

European mining: back to the future

To generate green energy and meet climate targets, Europe will need wind turbines, photovoltaic systems, fuel- and solar cells, heat pumps, and batteries. The problem: The necessary raw materials for their production largely come from unstable partners in non-European countries. Many of them are also in short supply and are already not available in sufficient quantities. This is already evident from delivery bottlenecks for electric cars or solar panels.

Last week, the European Commission announced in its newly adopted RePowerEU Communication that it will draft a legislative proposal on critical raw materials. The EU’s recipe for securing critical raw materials has so far consisted of three ingredients: expanding trust-based cooperation with other countries, increasing domestic production, and the circular economy action plan.

The first ingredient was highlighted by Commission President Ursula von der Leyen at the World Economic Forum in Davos yesterday: To secure raw materials for the energy transition, the EU should not fall into the same trap as it did with oil and gas, she said. “We should not replace old dependencies with new ones. We are therefore working to ensure the resilience of our supply chains.” Strong international partnerships like the one with Canada are “at the heart of the solution,” she said. This way, the EU would be able to build more trust-based and balanced supply chains.

The second part of the recipe means: Bringing back the domestic mining industry with which Europe dominated global markets of the past. By the early 2000s at the latest, it lost influence – production vanished off to cheaper foreign countries, far away from Europe’s rising environmental and social standards.

Higher prices for better standards

At the Raw Materials Summit, hosted by EIT Raw Materials and the European Raw Materials Alliance (ERMA) in Berlin this week, representatives from business, politics, and NGOs agreed: Europe is rich in raw materials and must now make better use of them. “We need a responsible mining sector and supply chains within Europe,” said Bernd Schaefer, CEO of EIT Raw Materials. Europe is at an “epochal turning point,” he said in the event’s opening speech. In the wake of the Russian invasion of Ukraine, the EU needs to take full advantage of the single market. “It’s time to rapidly build highly innovative and sustainable supply chains between member states.”

There are already numerous projects for mining and processing metals and other raw materials; years of approval procedures are often an obstacle. Together with the member states and regions, the European Commission wants to draw up an overview of mining and processing projects in the EU that can be put into operation by 2025. It wants to give special attention to regions that already boast expertise and technical capabilities due to their mining history. This was announced by the Commission in 2020 – but so far the results are not known.

Another conflict: Mining is harmful to the climate and the environment. A European mining sector must therefore be responsible and sustainable. In a global comparison, European standards are very high, have a good reputation, and serve as benchmarks. However, they must also be complied with, demanded Tobias Kind-Rieper of the WWF. The Portuguese government, for example, had announced an assessment of the social and environmental impact as a prerequisite for lithium mining. However, this has not been done for some projects.

One concern related to high standards is the competitiveness of the European industry. It is clear that raw material prices in the West are higher than prices in countries like China, said Erik Eschen of magnetic materials manufacturer Vacuumschmelze. This, however, is something that has to be accepted, he said. Some customers have already recognized this. In the past twenty years, it has been ignored that the strong dependence on certain countries also causes high costs, according to Eschen.

The right framing

The third ingredient of the EU strategy is the goal of creating a circular economy: To keep their footprint small, raw materials must remain in circulation and in use for as long as possible. According to a study by the NGO PowerShift, recycled aluminum can save up to 95 percent of emissions compared to the primary extraction of aluminum from bauxite; copper recyclates generate 30 to 80 percent fewer emissions. There is also great emissions savings potential for steel through recycling.

And there is an additional point on which everyone agrees: The importance of European mining projects must be better communicated to the public. “We need to show how great the potential is under our feet,” said MEP Reinhard Buetikofer. Domestic mining will certainly cause fears and uncertainties at first, said Sophia Kalantzakos, a researcher at New York University. That is why she believes that proper framing and transparency from all stakeholders are important.

Meanwhile, the mining industry strives to present a greener image. In Greenland, for example, the Canadian company Greenland Resources plans to mine molybdenum on a large scale, a metal that is, for example, essential for European steel production but which is so far not produced in Europe. Due to the company’s sophisticated mine design, it is set to become the world’s most eco-friendly molybdenum project. It claims to have particularly low emissions and low water consumption. “Companies today seem less profit-driven and more concerned with ethical standards,” Kalantzakos said. Whether they can live up to them remains to be seen. Leonie Düngefeld

Coal-fired power to ease gas crisis

German Economic Affairs Minister Robert Habeck wants to further prepare Germany for a possible end to Russian gas supplies and expand the number of coal-fired power plants in reserve for this purpose. If a gas shortage occurs or threatens, gas consumption in power generation is to be significantly reduced by means of a “malus“, as was heard from the Federal Ministry of Economic Affairs on Tuesday. A corresponding bill went to the departmental vote yesterday. In addition, a “sprinter program” is to promote the construction of new hydrogen power plants through the Renewable Energy Sources Act (EEG).

Shortly thereafter, voices were raised to bring forward the fuel switch. “Unfortunately a correct intention. Should be used, in my opinion, already now, so that the stores are filled as quickly as possible,” tweeted Dena head Andreas Kuhlmann. Approval came in the short message service from the vice president of the BDI, Holger Loesch: “Should really happen now, not only in an emergency. 16% of gas consumption in power generation is a great potential for storage ramp-up.” However, there was no official press release from BDI by press time on Tuesday.

Energy expert Marco Wünsch from Prognos opposed rapid regulatory intervention and referred to the European internal market: “I wouldn’t do that at the moment. If gas-fired power plants in Germany are placed in a worse position in the merit order, more inefficient gas-fired power plants abroad will step in. I don’t see any potential for more coal-fired power in the short term. Gas demand would increase as a result.“

The energy association BDEW expressed its rejection of the BMWK’s plans: “This would represent a significant encroachment on the fundamental rights of the companies concerned, which BDEW believes would be disproportionate and unjustified.” ber/dpa

Oil embargo: Von der Leyen does not expect decision at EU summit

EU Commission President Ursula von der Leyen says she does not expect a decision on an oil embargo against Russia to be made at the EU summit early next week. “I don’t think the summit is the right place for that… We should not stare at the summit,” she told Reuters on Tuesday on the sidelines of the World Economic Forum. Negotiations with member states were still ongoing, von der Leyen added. The main issue now, she said, is working out the details.

Hungary’s head of government Viktor Orbán takes a similar view. Since the outstanding issues are serious, it is very unlikely that a comprehensive solution can be found before the summit, Orbán writes in a letter to EU Council President Charles Michel. At the same time, in Monday’s letter, obtained by Europe.Table, the right-wing nationalist politician advocates not discussing the EU Commission’s proposed sanctions package at the summit. This, would be counterproductive and would only reveal internal divisions without any realistic chance of resolving differences. An EU official confirmed receipt of the letter on Tuesday.

Hungary demands exemption or payment in billions

In it, Orbán also reiterates that Hungary is still heavily dependent on Russian energy imports. Neither Hungarian households nor the Hungarian economy could withstand the price shock that the proposed sanctions would cause. He also points out that the EU Commission’s latest proposals to ease the burden on states that are particularly dependent on Russian energy do not dispel Hungary’s concerns.

The EU Commission had originally proposed in early March to end imports of Russian crude oil in six months and oil products in eight months because of the Ukraine war. Hungary and Slovakia were to be given 20 months. Even subsequent offers have so far failed to persuade the Hungarian government to abandon its rejection. Foreign Minister Péter Szijjártó made it clear that his country wants either a complete exemption for oil deliveries via pipelines or the payment of €15 billion from EU funds for adjustment and follow-up costs. dpa/rtr

German government spends €17 billion on chip industry

The traffic light coalition is massively increasing funding for the semiconductor industry in Germany. The Bundestag’s budget committee approved funds of €17.23 billion for microelectronics projects in the clean-up session at the end of last week, as a spokeswoman for the Federal Ministry of Economic Affairs and Climate Change (BMWK) confirmed in response to an inquiry from Europe.Table. Of this amount, €3.15 billion are to flow this year and €14.08 billion in subsequent years until 2028.

The budget holders are thus significantly increasing the funding planned by the German government. A large part of the funds is likely to benefit Intel. In mid-March, the US company announced plans to invest €17 billion in the construction of two semiconductor plants in Magdeburg. According to government and industry circles, Intel has been promised federal funding of around €7 billion. The BMWK would not comment on the amount of funding. However, the spokeswoman said, Intel is “currently in intensive discussions with the goal of submitting the project to the European Commission in the near future. The Brussels competition authorities must approve the state aid.

A second large block is earmarked for funding the planned IPCEI on microelectronics and communications technologies. In industry circles, there is talk of around €5 billion for the Important Project of Common European Interest. The project involves 32 companies in Germany, including Infineon, Bosch, and Globalfoundries. The IPCEI was initiated in the fall of 2020, but has not yet been launched in Germany due to complex coordination processes and the unresolved issue of financial support.

That is now likely to change: For the implementation of the IPCEI, the decision of the budget committee is “trend-setting”, says Wolfgang Weber, CEO of the German industry association ZVEI. For the industry in Germany and Europe, the supply of chips is of great importance to ensure future viability. SPD economic politician Falko Mohrs speaks of an “enormously important contribution” to the promotion of this strategically important industrial sector.

Spain also spends billions

A large part of the budget comes from the budget of the Federal Ministry of Finance. Section 60 provides €2.72 billion in expenditure appropriations and €12.48 billion in commitment appropriations. Around €2 billion come from the BMWK budget, €1.6 billion of which are commitment appropriations. A three-digit million euro amount has also been earmarked in the Research Ministry’s budget for the technology sector. The plenum of the Bundestag still has to approve the draft budget.

The plans of Berlin’s coalition partners are also being closely followed in Brussels. The EU Commission wants to use the planned Chips Act to promote the establishment of semiconductor companies to more than double Europe’s share of chip production to 20 percent by 2030. The lion’s share of the promised €43 billion in funding is to be provided by the member states.

The Spanish government is also digging deep into its coffers. It has released €12.25 billion to attract semiconductor manufacturers to the country. Of this, €9.3 billion have been earmarked to promote the construction of factories, said Economy Minister Nadia Calvino yesterday. A good €1 billion has been earmarked for research and development in the sector. The money is to be used until 2027.

Until now, the industry, which supplies the world market mainly from Asia, has given Spain a wide berth, Calvino said. Lack of government support has been one of the reasons, he said. “We want Spain to play a relevant role in this technology field.”

So far, companies from the USA have dominated in chip design and Asian manufacturers in production. A subsidy race has broken out internationally in the sector. “However, we must not ignore what is happening around us,” says ZVEI Managing Director Weber. The USA, China, and South Korea have announced much higher subsidy sums than Europe. tho

Study: Digital industry can significantly reduce CO2 emissions

The digitization of industry in Germany can make a large-scale contribution to achieving the 2030 climate targets. This is the finding of a study by business consultancy Accenture, which digital association Bitkom published in Berlin on Tuesday.

The study examines two scenarios: moderate digitization and accelerated digitization that significantly picks up the pace in the introduction, dissemination and use of digital technologies through appropriate political incentives. Accelerated use of digital technologies in industry could save up to 64 million metric tons of CO2, while slower digitization would reduce this figure to 37 million metric tons.

With the Paris climate protection agreement, Germany committed in 2015 to achieving certain climate targets and introducing measures to reduce greenhouse gas emissions. In 2019, CO2 emissions were still at 805 megatons. In 2030, this may only amount to 543 megatons.

The study cites the targeted use of digital twins as the greatest savings potential. This is the digital mapping of products and manufacturing processes to optimize both the product itself and the manufacturing process for the lowest possible CO2 emissions at an early stage during development. In this way, 33 million metric tons of CO2 could be saved with accelerated digitization alone, and 19 million metric tons with slower digitization.

The potential savings from automating production are of a similar order of magnitude. Here, CO2 emissions could be reduced by 31 million tons, or 18 million tons with slower digitization. dpa

France expects delayed implementation of global tax reform

The global tax reform will probably not come into force until the end of 2023 or early 2024 – and thus a year later than originally planned. This is what France’s Minister of Finance Bruno Le Maire announced in Brussels on Tuesday. The decisive factor, he said, is that the reform succeeds at all. It is intended to transfer the existing regulations into the digital age.

Around 140 countries agreed on the specifics of a global tax reform last year. This includes a minimum tax of 15 percent for internationally operating companies. In addition, emerging markets are to receive more revenue from the world’s largest corporations. Tax havens are to be dried up in this way, and, above all, large digital corporations are to be held more accountable.

However, the implementation of the minimum tax in the EU has stalled due to concerns raised by Poland. “All open questions have been answered,” said German Finance Minister Christian Lindner in Brussels. He hoped that the concerns would be resolved very soon. There was also no reason to wait before implementing the minimum tax. There is no legal connection between the two pillars of the planned reform, he said.

The details so far have been negotiated under the umbrella of the OECD. The Secretary-General of the organization of industrialized nations, Mathias Cormann, said at the World Economic Forum in Davos that he was cautiously optimistic that the EU would give the green light for the minimum tax. However, the implementation might not happen before 2024.

Le Maire hopes that all EU members will have given their approval by June. Tax reforms always require unanimity among the 27 countries of the European Union, so changes are often painstaking. rtr

Constitutional amendment: Orbán creates basis for further state of emergency

Shortly before the current COVID state of emergency expires at the end of the month, Hungary’s Prime Minister Viktor Orbán has found a way to continue governing by decree. The parliament in Budapest created a new category of state of emergency for this purpose on Tuesday. The government can now declare a state of emergency if a neighboring country is affected by an armed conflict, war, or humanitarian disaster. Ukraine, against which Russia has been waging a war of aggression for three months, is one of Hungary’s neighbors. The 136 deputies of the right-wing nationalist Fidesz party voted in favor of the corresponding constitutional amendment.

The health emergency that Orbán declared at the start of the COVID pandemic in spring 2020 and that parliament has extended several times since then expires on May 31. With the constitutional amendment, however, Orbán could again declare a state of emergency. This would allow him to repeal existing laws and take coercive measures by decree. Parliament must confirm this after 15 days at the latest. In view of the large majority of the Fidesz party led by Orbán, this is considered a formality.

Orbán also used the health emergency for purposes that could hardly be justified by addressing the health situation. These included measures to financially harm opposition-ruled municipalities or to provide advantages to pro-government businessmen. dpa

Joachim Poß: the ever critical SPD veteran

Joachim Poß has been a member of the SPD since 1966, including 37 years as a member of the German Bundestag.

Joachim Poß has been politically active for more than half a century. Even in retirement, he does not keep quiet. He regularly gives his opinion on current political events. “I have always been critical. So critical, in fact, that it has earned me disciplinary proceedings in the past,” he recalls of his not always friendly relationship with his own party. The issue of social justice, in particular, concerns him: “The inequality in society has become even greater as a result of the pandemic.”

Poß has been a member of the SPD since 1966: from 1999 to 2013, on the Federal Party Executive Committee. He was a member of the Bundestag for 37 years, including years as his parliamentary group’s financial policy spokesman, a member of the Finance Committee, and, from 2013 to 2017, on the Committee on EU Affairs.

His career began in post-war Gelsenkirchen: “I come from a miner’s family. In my youth, I witnessed huge protests; the future of these jobs was already uncertain back then.” Poß became editor of a newspaper for the young trade union and a member of the SPD-affiliated youth organization Die Falken. The step into the party was predestined. After graduating from school, he embarked on an administrative career in the upper echelons of the Gelsenkirchen city administration.

In 1980, his election to the Bundestag marked the beginning of his unprecedented career as a member of parliament, which lasted until 2017: Joachim Poß’s constituency Gelsenkirchen 1 elected him to parliament, again and again, sometimes with votes of almost 60 percent – despite all the changes in the SPD. All thanks to his trusted and deep-rooted ties to his region, he was able to help shape international politics through the end of the Cold War.

Witness of growing populism

In conversation, he recounts his travels through Europe and the USA over the past decades. He already noticed some developments early on that intensified much later. For example, “the financial policy in Greece was already bad in the 1990s. And before the word was on everyone’s lips, I was able to observe emerging populism very early on, in Italy, France, and here in Germany.”

The same applies to the US: In the 00s, he was there every year and observed the strengthening of the Tea Party: “Actually, this is a ‘civil war’ situation, I told the American interlocutors back then; and that’s how it is partly described today. And Trump’s re-election is not off the table given Biden’s poor performance so far.”

Joachim Poß spoke with Europe.Table a few weeks before Russia’s attack on Ukraine. Amid the politically and diplomatically escalating situation, he recalled a 2014 business trip: “I was in Donetsk just one day before the so-called separatists took over parts of the Donbas, caught the strange, almost ghostly atmosphere.” The reason for the official trip was to assess the situation in Ukraine after the Maidan. In light of problems such as nationalism, poverty, and corruption, Joachim Poß often wonders “whether there have not been steps backward in some areas”. Vera Altmolak

EUROPE.TABLE EDITORS

Till
Hoppe

Charlotte
Wirth

Falk
Steiner

Timo
Landenberger

Corinna
Visser

Lukas
Knigge

Eric
Bonse

Sarah
Schaefer

Manuel
Berkel

Lisa-Martina
Klein

Markus
Grabitz

Stephan
Israel

Claire
Stam

Dear reader,

The war in Ukraine continues to drive the global food crisis. Up to 20 million tons of wheat are currently stuck there and cannot be exported due to Russian port blockades. The European Commission has therefore launched an action plan to get the urgently needed goods out of the country by truck and rail. But different track widths and non-approved exhaust standards are just two of the many challenges, as Timo Landenberger analyzes.

It is only a small part of the investment sum for REPowerEU, but it attracts the most criticism: Europe’s energy independence is also supposed to be financed by selling CO2 certificates from the reserve. Critics fear a precedent. “Once Pandora’s box is open, it’s hard to close it again,” says climate policy researcher Emil Dimanchev. Lukas Scheid has the details.

In the past, Europe dominated the markets with its mining industry. Those days are over, but now domestic mining is being rediscovered. The EU wants to free itself from problematic dependencies, including in the area of critical raw materials. The problem is that mining pollutes the climate and the environment. Experts are therefore calling for a “responsible mining sector” in Europe. Read more about the discussion in Leonie Düngefeld‘s Feature.

The consequences of the Russian war of aggression on Ukraine also impact the German education landscape. According to EU law, all refugee children have a right to education. They must not be placed in a worse position than German pupils. However, this overburdens the German school system, according to our colleagues from Bildung.Table. Take a look.

Your
Sarah Schaefer

Logistics aid for Ukraine: EU action plan aims to save millions of tons of grain

By

Timo Landenberger

Up to 20 million tons of grain are currently stored in Ukraine and can only be exported with difficulty because Russia is blockading the seaports on the Black Sea. This has brought the country’s main export industry to a virtual standstill. Domestic farmers are barely generating any income from the surplus, while the price of wheat is skyrocketing on the world market. This is because Ukraine is one of the most important producing countries.

90 percent of Ukrainian grain exports were handled by ship before the war began – up to five million tons per month. This is roughly equivalent to Germany’s annual grain export volume. According to the International Chamber of Shipping (ICS), around 80 merchant ships are now stranded in Ukrainian ports, particularly in Mykolaiv, Odessa, and Kherson.

The European Union, therefore, wants to provide logistics support with an action plan. Alternative transport routes, known as solidarity lanes, are to be used to transport the grain by truck and rail from the country and via Poland and Romania to the European Black Sea, Mediterranean, and North Sea ports.

“By getting the wheat out of Ukraine, we can provide much-needed revenue for Ukrainians and equally much-needed food for the World Food Program,” EU Commission President Ursula von der Leyen said on Tuesday at the World Economic Forum in Davos, adding that she also wanted to enter into dialogue with Moscow. It cannot be in Russia’s interest to be responsible for starving people, von der Leyen said in an interview with the Reuters news agency.

Using ‘rail bridge’

Through a newly established logistics platform, there is a close exchange between the EU and the member states, the Ukrainian authorities, logistics companies, and financial institutions, a Commission spokeswoman said. The German government supports the plan. The EU has a “massive responsibility to help Ukraine move grain out of the country,” Agriculture Minister Cem Özdemir (Greens) said on the sidelines of Tuesday’s meeting of EU agriculture ministers in Brussels. Özdemir called on all member states to support Ukraine and its European neighbors “quickly and unbureaucratically”.

Transport Minister Volker Wissing (FDP) also welcomed the move. “A joint European initiative is a strong sign of solidarity and increases the effectiveness of the measures,” Wissing said last week at a meeting with EU Transport Commissioner Adina Vălean. He added that rail, in particular, was of great importance in this regard. For example, together with the rail subsidiary DB Cargo, the “rail bridge” set up for aid shipments to Ukraine is being upgraded to enable it to transport large quantities of agricultural goods out of the country.

Different track widths

A DB Cargo spokeswoman confirmed when asked: “We already run several trains a day with grain through Europe to various seaports with our European DB Cargo subsidiaries in Poland and Romania.” Now, the goal is to expand these agricultural exports, but that is proving difficult.

For example, the track width in Ukraine is different from that in the EU. The loads must therefore be reloaded onto other trains at the border, which means an immense second effort. It is also completely unclear exactly how much grain is where in the country, says agricultural economist Bettina Rudloff of the German Institute for International and Security Affairs. “In addition to the stocks in the ports, a large part is still in decentralized transshipment warehouses and also on farms spread across Ukraine. And that, of course, makes a big difference to the question of how we get it out of the country.”

For this reason, and because of the partly destroyed infrastructure in the country, trucks have to be used in many cases. And time is pressing: The new harvest begins as early as the beginning of July, and sufficient storage capacity must be available in Ukraine by then. Otherwise, the grain will spoil in the fields, which would further exacerbate the already existing crisis.

Kilometers of traffic jams at the border

However, to get one million tons of grain out of the country by road, 40,000 trucks are already needed, according to Ludwig Striewe, a member of the management board of ATR-Landhandel. The agricultural and logistics expert lived in Ukraine for many years and worked for the Ukrainian government as part of the German Economic Advisory Group.

However, there is neither enough diesel nor enough trucks. Most of them are stuck in kilometer-long traffic jams at the border crossings. “It currently takes trucks three days to get out of Ukraine and another three days to get back in,” Striewe criticizes. That has to happen faster. The fact that the EU last week suspended import duties on Ukrainian products for a year was long overdue. Others must now follow quickly, Striewe demands. These include increasing the number of border guards and installing provisional and temporary crossings.

The EU is also looking into temporarily allowing Ukrainian trucks on European roads. Most of the vehicles comply with the Euro 2 emissions standard and are not allowed to drive through to the ports, which in turn makes it necessary to reload the grain.

But even then, it remains questionable whether the warehouses can really be emptied by the beginning of July. Experts, therefore, suggest that, parallel to export support, the construction of additional storage capacities in Ukraine should begin now. For example, in the form of so-called silo bags: long plastic tubes that are easy to transport and can be set up directly in the field.

“Such decentralized storage would have the added advantage that stocks could not be destroyed or seized all at once in the event of Russian attacks,” says Ludwig Striewe. However, the focus must remain on simplifying exports.

Famines threaten

This is because they account for twelve percent of global grain exports. Numerous countries, especially African ones, are heavily dependent on the supplies. Russia and Belarus are also important exporting countries and have largely stopped their deliveries. In addition, major agricultural countries such as India and Argentina have reacted by halting exports to secure their own supplies.

This has a strong impact on the world market, where the already very high cost of food continues to rise. Experts, the G7 community, and the United Nations have already warned of impending famine for millions of people.

“The market is very inelastic. You can’t increase supply at the push of a button; that requires a longer lead time. Demand is also inelastic because we have to eat. That’s where the rapid and high price swings come from, even with small drops in volume,” says SWP agricultural expert Rudloff. Even before the outbreak of the war, there were more than 800 million hungry people in the world. The current situation, therefore, creates an additional problem that needs to be solved. However, the basic problem is a systematic one.

REPowerEU funding through ETS: a Pandora’s box

By

Lukas Knigge

In recent months, discussions about the European Emissions Trading Scheme (ETS) reform have often focused on planning security for companies and preventing price shocks for consumers and industry. Price spikes like the one last fall had fueled suspicions of external market manipulation and lent weight to calls for more control of the market (Europe.Table reported). It was hoped that a stable carbon market would make it easier for ETS sectors and other market participants to comply with the new rules.

For the same reason, when presenting the Fit for 55 package last summer, the Commission had proposed removing a much smaller quantity of unused emission allowances from the market (around 110 million allowances) than environmentalists had demanded. Instead, twice the amount of allowances is to be temporarily transferred to the Market Stability Reserve (MSR) – 24 instead of 12 percent of the total available emission allowances. As defined by the Commission, the MSR is intended to improve the resilience of the ETS to major shocks by adjusting the number of allowances to be auctioned.

The announcement was followed by the price shock

The plan published by the Commission last week to mobilize around €20 billion by the end of 2026 to finance the REPowerEU program through the sale of emission allowances from the MSR is correspondingly surprising. That’s because the announcement of the proposal last Wednesday alone caused a price shock. The European CO2 price has since fallen from over €90 to under €80 (as of May 24, 2022).

This is due to uncertainty in the market, says Emil Dimanchev, climate policy researcher and former carbon markets analyst. Market participants are reducing their risk exposure because of uncertainty about how the market will develop. That ultimately caused the price drop, Dimanchev believes. This means that the Commission’s proposal has caused exactly what the MSR is supposed to prevent.

Considering REPowerEU’s total investment of around €300 billion, the part financed by the MSR would be small, but the idea nevertheless shows that the Commission is ready to intervene in the market if external circumstances demand it from Brussels’ point of view. “This creates a precedent,” Dimanchev says. It goes against the original idea of the MSR. “This is not so much about the number of allowances but about the principle.”

Commission contradicts own reform proposals

There are no clear rules at what point in a crisis such a move is allowed. “Once Pandora’s box is open, it’s hard to close it again,” the climate policy researcher said. If the Commission decides on its own when this point is reached, that is dangerous because it shakes the reliability of the market and the confidence of traders.

Such unpredictability in the ETS should actually be prevented by its reform. Market stability is a prerequisite for the ETS to function properly and achieve its targets, the Commission wrote in mid-July when presenting its ETS reform proposal. In doing so, the MSR should address outdated imbalances between supply and demand and make the ETS more resilient to major imbalances, it added. “The mechanism must provide a reliable regulatory framework and long-term planning certainty.”

So now, the Commission is contradicting its own vision of better predictability on the market. If the plans are actually implemented, the CO2 price is likely to fall further due to the additional emission allowances that become available. It would therefore not be at all clear how many certificates would be needed from the reserve to achieve the target of €20 billion. At a CO2 price of €100 per ton, 200 million certificates would be needed; at a price of €80, 250 million certificates would be needed.

Threatening domino effect

The crux of the matter is also the threat of a domino effect. If the price per ton of CO2 falls, more certificates would be needed to reach the 20 billion mark. Thus, even more allowances would have to be flushed onto the market, which in turn would further depress the price. “The market stability reserve would become the market instability reserve,” Dimanchev says.

Instead, the EU Commission should ensure that the current revenues from the ETS are used more effectively to contribute to Europe’s energy independence from Russia, the carbon market expert demands. Instead of inflating the cake, it needs to be better divided up. Billions are collected every year through the sale of CO2 allowances, Dimanchev said. From his time as an ETS analyst, he reports that every year about a quarter of the revenue is not even used for climate protection measures. Exactly what this quarter is used for is not known, as member states are only required to report climate protection and energy investments.

In 2019, there were €4 billion in ETS revenues used for purposes other than climate protection or energy supply. In 2020, when the average CO2 price was still around €24 per ton, it was already €5 billion and 28 percent of total ETS revenues. Dimanchev, therefore, argues that this money should now be used for energy independence from Russia and to finance the REPowerEU plans. With an average CO2 price of over €50 per ton, the expert says it will take less than two years to raise the targeted €20 billion that the Commission hopes to collect through MSR allowances.

European mining: back to the future

To generate green energy and meet climate targets, Europe will need wind turbines, photovoltaic systems, fuel- and solar cells, heat pumps, and batteries. The problem: The necessary raw materials for their production largely come from unstable partners in non-European countries. Many of them are also in short supply and are already not available in sufficient quantities. This is already evident from delivery bottlenecks for electric cars or solar panels.

Last week, the European Commission announced in its newly adopted RePowerEU Communication that it will draft a legislative proposal on critical raw materials. The EU’s recipe for securing critical raw materials has so far consisted of three ingredients: expanding trust-based cooperation with other countries, increasing domestic production, and the circular economy action plan.

The first ingredient was highlighted by Commission President Ursula von der Leyen at the World Economic Forum in Davos yesterday: To secure raw materials for the energy transition, the EU should not fall into the same trap as it did with oil and gas, she said. “We should not replace old dependencies with new ones. We are therefore working to ensure the resilience of our supply chains.” Strong international partnerships like the one with Canada are “at the heart of the solution,” she said. This way, the EU would be able to build more trust-based and balanced supply chains.

The second part of the recipe means: Bringing back the domestic mining industry with which Europe dominated global markets of the past. By the early 2000s at the latest, it lost influence – production vanished off to cheaper foreign countries, far away from Europe’s rising environmental and social standards.

Higher prices for better standards

At the Raw Materials Summit, hosted by EIT Raw Materials and the European Raw Materials Alliance (ERMA) in Berlin this week, representatives from business, politics, and NGOs agreed: Europe is rich in raw materials and must now make better use of them. “We need a responsible mining sector and supply chains within Europe,” said Bernd Schaefer, CEO of EIT Raw Materials. Europe is at an “epochal turning point,” he said in the event’s opening speech. In the wake of the Russian invasion of Ukraine, the EU needs to take full advantage of the single market. “It’s time to rapidly build highly innovative and sustainable supply chains between member states.”

There are already numerous projects for mining and processing metals and other raw materials; years of approval procedures are often an obstacle. Together with the member states and regions, the European Commission wants to draw up an overview of mining and processing projects in the EU that can be put into operation by 2025. It wants to give special attention to regions that already boast expertise and technical capabilities due to their mining history. This was announced by the Commission in 2020 – but so far the results are not known.

Another conflict: Mining is harmful to the climate and the environment. A European mining sector must therefore be responsible and sustainable. In a global comparison, European standards are very high, have a good reputation, and serve as benchmarks. However, they must also be complied with, demanded Tobias Kind-Rieper of the WWF. The Portuguese government, for example, had announced an assessment of the social and environmental impact as a prerequisite for lithium mining. However, this has not been done for some projects.

One concern related to high standards is the competitiveness of the European industry. It is clear that raw material prices in the West are higher than prices in countries like China, said Erik Eschen of magnetic materials manufacturer Vacuumschmelze. This, however, is something that has to be accepted, he said. Some customers have already recognized this. In the past twenty years, it has been ignored that the strong dependence on certain countries also causes high costs, according to Eschen.

The right framing

The third ingredient of the EU strategy is the goal of creating a circular economy: To keep their footprint small, raw materials must remain in circulation and in use for as long as possible. According to a study by the NGO PowerShift, recycled aluminum can save up to 95 percent of emissions compared to the primary extraction of aluminum from bauxite; copper recyclates generate 30 to 80 percent fewer emissions. There is also great emissions savings potential for steel through recycling.

And there is an additional point on which everyone agrees: The importance of European mining projects must be better communicated to the public. “We need to show how great the potential is under our feet,” said MEP Reinhard Buetikofer. Domestic mining will certainly cause fears and uncertainties at first, said Sophia Kalantzakos, a researcher at New York University. That is why she believes that proper framing and transparency from all stakeholders are important.

Meanwhile, the mining industry strives to present a greener image. In Greenland, for example, the Canadian company Greenland Resources plans to mine molybdenum on a large scale, a metal that is, for example, essential for European steel production but which is so far not produced in Europe. Due to the company’s sophisticated mine design, it is set to become the world’s most eco-friendly molybdenum project. It claims to have particularly low emissions and low water consumption. “Companies today seem less profit-driven and more concerned with ethical standards,” Kalantzakos said. Whether they can live up to them remains to be seen. Leonie Düngefeld

Coal-fired power to ease gas crisis

German Economic Affairs Minister Robert Habeck wants to further prepare Germany for a possible end to Russian gas supplies and expand the number of coal-fired power plants in reserve for this purpose. If a gas shortage occurs or threatens, gas consumption in power generation is to be significantly reduced by means of a “malus“, as was heard from the Federal Ministry of Economic Affairs on Tuesday. A corresponding bill went to the departmental vote yesterday. In addition, a “sprinter program” is to promote the construction of new hydrogen power plants through the Renewable Energy Sources Act (EEG).

Shortly thereafter, voices were raised to bring forward the fuel switch. “Unfortunately a correct intention. Should be used, in my opinion, already now, so that the stores are filled as quickly as possible,” tweeted Dena head Andreas Kuhlmann. Approval came in the short message service from the vice president of the BDI, Holger Loesch: “Should really happen now, not only in an emergency. 16% of gas consumption in power generation is a great potential for storage ramp-up.” However, there was no official press release from BDI by press time on Tuesday.

Energy expert Marco Wünsch from Prognos opposed rapid regulatory intervention and referred to the European internal market: “I wouldn’t do that at the moment. If gas-fired power plants in Germany are placed in a worse position in the merit order, more inefficient gas-fired power plants abroad will step in. I don’t see any potential for more coal-fired power in the short term. Gas demand would increase as a result.“

The energy association BDEW expressed its rejection of the BMWK’s plans: “This would represent a significant encroachment on the fundamental rights of the companies concerned, which BDEW believes would be disproportionate and unjustified.” ber/dpa

Oil embargo: Von der Leyen does not expect decision at EU summit

EU Commission President Ursula von der Leyen says she does not expect a decision on an oil embargo against Russia to be made at the EU summit early next week. “I don’t think the summit is the right place for that… We should not stare at the summit,” she told Reuters on Tuesday on the sidelines of the World Economic Forum. Negotiations with member states were still ongoing, von der Leyen added. The main issue now, she said, is working out the details.

Hungary’s head of government Viktor Orbán takes a similar view. Since the outstanding issues are serious, it is very unlikely that a comprehensive solution can be found before the summit, Orbán writes in a letter to EU Council President Charles Michel. At the same time, in Monday’s letter, obtained by Europe.Table, the right-wing nationalist politician advocates not discussing the EU Commission’s proposed sanctions package at the summit. This, would be counterproductive and would only reveal internal divisions without any realistic chance of resolving differences. An EU official confirmed receipt of the letter on Tuesday.

Hungary demands exemption or payment in billions

In it, Orbán also reiterates that Hungary is still heavily dependent on Russian energy imports. Neither Hungarian households nor the Hungarian economy could withstand the price shock that the proposed sanctions would cause. He also points out that the EU Commission’s latest proposals to ease the burden on states that are particularly dependent on Russian energy do not dispel Hungary’s concerns.

The EU Commission had originally proposed in early March to end imports of Russian crude oil in six months and oil products in eight months because of the Ukraine war. Hungary and Slovakia were to be given 20 months. Even subsequent offers have so far failed to persuade the Hungarian government to abandon its rejection. Foreign Minister Péter Szijjártó made it clear that his country wants either a complete exemption for oil deliveries via pipelines or the payment of €15 billion from EU funds for adjustment and follow-up costs. dpa/rtr

German government spends €17 billion on chip industry

The traffic light coalition is massively increasing funding for the semiconductor industry in Germany. The Bundestag’s budget committee approved funds of €17.23 billion for microelectronics projects in the clean-up session at the end of last week, as a spokeswoman for the Federal Ministry of Economic Affairs and Climate Change (BMWK) confirmed in response to an inquiry from Europe.Table. Of this amount, €3.15 billion are to flow this year and €14.08 billion in subsequent years until 2028.

The budget holders are thus significantly increasing the funding planned by the German government. A large part of the funds is likely to benefit Intel. In mid-March, the US company announced plans to invest €17 billion in the construction of two semiconductor plants in Magdeburg. According to government and industry circles, Intel has been promised federal funding of around €7 billion. The BMWK would not comment on the amount of funding. However, the spokeswoman said, Intel is “currently in intensive discussions with the goal of submitting the project to the European Commission in the near future. The Brussels competition authorities must approve the state aid.

A second large block is earmarked for funding the planned IPCEI on microelectronics and communications technologies. In industry circles, there is talk of around €5 billion for the Important Project of Common European Interest. The project involves 32 companies in Germany, including Infineon, Bosch, and Globalfoundries. The IPCEI was initiated in the fall of 2020, but has not yet been launched in Germany due to complex coordination processes and the unresolved issue of financial support.

That is now likely to change: For the implementation of the IPCEI, the decision of the budget committee is “trend-setting”, says Wolfgang Weber, CEO of the German industry association ZVEI. For the industry in Germany and Europe, the supply of chips is of great importance to ensure future viability. SPD economic politician Falko Mohrs speaks of an “enormously important contribution” to the promotion of this strategically important industrial sector.

Spain also spends billions

A large part of the budget comes from the budget of the Federal Ministry of Finance. Section 60 provides €2.72 billion in expenditure appropriations and €12.48 billion in commitment appropriations. Around €2 billion come from the BMWK budget, €1.6 billion of which are commitment appropriations. A three-digit million euro amount has also been earmarked in the Research Ministry’s budget for the technology sector. The plenum of the Bundestag still has to approve the draft budget.

The plans of Berlin’s coalition partners are also being closely followed in Brussels. The EU Commission wants to use the planned Chips Act to promote the establishment of semiconductor companies to more than double Europe’s share of chip production to 20 percent by 2030. The lion’s share of the promised €43 billion in funding is to be provided by the member states.

The Spanish government is also digging deep into its coffers. It has released €12.25 billion to attract semiconductor manufacturers to the country. Of this, €9.3 billion have been earmarked to promote the construction of factories, said Economy Minister Nadia Calvino yesterday. A good €1 billion has been earmarked for research and development in the sector. The money is to be used until 2027.

Until now, the industry, which supplies the world market mainly from Asia, has given Spain a wide berth, Calvino said. Lack of government support has been one of the reasons, he said. “We want Spain to play a relevant role in this technology field.”

So far, companies from the USA have dominated in chip design and Asian manufacturers in production. A subsidy race has broken out internationally in the sector. “However, we must not ignore what is happening around us,” says ZVEI Managing Director Weber. The USA, China, and South Korea have announced much higher subsidy sums than Europe. tho

Study: Digital industry can significantly reduce CO2 emissions

The digitization of industry in Germany can make a large-scale contribution to achieving the 2030 climate targets. This is the finding of a study by business consultancy Accenture, which digital association Bitkom published in Berlin on Tuesday.

The study examines two scenarios: moderate digitization and accelerated digitization that significantly picks up the pace in the introduction, dissemination and use of digital technologies through appropriate political incentives. Accelerated use of digital technologies in industry could save up to 64 million metric tons of CO2, while slower digitization would reduce this figure to 37 million metric tons.

With the Paris climate protection agreement, Germany committed in 2015 to achieving certain climate targets and introducing measures to reduce greenhouse gas emissions. In 2019, CO2 emissions were still at 805 megatons. In 2030, this may only amount to 543 megatons.

The study cites the targeted use of digital twins as the greatest savings potential. This is the digital mapping of products and manufacturing processes to optimize both the product itself and the manufacturing process for the lowest possible CO2 emissions at an early stage during development. In this way, 33 million metric tons of CO2 could be saved with accelerated digitization alone, and 19 million metric tons with slower digitization.

The potential savings from automating production are of a similar order of magnitude. Here, CO2 emissions could be reduced by 31 million tons, or 18 million tons with slower digitization. dpa

France expects delayed implementation of global tax reform

The global tax reform will probably not come into force until the end of 2023 or early 2024 – and thus a year later than originally planned. This is what France’s Minister of Finance Bruno Le Maire announced in Brussels on Tuesday. The decisive factor, he said, is that the reform succeeds at all. It is intended to transfer the existing regulations into the digital age.

Around 140 countries agreed on the specifics of a global tax reform last year. This includes a minimum tax of 15 percent for internationally operating companies. In addition, emerging markets are to receive more revenue from the world’s largest corporations. Tax havens are to be dried up in this way, and, above all, large digital corporations are to be held more accountable.

However, the implementation of the minimum tax in the EU has stalled due to concerns raised by Poland. “All open questions have been answered,” said German Finance Minister Christian Lindner in Brussels. He hoped that the concerns would be resolved very soon. There was also no reason to wait before implementing the minimum tax. There is no legal connection between the two pillars of the planned reform, he said.

The details so far have been negotiated under the umbrella of the OECD. The Secretary-General of the organization of industrialized nations, Mathias Cormann, said at the World Economic Forum in Davos that he was cautiously optimistic that the EU would give the green light for the minimum tax. However, the implementation might not happen before 2024.

Le Maire hopes that all EU members will have given their approval by June. Tax reforms always require unanimity among the 27 countries of the European Union, so changes are often painstaking. rtr

Constitutional amendment: Orbán creates basis for further state of emergency

Shortly before the current COVID state of emergency expires at the end of the month, Hungary’s Prime Minister Viktor Orbán has found a way to continue governing by decree. The parliament in Budapest created a new category of state of emergency for this purpose on Tuesday. The government can now declare a state of emergency if a neighboring country is affected by an armed conflict, war, or humanitarian disaster. Ukraine, against which Russia has been waging a war of aggression for three months, is one of Hungary’s neighbors. The 136 deputies of the right-wing nationalist Fidesz party voted in favor of the corresponding constitutional amendment.

The health emergency that Orbán declared at the start of the COVID pandemic in spring 2020 and that parliament has extended several times since then expires on May 31. With the constitutional amendment, however, Orbán could again declare a state of emergency. This would allow him to repeal existing laws and take coercive measures by decree. Parliament must confirm this after 15 days at the latest. In view of the large majority of the Fidesz party led by Orbán, this is considered a formality.

Orbán also used the health emergency for purposes that could hardly be justified by addressing the health situation. These included measures to financially harm opposition-ruled municipalities or to provide advantages to pro-government businessmen. dpa

Joachim Poß: the ever critical SPD veteran

Joachim Poß has been politically active for more than half a century. Even in retirement, he does not keep quiet. He regularly gives his opinion on current political events. “I have always been critical. So critical, in fact, that it has earned me disciplinary proceedings in the past,” he recalls of his not always friendly relationship with his own party. The issue of social justice, in particular, concerns him: “The inequality in society has become even greater as a result of the pandemic.”

Poß has been a member of the SPD since 1966: from 1999 to 2013, on the Federal Party Executive Committee. He was a member of the Bundestag for 37 years, including years as his parliamentary group’s financial policy spokesman, a member of the Finance Committee, and, from 2013 to 2017, on the Committee on EU Affairs.

His career began in post-war Gelsenkirchen: “I come from a miner’s family. In my youth, I witnessed huge protests; the future of these jobs was already uncertain back then.” Poß became editor of a newspaper for the young trade union and a member of the SPD-affiliated youth organization Die Falken. The step into the party was predestined. After graduating from school, he embarked on an administrative career in the upper echelons of the Gelsenkirchen city administration.

In 1980, his election to the Bundestag marked the beginning of his unprecedented career as a member of parliament, which lasted until 2017: Joachim Poß’s constituency Gelsenkirchen 1 elected him to parliament, again and again, sometimes with votes of almost 60 percent – despite all the changes in the SPD. All thanks to his trusted and deep-rooted ties to his region, he was able to help shape international politics through the end of the Cold War.

Witness of growing populism

In conversation, he recounts his travels through Europe and the USA over the past decades. He already noticed some developments early on that intensified much later. For example, “the financial policy in Greece was already bad in the 1990s. And before the word was on everyone’s lips, I was able to observe emerging populism very early on, in Italy, France, and here in Germany.”

The same applies to the US: In the 00s, he was there every year and observed the strengthening of the Tea Party: “Actually, this is a ‘civil war’ situation, I told the American interlocutors back then; and that’s how it is partly described today. And Trump’s re-election is not off the table given Biden’s poor performance so far.”

Joachim Poß spoke with Europe.Table a few weeks before Russia’s attack on Ukraine. Amid the politically and diplomatically escalating situation, he recalled a 2014 business trip: “I was in Donetsk just one day before the so-called separatists took over parts of the Donbas, caught the strange, almost ghostly atmosphere.” The reason for the official trip was to assess the situation in Ukraine after the Maidan. In light of problems such as nationalism, poverty, and corruption, Joachim Poß often wonders “whether there have not been steps backward in some areas”. Vera Altmolak