China is experiencing the biggest wave of protests in decades – and now, of all times, EU Council President Charles Michel is traveling to Beijing. Members of the EU Parliament are calling on him to send a clear signal in support of freedom of expression, for example, in the form of a white leaf, like those carried by demonstrators in the People’s Republic. For President Xi, on the other hand, the meeting comes just at the right time because the EU-US dialogue on China is taking place in Washington almost simultaneously. Michel’s trip – a “mission impossible,” writes Amelie Richter.
Tomorrow, the Council will vote on its position on corporate due diligence. This is more than a mere formality. Although the text is less ambitious than the Commission proposal, France is blocking it. Paris objects to the fact that the financial industry must perform due diligence. The Parliament, on the other hand, under rapporteur Lara Wolters, wants to make financial service providers much more accountable. The question of the scope of the law will also be particularly problematic, analyzes Charlotte Wirth. Tough negotiations are on the horizon.
Today, the Commission will present its proposal for a certification system for carbon removal. It was said in advance that the aim is to create confidence in the process and to combat greenwashing. Critics, however, see carbon removal as just that, saying it is “just a smokescreen for the current inaction” on reducing emissions. For ETS rapporteur Peter Liese, on the other hand, the case is clear: “We cannot achieve the Paris target without removing carbon from the atmosphere,” Claire Stam reports on a debate that is now picking up steam.
The China trip of EU Council President Charles Michel comes at a delicate political time. After all, the EU Council President will be the first Western representative to meet President Xi Jinping since the start of the massive protests against zero-Covid. Moreover, the meeting between Xi and Michel is the first encounter at this high level since 2018.
MEPs in particular are calling for a clear signal from Michel to Beijing. However, it is unlikely that he will directly address the protests in the People’s Republic. Nor is any other major progress expected. For example, it is still open whether there will be a joint statement or press conference or merely separate statements after the meeting. What is already clear, however, is that Michel is a welcome photo op for Xi on Thursday. This is because an EU-US dialogue meeting on China and the Indo-Pacific region will be held in Washington on the same day.
The timing of the visit on December 1 is certainly problematic, explains Merics analyst Grzegorz Stec in conversation with China.Table. The fact that Michel will meet Xi on the very day of the dialogue between EU and US representatives in Beijing could create the feeling of cracks in transatlantic coordination. This is a win-win for Beijing, Stec believes. The delegation in Washington is headed by Stefano Sannino, Secretary General of the European External Action Service (EEAS) – so the meeting may be less high-level, but more effective at the working level.
Sannino is primarily responsible for geopolitical issues within the EEAS. According to EU circles, China’s role in the Russian war in Ukraine is once again on the agenda. It is safe to assume that the protests in the People’s Republic will also be a topic of discussion.
EU-China observer Stec believes that Michel’s trip “is unlikely to bring major practical results or signal a shift in EU-China relations.” The EU Council chief wanted to explore possible cooperation opportunities with the People’s Republic on key issues in Beijing, the EU side said before Michel departed from Brussels on Tuesday.
The list of discussion points is long: Michel and his interlocutors are expected to discuss geopolitical developments and economic and trade relations. “Other global challenges” such as climate change, health and rising food and energy prices are also to be discussed, according to preliminary information. A proper focus on one topic, or at least a general theme, is missing. The agenda is more of an all-around meeting, a first face-to-face after a long break.
Concrete talks on many points are difficult anyway. This is because Michel will not be accompanied by EU Commission President Ursula von der Leyen. However, the Commission, as the highest EU authority, is in charge of implementing legislation like most trade instruments. Brussels is always represented by both at EU summits. The fact that Michel’s visit appears not to be coordinated with other European institutions is a disadvantage when it comes to external perception.
At their summit in October, the EU heads of state and government reportedly gave Michel a clear mandate for the approach to China (China.Table reported). At the EU summit, the familiar triad of partner-competitor-systemic rival was confirmed and a warning against excessive dependence was made. It is no secret that the various EU capitals have very different opinions on how to deal with the People’s Republic.
The EU Council president is also expected to address “questions about human rights and our values,” according to a briefing given to journalists at the end of last week, before the weekend protests in the People’s Republic. The “latest developments in Hong Kong and Xinjiang” were mentioned as topics at the time. It is unclear if and how the wave of protests in China could be raised at the meeting. So far, the EEAS has announced that it will monitor the events in the People’s Republic.
EU High Representative for Foreign Affairs Josep Borrell addressed the protests directly for the first time in Brussels on Tuesday. “These days we are seeing the growing costs of [China’s] zero-Covid policy and the growing concerns of Chinese citizens over the lockdowns.”
Members of the EU Parliament now expect Michel to send a clear signal. “Instead of a handshake, Council President Michel should unmistakably hold a white sheet in his hands,” demanded European Parliament Vice President Nicola Beer (FDP). Europe must unequivocally stand on the side of those who call for freedom of expression and demonstration, Beer told China.Table. “Europe must give these people political backing and not be a silent onlooker here.” Green Party MEP Reinhard Buetikofer and CDU MEP Michael Gahler also demanded a clear signal.
In practice, however, that could be difficult, believes Merics analyst Stec: “On one hand, he will need to raise the issue of protests alongside EU’s other concerns to show that the bloc is serious about human rights and systemic rivalry. On the other hand, he will not want that message to dominate the visit geared towards diplomatic reopening.” A diplomatic balancing act.
It’s more than a mere formality: On Thursday, the Competitiveness Council will vote on the General Approach to corporate due diligence. France tried to achieve a blocking minority in recent days. Thanks to the support of Italy, Spain, and Slovakia, Paris was able to build up sufficient pressure for the text to be discussed again today.
Paris is upset that the financial industry has to do due diligence. The Council compromise, which is available to Europe.Table, is already much weaker than the Commission’s proposal. Asset managers, for example, are no longer covered by the text. Overall, due diligence is to apply only prior to the provision of financial services. Moreover, financial service providers do not have to terminate their business relationships if violations occur.
This does not go far enough for Paris: a counter-proposal by the French, which Europe.Table submitted would practically exempt the financial sector from the due diligence obligation altogether. The Parliament under rapporteur Lara Wolters (S&D), has chosen a completely different approach: Wolters wants to make financial service providers much more accountable than the Commission proposes.
The Council struggled for a long time to find a compromise. Only a few countries, such as Denmark and the Netherlands, advocated a progressive approach. The German government also tried to water down the Commission’s text in the Council.
They did not want to upset the German industry, which already finds it difficult to come to terms with the local law. Germany, however, wants to support the compromised text and not push for further watering down of the directive.
The Council Presidency’s compromise is significantly more accommodating than the Commission’s proposal. Tough negotiations are on the horizon: The Council and Parliament are threatening to diverge on a number of points, and not only on financial services. However, there is still no compromised text in Parliament. At the beginning of November, rapporteur Lara Wolters presented her amendments.
The question of the law’s scope will be particularly problematic. The Council proposes that in the first year, the directive will only apply to companies with 1,000 employees and €300 million in sales. Only after that does the Council want to follow the Commission’s proposal, according to which the law will cover companies with 500 employees and sales of €150 million or more.
By way of comparison, Wolters requires companies with 250 or more employees and €40 million in sales to perform due diligence. The Council is visibly taking its cue from the German Supply Chain Act, which also adopts a multi-stage approach: In the first year, only companies with more than 3,000 employees are affected.
The Council’s compromise grants small and medium-sized companies some exemptions. For example, they are entirely exempt from commissions for financial services. They should also not have to terminate their business relationships if their business partners do not fulfill their due diligence obligations.
While Lara Wolters calls in her report for due diligence to cover the entire value chain, the Council wants to split the definition. In other words, upstream and downstream activities will be better defined and broken down into concrete activities. The Council compromise also prefers the term “chain of activities.”
It could be concluded that downstream activities will continue to be covered, albeit in a weakened form. But negotiating circles say they want to push in the trilogue for due diligence to apply only to the supply chains. Berlin is likely to approve of this tactic, as German law is also interpreted this way.
In addition, the Council advocates a risk-based approach. According to this, companies are required to obtain an overview of their activities and those of their subsidiaries and business partners. Based on this, companies should focus primarily on the areas where problems are most likely or greatest. They should also address the most consequential problems first.
The text by Lara Wolters also contains references to a risk-based approach. This approach is likely to be reinforced after the negotiations in Parliament. In particular, the EPP wants to ensure that the law does not apply to the entire value chain or supply chain but only takes effect if there are real risks of human rights violations or environmental violations.
Further weakening compared to the Commission proposal, but especially to Wolters’ text, can be found, for example, in the definition of business relationships and civil liability for companies. However, the text does not contain a “safe harbor” clause, as demanded by the EPP. According to such a clause, companies could not be held liable for damages if they fulfill a certain checklist.
The personal liability of company directors, which has already caused controversy among EU commissioners, is to be dropped altogether by the Council. The statement is that this is an aspect of internal corporate governance. For her part, Lara Wolters wants to tighten up and tie the payment of directors to even stricter sustainability criteria, such as the fight against climate change and the reduction of greenhouse emissions.
Although the Council compromise is less ambitious than the Commission’s text and deviates considerably from the Parliament’s current approach, human rights NGOs are expressing resignation behind closed doors. They are already relieved that the Czech presidency can come up with a compromise. Under Swedish leadership, this would not have been so certain. The new government can hardly make friends with the law. There is also still considerable opposition to the law from the Eastern European states.
Voluntary public and private carbon certification and financial reward schemes already exist in some EU countries. The text of the proposal available to Europe.Table aims to harmonize the various systems by setting common European minimum standards for what is also described as “negative emissions.”
“This is a very first step,” stresses a senior EU official. The goal, he says, is to build confidence in the concept of carbon removal and to combat greenwashing. That’s why it will “provide reliable, independently verified data on the costs and benefits of carbon removal” as well as “full transparency on how they are calculated.” The goal is to determine which methods of carbon removal have the most positive impact on the carbon footprint, he adds.
At the Commission, DG Climate is responsible for the dossier. It is based on the sixth IPCC report. It states that using carbon dioxide capture to compensate for difficult to decompose residual emissions is unavoidable if net zero emissions are to be achieved. The Brussels-based agency deduces the need for “large-scale deployment of sustainable measures to capture carbon from the atmosphere.”
The proposal examines three methods for removing and storing carbon:
To achieve this, the Commission highlights both natural solutions (such as the use of peat bogs and forests) and technological solutions. For example, the proposal mentions bioenergy with carbon capture and storage (BECCS) and direct atmospheric carbon capture and storage (DACCS). The proposal also introduces a voluntary financing mechanism.
The vast majority of stakeholders and negotiators involved in this dossier emphasize the complexity of the issue. The Directorate-General for Climate is thus in the process of setting up a group of experts, which should begin its work in the first quarter of next year, to find answers to the many technical aspects involved.
However, there are already two opposing camps. These relate not to the pros and cons of using technology and introducing financial mechanisms into the certification system but to the degree of technology, the degree of financialization of this system, the dangers of greenwashing, and the question of the legal responsibility of the actors involved.
Wijnand Stoefs, who is responsible for carbon uptake at the environmental NGO Carbon Market Watch, is in favor of using peat bogs and forests for carbon uptake, for example, but he thinks little of including carbon sequestered in soils and products in the certification system. He points to the complexity of carbon sequestration in soil when applied on a large scale. In addition, there is a “high probability” that carbon will escape back into the atmosphere in the process.
He thinks carbon stored in products such as furniture or building materials has no significant impact on the climate. In addition, Stoefs raises the question of whether farmers with small farms are not being put at a disadvantage compared to large farmers, who have much greater financial leeway to invest in these technologies.
In a “Real Zero Europe” statement, 170 organizations sharply criticized the Commission’s plans. The activists believe that the use of carbon capture technologies would only prolong the use of fossil fuels. Future carbon removal “should not be used as a substitute for deep emission cuts in the present,” the coalition said. It says this is “only a pretext for current inaction” on reducing emissions.
The point for ETS rapporteur Peter Liese (EPP) is clear: “We can’t meet the Paris target without removing carbon from the atmosphere.” He stresses the need to have both methods, i.e. greenhouse gas emission reductions, and negative emissions.
“I think we should focus more on the technical solutions, and they are already operational,” Liese says, citing the example of carbon captured by direct air capture (DAC) and used to make bricks. Products made this way are expensive, he says, but so were solar panels 25 years ago.
The parliamentarian also suggests including carbon removal technologies in the ETS. Only when the certification system is ready for use, however, can the commission consider including it in the EU emissions trading system, he said. A measure that is expected to be discussed next July.
With the draft bill for an electricity price brake, which the federal cabinet approved last Friday, the federal government is officially pursuing the goal of limiting the rise in electricity prices. Households and businesses are to save “compared to the extremely high energy costs resulting from high new contract prices,” according to the overview paper used by the government to justify the regulation.
This is also true for household customers. For many companies, on the other hand, electricity prices are falling not only compared to the current high prices but also compared to the prices incurred in 2021, i.e. before the war-related energy price crisis began. This is shown by Table.Media calculations based on figures from the German Federal Network Agency and the German Association of Energy and Water Industries (BDEW). This could prompt renewed criticism of Germany’s lavish aid from other EU countries.
Under the draft law, companies and commercial enterprises with consumption of more than 30,000 kilowatt-hours per year will receive 70 percent of their previous year’s consumption next year for 13 cents per kilowatt-hour. Added to this are state levies and charges, which amount to 1.18 cents per kilowatt-hour for large industrial companies according to the BDEW electricity price analysis, as well as grid charges, which average 2.67 cents for industrial customers according to the Federal Network Agency’s monitoring report.
The total price (excluding electricity tax) is thus 16.85 cents per kilowatt-hour on average – and thus significantly less than the 19.84 cents per kilowatt-hour that BDEW quotes (also excluding electricity tax) as the final price for industrial customers with electricity consumption of between 160,000 and 20 million kilowatt-hours for 2021. Even if companies do not reduce their electricity consumption and have to pay the current market prices for the 30 percent outside the discounted quota, which the Federal Ministry of Economics assumes elsewhere in its sample calculations, there is still a slight decrease.
Commercial customers can also rejoice: Here, the Federal Network Agency sample calculations show an average electricity price of 23.23 cents per kilowatt-hour for 2021 for a business with an electricity consumption of 50,000 kilowatt-hours per year. If the electricity price brake is implemented as planned, the price for 70 percent of consumption will remain almost unchanged at 23.57 cents – and far lower than current market prices.
The reason for the falling or stable prices is that in addition to the electricity price brake, commercial and many industrial customers are also benefiting from the complete abolishment of the EEG surcharge this year, which will reduce their final price for 2023 by 6.5 cents per kilowatt-hour compared with 2021.
Electricity will only become significantly more expensive for those companies that were exempt from the EEG surcharge in the past due to high electricity consumption and competition and therefore do not benefit from its abolition: For them, the future price of 13 cents means in many cases a tripling of their previous costs.
These energy-intensive companies, which account for around half of the industry’s electricity consumption, are also the reason given for the electricity price envisaged in the law by the Ministry of Economics. If it were higher, “the relief for very electricity-intensive companies would be too small”, writes Minister Robert Habeck (Greens) in response to a question. And different levels of relief, as has been practiced in the past with the EEG levy, would have delayed the process because it would have had to be approved by the EU as aid.
On the table are Mozartkugeln and sweets from Manner – the Austrian touch is visible at first glance. Christa Schweng receives visitors on the eighth floor of the building where the European Economic and Social Committee (EESC) is based. The view from the window in the heart of Brussels is breathtaking.
The lawyer from Vienna began her term as president at the EESC amid the lockdown on October 28, 2020. Then came February 24 of this year. Christa Schweng is in plenary that day when she is told that Frans Timmermans just canceled a planned speech at short notice. “Because Russia has just invaded Ukraine.” She then initiates a spontaneous debate in the chamber. Already then, a difference in the assessment between the Western European countries and those bordering Russia becomes apparent.
Covid, Ukraine, and now inflation: “There have been easier mandates, I think,” she sums up calmly. Then there are the debates about the utility of the institution she presides over. They flared up again after the European Parliament threatened to refuse approval of the budget discharge once more, as it had already done in 2020. Christa Schweng had to prove that the MEPs’ questions had been taken into account. She succeeded. The budget discharge was finally approved.
Indeed, a difficult mandate that came at an equally difficult time politically. The search for compromise and consensus is thus particularly important. “We try to build consensus between divergent national, between the many social groups. And that consensus is a safe ground for politicians.”
The EESC’s main task is to provide expertise to the European executive. This expertise derives its legitimacy from the compromise reached by the parties involved. She states a precise communication process helps in this regard. “I must not put personal interests in the foreground from the outset,” says Schweng. “Instead, you have to state very clearly what the task is that needs to be solved. Personally, I always act transparently and show that. I think that’s extremely important.”
Schweng has been an employee of the Austrian Chamber of Commerce since 1991 and is responsible for social issues. It was this path that brought her to the EESC. Her European career began with discussions about Austria’s accession to the European Union. “At that time, the Economic Chamber was looking for trainees who were willing to be trained in European law and go to Brussels to work. I applied, was hired, and thus never finished my dissertation,” she recalls.
Instead, she worked at the Permanent Representation of Austria to the EU, among other places. It was in the period before the referendum, that is, in the hot phase of the accession negotiations. A time when it was also very important to reach consensus. Claire Stam
China is experiencing the biggest wave of protests in decades – and now, of all times, EU Council President Charles Michel is traveling to Beijing. Members of the EU Parliament are calling on him to send a clear signal in support of freedom of expression, for example, in the form of a white leaf, like those carried by demonstrators in the People’s Republic. For President Xi, on the other hand, the meeting comes just at the right time because the EU-US dialogue on China is taking place in Washington almost simultaneously. Michel’s trip – a “mission impossible,” writes Amelie Richter.
Tomorrow, the Council will vote on its position on corporate due diligence. This is more than a mere formality. Although the text is less ambitious than the Commission proposal, France is blocking it. Paris objects to the fact that the financial industry must perform due diligence. The Parliament, on the other hand, under rapporteur Lara Wolters, wants to make financial service providers much more accountable. The question of the scope of the law will also be particularly problematic, analyzes Charlotte Wirth. Tough negotiations are on the horizon.
Today, the Commission will present its proposal for a certification system for carbon removal. It was said in advance that the aim is to create confidence in the process and to combat greenwashing. Critics, however, see carbon removal as just that, saying it is “just a smokescreen for the current inaction” on reducing emissions. For ETS rapporteur Peter Liese, on the other hand, the case is clear: “We cannot achieve the Paris target without removing carbon from the atmosphere,” Claire Stam reports on a debate that is now picking up steam.
The China trip of EU Council President Charles Michel comes at a delicate political time. After all, the EU Council President will be the first Western representative to meet President Xi Jinping since the start of the massive protests against zero-Covid. Moreover, the meeting between Xi and Michel is the first encounter at this high level since 2018.
MEPs in particular are calling for a clear signal from Michel to Beijing. However, it is unlikely that he will directly address the protests in the People’s Republic. Nor is any other major progress expected. For example, it is still open whether there will be a joint statement or press conference or merely separate statements after the meeting. What is already clear, however, is that Michel is a welcome photo op for Xi on Thursday. This is because an EU-US dialogue meeting on China and the Indo-Pacific region will be held in Washington on the same day.
The timing of the visit on December 1 is certainly problematic, explains Merics analyst Grzegorz Stec in conversation with China.Table. The fact that Michel will meet Xi on the very day of the dialogue between EU and US representatives in Beijing could create the feeling of cracks in transatlantic coordination. This is a win-win for Beijing, Stec believes. The delegation in Washington is headed by Stefano Sannino, Secretary General of the European External Action Service (EEAS) – so the meeting may be less high-level, but more effective at the working level.
Sannino is primarily responsible for geopolitical issues within the EEAS. According to EU circles, China’s role in the Russian war in Ukraine is once again on the agenda. It is safe to assume that the protests in the People’s Republic will also be a topic of discussion.
EU-China observer Stec believes that Michel’s trip “is unlikely to bring major practical results or signal a shift in EU-China relations.” The EU Council chief wanted to explore possible cooperation opportunities with the People’s Republic on key issues in Beijing, the EU side said before Michel departed from Brussels on Tuesday.
The list of discussion points is long: Michel and his interlocutors are expected to discuss geopolitical developments and economic and trade relations. “Other global challenges” such as climate change, health and rising food and energy prices are also to be discussed, according to preliminary information. A proper focus on one topic, or at least a general theme, is missing. The agenda is more of an all-around meeting, a first face-to-face after a long break.
Concrete talks on many points are difficult anyway. This is because Michel will not be accompanied by EU Commission President Ursula von der Leyen. However, the Commission, as the highest EU authority, is in charge of implementing legislation like most trade instruments. Brussels is always represented by both at EU summits. The fact that Michel’s visit appears not to be coordinated with other European institutions is a disadvantage when it comes to external perception.
At their summit in October, the EU heads of state and government reportedly gave Michel a clear mandate for the approach to China (China.Table reported). At the EU summit, the familiar triad of partner-competitor-systemic rival was confirmed and a warning against excessive dependence was made. It is no secret that the various EU capitals have very different opinions on how to deal with the People’s Republic.
The EU Council president is also expected to address “questions about human rights and our values,” according to a briefing given to journalists at the end of last week, before the weekend protests in the People’s Republic. The “latest developments in Hong Kong and Xinjiang” were mentioned as topics at the time. It is unclear if and how the wave of protests in China could be raised at the meeting. So far, the EEAS has announced that it will monitor the events in the People’s Republic.
EU High Representative for Foreign Affairs Josep Borrell addressed the protests directly for the first time in Brussels on Tuesday. “These days we are seeing the growing costs of [China’s] zero-Covid policy and the growing concerns of Chinese citizens over the lockdowns.”
Members of the EU Parliament now expect Michel to send a clear signal. “Instead of a handshake, Council President Michel should unmistakably hold a white sheet in his hands,” demanded European Parliament Vice President Nicola Beer (FDP). Europe must unequivocally stand on the side of those who call for freedom of expression and demonstration, Beer told China.Table. “Europe must give these people political backing and not be a silent onlooker here.” Green Party MEP Reinhard Buetikofer and CDU MEP Michael Gahler also demanded a clear signal.
In practice, however, that could be difficult, believes Merics analyst Stec: “On one hand, he will need to raise the issue of protests alongside EU’s other concerns to show that the bloc is serious about human rights and systemic rivalry. On the other hand, he will not want that message to dominate the visit geared towards diplomatic reopening.” A diplomatic balancing act.
It’s more than a mere formality: On Thursday, the Competitiveness Council will vote on the General Approach to corporate due diligence. France tried to achieve a blocking minority in recent days. Thanks to the support of Italy, Spain, and Slovakia, Paris was able to build up sufficient pressure for the text to be discussed again today.
Paris is upset that the financial industry has to do due diligence. The Council compromise, which is available to Europe.Table, is already much weaker than the Commission’s proposal. Asset managers, for example, are no longer covered by the text. Overall, due diligence is to apply only prior to the provision of financial services. Moreover, financial service providers do not have to terminate their business relationships if violations occur.
This does not go far enough for Paris: a counter-proposal by the French, which Europe.Table submitted would practically exempt the financial sector from the due diligence obligation altogether. The Parliament under rapporteur Lara Wolters (S&D), has chosen a completely different approach: Wolters wants to make financial service providers much more accountable than the Commission proposes.
The Council struggled for a long time to find a compromise. Only a few countries, such as Denmark and the Netherlands, advocated a progressive approach. The German government also tried to water down the Commission’s text in the Council.
They did not want to upset the German industry, which already finds it difficult to come to terms with the local law. Germany, however, wants to support the compromised text and not push for further watering down of the directive.
The Council Presidency’s compromise is significantly more accommodating than the Commission’s proposal. Tough negotiations are on the horizon: The Council and Parliament are threatening to diverge on a number of points, and not only on financial services. However, there is still no compromised text in Parliament. At the beginning of November, rapporteur Lara Wolters presented her amendments.
The question of the law’s scope will be particularly problematic. The Council proposes that in the first year, the directive will only apply to companies with 1,000 employees and €300 million in sales. Only after that does the Council want to follow the Commission’s proposal, according to which the law will cover companies with 500 employees and sales of €150 million or more.
By way of comparison, Wolters requires companies with 250 or more employees and €40 million in sales to perform due diligence. The Council is visibly taking its cue from the German Supply Chain Act, which also adopts a multi-stage approach: In the first year, only companies with more than 3,000 employees are affected.
The Council’s compromise grants small and medium-sized companies some exemptions. For example, they are entirely exempt from commissions for financial services. They should also not have to terminate their business relationships if their business partners do not fulfill their due diligence obligations.
While Lara Wolters calls in her report for due diligence to cover the entire value chain, the Council wants to split the definition. In other words, upstream and downstream activities will be better defined and broken down into concrete activities. The Council compromise also prefers the term “chain of activities.”
It could be concluded that downstream activities will continue to be covered, albeit in a weakened form. But negotiating circles say they want to push in the trilogue for due diligence to apply only to the supply chains. Berlin is likely to approve of this tactic, as German law is also interpreted this way.
In addition, the Council advocates a risk-based approach. According to this, companies are required to obtain an overview of their activities and those of their subsidiaries and business partners. Based on this, companies should focus primarily on the areas where problems are most likely or greatest. They should also address the most consequential problems first.
The text by Lara Wolters also contains references to a risk-based approach. This approach is likely to be reinforced after the negotiations in Parliament. In particular, the EPP wants to ensure that the law does not apply to the entire value chain or supply chain but only takes effect if there are real risks of human rights violations or environmental violations.
Further weakening compared to the Commission proposal, but especially to Wolters’ text, can be found, for example, in the definition of business relationships and civil liability for companies. However, the text does not contain a “safe harbor” clause, as demanded by the EPP. According to such a clause, companies could not be held liable for damages if they fulfill a certain checklist.
The personal liability of company directors, which has already caused controversy among EU commissioners, is to be dropped altogether by the Council. The statement is that this is an aspect of internal corporate governance. For her part, Lara Wolters wants to tighten up and tie the payment of directors to even stricter sustainability criteria, such as the fight against climate change and the reduction of greenhouse emissions.
Although the Council compromise is less ambitious than the Commission’s text and deviates considerably from the Parliament’s current approach, human rights NGOs are expressing resignation behind closed doors. They are already relieved that the Czech presidency can come up with a compromise. Under Swedish leadership, this would not have been so certain. The new government can hardly make friends with the law. There is also still considerable opposition to the law from the Eastern European states.
Voluntary public and private carbon certification and financial reward schemes already exist in some EU countries. The text of the proposal available to Europe.Table aims to harmonize the various systems by setting common European minimum standards for what is also described as “negative emissions.”
“This is a very first step,” stresses a senior EU official. The goal, he says, is to build confidence in the concept of carbon removal and to combat greenwashing. That’s why it will “provide reliable, independently verified data on the costs and benefits of carbon removal” as well as “full transparency on how they are calculated.” The goal is to determine which methods of carbon removal have the most positive impact on the carbon footprint, he adds.
At the Commission, DG Climate is responsible for the dossier. It is based on the sixth IPCC report. It states that using carbon dioxide capture to compensate for difficult to decompose residual emissions is unavoidable if net zero emissions are to be achieved. The Brussels-based agency deduces the need for “large-scale deployment of sustainable measures to capture carbon from the atmosphere.”
The proposal examines three methods for removing and storing carbon:
To achieve this, the Commission highlights both natural solutions (such as the use of peat bogs and forests) and technological solutions. For example, the proposal mentions bioenergy with carbon capture and storage (BECCS) and direct atmospheric carbon capture and storage (DACCS). The proposal also introduces a voluntary financing mechanism.
The vast majority of stakeholders and negotiators involved in this dossier emphasize the complexity of the issue. The Directorate-General for Climate is thus in the process of setting up a group of experts, which should begin its work in the first quarter of next year, to find answers to the many technical aspects involved.
However, there are already two opposing camps. These relate not to the pros and cons of using technology and introducing financial mechanisms into the certification system but to the degree of technology, the degree of financialization of this system, the dangers of greenwashing, and the question of the legal responsibility of the actors involved.
Wijnand Stoefs, who is responsible for carbon uptake at the environmental NGO Carbon Market Watch, is in favor of using peat bogs and forests for carbon uptake, for example, but he thinks little of including carbon sequestered in soils and products in the certification system. He points to the complexity of carbon sequestration in soil when applied on a large scale. In addition, there is a “high probability” that carbon will escape back into the atmosphere in the process.
He thinks carbon stored in products such as furniture or building materials has no significant impact on the climate. In addition, Stoefs raises the question of whether farmers with small farms are not being put at a disadvantage compared to large farmers, who have much greater financial leeway to invest in these technologies.
In a “Real Zero Europe” statement, 170 organizations sharply criticized the Commission’s plans. The activists believe that the use of carbon capture technologies would only prolong the use of fossil fuels. Future carbon removal “should not be used as a substitute for deep emission cuts in the present,” the coalition said. It says this is “only a pretext for current inaction” on reducing emissions.
The point for ETS rapporteur Peter Liese (EPP) is clear: “We can’t meet the Paris target without removing carbon from the atmosphere.” He stresses the need to have both methods, i.e. greenhouse gas emission reductions, and negative emissions.
“I think we should focus more on the technical solutions, and they are already operational,” Liese says, citing the example of carbon captured by direct air capture (DAC) and used to make bricks. Products made this way are expensive, he says, but so were solar panels 25 years ago.
The parliamentarian also suggests including carbon removal technologies in the ETS. Only when the certification system is ready for use, however, can the commission consider including it in the EU emissions trading system, he said. A measure that is expected to be discussed next July.
With the draft bill for an electricity price brake, which the federal cabinet approved last Friday, the federal government is officially pursuing the goal of limiting the rise in electricity prices. Households and businesses are to save “compared to the extremely high energy costs resulting from high new contract prices,” according to the overview paper used by the government to justify the regulation.
This is also true for household customers. For many companies, on the other hand, electricity prices are falling not only compared to the current high prices but also compared to the prices incurred in 2021, i.e. before the war-related energy price crisis began. This is shown by Table.Media calculations based on figures from the German Federal Network Agency and the German Association of Energy and Water Industries (BDEW). This could prompt renewed criticism of Germany’s lavish aid from other EU countries.
Under the draft law, companies and commercial enterprises with consumption of more than 30,000 kilowatt-hours per year will receive 70 percent of their previous year’s consumption next year for 13 cents per kilowatt-hour. Added to this are state levies and charges, which amount to 1.18 cents per kilowatt-hour for large industrial companies according to the BDEW electricity price analysis, as well as grid charges, which average 2.67 cents for industrial customers according to the Federal Network Agency’s monitoring report.
The total price (excluding electricity tax) is thus 16.85 cents per kilowatt-hour on average – and thus significantly less than the 19.84 cents per kilowatt-hour that BDEW quotes (also excluding electricity tax) as the final price for industrial customers with electricity consumption of between 160,000 and 20 million kilowatt-hours for 2021. Even if companies do not reduce their electricity consumption and have to pay the current market prices for the 30 percent outside the discounted quota, which the Federal Ministry of Economics assumes elsewhere in its sample calculations, there is still a slight decrease.
Commercial customers can also rejoice: Here, the Federal Network Agency sample calculations show an average electricity price of 23.23 cents per kilowatt-hour for 2021 for a business with an electricity consumption of 50,000 kilowatt-hours per year. If the electricity price brake is implemented as planned, the price for 70 percent of consumption will remain almost unchanged at 23.57 cents – and far lower than current market prices.
The reason for the falling or stable prices is that in addition to the electricity price brake, commercial and many industrial customers are also benefiting from the complete abolishment of the EEG surcharge this year, which will reduce their final price for 2023 by 6.5 cents per kilowatt-hour compared with 2021.
Electricity will only become significantly more expensive for those companies that were exempt from the EEG surcharge in the past due to high electricity consumption and competition and therefore do not benefit from its abolition: For them, the future price of 13 cents means in many cases a tripling of their previous costs.
These energy-intensive companies, which account for around half of the industry’s electricity consumption, are also the reason given for the electricity price envisaged in the law by the Ministry of Economics. If it were higher, “the relief for very electricity-intensive companies would be too small”, writes Minister Robert Habeck (Greens) in response to a question. And different levels of relief, as has been practiced in the past with the EEG levy, would have delayed the process because it would have had to be approved by the EU as aid.
On the table are Mozartkugeln and sweets from Manner – the Austrian touch is visible at first glance. Christa Schweng receives visitors on the eighth floor of the building where the European Economic and Social Committee (EESC) is based. The view from the window in the heart of Brussels is breathtaking.
The lawyer from Vienna began her term as president at the EESC amid the lockdown on October 28, 2020. Then came February 24 of this year. Christa Schweng is in plenary that day when she is told that Frans Timmermans just canceled a planned speech at short notice. “Because Russia has just invaded Ukraine.” She then initiates a spontaneous debate in the chamber. Already then, a difference in the assessment between the Western European countries and those bordering Russia becomes apparent.
Covid, Ukraine, and now inflation: “There have been easier mandates, I think,” she sums up calmly. Then there are the debates about the utility of the institution she presides over. They flared up again after the European Parliament threatened to refuse approval of the budget discharge once more, as it had already done in 2020. Christa Schweng had to prove that the MEPs’ questions had been taken into account. She succeeded. The budget discharge was finally approved.
Indeed, a difficult mandate that came at an equally difficult time politically. The search for compromise and consensus is thus particularly important. “We try to build consensus between divergent national, between the many social groups. And that consensus is a safe ground for politicians.”
The EESC’s main task is to provide expertise to the European executive. This expertise derives its legitimacy from the compromise reached by the parties involved. She states a precise communication process helps in this regard. “I must not put personal interests in the foreground from the outset,” says Schweng. “Instead, you have to state very clearly what the task is that needs to be solved. Personally, I always act transparently and show that. I think that’s extremely important.”
Schweng has been an employee of the Austrian Chamber of Commerce since 1991 and is responsible for social issues. It was this path that brought her to the EESC. Her European career began with discussions about Austria’s accession to the European Union. “At that time, the Economic Chamber was looking for trainees who were willing to be trained in European law and go to Brussels to work. I applied, was hired, and thus never finished my dissertation,” she recalls.
Instead, she worked at the Permanent Representation of Austria to the EU, among other places. It was in the period before the referendum, that is, in the hot phase of the accession negotiations. A time when it was also very important to reach consensus. Claire Stam
