Three Commissioners – Margrethe Vestager, Thierry Breton and Valdis Dombrovskis – are in Washington to attend the fifth meeting of the EU-US Trade and Technology Council (TTC) and meet members of the government. There will be no final paper this time. Instead, this meeting will serve to prepare for the sixth and final meeting in this cycle. This is expected to take place in Belgium at the end of April or the beginning of May.
A wide range of topics are on the agenda. These include steps to simplify trade, such as electronic invoicing or the mutual recognition of greentech standards, as well as cooperation on the regulation of artificial intelligence, securing chip supply chains, the introduction of 6G mobile technology and submarine cables.
Bernd Lange, SPD MEP and Chairman of the Trade Committee, wants both sides to agree on a way to reform the dispute settlement mechanism, which is on the agenda at the next World Trade Organization ministerial meeting in Abu Dhabi. “For the next TTC in Belgium, it is also important to discuss how we can end the subsidy race and define criteria for what is truly sustainable and climate-friendly,” says Lange. We need to do this again.
He would also like to see closer cooperation on standards and accessibility. “The Commission has just launched an initiative to give start-ups access to supercomputers. We would also like to see stronger cooperation with the USA here.” The politicians also want to hear the opinion of the business community on these topics. To this end, the stakeholder event Crafting the Transatlantic Green Marketplace is taking place today and tomorrow in Washington.
I wish you a good start to the day!
Is it conceivable that Olaf Scholz or Emmanuel Macron will appear before the press after the special summit on Thursday and speak out against the disbursement of frozen EU funds for Hungary? Perhaps with an indication of what consequences the permanent withdrawal of the billions could have for the country’s ailing economy?
An employee of the Council Secretariat in Brussels had recorded such a scenario in a memo. The corresponding report in the “Financial Times” caused a stir on Monday. Not only in Brussels would such an approach mean an unprecedented escalation in relations between EU partners. Hungarian Minister for European Affairs János Bóka railed on X: “The document written by Brussels bureaucrats only confirms what the Hungarian government has been saying for a long time: access to EU funds is being used by Brussels for political blackmail.”
A spokeswoman for Council President Charles Michel immediately emphasized that it was merely a “background paper describing the current state of the Hungarian economy” and not a plan for Hungary or the upcoming special summit. The heads of state and government will meet again on Thursday to discuss an aid package for Ukraine. The 50 billion euros for four years should actually have been agreed back in December, but Hungary’s Prime Minister Viktor Orbán prevented this with his veto.
In many capitals, great anger has built up over Orbán’s blockade of support for Ukraine – he is endangering Europe’s security, said an EU diplomat. The government in Kyiv is urgently reliant on the cash injection. There are therefore tough negotiations going on behind the scenes to persuade Budapest to give in. The duration of the blockade has led some to consider “more radical options”, according to the Élysée Palace.
The Sherpas of the other heads of state and government may also draw Orbán’s negotiators’ attention to the tense financial situation: Hungary has one of the highest national deficits in the EU and has recently been struggling with high inflation. Budapest could therefore urgently use the €20 billion from Brussels that are still frozen due to corruption and rule of law deficits. However, it would still have to implement several reforms, which the Commission is calling for in the form of milestones – and needs the approval of its EU partners.
However, publicly addressing the economic hardships and possibly scaring off bond investors would have a completely different quality. This would only be conceivable, if at all, in the most extreme case – if Orbán were to let the partners off the hook again at the summit on Thursday. In this case, the other 26 have already discussed other consequences, such as the withdrawal of Hungary’s voting rights in the Council. For such a step to be taken under the Article 7 procedure, however, all 26 would have to be in agreement – which is not yet the case.
Brussels, Berlin and Paris are anything but happy about the leaked document: it reinforces Orbán’s narrative that Brussels is instrumentalizing the frozen funds to bring Hungary into line politically. The document from the Council is not known, emphasizes a spokesperson for the EU Commission. Moreover, the Commission acts on the basis of legal texts and is subject to the control of the European courts. Berlin is also said to have no knowledge of the document.
The revelation heats up the atmosphere in the talks ahead of the special summit once again. According to Bóka, Budapest had recently signaled its willingness to compromise and offered to finance the aid for Kyiv from the EU budget after all – provided that it retained the option of raising objections at a later date.
However, a compromise that gives Orbán the right to veto every year or after two years is not an option for other states. A face-saving way out could be for a member state to demand a discussion at an EU summit via a kind of emergency brake.
EU diplomats expressed confidence on Monday that an agreement on 27 could be reached on Thursday. If Orbán does not go along, the other 26 want to act without him. Member states could provide guarantees so that the EU Commission can raise 20 billion euros for Kyiv on the financial markets.
EPP leader Manfred Weber called for an agreement at the summit: “Failure is not an option this week,” he said. “If we can’t do it with 27 countries, we should secure funding with 26.”
The European Commission and the African Development Bank have signed a new framework agreement for their existing financial partnership. The Brussels-based authority hopes that the deal will give a boost to its Global Gateway infrastructure initiative in Africa. According to the EU Commission, the aim is to drive investment in projects. The EU initiative is considered Brussels’s alternative to China’s New Silk Road.
The partnership has now been renewed at the Italy-Africa summit in Rome. The exact amount of the funding framework was not disclosed. The EU Commission states it has “significantly increased over the last two years, now amounting to 972 million euros in blending operations and guarantees.”
The EU Commission stated that this agreement would enable a series of investments in strategic transport corridors, energy and digital connectivity south of the Sahara. One key joint project is the development of the Lobito Corridor, which will connect the Democratic Republic of Congo and Zambia to the Atlantic Ocean. The route will run through Angola to the port of Lobito and connect the countries with the world markets from there. It is one of the typical projects competing with China, in this case, for access to raw materials.
The EU plans to invest around 150 billion euros in Africa between 2021 and 2027 as part of Global Gateway. That is half the planned 300 billion euros over the same period.
However, this publicly disclosed sum is misleading, as Wilhelm Emmrich from the foreign trade agency Germany Trade and Invest (GTAI) criticized in conversation with Table.Media: The investments are expected to come largely from the private sector; however, the EU will secure them with investment guarantees. Moreover, the EU will not be providing any new funds for the targeted investment amount by 2027. Instead, existing funding will be reallocated. This is because the EU’s multi-annual financial framework for 2021-27 had already been adopted before Global Gateway was launched.
The private sector is expected to make an important investment contribution to Global Gateway. However, a report by Emmrich for GTAI reveals that there has hardly been any new funding to date.
Emmrich has examined the EU initiative’s list for 2024, which are labeled as lighthouse projects. For 2023, “Team Europe” has identified 87 lighthouse projects in five areas: digitalization, climate and energy, transport, health and education and research. In December, the list of lighthouse projects was expanded by another 138 for 2024. Many projects have been running for years, while others are now being put out to tender for the first time.
As in the previous year, half of the 2024 lighthouse projects are located in Africa. The report explains that with 30 projects, Latin America will replace Asia-Pacific (17 projects) as the second most important global gateway region in 2024. The EU has set an investment target of 45 billion euros for the region through 2027. The main sectors, both globally and in Africa, are climate and energy, followed by transport.
In addition to the specifically highlighted lighthouse projects, the EU initiative also includes other projects. However, GTAI expert Emmrich criticizes the lack of a list of these projects or a uniform EU definition of which projects are included in Global Gateway and which are not.
The projects also cover a wide range, with a lack of focus: From supporting early childhood development, to constructing hydroelectric power plants, to supra-regional programs such as building submarine data cables and developing vaccine production in Africa.
However, Global Gateway has generally shown an important change in Europe’s relationship with other world regions, Tim Zajontz from the University of Freiburg told Table.Media. Zajontz researches infrastructure projects and global political economy as part of the “De/Coloniality Now” project. Zajontz says that the EU is taking a more strategic and openly interest-led approach with Global Gateway than before.
At least, after two years of focusing on critical minerals, infrastructure, health and digitalization, certain priorities can be discerned, says Zajontz. “The overarching geostrategic goal of the initiative is to secure access to certain resources, energy sources and markets and to reduce dependencies, especially on China.”
However, the focus on raw materials and the associated infrastructure could also become a problem. The EU consistently portrays its Global Gateway as a “better option” in international competition. However, critics point out that the initiative could continue the extractivism of the colonial era. The fact that the old European colonizers now claim that they want to protect Africans from the Chinese is often seen as hypocritical on the continent.
Indeed, a neo-extractivist race for African resources is in full swing, says researcher Zajontz. However, the extent of the exploitation is not yet foreseeable. The countries of the Global South have become much more important and self-confident. It is now up to them to make demands on the Europeans. Zajontz also reports that some African politicians are even relieved that Europe is at least finally honoring its interest-driven policies.
In just two political trilogues, the Council and Parliament must reach an agreement on the planned ban on imports of products from forced labor. The first meeting is scheduled for today, Tuesday, just a few days after the Council adopted its general approach on Friday. The 45 minutes scheduled for this meeting will initially only deal with the more general content.
The planned regulation is intended to ban products on the EU internal market that were manufactured using forced labor as defined by the International Labor Organization (ILO). The law is primarily aimed at products from China.
In its mandate, the Council proposes strengthening the role of the EU Commission. It is to assess whether the respective product is of “Union interest” based on certain criteria. This is intended to reduce the administrative burden and simplify the allocation of cases. The Member States and the Parliament are largely in agreement on this; the Parliament’s negotiating mandate also envisages greater responsibility for the Commission.
Two issues in particular are likely to be more difficult: Firstly, the Parliament wants a reversal of the burden of proof for high-risk areas, especially for state-imposed forced labor. According to the parliamentary mandate, the Commission is to draw up a list of geographical areas and economic sectors where there is a high risk of forced labor being used. The authorities would no longer have to provide evidence of forced labor for goods produced in these areas. Instead, companies would have to prove that their products were not manufactured using forced labor.
Secondly, Parliament wants to enshrine compensation for the victims of forced labor by the economic actor in law. This could include financial and non-financial compensation. Due to the burdens that could arise for companies, the Council is likely to have difficulty with these regulations.
Steve Trent, Executive Director of the Environmental Justice Foundation, expressed concerns about possible loopholes in the Council’s position: “Labor exploitation is not just a problem that affects individual products – often the abuse runs through entire production facilities,” he said. “Bans should not only apply to individual products but also to product groups that can be traced back to the same location.”
Trent also calls for the investigation of alleged cases of forced labor in third countries to be the responsibility of the EU authorities. If EU authorities are not able to verify the authenticity of information themselves in the context of investigations into alleged cases of forced labor, the application of the law will be significantly weakened, he explains. This is because there is no trust in the impartiality of the governments of third countries that order forced labor.
The German Chamber of Industry and Commerce (DIHK) supports the regulation, but warns against overestimating the control options available to companies. “The actual possibilities for companies to influence the supply chain vary greatly depending on the size, structure and market position of the company,” it said in a statement. “Small and medium-sized companies in particular often have only limited influence and little control over compliance with local standards.”
Whether the German government will approve the law is questionable anyway. According to information from Table.Media, it abstained in the vote on the general approach in the Council. Following the debate on the related EU supply chain law (CSDDD), NGOs are expressing fears that Germany’s abstention could once again complicate the negotiations. The FDP is blocking this and thus positioning itself against the compromise reached by the Council and the European Parliament – just as it did with the AI Act. The German government itself is now also concerned about its credibility and reputation as a reliable and serious negotiating partner.
Anna Cavazzini (Greens), shadow rapporteur in the Internal Market Committee, has clear words: “It is incomprehensible to me that the FDP is blocking the German approval of the ban on products from forced labor at European level,” she told Table.Media. The law would hardly mean any additional work for European companies. Other countries such as the USA already have similar laws, said Cavazzini.
The EU hydrogen strategy provides for an ambitious growth plan: The capacities for the production of green hydrogen are to be increased from six gigawatts (GW) planned for this year to 40 GW by 2030. The target by 2050 is 500 GW. However, installed capacities only amounted to around 0.2 GW by the end of 2023. The reasons: Major uncertainties regarding the regulation of clean hydrogen and its derivatives as well as a lack of buyers due to the significantly higher prices compared to fossil alternatives.
The third amendment to the Renewable Energy Directive (RED III) has largely removed the uncertainties, for example by clearly defining the requirements for renewable hydrogen, but also defines ambitious targets: All hydrogen used by industry is to be 42 percent renewable as early as 2030.
In concrete terms, this means that within the next six years it must be possible to provide 2 to 3.5 million tons of green hydrogen for refineries, fertilizer and chemical companies alone – but currently only around 50,000 tons of clean hydrogen are available.
These figures alone show that Hydrogen expansion cannot succeed if nobody wants to move forward. What we are currently seeing among companies is a cultivation of the first-mover disadvantage: Whoever invests in a new technology first must also deal with its “teething troubles” and develop appropriate solutions. Many companies shy away from the risk and projects are delayed indefinitely.
This hesitation is only human, but in view of the necessary massive transformation of our energy industry, we as a society and as an economy need entrepreneurs who are actively shaping the change. And there are certainly examples of this: the first steel manufacturers are in the starting blocks to operate the first direct reduction plants for the production of green iron. Some energy companies are planning their first large-scale plants to produce green hydrogen, and many refineries are developing local electrolyzer projects.
The times are good for this, despite the current economic situation. The EU’s goal is clear, now it needs the interaction of public and private stakeholders. Numerous funding instruments are available at both national and European levels for the development of the hydrogen economy and the necessary infrastructure, for example from the Recovery and Resilience Facility (ARF) for the European Hydrogen Bank or money from the European Innovation Fund.
They are essential means for companies to minimize risks and cover the costs of the necessary investments. At least five billion euros have already been promised to companies in the steel industry.
Achieving the expansion targets in a relatively short period of time is no easy task. One thing is certain: The capacities of renewable power generation and electrolyzers must be massively expanded. Despite numerous project announcements, the target of six gigawatts in 2024 could be missed by a huge margin and would have to be compensated for in subsequent years.
According to the International Energy Agency’s Global Hydrogen Review 2023, only four percent of global hydrogen projects have a final investment decision. The situation in Europe is similar. At the same time, a large number of electrolyzers and currently even the corresponding production capacities are lacking.
There is also a lack of infrastructure. The political will to complete the German hydrogen core network by 2028 is an important step. However, in view of the duration of planning procedures and the construction of infrastructure, the time pressure to act becomes even more apparent. Another time factor is the long-term customer structures that need to be established first.
The first production capacities in particular are dependent on reliable customers, as green hydrogen will be more expensive than the fossil alternative, especially at the beginning. In addition, hydrogen will also be transported over long distances in the future by converting hydrogen into ammonia, as this is easier to transport. This will also require scalable technical solutions that enable the respective conversion in large quantities.
Despite unanswered questions, companies can benefit from the enormous potential offered by the development of the hydrogen economy. They need to find a way through the current challenges. Energy-intensive companies in particular should draw up a strategy and roadmap now to secure their supply of green hydrogen in the long term.
Here, too, it is essential to use existing funding mechanisms and analyze possible technologies and business models. At the same time, long-term cooperation between producers and customers can ensure the quantities of green hydrogen required in the future and guarantee planning security for the first projects.
So are the goals of European regulation achievable? Only if industry, politics and society work closely together over the next six years and actively drive change. The RED III targets for hydrogen should serve as a motivator. Those who get actively involved and implement the innovation will benefit from economic gains – and make an important contribution to the energy transition.
Three Commissioners – Margrethe Vestager, Thierry Breton and Valdis Dombrovskis – are in Washington to attend the fifth meeting of the EU-US Trade and Technology Council (TTC) and meet members of the government. There will be no final paper this time. Instead, this meeting will serve to prepare for the sixth and final meeting in this cycle. This is expected to take place in Belgium at the end of April or the beginning of May.
A wide range of topics are on the agenda. These include steps to simplify trade, such as electronic invoicing or the mutual recognition of greentech standards, as well as cooperation on the regulation of artificial intelligence, securing chip supply chains, the introduction of 6G mobile technology and submarine cables.
Bernd Lange, SPD MEP and Chairman of the Trade Committee, wants both sides to agree on a way to reform the dispute settlement mechanism, which is on the agenda at the next World Trade Organization ministerial meeting in Abu Dhabi. “For the next TTC in Belgium, it is also important to discuss how we can end the subsidy race and define criteria for what is truly sustainable and climate-friendly,” says Lange. We need to do this again.
He would also like to see closer cooperation on standards and accessibility. “The Commission has just launched an initiative to give start-ups access to supercomputers. We would also like to see stronger cooperation with the USA here.” The politicians also want to hear the opinion of the business community on these topics. To this end, the stakeholder event Crafting the Transatlantic Green Marketplace is taking place today and tomorrow in Washington.
I wish you a good start to the day!
Is it conceivable that Olaf Scholz or Emmanuel Macron will appear before the press after the special summit on Thursday and speak out against the disbursement of frozen EU funds for Hungary? Perhaps with an indication of what consequences the permanent withdrawal of the billions could have for the country’s ailing economy?
An employee of the Council Secretariat in Brussels had recorded such a scenario in a memo. The corresponding report in the “Financial Times” caused a stir on Monday. Not only in Brussels would such an approach mean an unprecedented escalation in relations between EU partners. Hungarian Minister for European Affairs János Bóka railed on X: “The document written by Brussels bureaucrats only confirms what the Hungarian government has been saying for a long time: access to EU funds is being used by Brussels for political blackmail.”
A spokeswoman for Council President Charles Michel immediately emphasized that it was merely a “background paper describing the current state of the Hungarian economy” and not a plan for Hungary or the upcoming special summit. The heads of state and government will meet again on Thursday to discuss an aid package for Ukraine. The 50 billion euros for four years should actually have been agreed back in December, but Hungary’s Prime Minister Viktor Orbán prevented this with his veto.
In many capitals, great anger has built up over Orbán’s blockade of support for Ukraine – he is endangering Europe’s security, said an EU diplomat. The government in Kyiv is urgently reliant on the cash injection. There are therefore tough negotiations going on behind the scenes to persuade Budapest to give in. The duration of the blockade has led some to consider “more radical options”, according to the Élysée Palace.
The Sherpas of the other heads of state and government may also draw Orbán’s negotiators’ attention to the tense financial situation: Hungary has one of the highest national deficits in the EU and has recently been struggling with high inflation. Budapest could therefore urgently use the €20 billion from Brussels that are still frozen due to corruption and rule of law deficits. However, it would still have to implement several reforms, which the Commission is calling for in the form of milestones – and needs the approval of its EU partners.
However, publicly addressing the economic hardships and possibly scaring off bond investors would have a completely different quality. This would only be conceivable, if at all, in the most extreme case – if Orbán were to let the partners off the hook again at the summit on Thursday. In this case, the other 26 have already discussed other consequences, such as the withdrawal of Hungary’s voting rights in the Council. For such a step to be taken under the Article 7 procedure, however, all 26 would have to be in agreement – which is not yet the case.
Brussels, Berlin and Paris are anything but happy about the leaked document: it reinforces Orbán’s narrative that Brussels is instrumentalizing the frozen funds to bring Hungary into line politically. The document from the Council is not known, emphasizes a spokesperson for the EU Commission. Moreover, the Commission acts on the basis of legal texts and is subject to the control of the European courts. Berlin is also said to have no knowledge of the document.
The revelation heats up the atmosphere in the talks ahead of the special summit once again. According to Bóka, Budapest had recently signaled its willingness to compromise and offered to finance the aid for Kyiv from the EU budget after all – provided that it retained the option of raising objections at a later date.
However, a compromise that gives Orbán the right to veto every year or after two years is not an option for other states. A face-saving way out could be for a member state to demand a discussion at an EU summit via a kind of emergency brake.
EU diplomats expressed confidence on Monday that an agreement on 27 could be reached on Thursday. If Orbán does not go along, the other 26 want to act without him. Member states could provide guarantees so that the EU Commission can raise 20 billion euros for Kyiv on the financial markets.
EPP leader Manfred Weber called for an agreement at the summit: “Failure is not an option this week,” he said. “If we can’t do it with 27 countries, we should secure funding with 26.”
The European Commission and the African Development Bank have signed a new framework agreement for their existing financial partnership. The Brussels-based authority hopes that the deal will give a boost to its Global Gateway infrastructure initiative in Africa. According to the EU Commission, the aim is to drive investment in projects. The EU initiative is considered Brussels’s alternative to China’s New Silk Road.
The partnership has now been renewed at the Italy-Africa summit in Rome. The exact amount of the funding framework was not disclosed. The EU Commission states it has “significantly increased over the last two years, now amounting to 972 million euros in blending operations and guarantees.”
The EU Commission stated that this agreement would enable a series of investments in strategic transport corridors, energy and digital connectivity south of the Sahara. One key joint project is the development of the Lobito Corridor, which will connect the Democratic Republic of Congo and Zambia to the Atlantic Ocean. The route will run through Angola to the port of Lobito and connect the countries with the world markets from there. It is one of the typical projects competing with China, in this case, for access to raw materials.
The EU plans to invest around 150 billion euros in Africa between 2021 and 2027 as part of Global Gateway. That is half the planned 300 billion euros over the same period.
However, this publicly disclosed sum is misleading, as Wilhelm Emmrich from the foreign trade agency Germany Trade and Invest (GTAI) criticized in conversation with Table.Media: The investments are expected to come largely from the private sector; however, the EU will secure them with investment guarantees. Moreover, the EU will not be providing any new funds for the targeted investment amount by 2027. Instead, existing funding will be reallocated. This is because the EU’s multi-annual financial framework for 2021-27 had already been adopted before Global Gateway was launched.
The private sector is expected to make an important investment contribution to Global Gateway. However, a report by Emmrich for GTAI reveals that there has hardly been any new funding to date.
Emmrich has examined the EU initiative’s list for 2024, which are labeled as lighthouse projects. For 2023, “Team Europe” has identified 87 lighthouse projects in five areas: digitalization, climate and energy, transport, health and education and research. In December, the list of lighthouse projects was expanded by another 138 for 2024. Many projects have been running for years, while others are now being put out to tender for the first time.
As in the previous year, half of the 2024 lighthouse projects are located in Africa. The report explains that with 30 projects, Latin America will replace Asia-Pacific (17 projects) as the second most important global gateway region in 2024. The EU has set an investment target of 45 billion euros for the region through 2027. The main sectors, both globally and in Africa, are climate and energy, followed by transport.
In addition to the specifically highlighted lighthouse projects, the EU initiative also includes other projects. However, GTAI expert Emmrich criticizes the lack of a list of these projects or a uniform EU definition of which projects are included in Global Gateway and which are not.
The projects also cover a wide range, with a lack of focus: From supporting early childhood development, to constructing hydroelectric power plants, to supra-regional programs such as building submarine data cables and developing vaccine production in Africa.
However, Global Gateway has generally shown an important change in Europe’s relationship with other world regions, Tim Zajontz from the University of Freiburg told Table.Media. Zajontz researches infrastructure projects and global political economy as part of the “De/Coloniality Now” project. Zajontz says that the EU is taking a more strategic and openly interest-led approach with Global Gateway than before.
At least, after two years of focusing on critical minerals, infrastructure, health and digitalization, certain priorities can be discerned, says Zajontz. “The overarching geostrategic goal of the initiative is to secure access to certain resources, energy sources and markets and to reduce dependencies, especially on China.”
However, the focus on raw materials and the associated infrastructure could also become a problem. The EU consistently portrays its Global Gateway as a “better option” in international competition. However, critics point out that the initiative could continue the extractivism of the colonial era. The fact that the old European colonizers now claim that they want to protect Africans from the Chinese is often seen as hypocritical on the continent.
Indeed, a neo-extractivist race for African resources is in full swing, says researcher Zajontz. However, the extent of the exploitation is not yet foreseeable. The countries of the Global South have become much more important and self-confident. It is now up to them to make demands on the Europeans. Zajontz also reports that some African politicians are even relieved that Europe is at least finally honoring its interest-driven policies.
In just two political trilogues, the Council and Parliament must reach an agreement on the planned ban on imports of products from forced labor. The first meeting is scheduled for today, Tuesday, just a few days after the Council adopted its general approach on Friday. The 45 minutes scheduled for this meeting will initially only deal with the more general content.
The planned regulation is intended to ban products on the EU internal market that were manufactured using forced labor as defined by the International Labor Organization (ILO). The law is primarily aimed at products from China.
In its mandate, the Council proposes strengthening the role of the EU Commission. It is to assess whether the respective product is of “Union interest” based on certain criteria. This is intended to reduce the administrative burden and simplify the allocation of cases. The Member States and the Parliament are largely in agreement on this; the Parliament’s negotiating mandate also envisages greater responsibility for the Commission.
Two issues in particular are likely to be more difficult: Firstly, the Parliament wants a reversal of the burden of proof for high-risk areas, especially for state-imposed forced labor. According to the parliamentary mandate, the Commission is to draw up a list of geographical areas and economic sectors where there is a high risk of forced labor being used. The authorities would no longer have to provide evidence of forced labor for goods produced in these areas. Instead, companies would have to prove that their products were not manufactured using forced labor.
Secondly, Parliament wants to enshrine compensation for the victims of forced labor by the economic actor in law. This could include financial and non-financial compensation. Due to the burdens that could arise for companies, the Council is likely to have difficulty with these regulations.
Steve Trent, Executive Director of the Environmental Justice Foundation, expressed concerns about possible loopholes in the Council’s position: “Labor exploitation is not just a problem that affects individual products – often the abuse runs through entire production facilities,” he said. “Bans should not only apply to individual products but also to product groups that can be traced back to the same location.”
Trent also calls for the investigation of alleged cases of forced labor in third countries to be the responsibility of the EU authorities. If EU authorities are not able to verify the authenticity of information themselves in the context of investigations into alleged cases of forced labor, the application of the law will be significantly weakened, he explains. This is because there is no trust in the impartiality of the governments of third countries that order forced labor.
The German Chamber of Industry and Commerce (DIHK) supports the regulation, but warns against overestimating the control options available to companies. “The actual possibilities for companies to influence the supply chain vary greatly depending on the size, structure and market position of the company,” it said in a statement. “Small and medium-sized companies in particular often have only limited influence and little control over compliance with local standards.”
Whether the German government will approve the law is questionable anyway. According to information from Table.Media, it abstained in the vote on the general approach in the Council. Following the debate on the related EU supply chain law (CSDDD), NGOs are expressing fears that Germany’s abstention could once again complicate the negotiations. The FDP is blocking this and thus positioning itself against the compromise reached by the Council and the European Parliament – just as it did with the AI Act. The German government itself is now also concerned about its credibility and reputation as a reliable and serious negotiating partner.
Anna Cavazzini (Greens), shadow rapporteur in the Internal Market Committee, has clear words: “It is incomprehensible to me that the FDP is blocking the German approval of the ban on products from forced labor at European level,” she told Table.Media. The law would hardly mean any additional work for European companies. Other countries such as the USA already have similar laws, said Cavazzini.
The EU hydrogen strategy provides for an ambitious growth plan: The capacities for the production of green hydrogen are to be increased from six gigawatts (GW) planned for this year to 40 GW by 2030. The target by 2050 is 500 GW. However, installed capacities only amounted to around 0.2 GW by the end of 2023. The reasons: Major uncertainties regarding the regulation of clean hydrogen and its derivatives as well as a lack of buyers due to the significantly higher prices compared to fossil alternatives.
The third amendment to the Renewable Energy Directive (RED III) has largely removed the uncertainties, for example by clearly defining the requirements for renewable hydrogen, but also defines ambitious targets: All hydrogen used by industry is to be 42 percent renewable as early as 2030.
In concrete terms, this means that within the next six years it must be possible to provide 2 to 3.5 million tons of green hydrogen for refineries, fertilizer and chemical companies alone – but currently only around 50,000 tons of clean hydrogen are available.
These figures alone show that Hydrogen expansion cannot succeed if nobody wants to move forward. What we are currently seeing among companies is a cultivation of the first-mover disadvantage: Whoever invests in a new technology first must also deal with its “teething troubles” and develop appropriate solutions. Many companies shy away from the risk and projects are delayed indefinitely.
This hesitation is only human, but in view of the necessary massive transformation of our energy industry, we as a society and as an economy need entrepreneurs who are actively shaping the change. And there are certainly examples of this: the first steel manufacturers are in the starting blocks to operate the first direct reduction plants for the production of green iron. Some energy companies are planning their first large-scale plants to produce green hydrogen, and many refineries are developing local electrolyzer projects.
The times are good for this, despite the current economic situation. The EU’s goal is clear, now it needs the interaction of public and private stakeholders. Numerous funding instruments are available at both national and European levels for the development of the hydrogen economy and the necessary infrastructure, for example from the Recovery and Resilience Facility (ARF) for the European Hydrogen Bank or money from the European Innovation Fund.
They are essential means for companies to minimize risks and cover the costs of the necessary investments. At least five billion euros have already been promised to companies in the steel industry.
Achieving the expansion targets in a relatively short period of time is no easy task. One thing is certain: The capacities of renewable power generation and electrolyzers must be massively expanded. Despite numerous project announcements, the target of six gigawatts in 2024 could be missed by a huge margin and would have to be compensated for in subsequent years.
According to the International Energy Agency’s Global Hydrogen Review 2023, only four percent of global hydrogen projects have a final investment decision. The situation in Europe is similar. At the same time, a large number of electrolyzers and currently even the corresponding production capacities are lacking.
There is also a lack of infrastructure. The political will to complete the German hydrogen core network by 2028 is an important step. However, in view of the duration of planning procedures and the construction of infrastructure, the time pressure to act becomes even more apparent. Another time factor is the long-term customer structures that need to be established first.
The first production capacities in particular are dependent on reliable customers, as green hydrogen will be more expensive than the fossil alternative, especially at the beginning. In addition, hydrogen will also be transported over long distances in the future by converting hydrogen into ammonia, as this is easier to transport. This will also require scalable technical solutions that enable the respective conversion in large quantities.
Despite unanswered questions, companies can benefit from the enormous potential offered by the development of the hydrogen economy. They need to find a way through the current challenges. Energy-intensive companies in particular should draw up a strategy and roadmap now to secure their supply of green hydrogen in the long term.
Here, too, it is essential to use existing funding mechanisms and analyze possible technologies and business models. At the same time, long-term cooperation between producers and customers can ensure the quantities of green hydrogen required in the future and guarantee planning security for the first projects.
So are the goals of European regulation achievable? Only if industry, politics and society work closely together over the next six years and actively drive change. The RED III targets for hydrogen should serve as a motivator. Those who get actively involved and implement the innovation will benefit from economic gains – and make an important contribution to the energy transition.
