In NATO’s new strategic concept, which was adopted in Madrid yesterday, China appears as a “challenge” for the first time. Although NATO had already classified the People’s Republic as a “systemic challenge” previously, this is now also stated in the paper that will determine the course of the next ten years. Stephan Israel analyzed what this means.
The de facto end for the internal combustion engine became a quasi-end for e-fuels and hybrids during the negotiations on the Fit for 55 package on Wednesday night. It is true that from 2035, no more cars that emit C02 may be registered. However, the interpretations of what this means in detail are surprisingly different. Lukas Scheid looked into the interpretations and reactions.
Either way, the end of the internal combustion engine means high demand for batteries for electric cars in the future. Many in the industry now foresee a shortage of lithium, and by 2024 or 2025, a shortage of batteries as well. Read more about this in the News .
Of course, Frans Timmermans, Vice-President of the EU Commission and master of the Green Deal, was also involved in the negotiations on the Fit for 55 package. In today’s Profile, Stephan Israel‘s takes a closer look at the “climate czar”, who is always overshadowed by events.
I wish you an exciting read.
The view of Russia is unsurprisingly without illusions against the backdrop of the attack on Ukraine: The Russian Federation is the “greatest and most immediate threat to the security of allies and to peace and stability in the Euro-Atlantic area,” according to the new strategic concept adopted by NATO at its summit in Madrid.
The passage on China, which is mentioned in a NATO strategic concept for the first time ever, caused more discussion in the run-up. The US, supported by Great Britain, demanded plain terms to circumscribe the Chinese leadership’s aggressive striving for power. Germany and France also pushed for a more nuanced characterization in view of economic interests in the world’s second-largest economy. China could not be described as an adversary on a par with Russia, they said.
However, the mere fact that two sections are now devoted to China is a watershed in the history of the transatlantic alliance. Top diplomats were still negotiating the crucial passages shortly before Madrid. The People’s Republic of China’s stated goals and its policy of coercion posed “challenges” to the interests, security and values of NATO allies, the strategic concept now says. China was using a wide range of political, economic, and military tools to expand its global footprint and power projection.
It goes on to describe in clear terms how China is targeting allies with “malicious hybrid and cyber operations”, “confrontational rhetoric and disinformation”, and harming alliance security. China also seeks to control key technology and industrial sectors, critical infrastructure, and strategic materials and supply chains. China is using its economic clout to create strategic dependencies and increase its influence.
China was also seeking to undermine the international order, including in space, on the Internet, and at sea. The leadership in Beijing also used its “increasingly close strategic partnership” with the Russian Federation as leverage. The interplay between Beijing and Moscow is an issue of concern to the US, also in light of the Russian war in Ukraine. At the same time, NATO says it is open “to constructive discussions with the People’s Republic of China aimed at safeguarding the alliance’s security interests, including talks to build mutual transparency”.
However, there is no intention to be naive about it: The alliance will expand its joint situational awareness, increase resilience and operational readiness, and guard against “the tactics of coercion by the People’s Republic of China and its attempts to divide the alliance”. NATO will stand up for its shared values and the rules-based international order, “including freedom of navigation”.
NATO updates its strategic concept every ten years. At the last meeting in Lisbon in 2010, China was not yet an issue, Russia was valued as a “strategic partner” and the then Russian President Dmitry Medvedev was a welcome guest. This was despite the fact that Russian forces had invaded Georgia two years earlier and had not withdrawn from Moldova or Transnistria, contrary to the agreements. After the Russian annexation of Crimea in 2014, at the latest, the alliance’s old strategic guideline was completely obsolete.
The new concept could be similar. It is quite possible that Russia will have served its time as an opponent in ten years and that the real threat will come from China. The clear sections on the new challenger are at least an indication in this direction . The fact that the heads of state and government of Australia, New Zealand, Japan and South Korea were present for the first time on the first day of the summit is also an indication. “We are facing an era of strategic competition,” said NATO Secretary General Jens Stoltenberg following the meeting with partner countries.
NATO will remain a transatlantic alliance, the Norwegian stressed. But it shares the same values with its partners and has to deal with the same threats. When the security of partners is called into question, this also affects NATO and the security interests of its members. China terrorizes its neighbors and threatens Taiwan. The leadership in Beijing is substantially expanding its armed forces and spreading Russian propaganda. China is not an adversary, Stoltenberg stressed, but allies and partners should not be blind to the challenge. NATO would expand cooperation with friendly states in the Indo-Pacific region.
The EU’s “no” to phasing out internal combustion engines was the right thing to do, FDP leader and German Finance Minister Christian Lindner tweeted on Wednesday morning. CO2-free fuels in passenger cars remain possible even after the agreement of the EU environment ministers, in his view. Many see it differently. They see the agreement at the Environment Council as a clear vote against the internal combustion engine. Among them are Steffi Lemke (Greens), the environment minister responsible for the legislative proposal, and Green Deal Commissioner Frans Timmermans.
Both made it clear that from 2035 onwards, only new cars that do not emit CO2 are to be registered. And according to the EU’s current definition, neither e-fuels nor plug-in hybrids are free of CO2 emissions. The German Association of the Automotive Industry (VDA) therefore sees the Council’s position as a “de facto ban on internal combustion engines” from 2035. “With this decision, the environment ministers have taken a decision against an industrial policy that is open to technology,” commented VDA President Hildegard Müller.
Politics has the task – especially when it comes to setting such ambitious targets – of creating the framework conditions to ensure that these plans can be achieved, Müller added. “With a policy that only demands from others and does not deliver itself, the climate targets cannot be achieved.” The VDA is therefore calling for a “reliable charging and H2 refueling infrastructure throughout Europe“.
The Federation of German Industries (BDI) also sees no opportunities for the use of e-fuels “because only electric drives may continue to be counted in fleet regulation”. This lacks a decisive incentive for the market ramp-up of e-fuels, says BDI President Siegfried Russwurm. “No one can predict with absolute certainty today what will be technologically possible and the best solution in 2035.”
Only the German Mechanical Engineering Industry Association (VDMA) interprets the outcome of the Environmental Council as an averted ban on internal combustion engines. Nevertheless, there are “major uncertainties with regard to future drive technologies for passenger cars and light commercial vehicles,” says Hartmut Rauen, Deputy Managing Director of the VDMA. The EU has not been able to come to a clear decision on the form in which e-fuels will be used in road traffic in the future.
Interestingly, the environmental associations are disappointed by the Council’s agreement for the opposite reasons. A back door remains open for internal combustion vehicles, commented Kerstin Haarmann, the federal chairwoman of the Traffic Club Germany (VCD). She said that the FDP’s refusal to agree to a ban on new combustion engine cars from 2035 was responsible for this. As a result, Germany has lost its credibility as a climate protection pioneer in Europe.
It is annoying that the EU must continue to “deal with the bogus solution of inefficient and expensive e-fuels, which have no place in the passenger car market,” said Greenpeace managing director Martin Kaiser. What is clear, however – and Frans Timmermans made this clear as late as Wednesday night – is that the right of initiative to consider e-fuels lies with the Commission. He said it is not obliged to bring forward a legislative proposal to include e-fuels or hybrids in the fleet limits. If manufacturers show that their technologies are carbon-neutral under EU regulations, the Commission would be open to it but also makes clear that so far they can’t.
The criticism of some environmental associations is also directed against the further compromises of the Environment Council. A “heavily watered-down” EU climate package, says Germanwatch, including the agreement on the Social Climate Fund. Germany’s prolonged blockade has almost jeopardized the entire package here, criticizes political director Christoph Bals. The compromise that has now been reached is inadequate and urgently needs to be improved. Germany had tried to reduce the size of the Social Climate Fund. “At least the German government was not able to prevail with its shameful proposal,” said Bals.
Bals sees the fact that industry is to receive free CO2 certificates as protection against carbon leakage until the end of 2035 as showing too much consideration for industry rather than for achieving climate targets. “The already inadequate proposal of the Commission and the French Council Presidency was watered down even further under pressure from the German government.” For trilogue negotiations with the Parliament, he demands that Berlin henceforth act as a “climate policy draught horse and not a brake”.
The new government in Berlin “actively undermined negotiations on crucial issues such as the emissions trading system and the climate fund during the preparation of the Council,” said Viviane Raddatz, head of climate protection and energy policy at WWF Germany. “In this context, the question is how Germany intends to achieve its national climate targets and what concept of European solidarity it represents.”
Monday’s negotiation results in the Energy Council were also not without criticism. “Unfortunately, the target of 40 percent renewables by 2030 in the EU is far too weak,” tweeted Simone Peter, president of the German Renewable Energy Federation (BEE). “Science & associations have been calling for higher targets for a long time. Given cost & supply crisis of fossil fuels plus climate crisis, far more ambition would be needed.” The Council had postponed negotiations on a target increase to 45 percent renewables until the trilogue with the Parliament.
On the other hand, the adoption of proposals for faster planning and permitting procedures met with a positive response. “Europe now wants 510 gigawatts of wind energy by 2030, up from 190 GW today. Europe will only achieve this if it speeds up permitting procedures. It is very good that EU energy ministers have now agreed to do just that,” said Giles Dickson, CEO of WindEurope.
For the renewable associations, however, it is the concrete implementation that matters. “All new wind farms should be approved in a maximum of two years. Governments should ensure that this deadline covers all approvals, including environmental impact assessments and grid permits,” Dickson added.
Hydrogen Europe, on the other hand, was less than enthusiastic about the target for sustainable e-fuels in industry, which was watered down from the Commission’s proposal last July (50 percent) and which the Commission wanted to increase further with REPowerEU (75 percent).
“Unfortunately, the Council’s position falls short of the ambitious targets set in the RePowerEU Communication and dilutes the targets for renewable fuels of non-biological origin (RFNBOs) in transport and industry. The shift from mandatory to indicative targets in these sectors harms the business model and affects certainty for investors,” said CEO Jorgo Chatzimarkakis.
“We call on the European Parliament and the European Commission to advocate for the mandatory sub-targets for RFNBOs in transport and industry proposed under the RED II revision.” With Manuel Berkel
Following the decision to phase out internal combustion engines, representatives of the major car companies see the procurement of batteries for EVs in jeopardy. The shortage of raw materials required for battery production, such as lithium, could restrict the planned switch to e-cars. Current calculations by the German Mineral Resources Agency (DERA) confirm this.
Arno Antlitz, VW Group’s chief financial officer, told Reuters news agency this week, “The biggest challenge is not ramping up car factories. The biggest challenge will be expanding the battery supply chain.” VW said it will stop selling internal combustion engine cars in Europe by 2035, but some automakers such as Toyota, which is further behind in the race to develop electric cars, could struggle to meet the target. The Japanese automaker declined to comment on Wednesday.
The major car manufacturers are trying to secure the supply of battery cells. However, the lack of raw materials for the batteries is a much bigger problem. Insufficient supplies of lithium, nickel, manganese, or cobalt could slow the transition to EVs, make these vehicles more expensive and threaten automakers’ profit margins. According to Carlos Tavares, CEO of automotive group Stellantis, manufacturers will not be able to procure enough batteries as early as 2024 to 2025.
In a study last month, the environmental umbrella organization Transport and Environment (T&E) had concluded that there would be no raw material shortages for lithium and nickel even if demand for electric cars increased (Europe.Table reported). Recent calculations by DERA now forecast a significant shortage of lithium by 2030. The analysis, which DERA presented last week, compares production capacity and demand for lithium in three different scenarios. The result: In the best case, there will be a shortage of just under 90,000 metric tons of the raw material in eight years – in the worst scenario, 300,000 metric tons. The reason for the shortage is said to be insufficient investment in production and the simultaneous sharp rise in demand for lithium. Around 90 percent of the total demand for lithium comes from the automotive industry, which needs lithium-ion batteries for the production of EVs. leo/rtr
If ships were powered exclusively by environmentally friendly e-fuels, the price of a pair of sneakers from China would increase by less than ten cents. This is the result of a new study by the European environmental organization Transport&Environment (T&E) on the costs of decarbonizing shipping. The voyage of an average container ship from Shenzhen in China to Belgium was analyzed for this purpose. The study concludes that the likely impact on maritime transport costs would be negligible.
The NGO claims that the study was conducted to counter claims by the shipping industry that the greening of the industry would lead to high prices for consumers. The small cost increase reflects economies of scale through global supply chains that are not overly sensitive to fuel costs, the NGO said. In the worst-case scenario, freight companies would see a one to 1.7 percent increase in transportation costs if they exclusively used e-fuels. The study examined different products: The price increase of a pair of sneakers amounts to €0.8 while that of a refrigerator is €8.
The EU currently has two proposals in the works that would permanently change the shipping industry: The first is an extension of emissions trading to shipping. The European Parliament already endorsed this move last week. The second proposal involves a law on maritime fuels. This would make the use of eco-friendly e-fuels mandatory on a small scale by 2030. ari
Europe should reduce its dependencies on key technologies for decarbonization and digitalization, according to the EU Commission. “In today’s world, everything can be used as a weapon, data, food, energy,” Vice President Maroš Šefčovič said yesterday. “Therefore, we need to look at our policies and make sure we are prepared for all eventualities.” Diversification of supply sources is necessary for the EU’s strategic autonomy, he cautioned.
In its new Strategic Foresight Report, the Commission recommends leveraging linkages between megatrends. For example, satellite data, sensors, and blockchain technology could help predict energy supply and demand more accurately, thereby improving security of supply. To realize the potential, Europe should work closely with like-minded partners on such issues.
The Commission’s internal Observatory of Critical Technologies is to contribute through its analyses to avoiding strategic dependencies in technologies, according to the report. EU agricultural policy should be thought of even more strongly from the point of view of food security.
To secure supplies of key raw materials, the EU should be enabled to monitor global commodity markets and supply chains more closely. If appropriate, new instruments for stockpiling and joint procurement are also options to be better prepared for supply disruptions.
Partnerships with countries such as Canada and Norway are also important, as the EU can rely on them even in times of crisis, said Commission Vice President Margrethe Vestager at an event organized by the think tank Bruegel. In addition, massive investments are being made in the extraction of the EU’s own reserves in northern Sweden, for example. She appealed to the user industries to accept somewhat higher costs for better protection of nature and inhabitants: “The price point could be somewhat different.” tho
Millions of people are at risk of famine due to sharp increases in grain prices caused by the war in Ukraine, according to the UN. If Ukrainian grain exports come to a complete halt, global prices would rise by 19 percent compared to pre-war levels, the Organization for Economic Cooperation and Development (OECD) and the Food and Agriculture Organization of the United Nations (FAO) predicted. If Russian exports shrank by half, there could be a 34 percent increase in prices compared to 2021.
Such a development could push an additional 8 to 19 million people into famine, the organizations said. “With food supplies already under pressure, the consequences would be devastating, especially for the most vulnerable,” warned OECD Secretary-General Mathias Cormann.
Some 20 million tons of grain must be removed from storage in Ukraine by the end of next month to make room for this year’s harvest, according to the European Union (EU). Only then can food shortages in Africa be avoided, the EU warned a month ago.
Since the Russian attack on Ukraine, Ukraine has been able to export only one-fifth of the usual amount of grain, according to the FAO and OECD. The reason is the blockade of Ukraine’s Black Sea ports, off which the Russian navy patrols. Russia and Ukraine together supply one-third of the world’s grain exports. rtr
The Swiss government on Wednesday presented plans against a possible gas shortage. If savings appeals and switching plants to oil were not enough, natural gas consumption would be rationed, it said. Households and social services would be exempt from the restrictions in a first phase.
Switzerland has no gas storage facilities of its own and is completely dependent on imports, mainly from Russia and Germany. Gas shortages in Germany would therefore also affect Switzerland. An agreement between Switzerland and France ensures that Swiss customers are supplied with gas even in the event of shortages. A similar agreement is currently being negotiated with Germany.
Hungary has also taken emergency measures to secure energy supplies. The government led by Prime Minister Viktor Orbán passed a resolution under which the government can take over the supervision of important energy companies and the operator of the gas pipeline network FGSZ in an emergency to ensure continuous supply.
The decree fits in with the interventionist policies of the Orbán government. For example, the government has already capped fuel prices and household energy costs.
Oil and gas company MOL, which controls the FGSZ, would not comment on the government strategy aimed at war-related contingencies when asked by Reuters news agency. “Such measures are not unusual in EU countries,” it said.
Hungary is 85 percent dependent on Russian gas imports and 65 percent on crude oil imports from Russia, and also imports a smaller portion of the electricity it needs, making its risk high in the event of an energy crisis in Europe, analysts say. rtr
The EU Commission is not yet releasing its previously withheld COVID aid for Hungary and Poland. It says the conditions have not been met in either case. Hungary is waiting for the release of €15.5 billion, Poland for €35 billion.
The Hungarian government had written to the EU urging the transfer of the funds. A spokeswoman for the EU Commission said Wednesday that the letter had been received and was being examined. A colleague said there were “no updates” compared to the Commission’s latest statement on the matter on June 3.
There has been progress on some issues in recent months. “However, there are a number of issues that remain open, including the fight against corruption and education measures.” Talks would continue.
An adviser to Orbán said last week that his government would welcome detailed recommendations from the EU Commission on exactly which laws would have to be changed to receive the money. Orbán himself said they were open to a compromise.
In the case of Poland, the EU Commission considers recent changes to the Polish judicial system to be insufficient to dispel doubts about compliance with rule-of-law standards. In proceedings before the European Court of Justice, the Brussels-based authority made it clear that, in its view, disputed provisions had not been repealed after an initial analysis.
In particular, the exclusive jurisdiction of the Supreme Court’s “Chamber of Extraordinary Review and Public Affairs” over issues of judicial independence was not abrogated.
It was also noted that the new law does not immediately reinstate suspended judges , but only provides for a review procedure. According to the EU Commission’s ideas, such cases should actually be reviewed by an independent court within the period provided by law. rtr/dpa
The dispute between Russia and Lithuania over the ban on the transit of certain goods to the Russian exclave of Kaliningrad could end in a few days, according to insiders. Representatives of the European Union, with the support of Germany, are currently negotiating with Lithuania on the suspension of the transit ban, two people familiar with the matter said.
Despite reservations from the Lithuanian government, insiders expressed confidence that a compromise would be reached by July 10 at the latest. The former Soviet republic is one of Russia’s harshest critics in the EU. “Sanctions must be enforced. No decision should undermine the credibility and effectiveness of the EU sanctions policy,” a Lithuanian Foreign Ministry spokeswoman said.
According to one of the insiders, however, proponents of a compromise fear a military escalation on EU soil. The government in Moscow could use force to create a land corridor. Kaliningrad is “sacred” to Russia, they said.
German soldiers are also stationed in the NATO partner country Lithuania. A reduction in gas imports from Russia could also hit Germany hard. “We have to accept reality,” said one of the insiders. Russian President Vladimir Putin “has much more leverage than we do. It is in our interest to find a compromise.”
Two main scenarios are possible, he said: Either cargo traffic between Russia and Kaliningrad will be exempt from EU sanctions, or humanitarian reasons could create an exemption for the area, which lies between Lithuania, Poland, and the Baltic Sea.
Lithuania has banned the transit of goods such as construction materials, metals, and coal to the exclave since June 17, citing EU sanctions over Russia’s invasion of Ukraine. The ban also affects the only train route between Russia and Kaliningrad. There is no direct land connection between the former East Prussian Königsberg and Russia. Air and sea routes are not affected by the sanctions. rtr
Commission Vice President Margrethe Vestager has announced an implementation strategy for the EU’s digital agenda. She said at an event organized by the think tank Bruegel that numerous regulatory projects have been launched and will soon come into force, such as the Digital Services Act, the Digital Markets Act, and the Data Governance Act. More are in the works, she said, with the AI Act and Data Act. Now it is crucial to implement and enforce them.
She asked her staff to record what it would take to do that. “The picture is quite complex,” Vestager said. Creating the structures within the Commission is still the easier part, she said. More complex is getting the different national authorities involved, as decided in each piece of legislation. An implementation strategy will facilitate that coordination.
A Commission spokesman said in response to a question that the Commission was looking at what kind of support its own services, as well as member states and national authorities, might need up front to help them organize implementation and enforcement activities.
The regulatory proposals provide for different and sometimes complex governance structures. According to the DSA, each member state is to appoint a supervisory authority (the Digital Services Coordinator), which is to take the lead in enforcement against providers based in the respective territory. For large providers, the Commission itself is responsible. The DMA, in turn, provides for coordination mechanisms between the Commission and the national antitrust authorities. tho
Actually, as the EU’s climate czar, Frans Timmermans would be the man of the hour. But now, he is once again somewhat overshadowed, not getting the unrestricted attention he deserves. Sometimes it’s the circumstances, like now with the Ukraine war, sometimes Ursula von der Leyen steals the show. Yet Frans Timmermans is the man who will get the Fit-for-55 climate package over the finish line: “Europe must send a clear signal to the world that we are ready to do whatever it takes to implement our climate policy,” the Dutchman said before the crucial night session.
On Wednesday morning, he is a good deal closer to achieving his goal. “This is a very good day for the European Green Deal and for the European Union,” Timmermans said. But there is little room for the climate commissioner’s success between the EU summit, G7, and NATO meetings. Timmermans will always remain number two. Or rather, the First Vice-President in the team of the head of the Commission, as the professional politician likes to emphasize, known as a man with a big ego and inexhaustible energy. In fact, he would have liked to replace Ursula von der Leyen at the helm of the Brussels office.
Timmermans was the European Socialists’ top candidate in the 2019 European elections. The Social Democrats only finished as the second-strongest force. When it became clear that the conservative winner Manfred Weber would not be able to muster a majority in the EU Parliament, Timmermans briefly thought he had a good chance.
But the heads of state and government bypassed the top candidates altogether and conjured Ursula von der Leyen out of a hat, on the recommendation of French President Emmanuel Macron. The disappointment was great, especially for the candidate “for a social Europe”, but not only that. The Dutchman needed some time to regain his footing and accept the role as number 2 behind Ursula von der Leyen. The corpulent politician from the Parti van de Arbeid (PvdA) was hardly seen for a long time, and when he reappeared, he had grown a beard.
After all, as First Vice-President and Commissioner for Climate Protection, Ursula von der Leyen entrusted him with her most important project, the Green Deal . If it hadn’t been for COVID and the Ukraine war, Timmermans would have attracted considerably more attention. Timmermans was born in Maastricht on May 6, 1961. His father, married to a German, worked in the diplomatic service. Timmermans studied French literature and European law in the Netherlands and in Nancy, France. He later served in The Hague as State Secretary for European Affairs and then Foreign Minister of the Netherlands, among other positions.
He was in office when separatists in eastern Ukraine shot down a Malaysia Airlines airliner with a Russian forces Buk anti-aircraft missile in 2014, killing 298 people, many of them Dutch. Timmermans led the charge at the UN at the time and found the right words, earning him the nickname “Super Frans”. He had made the world cry, the press at home found. Shortly thereafter, he moved to Brussels for his first term and, under Jean-Claude Juncker, had the thankless task of stopping the erosion of the rule of law in Poland and Hungary, of seeking dialogue with Warsaw and Budapest. In the end, a Sisyphean task that made him a hate figure among the right-wing nationalist governments in Warsaw and Budapest.
During the election campaign, he campaigned for a social Europe, for a European minimum wage, for European unemployment insurance. He likes to remind people of his two grandfathers, who were both miners. “We must leave no one behind,” he says, even as Commissioner for the Green Deal. He has brought in former Greenpeace activist and former Social Democratic Party leader Diederik Samsom from The Hague to head his cabinet. Conservative members of the EU Parliament initially scolded the “mortician of European industry” and lobbied Ursula von der Leyen to curb the Dutchman’s momentum for the climate.
But in the meantime, the criticism has died down. The workaholic knows his way around the thicket of Green Deal bills. Timmermans is considered a rhetorical super talent. He can represent the EU with dignity at international climate conferences but also explain the Green Deal convincingly to citizens. Timmermans speaks seven languages fluently and also likes to switch from one idiom to another in the press room of the EU Commission. Timmermans is married and has four children from two marriages. Stephan Israel
In NATO’s new strategic concept, which was adopted in Madrid yesterday, China appears as a “challenge” for the first time. Although NATO had already classified the People’s Republic as a “systemic challenge” previously, this is now also stated in the paper that will determine the course of the next ten years. Stephan Israel analyzed what this means.
The de facto end for the internal combustion engine became a quasi-end for e-fuels and hybrids during the negotiations on the Fit for 55 package on Wednesday night. It is true that from 2035, no more cars that emit C02 may be registered. However, the interpretations of what this means in detail are surprisingly different. Lukas Scheid looked into the interpretations and reactions.
Either way, the end of the internal combustion engine means high demand for batteries for electric cars in the future. Many in the industry now foresee a shortage of lithium, and by 2024 or 2025, a shortage of batteries as well. Read more about this in the News .
Of course, Frans Timmermans, Vice-President of the EU Commission and master of the Green Deal, was also involved in the negotiations on the Fit for 55 package. In today’s Profile, Stephan Israel‘s takes a closer look at the “climate czar”, who is always overshadowed by events.
I wish you an exciting read.
The view of Russia is unsurprisingly without illusions against the backdrop of the attack on Ukraine: The Russian Federation is the “greatest and most immediate threat to the security of allies and to peace and stability in the Euro-Atlantic area,” according to the new strategic concept adopted by NATO at its summit in Madrid.
The passage on China, which is mentioned in a NATO strategic concept for the first time ever, caused more discussion in the run-up. The US, supported by Great Britain, demanded plain terms to circumscribe the Chinese leadership’s aggressive striving for power. Germany and France also pushed for a more nuanced characterization in view of economic interests in the world’s second-largest economy. China could not be described as an adversary on a par with Russia, they said.
However, the mere fact that two sections are now devoted to China is a watershed in the history of the transatlantic alliance. Top diplomats were still negotiating the crucial passages shortly before Madrid. The People’s Republic of China’s stated goals and its policy of coercion posed “challenges” to the interests, security and values of NATO allies, the strategic concept now says. China was using a wide range of political, economic, and military tools to expand its global footprint and power projection.
It goes on to describe in clear terms how China is targeting allies with “malicious hybrid and cyber operations”, “confrontational rhetoric and disinformation”, and harming alliance security. China also seeks to control key technology and industrial sectors, critical infrastructure, and strategic materials and supply chains. China is using its economic clout to create strategic dependencies and increase its influence.
China was also seeking to undermine the international order, including in space, on the Internet, and at sea. The leadership in Beijing also used its “increasingly close strategic partnership” with the Russian Federation as leverage. The interplay between Beijing and Moscow is an issue of concern to the US, also in light of the Russian war in Ukraine. At the same time, NATO says it is open “to constructive discussions with the People’s Republic of China aimed at safeguarding the alliance’s security interests, including talks to build mutual transparency”.
However, there is no intention to be naive about it: The alliance will expand its joint situational awareness, increase resilience and operational readiness, and guard against “the tactics of coercion by the People’s Republic of China and its attempts to divide the alliance”. NATO will stand up for its shared values and the rules-based international order, “including freedom of navigation”.
NATO updates its strategic concept every ten years. At the last meeting in Lisbon in 2010, China was not yet an issue, Russia was valued as a “strategic partner” and the then Russian President Dmitry Medvedev was a welcome guest. This was despite the fact that Russian forces had invaded Georgia two years earlier and had not withdrawn from Moldova or Transnistria, contrary to the agreements. After the Russian annexation of Crimea in 2014, at the latest, the alliance’s old strategic guideline was completely obsolete.
The new concept could be similar. It is quite possible that Russia will have served its time as an opponent in ten years and that the real threat will come from China. The clear sections on the new challenger are at least an indication in this direction . The fact that the heads of state and government of Australia, New Zealand, Japan and South Korea were present for the first time on the first day of the summit is also an indication. “We are facing an era of strategic competition,” said NATO Secretary General Jens Stoltenberg following the meeting with partner countries.
NATO will remain a transatlantic alliance, the Norwegian stressed. But it shares the same values with its partners and has to deal with the same threats. When the security of partners is called into question, this also affects NATO and the security interests of its members. China terrorizes its neighbors and threatens Taiwan. The leadership in Beijing is substantially expanding its armed forces and spreading Russian propaganda. China is not an adversary, Stoltenberg stressed, but allies and partners should not be blind to the challenge. NATO would expand cooperation with friendly states in the Indo-Pacific region.
The EU’s “no” to phasing out internal combustion engines was the right thing to do, FDP leader and German Finance Minister Christian Lindner tweeted on Wednesday morning. CO2-free fuels in passenger cars remain possible even after the agreement of the EU environment ministers, in his view. Many see it differently. They see the agreement at the Environment Council as a clear vote against the internal combustion engine. Among them are Steffi Lemke (Greens), the environment minister responsible for the legislative proposal, and Green Deal Commissioner Frans Timmermans.
Both made it clear that from 2035 onwards, only new cars that do not emit CO2 are to be registered. And according to the EU’s current definition, neither e-fuels nor plug-in hybrids are free of CO2 emissions. The German Association of the Automotive Industry (VDA) therefore sees the Council’s position as a “de facto ban on internal combustion engines” from 2035. “With this decision, the environment ministers have taken a decision against an industrial policy that is open to technology,” commented VDA President Hildegard Müller.
Politics has the task – especially when it comes to setting such ambitious targets – of creating the framework conditions to ensure that these plans can be achieved, Müller added. “With a policy that only demands from others and does not deliver itself, the climate targets cannot be achieved.” The VDA is therefore calling for a “reliable charging and H2 refueling infrastructure throughout Europe“.
The Federation of German Industries (BDI) also sees no opportunities for the use of e-fuels “because only electric drives may continue to be counted in fleet regulation”. This lacks a decisive incentive for the market ramp-up of e-fuels, says BDI President Siegfried Russwurm. “No one can predict with absolute certainty today what will be technologically possible and the best solution in 2035.”
Only the German Mechanical Engineering Industry Association (VDMA) interprets the outcome of the Environmental Council as an averted ban on internal combustion engines. Nevertheless, there are “major uncertainties with regard to future drive technologies for passenger cars and light commercial vehicles,” says Hartmut Rauen, Deputy Managing Director of the VDMA. The EU has not been able to come to a clear decision on the form in which e-fuels will be used in road traffic in the future.
Interestingly, the environmental associations are disappointed by the Council’s agreement for the opposite reasons. A back door remains open for internal combustion vehicles, commented Kerstin Haarmann, the federal chairwoman of the Traffic Club Germany (VCD). She said that the FDP’s refusal to agree to a ban on new combustion engine cars from 2035 was responsible for this. As a result, Germany has lost its credibility as a climate protection pioneer in Europe.
It is annoying that the EU must continue to “deal with the bogus solution of inefficient and expensive e-fuels, which have no place in the passenger car market,” said Greenpeace managing director Martin Kaiser. What is clear, however – and Frans Timmermans made this clear as late as Wednesday night – is that the right of initiative to consider e-fuels lies with the Commission. He said it is not obliged to bring forward a legislative proposal to include e-fuels or hybrids in the fleet limits. If manufacturers show that their technologies are carbon-neutral under EU regulations, the Commission would be open to it but also makes clear that so far they can’t.
The criticism of some environmental associations is also directed against the further compromises of the Environment Council. A “heavily watered-down” EU climate package, says Germanwatch, including the agreement on the Social Climate Fund. Germany’s prolonged blockade has almost jeopardized the entire package here, criticizes political director Christoph Bals. The compromise that has now been reached is inadequate and urgently needs to be improved. Germany had tried to reduce the size of the Social Climate Fund. “At least the German government was not able to prevail with its shameful proposal,” said Bals.
Bals sees the fact that industry is to receive free CO2 certificates as protection against carbon leakage until the end of 2035 as showing too much consideration for industry rather than for achieving climate targets. “The already inadequate proposal of the Commission and the French Council Presidency was watered down even further under pressure from the German government.” For trilogue negotiations with the Parliament, he demands that Berlin henceforth act as a “climate policy draught horse and not a brake”.
The new government in Berlin “actively undermined negotiations on crucial issues such as the emissions trading system and the climate fund during the preparation of the Council,” said Viviane Raddatz, head of climate protection and energy policy at WWF Germany. “In this context, the question is how Germany intends to achieve its national climate targets and what concept of European solidarity it represents.”
Monday’s negotiation results in the Energy Council were also not without criticism. “Unfortunately, the target of 40 percent renewables by 2030 in the EU is far too weak,” tweeted Simone Peter, president of the German Renewable Energy Federation (BEE). “Science & associations have been calling for higher targets for a long time. Given cost & supply crisis of fossil fuels plus climate crisis, far more ambition would be needed.” The Council had postponed negotiations on a target increase to 45 percent renewables until the trilogue with the Parliament.
On the other hand, the adoption of proposals for faster planning and permitting procedures met with a positive response. “Europe now wants 510 gigawatts of wind energy by 2030, up from 190 GW today. Europe will only achieve this if it speeds up permitting procedures. It is very good that EU energy ministers have now agreed to do just that,” said Giles Dickson, CEO of WindEurope.
For the renewable associations, however, it is the concrete implementation that matters. “All new wind farms should be approved in a maximum of two years. Governments should ensure that this deadline covers all approvals, including environmental impact assessments and grid permits,” Dickson added.
Hydrogen Europe, on the other hand, was less than enthusiastic about the target for sustainable e-fuels in industry, which was watered down from the Commission’s proposal last July (50 percent) and which the Commission wanted to increase further with REPowerEU (75 percent).
“Unfortunately, the Council’s position falls short of the ambitious targets set in the RePowerEU Communication and dilutes the targets for renewable fuels of non-biological origin (RFNBOs) in transport and industry. The shift from mandatory to indicative targets in these sectors harms the business model and affects certainty for investors,” said CEO Jorgo Chatzimarkakis.
“We call on the European Parliament and the European Commission to advocate for the mandatory sub-targets for RFNBOs in transport and industry proposed under the RED II revision.” With Manuel Berkel
Following the decision to phase out internal combustion engines, representatives of the major car companies see the procurement of batteries for EVs in jeopardy. The shortage of raw materials required for battery production, such as lithium, could restrict the planned switch to e-cars. Current calculations by the German Mineral Resources Agency (DERA) confirm this.
Arno Antlitz, VW Group’s chief financial officer, told Reuters news agency this week, “The biggest challenge is not ramping up car factories. The biggest challenge will be expanding the battery supply chain.” VW said it will stop selling internal combustion engine cars in Europe by 2035, but some automakers such as Toyota, which is further behind in the race to develop electric cars, could struggle to meet the target. The Japanese automaker declined to comment on Wednesday.
The major car manufacturers are trying to secure the supply of battery cells. However, the lack of raw materials for the batteries is a much bigger problem. Insufficient supplies of lithium, nickel, manganese, or cobalt could slow the transition to EVs, make these vehicles more expensive and threaten automakers’ profit margins. According to Carlos Tavares, CEO of automotive group Stellantis, manufacturers will not be able to procure enough batteries as early as 2024 to 2025.
In a study last month, the environmental umbrella organization Transport and Environment (T&E) had concluded that there would be no raw material shortages for lithium and nickel even if demand for electric cars increased (Europe.Table reported). Recent calculations by DERA now forecast a significant shortage of lithium by 2030. The analysis, which DERA presented last week, compares production capacity and demand for lithium in three different scenarios. The result: In the best case, there will be a shortage of just under 90,000 metric tons of the raw material in eight years – in the worst scenario, 300,000 metric tons. The reason for the shortage is said to be insufficient investment in production and the simultaneous sharp rise in demand for lithium. Around 90 percent of the total demand for lithium comes from the automotive industry, which needs lithium-ion batteries for the production of EVs. leo/rtr
If ships were powered exclusively by environmentally friendly e-fuels, the price of a pair of sneakers from China would increase by less than ten cents. This is the result of a new study by the European environmental organization Transport&Environment (T&E) on the costs of decarbonizing shipping. The voyage of an average container ship from Shenzhen in China to Belgium was analyzed for this purpose. The study concludes that the likely impact on maritime transport costs would be negligible.
The NGO claims that the study was conducted to counter claims by the shipping industry that the greening of the industry would lead to high prices for consumers. The small cost increase reflects economies of scale through global supply chains that are not overly sensitive to fuel costs, the NGO said. In the worst-case scenario, freight companies would see a one to 1.7 percent increase in transportation costs if they exclusively used e-fuels. The study examined different products: The price increase of a pair of sneakers amounts to €0.8 while that of a refrigerator is €8.
The EU currently has two proposals in the works that would permanently change the shipping industry: The first is an extension of emissions trading to shipping. The European Parliament already endorsed this move last week. The second proposal involves a law on maritime fuels. This would make the use of eco-friendly e-fuels mandatory on a small scale by 2030. ari
Europe should reduce its dependencies on key technologies for decarbonization and digitalization, according to the EU Commission. “In today’s world, everything can be used as a weapon, data, food, energy,” Vice President Maroš Šefčovič said yesterday. “Therefore, we need to look at our policies and make sure we are prepared for all eventualities.” Diversification of supply sources is necessary for the EU’s strategic autonomy, he cautioned.
In its new Strategic Foresight Report, the Commission recommends leveraging linkages between megatrends. For example, satellite data, sensors, and blockchain technology could help predict energy supply and demand more accurately, thereby improving security of supply. To realize the potential, Europe should work closely with like-minded partners on such issues.
The Commission’s internal Observatory of Critical Technologies is to contribute through its analyses to avoiding strategic dependencies in technologies, according to the report. EU agricultural policy should be thought of even more strongly from the point of view of food security.
To secure supplies of key raw materials, the EU should be enabled to monitor global commodity markets and supply chains more closely. If appropriate, new instruments for stockpiling and joint procurement are also options to be better prepared for supply disruptions.
Partnerships with countries such as Canada and Norway are also important, as the EU can rely on them even in times of crisis, said Commission Vice President Margrethe Vestager at an event organized by the think tank Bruegel. In addition, massive investments are being made in the extraction of the EU’s own reserves in northern Sweden, for example. She appealed to the user industries to accept somewhat higher costs for better protection of nature and inhabitants: “The price point could be somewhat different.” tho
Millions of people are at risk of famine due to sharp increases in grain prices caused by the war in Ukraine, according to the UN. If Ukrainian grain exports come to a complete halt, global prices would rise by 19 percent compared to pre-war levels, the Organization for Economic Cooperation and Development (OECD) and the Food and Agriculture Organization of the United Nations (FAO) predicted. If Russian exports shrank by half, there could be a 34 percent increase in prices compared to 2021.
Such a development could push an additional 8 to 19 million people into famine, the organizations said. “With food supplies already under pressure, the consequences would be devastating, especially for the most vulnerable,” warned OECD Secretary-General Mathias Cormann.
Some 20 million tons of grain must be removed from storage in Ukraine by the end of next month to make room for this year’s harvest, according to the European Union (EU). Only then can food shortages in Africa be avoided, the EU warned a month ago.
Since the Russian attack on Ukraine, Ukraine has been able to export only one-fifth of the usual amount of grain, according to the FAO and OECD. The reason is the blockade of Ukraine’s Black Sea ports, off which the Russian navy patrols. Russia and Ukraine together supply one-third of the world’s grain exports. rtr
The Swiss government on Wednesday presented plans against a possible gas shortage. If savings appeals and switching plants to oil were not enough, natural gas consumption would be rationed, it said. Households and social services would be exempt from the restrictions in a first phase.
Switzerland has no gas storage facilities of its own and is completely dependent on imports, mainly from Russia and Germany. Gas shortages in Germany would therefore also affect Switzerland. An agreement between Switzerland and France ensures that Swiss customers are supplied with gas even in the event of shortages. A similar agreement is currently being negotiated with Germany.
Hungary has also taken emergency measures to secure energy supplies. The government led by Prime Minister Viktor Orbán passed a resolution under which the government can take over the supervision of important energy companies and the operator of the gas pipeline network FGSZ in an emergency to ensure continuous supply.
The decree fits in with the interventionist policies of the Orbán government. For example, the government has already capped fuel prices and household energy costs.
Oil and gas company MOL, which controls the FGSZ, would not comment on the government strategy aimed at war-related contingencies when asked by Reuters news agency. “Such measures are not unusual in EU countries,” it said.
Hungary is 85 percent dependent on Russian gas imports and 65 percent on crude oil imports from Russia, and also imports a smaller portion of the electricity it needs, making its risk high in the event of an energy crisis in Europe, analysts say. rtr
The EU Commission is not yet releasing its previously withheld COVID aid for Hungary and Poland. It says the conditions have not been met in either case. Hungary is waiting for the release of €15.5 billion, Poland for €35 billion.
The Hungarian government had written to the EU urging the transfer of the funds. A spokeswoman for the EU Commission said Wednesday that the letter had been received and was being examined. A colleague said there were “no updates” compared to the Commission’s latest statement on the matter on June 3.
There has been progress on some issues in recent months. “However, there are a number of issues that remain open, including the fight against corruption and education measures.” Talks would continue.
An adviser to Orbán said last week that his government would welcome detailed recommendations from the EU Commission on exactly which laws would have to be changed to receive the money. Orbán himself said they were open to a compromise.
In the case of Poland, the EU Commission considers recent changes to the Polish judicial system to be insufficient to dispel doubts about compliance with rule-of-law standards. In proceedings before the European Court of Justice, the Brussels-based authority made it clear that, in its view, disputed provisions had not been repealed after an initial analysis.
In particular, the exclusive jurisdiction of the Supreme Court’s “Chamber of Extraordinary Review and Public Affairs” over issues of judicial independence was not abrogated.
It was also noted that the new law does not immediately reinstate suspended judges , but only provides for a review procedure. According to the EU Commission’s ideas, such cases should actually be reviewed by an independent court within the period provided by law. rtr/dpa
The dispute between Russia and Lithuania over the ban on the transit of certain goods to the Russian exclave of Kaliningrad could end in a few days, according to insiders. Representatives of the European Union, with the support of Germany, are currently negotiating with Lithuania on the suspension of the transit ban, two people familiar with the matter said.
Despite reservations from the Lithuanian government, insiders expressed confidence that a compromise would be reached by July 10 at the latest. The former Soviet republic is one of Russia’s harshest critics in the EU. “Sanctions must be enforced. No decision should undermine the credibility and effectiveness of the EU sanctions policy,” a Lithuanian Foreign Ministry spokeswoman said.
According to one of the insiders, however, proponents of a compromise fear a military escalation on EU soil. The government in Moscow could use force to create a land corridor. Kaliningrad is “sacred” to Russia, they said.
German soldiers are also stationed in the NATO partner country Lithuania. A reduction in gas imports from Russia could also hit Germany hard. “We have to accept reality,” said one of the insiders. Russian President Vladimir Putin “has much more leverage than we do. It is in our interest to find a compromise.”
Two main scenarios are possible, he said: Either cargo traffic between Russia and Kaliningrad will be exempt from EU sanctions, or humanitarian reasons could create an exemption for the area, which lies between Lithuania, Poland, and the Baltic Sea.
Lithuania has banned the transit of goods such as construction materials, metals, and coal to the exclave since June 17, citing EU sanctions over Russia’s invasion of Ukraine. The ban also affects the only train route between Russia and Kaliningrad. There is no direct land connection between the former East Prussian Königsberg and Russia. Air and sea routes are not affected by the sanctions. rtr
Commission Vice President Margrethe Vestager has announced an implementation strategy for the EU’s digital agenda. She said at an event organized by the think tank Bruegel that numerous regulatory projects have been launched and will soon come into force, such as the Digital Services Act, the Digital Markets Act, and the Data Governance Act. More are in the works, she said, with the AI Act and Data Act. Now it is crucial to implement and enforce them.
She asked her staff to record what it would take to do that. “The picture is quite complex,” Vestager said. Creating the structures within the Commission is still the easier part, she said. More complex is getting the different national authorities involved, as decided in each piece of legislation. An implementation strategy will facilitate that coordination.
A Commission spokesman said in response to a question that the Commission was looking at what kind of support its own services, as well as member states and national authorities, might need up front to help them organize implementation and enforcement activities.
The regulatory proposals provide for different and sometimes complex governance structures. According to the DSA, each member state is to appoint a supervisory authority (the Digital Services Coordinator), which is to take the lead in enforcement against providers based in the respective territory. For large providers, the Commission itself is responsible. The DMA, in turn, provides for coordination mechanisms between the Commission and the national antitrust authorities. tho
Actually, as the EU’s climate czar, Frans Timmermans would be the man of the hour. But now, he is once again somewhat overshadowed, not getting the unrestricted attention he deserves. Sometimes it’s the circumstances, like now with the Ukraine war, sometimes Ursula von der Leyen steals the show. Yet Frans Timmermans is the man who will get the Fit-for-55 climate package over the finish line: “Europe must send a clear signal to the world that we are ready to do whatever it takes to implement our climate policy,” the Dutchman said before the crucial night session.
On Wednesday morning, he is a good deal closer to achieving his goal. “This is a very good day for the European Green Deal and for the European Union,” Timmermans said. But there is little room for the climate commissioner’s success between the EU summit, G7, and NATO meetings. Timmermans will always remain number two. Or rather, the First Vice-President in the team of the head of the Commission, as the professional politician likes to emphasize, known as a man with a big ego and inexhaustible energy. In fact, he would have liked to replace Ursula von der Leyen at the helm of the Brussels office.
Timmermans was the European Socialists’ top candidate in the 2019 European elections. The Social Democrats only finished as the second-strongest force. When it became clear that the conservative winner Manfred Weber would not be able to muster a majority in the EU Parliament, Timmermans briefly thought he had a good chance.
But the heads of state and government bypassed the top candidates altogether and conjured Ursula von der Leyen out of a hat, on the recommendation of French President Emmanuel Macron. The disappointment was great, especially for the candidate “for a social Europe”, but not only that. The Dutchman needed some time to regain his footing and accept the role as number 2 behind Ursula von der Leyen. The corpulent politician from the Parti van de Arbeid (PvdA) was hardly seen for a long time, and when he reappeared, he had grown a beard.
After all, as First Vice-President and Commissioner for Climate Protection, Ursula von der Leyen entrusted him with her most important project, the Green Deal . If it hadn’t been for COVID and the Ukraine war, Timmermans would have attracted considerably more attention. Timmermans was born in Maastricht on May 6, 1961. His father, married to a German, worked in the diplomatic service. Timmermans studied French literature and European law in the Netherlands and in Nancy, France. He later served in The Hague as State Secretary for European Affairs and then Foreign Minister of the Netherlands, among other positions.
He was in office when separatists in eastern Ukraine shot down a Malaysia Airlines airliner with a Russian forces Buk anti-aircraft missile in 2014, killing 298 people, many of them Dutch. Timmermans led the charge at the UN at the time and found the right words, earning him the nickname “Super Frans”. He had made the world cry, the press at home found. Shortly thereafter, he moved to Brussels for his first term and, under Jean-Claude Juncker, had the thankless task of stopping the erosion of the rule of law in Poland and Hungary, of seeking dialogue with Warsaw and Budapest. In the end, a Sisyphean task that made him a hate figure among the right-wing nationalist governments in Warsaw and Budapest.
During the election campaign, he campaigned for a social Europe, for a European minimum wage, for European unemployment insurance. He likes to remind people of his two grandfathers, who were both miners. “We must leave no one behind,” he says, even as Commissioner for the Green Deal. He has brought in former Greenpeace activist and former Social Democratic Party leader Diederik Samsom from The Hague to head his cabinet. Conservative members of the EU Parliament initially scolded the “mortician of European industry” and lobbied Ursula von der Leyen to curb the Dutchman’s momentum for the climate.
But in the meantime, the criticism has died down. The workaholic knows his way around the thicket of Green Deal bills. Timmermans is considered a rhetorical super talent. He can represent the EU with dignity at international climate conferences but also explain the Green Deal convincingly to citizens. Timmermans speaks seven languages fluently and also likes to switch from one idiom to another in the press room of the EU Commission. Timmermans is married and has four children from two marriages. Stephan Israel