In Berlin, the coalition leaders are on the last stretch – and as is well known, this is the most painful part of every summit. And today, they could be presenting themselves: the traffic light coalition. Or maybe tomorrow, or the day after. In terms of resulting European policy, digital policy, and environmental policy, there is not enough information available yet to fill you in on in today’s issue.
What we do know: If the SPD party conference, Green members, and the FDP agree to the result, Olaf Scholz will, in all likelihood, be elected chancellor in the Bundestag on December 7th – the chancellor election traditionally takes place on a Tuesday and the week of Saint Nicholas Day is set.
Meanwhile, in Strasbourg, European policy continues to be driven practically: Europe must become more independent in the procurement of raw materials. At the same time, the sources should become cleaner, child labor and other forms of exploitation should be reduced as far as possible. The majority of European parliamentarians could probably sign up to both – but there are still differences of opinion as to how. And that has a lot to do with nature conservation in Europe, as per my colleague Timo Landenberger’s analyzes.
Tihange and Doel, these two names stand for potential nuclear power plants in western Germany. The safety of the two Belgian nuclear power plants is repeatedly called into question. Actually, it was decided long ago that they would be shut down by 2025 at the latest. But part of the government coalition wants to keep two reactor units running – for environmental reasons. Charlotte Wirth takes a closer look at the Belgian debate. Meanwhile, in Portugal, the last coal-fired power plant has been shut down.
During the Strasbourg week of the European Parliament, digital topics are, of course, on the agenda again: The Digital Services Act is now slightly behind schedule. There is another meeting of the rapporteurs and shadow rapporteurs. After weeks of disagreement, there now seems to be some movement: New proposals should make it easier to reach a compromise – on online marketplaces, personalized advertising, and recommendation systems, reports Jasmin Kohl.
The Digital Markets Act, on the other hand, is making faster progress. The compromise amendments were voted yesterday in the lead committee, the Internal Market Committee, and the trilogue with the Council and the Commission is set to begin in the beginning of the year after the vote in Parliament in December.
And for those who want to get some quick world feeling in these days when Austria and parts of Germany are again very close to or in lockdown: Today, the registration period for the first of three stakeholder events of the Commission on the TTC ends.
To move away from nuclear energy or not? This is the question the Belgian government currently has to answer. Nuclear power accounted for around 38 percent of Belgium’s energy production in 2020. But the phase-out of nuclear power has been enshrined in law since 2003. In the coalition agreement, the seven governing parties agreed about a year ago to phase out nuclear power in 2025 “if the country’s energy security is guaranteed“.
Whether it is, however, is a matter of dispute between the parties. While the Green energy minister Tinne Van Der Straeten has so far spoken out in favor of a complete phase-out, the Walloon Liberals (MR) are against it and want to keep the Doel 4 and Tihange 3 reactors on the grid.
“If Belgium wants to quickly limit CO2 emissions, there is only one solution: nuclear power,” says the president of the MR, Georges-Louis Bouchez. It would be impossible to phase out nuclear power in 2025, he recently told the newspaper Le Soir: Bouchez prefers instead a “renouveau nucléaire” along the lines of France.
But he lacks support for this within the government. With this position, the Liberals are moving much closer to the right-wing N-VA party, which sits on the opposition bench at the national level but co-governs in Flanders. For its part, the nuclear power plant operator Engie is only willing to continue investing in the two reactors at Tihange and Doel if it has sufficient guarantees that they will remain on the grid beyond 2025.
The first step towards the nuclear phase-out has long been taken: At the end of August, the European Commission approved the Belgian “mécanisme de rénumération de la capacité” (CRM). This involves indirect state aid for energy projects to compensate for the phase-out of nuclear power and guarantee the stability of the grid. At the beginning of November, the grid operator Elia announced the first contracts for the supply of electricity for 2025-26.
The body awarded a total of 40 contracts, most of which run for several years. Gas-fired power plants, battery technologies, and energy demand management projects were taken into account. “Le Soir” calculated that the aid amounts to €140 million in the first year. Together, the selected projects have a production capacity of about 4.5GW. According to Elia, this would compensate for the loss of nuclear power.
Two of the projects are particularly important for securing Belgium’s electricity supply. They involve the construction of two gas-fired power plants, one in Awirs in Wallonia and the other in Vilvoorde in Flanders. Together, the two projects account for 36 percent of the country’s 4.5 GW of generation capacity and are also operated by Engie, the country’s largest energy producer. Together, the two gas-fired power plants are expected to produce about 1.6 GW.
But shortly after the contract was awarded, the plan was already in doubt: Flemish Environment Minister Zuhal Demir (N-VA) refused to grant Engie permission for the project in Vilvoorde. She criticizes the high nitrogen emissions of the planned gas-fired power plant. A decision in the interest of the environment?
Her political opponents doubt that: They see her decision more as a plea for nuclear power and political calculation. In any case, Demir is not known for environmentally friendly policies. As recently as the beginning of November, she criticized the EU Commission’s climate requirements and argued that they should be adjusted downwards for Belgium.
At the same time, the current debate says a lot about the attitude of the Greens, of which both the Flemish and Walloon parties are in government. Despite the CO2 emissions of gas-fired power plants, the Greens prefer the switch to gas as a transitional solution to nuclear power. If necessary, they would even accept two gas-fired power plants on Walloon territory, said Jean-Marc Nollet, co-president of the Walloon party Ecolo.
At the end of November, Energy Minister Van Der Straeten is to present her report on how Belgium’s energy supply can be secured without nuclear power and how the energy transition will affect electricity prices. The basis for this is above all the contract awarded by Elia, according to which the loss of energy from the nuclear power plants could actually be compensated. But also the recent report of the High Health Council should be taken into account.
In October, the Council published an expert opinion according to which nuclear energy could not be considered “sustainable”: “The risk of serious nuclear accidents cannot be ruled out, even with the best power plants,” the Council ruled. Belgium is also particularly at risk because the nuclear power plants are located close to cities and international transport routes.
After the Internal Market Committee (IMCO) will vote on the compromise on the Digital Markets Act this morning, the negotiators of the political groups in the European Parliament seem to be slowly hitting the home stretch on the Digital Services Act. IMCO rapporteur Christel Schaldemose (S&D) has prepared new compromise drafts on three central points of contention, which are available to Europe.Table. The Dane wants to discuss these with the shadow rapporteurs of the co-negotiating committees at a round of negotiations this afternoon. “Things are moving,” Schaldemose tweeted yesterday while asking observers to be patient.
On personalized advertising (Article 24), one of the biggest sticking points in the European Parliament (Europe.Table reported), Schaldemose largely follows the compromise reached by the negotiators of the “Digital Markets Act”. Instead of completely banning the controversial advertising practice, personalized advertising should only be completely banned for minors. Their personal data should “not be processed for commercial purposes related to direct marketing, profiling, and advertising based on analysis of surfing behavior“.
Personal data of users should also not be automatically processed by online platforms for the purpose of personalized advertising. With reference to the General Data Protection Regulation, the platforms should also provide their users with “meaningful information”, including information on how their data is used to generate profits. Users should be able to give informed consent, which should not make it more difficult or time-consuming to refuse the processing of their personal data.
Schaldemose has also given in on the use of recommendation systems on online platforms, which personalize the content displayed to users according to their individual preferences: Recommendation systems should not, as she originally demanded, only be used with an opt-in from the user. However, very large online platforms should offer users at least one alternative recommendation system that is not based on profiling. The user interface should also be designed in such a way that users can adapt the recommendation systems to their preferences at any time.
In order to make recommender systems more transparent, information on the main parameters of the algorithm-based systems should be listed in the general terms and conditions of the online platforms. In addition, users should be able to access this information directly via the user interfaces of the platforms. According to the compromise, the required information includes “at least”: the criteria on the basis of which the recommendations are made; the “relative importance” of the main parameters; the objectives for which the recommendation system has been optimized; and an explanation of the role of user behavior in producing the results of the recommendation systems.
Schaldemose’s proposal to make online marketplaces liable for the infringement of third-country sellers (Article 22), regardless of their size, had met with strong opposition. Her compromise proposal now provides that: Small and micro enterprises to be given the opportunity to apply to the Commission for a derogation from Article 22. The Commission is then to examine the application and consult the European Committee of Digital Services Coordinators. The decision will then be taken in the form of a delegated act. Users will also be able to claim compensation from online platforms if they have suffered “damage or loss resulting from a breach by providers of their obligations under the DSA”.
Two other points are still open: The Legal Affairs and Culture Committee of the European Parliament had proposed a media exception: Platforms would then not be allowed to delete or block content that is editorially responsible by the press or radio, television, audio, or video services according to Article 1 (1) sentence 1 of the Audiovisual Media Services Directive and is subject to member state law there. This proposal is also of some explosive force because media regulation is largely a matter for the member states – in Germany, it is a matter for the Länder. Without such an exception, the DSA could exceed EU competencies here if media content on platforms were also subject to the moderation regime.
The Group of the Greens/European Free Alliance has also tabled another proposal that could now be put forward: Platforms with predominantly user-generated pornographic content should be subject to special due diligence requirements. Users who distribute content on these platforms would have to go through a two-factor authentication process and provide both a verified email address and a verified mobile number. In addition, the providers are to comply with special procedures to initiate a review process in the event of complaints from those affected by illegal dissemination and to make a decision after 48 hours at the latest.
Asked by Europe.Table, rapporteur Schaldemose expressed confidence that her new proposals would take the negotiations into the home stretch: “I am hopeful that we will find an agreement on the most important issues in today’s meeting“. Should this succeed, the final vote in the Internal Market Committee could take place as planned on December 9th. The plenary could then adopt the position for the trialogue with the Council in January.
Other voices in the EP also expect a clear convergence of the negotiators in today’s session. The finer details will be worked out in three technical rounds of negotiations until November 30th, they say. With Falk Steiner
Raw materials are at the beginning of every value chain and are of crucial importance for Europe as an industrial location. Europe is not a resource-poor region. Nevertheless, the list of so-called critical raw materials, i.e., all those whose supply risk is particularly high according to the EU Commission, grows from year to year. While the Brussels authority listed 14 minerals in 2011, the number has now risen to 30, and the trend is rising, which is why there are already warnings of growing dependencies.
The main reason for the heightened alert, besides digitalization, is the implementation of the Green Deal measures. The green transformation of the economy is leading to a significant increase in demand for resources, most of which come from third countries. For electric vehicle batteries and energy storage alone, Europe will need up to 18 times more lithium by 2030 and up to 60 times more by 2050, according to the Commission, which is why the metal has been added to the list of critical raw materials for the first time.
Rare-earth metals, which play an important role as a component of permanent magnets, are also regularly represented on the list. The magnets are used in laptops and smartphones, but also in wind turbines or in the motors of EVs. The latter thus manage with less battery power than with ordinary magnets – the range increases. However, the dependence on imports of rare-earth metals is particularly high. The EU obtains 98 percent of its requirements from China. Commission Vice-President Maroš Šefčovič warns: “We cannot afford to trade our current dependence on fossil fuels for a dependence on critical raw materials.”
As part of its industrial strategy, the Commission has therefore already presented an action plan for critical raw materials and launched the European Raw Materials Alliance (ERMA). The aim is to strengthen the circular economy for critical raw materials, diversify procurement from third countries and build European supply chains.
Today, the European Parliament will also vote on its position on the Commission’s raw materials strategy. The pressure to act quickly is great, says rapporteur Hildegard Bentele (CDU). The MEP welcomes the Commission’s move to focus more on the extraction of Europe’s own raw material deposits. The authority is focusing on coal-mining regions, with particular attention to the expertise and skills available there that are relevant to the mining, extraction, and processing of raw materials.
“But the deposits are where they are. That’s why mining should also be possible in nature conservation areas, in compliance with EU environmental and social standards,” Bentele demands. In Europe, there are relevant lithium deposits, for example, on the Upper Rhine, and in the Ore Mountains. This point is controversial in the EU Parliament.
“Extraction of raw materials in nature reserves takes EU environmental protection under the Green Deal ad absurdum,” said Green Party industrial policy spokeswoman Henrike Hahn in Monday night’s plenary debate. “The required quantities of critical raw materials for the green transformation in Europe are often exaggerated and start from wrong basic assumptions.”
Sarah Hillmann, specialist for raw materials at the Federation of German Industries (BDI), on the other hand, is convinced: “The energy transition, electromobility, and other climate protection measures will significantly increase industry’s demand for critical raw materials. Securing the supply in the future is of central importance for the economy and strengthening domestic raw materials production is the right thing to do.
However, this alone cannot cover the rising demand, which is why the BDI is pursuing a three-pillar model for securing raw materials. In addition to strengthening the circular economy, this also includes calling on companies to think more perspectively and to increasingly store raw materials in order to counteract any supply bottlenecks. This should be promoted through tax incentives, according to Hillmann.
“We need to rethink our priorities, away from primary raw material extraction towards a stronger circular economy,” demands Johanna Sydow from the environmental organization Germanwatch, adding: “No mining in protected areas”. After all, this is always associated with irreversible ecological damage. Instead, the focus should be on expanding the use cycles and improving recycling. A smartphone contains about 30 raw materials. However, only two to three of these are reclaimable.
In fact, strengthening the circular economy is part of the EU’s raw materials strategy. “The Commission is also considering whether the circular economy legislation should include provisions on secondary raw materials,” a Commission spokeswoman informs.
Hildegard Bentele points out: “However, these effects will only occur in the long term. A secondary raw materials market will take at least another ten to 15 years and will require investments. For now, there will remain a strong additional demand, and we have to address that.”
“Blah, blah, blah.” That was how the young climate activist Greta Thunberg characterized this year’s climate summit in Glasgow (COP26) – even before it began. She was right, in a way. Talk is cheap whenever international agreements lack effective mechanisms to verify and enforce commitments. Gatherings like COP26 tend to lack credibility, even when they are presented as a “last chance” to prevent the end of the world as we know it. Nonetheless, such meetings help to raise awareness about the problem and potential solutions, and that is better than the denialism of past years.
True, the final agreement produced at COP26 appears weak, considering that the goal of keeping global warming below 1.5º Celsius is now barely alive. Instead of “unabated coal power” being phased out, now it will be “phased down,” a crucial change inserted at India’s insistence (and with China’s acquiescence). While “inefficient fossil-fuels subsidies” will still be “phased out,” the implication is that “efficient” fossil-fuel subsidies remain an option.
But, remember, talk is cheap. Given India’s high dependence on coal, it is perhaps better that it has set its net-zero emissions target for 2070 rather than proclaiming a “mid-century” commitment that is has no intention of upholding.
More broadly, there are two main obstacles to attaining the world’s stated climate goals. The first is geopolitical, exemplified by Russia’s use of natural gas as a strategic tool to divide Europe between those using nuclear power as an energy-transition technology (France) and those using gas (Germany). Even more important are major rivalries like the one between the United States and China. Here, there is some good news: COP26 seems to have induced the world’s two leading polluters to declare that they will work together to combat climate change. (We will know if this is more “blah, blah, blah” if and when bilateral military tensions increase.)
The second big obstacle is disagreement over how to compensate less-developed countries for forgoing or abandoning carbon-intensive technologies. The question is not only who foots the bill but also how financing should be delivered. The history of development aid is not particularly encouraging. And although it is well established that a global price for carbon is necessary to deal with the negative externality that greenhouse-gas emissions represent, implementing such a regime is difficult. Carbon markets remain mostly underdeveloped.
The deal adopted by almost 200 countries at COP26 will allow countries to meet their climate targets by buying offset credits representing emissions cuts made by others. This system will bring more clarity, but it is open to manipulation. Worse, it permits countries to carry forward carbon credits registered since 2013 and created under the Kyoto Protocol, potentially setting the stage for a flooding of the emissions market and an artificially low carbon price.
The COP26 agreement also encourages the public and private sectors to mobilize more climate finance, and to foster innovation in green technologies. To that end, one promising model is Operation Warp Speed, the US public-private partnership that made possible the extremely rapid development of COVID-19 vaccines.
The financial sector’s role in transferring resources from brown to green technologies will be crucial. Asset managers and financial intermediaries may act out of pure self-interest in divesting from dirty assets that they have come to see as too risky (owing either to the effects of climate change or to the transition that will render them obsolete). Alternatively, they may divest at the behest of others who have a green preference or a longer horizon over which to internalize climate problems. Universal owners such as large pension funds, for example, are increasingly aware of the systemic risks posed by climate change.
In any case, the financial sector is now coordinating to align itself more closely with the global climate agenda, as demonstrated by new initiatives such as the Glasgow Financial Alliance for Net Zero, chaired by former Bank of England Governor Mark Carney. It has become increasingly clear that the voluntary sustainable-finance mandates backed by financial intermediaries need to be significantly more stringent than they are today.
Green shareholder activism may force more disclosure of exposure to climate risk or even outright divestment; but mandatory disclosure under a clear framework will probably be needed to police greenwashing. The new International Sustainability Standards Board is a welcome development in this direction.
Finally, financial regulation and central bank policies also have key roles to play in promoting a green economy. Central banks, particularly after the 2007-09 financial crisis, have a mandate to ensure financial stability, and with climate change posing a systemic risk, they will have to incorporate it in their prudential frameworks. They also will need to foster a more transparent disclosure environment, so that climate risk is properly priced (although this is easier said than done). Many central banks already are engaging in climate stress tests and designing forward-looking transition scenarios.
More controversial are the questions of whether, and to what extent, central banks should favor green assets (or penalize brown ones) in their asset-purchase programs, and to what extent capital requirements should be attuned to sustainability criteria. Should brown loans have a capital surcharge over and above risk considerations (or should green loans carry a discount)? Such provisions would make no sense in a world where carbon is priced properly, but we are a long way from that scenario.
The international community’s climate goals remain highly ambitious, especially for a world characterized by great-power rivalries. It is rare for parties with disparate interests to work together as a team. Compromise is necessary, and “cheap talk” is the first step toward agreeing on a common course of action.
In collaboration with Project Syndicate.
In Berlin, the coalition leaders are on the last stretch – and as is well known, this is the most painful part of every summit. And today, they could be presenting themselves: the traffic light coalition. Or maybe tomorrow, or the day after. In terms of resulting European policy, digital policy, and environmental policy, there is not enough information available yet to fill you in on in today’s issue.
What we do know: If the SPD party conference, Green members, and the FDP agree to the result, Olaf Scholz will, in all likelihood, be elected chancellor in the Bundestag on December 7th – the chancellor election traditionally takes place on a Tuesday and the week of Saint Nicholas Day is set.
Meanwhile, in Strasbourg, European policy continues to be driven practically: Europe must become more independent in the procurement of raw materials. At the same time, the sources should become cleaner, child labor and other forms of exploitation should be reduced as far as possible. The majority of European parliamentarians could probably sign up to both – but there are still differences of opinion as to how. And that has a lot to do with nature conservation in Europe, as per my colleague Timo Landenberger’s analyzes.
Tihange and Doel, these two names stand for potential nuclear power plants in western Germany. The safety of the two Belgian nuclear power plants is repeatedly called into question. Actually, it was decided long ago that they would be shut down by 2025 at the latest. But part of the government coalition wants to keep two reactor units running – for environmental reasons. Charlotte Wirth takes a closer look at the Belgian debate. Meanwhile, in Portugal, the last coal-fired power plant has been shut down.
During the Strasbourg week of the European Parliament, digital topics are, of course, on the agenda again: The Digital Services Act is now slightly behind schedule. There is another meeting of the rapporteurs and shadow rapporteurs. After weeks of disagreement, there now seems to be some movement: New proposals should make it easier to reach a compromise – on online marketplaces, personalized advertising, and recommendation systems, reports Jasmin Kohl.
The Digital Markets Act, on the other hand, is making faster progress. The compromise amendments were voted yesterday in the lead committee, the Internal Market Committee, and the trilogue with the Council and the Commission is set to begin in the beginning of the year after the vote in Parliament in December.
And for those who want to get some quick world feeling in these days when Austria and parts of Germany are again very close to or in lockdown: Today, the registration period for the first of three stakeholder events of the Commission on the TTC ends.
To move away from nuclear energy or not? This is the question the Belgian government currently has to answer. Nuclear power accounted for around 38 percent of Belgium’s energy production in 2020. But the phase-out of nuclear power has been enshrined in law since 2003. In the coalition agreement, the seven governing parties agreed about a year ago to phase out nuclear power in 2025 “if the country’s energy security is guaranteed“.
Whether it is, however, is a matter of dispute between the parties. While the Green energy minister Tinne Van Der Straeten has so far spoken out in favor of a complete phase-out, the Walloon Liberals (MR) are against it and want to keep the Doel 4 and Tihange 3 reactors on the grid.
“If Belgium wants to quickly limit CO2 emissions, there is only one solution: nuclear power,” says the president of the MR, Georges-Louis Bouchez. It would be impossible to phase out nuclear power in 2025, he recently told the newspaper Le Soir: Bouchez prefers instead a “renouveau nucléaire” along the lines of France.
But he lacks support for this within the government. With this position, the Liberals are moving much closer to the right-wing N-VA party, which sits on the opposition bench at the national level but co-governs in Flanders. For its part, the nuclear power plant operator Engie is only willing to continue investing in the two reactors at Tihange and Doel if it has sufficient guarantees that they will remain on the grid beyond 2025.
The first step towards the nuclear phase-out has long been taken: At the end of August, the European Commission approved the Belgian “mécanisme de rénumération de la capacité” (CRM). This involves indirect state aid for energy projects to compensate for the phase-out of nuclear power and guarantee the stability of the grid. At the beginning of November, the grid operator Elia announced the first contracts for the supply of electricity for 2025-26.
The body awarded a total of 40 contracts, most of which run for several years. Gas-fired power plants, battery technologies, and energy demand management projects were taken into account. “Le Soir” calculated that the aid amounts to €140 million in the first year. Together, the selected projects have a production capacity of about 4.5GW. According to Elia, this would compensate for the loss of nuclear power.
Two of the projects are particularly important for securing Belgium’s electricity supply. They involve the construction of two gas-fired power plants, one in Awirs in Wallonia and the other in Vilvoorde in Flanders. Together, the two projects account for 36 percent of the country’s 4.5 GW of generation capacity and are also operated by Engie, the country’s largest energy producer. Together, the two gas-fired power plants are expected to produce about 1.6 GW.
But shortly after the contract was awarded, the plan was already in doubt: Flemish Environment Minister Zuhal Demir (N-VA) refused to grant Engie permission for the project in Vilvoorde. She criticizes the high nitrogen emissions of the planned gas-fired power plant. A decision in the interest of the environment?
Her political opponents doubt that: They see her decision more as a plea for nuclear power and political calculation. In any case, Demir is not known for environmentally friendly policies. As recently as the beginning of November, she criticized the EU Commission’s climate requirements and argued that they should be adjusted downwards for Belgium.
At the same time, the current debate says a lot about the attitude of the Greens, of which both the Flemish and Walloon parties are in government. Despite the CO2 emissions of gas-fired power plants, the Greens prefer the switch to gas as a transitional solution to nuclear power. If necessary, they would even accept two gas-fired power plants on Walloon territory, said Jean-Marc Nollet, co-president of the Walloon party Ecolo.
At the end of November, Energy Minister Van Der Straeten is to present her report on how Belgium’s energy supply can be secured without nuclear power and how the energy transition will affect electricity prices. The basis for this is above all the contract awarded by Elia, according to which the loss of energy from the nuclear power plants could actually be compensated. But also the recent report of the High Health Council should be taken into account.
In October, the Council published an expert opinion according to which nuclear energy could not be considered “sustainable”: “The risk of serious nuclear accidents cannot be ruled out, even with the best power plants,” the Council ruled. Belgium is also particularly at risk because the nuclear power plants are located close to cities and international transport routes.
After the Internal Market Committee (IMCO) will vote on the compromise on the Digital Markets Act this morning, the negotiators of the political groups in the European Parliament seem to be slowly hitting the home stretch on the Digital Services Act. IMCO rapporteur Christel Schaldemose (S&D) has prepared new compromise drafts on three central points of contention, which are available to Europe.Table. The Dane wants to discuss these with the shadow rapporteurs of the co-negotiating committees at a round of negotiations this afternoon. “Things are moving,” Schaldemose tweeted yesterday while asking observers to be patient.
On personalized advertising (Article 24), one of the biggest sticking points in the European Parliament (Europe.Table reported), Schaldemose largely follows the compromise reached by the negotiators of the “Digital Markets Act”. Instead of completely banning the controversial advertising practice, personalized advertising should only be completely banned for minors. Their personal data should “not be processed for commercial purposes related to direct marketing, profiling, and advertising based on analysis of surfing behavior“.
Personal data of users should also not be automatically processed by online platforms for the purpose of personalized advertising. With reference to the General Data Protection Regulation, the platforms should also provide their users with “meaningful information”, including information on how their data is used to generate profits. Users should be able to give informed consent, which should not make it more difficult or time-consuming to refuse the processing of their personal data.
Schaldemose has also given in on the use of recommendation systems on online platforms, which personalize the content displayed to users according to their individual preferences: Recommendation systems should not, as she originally demanded, only be used with an opt-in from the user. However, very large online platforms should offer users at least one alternative recommendation system that is not based on profiling. The user interface should also be designed in such a way that users can adapt the recommendation systems to their preferences at any time.
In order to make recommender systems more transparent, information on the main parameters of the algorithm-based systems should be listed in the general terms and conditions of the online platforms. In addition, users should be able to access this information directly via the user interfaces of the platforms. According to the compromise, the required information includes “at least”: the criteria on the basis of which the recommendations are made; the “relative importance” of the main parameters; the objectives for which the recommendation system has been optimized; and an explanation of the role of user behavior in producing the results of the recommendation systems.
Schaldemose’s proposal to make online marketplaces liable for the infringement of third-country sellers (Article 22), regardless of their size, had met with strong opposition. Her compromise proposal now provides that: Small and micro enterprises to be given the opportunity to apply to the Commission for a derogation from Article 22. The Commission is then to examine the application and consult the European Committee of Digital Services Coordinators. The decision will then be taken in the form of a delegated act. Users will also be able to claim compensation from online platforms if they have suffered “damage or loss resulting from a breach by providers of their obligations under the DSA”.
Two other points are still open: The Legal Affairs and Culture Committee of the European Parliament had proposed a media exception: Platforms would then not be allowed to delete or block content that is editorially responsible by the press or radio, television, audio, or video services according to Article 1 (1) sentence 1 of the Audiovisual Media Services Directive and is subject to member state law there. This proposal is also of some explosive force because media regulation is largely a matter for the member states – in Germany, it is a matter for the Länder. Without such an exception, the DSA could exceed EU competencies here if media content on platforms were also subject to the moderation regime.
The Group of the Greens/European Free Alliance has also tabled another proposal that could now be put forward: Platforms with predominantly user-generated pornographic content should be subject to special due diligence requirements. Users who distribute content on these platforms would have to go through a two-factor authentication process and provide both a verified email address and a verified mobile number. In addition, the providers are to comply with special procedures to initiate a review process in the event of complaints from those affected by illegal dissemination and to make a decision after 48 hours at the latest.
Asked by Europe.Table, rapporteur Schaldemose expressed confidence that her new proposals would take the negotiations into the home stretch: “I am hopeful that we will find an agreement on the most important issues in today’s meeting“. Should this succeed, the final vote in the Internal Market Committee could take place as planned on December 9th. The plenary could then adopt the position for the trialogue with the Council in January.
Other voices in the EP also expect a clear convergence of the negotiators in today’s session. The finer details will be worked out in three technical rounds of negotiations until November 30th, they say. With Falk Steiner
Raw materials are at the beginning of every value chain and are of crucial importance for Europe as an industrial location. Europe is not a resource-poor region. Nevertheless, the list of so-called critical raw materials, i.e., all those whose supply risk is particularly high according to the EU Commission, grows from year to year. While the Brussels authority listed 14 minerals in 2011, the number has now risen to 30, and the trend is rising, which is why there are already warnings of growing dependencies.
The main reason for the heightened alert, besides digitalization, is the implementation of the Green Deal measures. The green transformation of the economy is leading to a significant increase in demand for resources, most of which come from third countries. For electric vehicle batteries and energy storage alone, Europe will need up to 18 times more lithium by 2030 and up to 60 times more by 2050, according to the Commission, which is why the metal has been added to the list of critical raw materials for the first time.
Rare-earth metals, which play an important role as a component of permanent magnets, are also regularly represented on the list. The magnets are used in laptops and smartphones, but also in wind turbines or in the motors of EVs. The latter thus manage with less battery power than with ordinary magnets – the range increases. However, the dependence on imports of rare-earth metals is particularly high. The EU obtains 98 percent of its requirements from China. Commission Vice-President Maroš Šefčovič warns: “We cannot afford to trade our current dependence on fossil fuels for a dependence on critical raw materials.”
As part of its industrial strategy, the Commission has therefore already presented an action plan for critical raw materials and launched the European Raw Materials Alliance (ERMA). The aim is to strengthen the circular economy for critical raw materials, diversify procurement from third countries and build European supply chains.
Today, the European Parliament will also vote on its position on the Commission’s raw materials strategy. The pressure to act quickly is great, says rapporteur Hildegard Bentele (CDU). The MEP welcomes the Commission’s move to focus more on the extraction of Europe’s own raw material deposits. The authority is focusing on coal-mining regions, with particular attention to the expertise and skills available there that are relevant to the mining, extraction, and processing of raw materials.
“But the deposits are where they are. That’s why mining should also be possible in nature conservation areas, in compliance with EU environmental and social standards,” Bentele demands. In Europe, there are relevant lithium deposits, for example, on the Upper Rhine, and in the Ore Mountains. This point is controversial in the EU Parliament.
“Extraction of raw materials in nature reserves takes EU environmental protection under the Green Deal ad absurdum,” said Green Party industrial policy spokeswoman Henrike Hahn in Monday night’s plenary debate. “The required quantities of critical raw materials for the green transformation in Europe are often exaggerated and start from wrong basic assumptions.”
Sarah Hillmann, specialist for raw materials at the Federation of German Industries (BDI), on the other hand, is convinced: “The energy transition, electromobility, and other climate protection measures will significantly increase industry’s demand for critical raw materials. Securing the supply in the future is of central importance for the economy and strengthening domestic raw materials production is the right thing to do.
However, this alone cannot cover the rising demand, which is why the BDI is pursuing a three-pillar model for securing raw materials. In addition to strengthening the circular economy, this also includes calling on companies to think more perspectively and to increasingly store raw materials in order to counteract any supply bottlenecks. This should be promoted through tax incentives, according to Hillmann.
“We need to rethink our priorities, away from primary raw material extraction towards a stronger circular economy,” demands Johanna Sydow from the environmental organization Germanwatch, adding: “No mining in protected areas”. After all, this is always associated with irreversible ecological damage. Instead, the focus should be on expanding the use cycles and improving recycling. A smartphone contains about 30 raw materials. However, only two to three of these are reclaimable.
In fact, strengthening the circular economy is part of the EU’s raw materials strategy. “The Commission is also considering whether the circular economy legislation should include provisions on secondary raw materials,” a Commission spokeswoman informs.
Hildegard Bentele points out: “However, these effects will only occur in the long term. A secondary raw materials market will take at least another ten to 15 years and will require investments. For now, there will remain a strong additional demand, and we have to address that.”
“Blah, blah, blah.” That was how the young climate activist Greta Thunberg characterized this year’s climate summit in Glasgow (COP26) – even before it began. She was right, in a way. Talk is cheap whenever international agreements lack effective mechanisms to verify and enforce commitments. Gatherings like COP26 tend to lack credibility, even when they are presented as a “last chance” to prevent the end of the world as we know it. Nonetheless, such meetings help to raise awareness about the problem and potential solutions, and that is better than the denialism of past years.
True, the final agreement produced at COP26 appears weak, considering that the goal of keeping global warming below 1.5º Celsius is now barely alive. Instead of “unabated coal power” being phased out, now it will be “phased down,” a crucial change inserted at India’s insistence (and with China’s acquiescence). While “inefficient fossil-fuels subsidies” will still be “phased out,” the implication is that “efficient” fossil-fuel subsidies remain an option.
But, remember, talk is cheap. Given India’s high dependence on coal, it is perhaps better that it has set its net-zero emissions target for 2070 rather than proclaiming a “mid-century” commitment that is has no intention of upholding.
More broadly, there are two main obstacles to attaining the world’s stated climate goals. The first is geopolitical, exemplified by Russia’s use of natural gas as a strategic tool to divide Europe between those using nuclear power as an energy-transition technology (France) and those using gas (Germany). Even more important are major rivalries like the one between the United States and China. Here, there is some good news: COP26 seems to have induced the world’s two leading polluters to declare that they will work together to combat climate change. (We will know if this is more “blah, blah, blah” if and when bilateral military tensions increase.)
The second big obstacle is disagreement over how to compensate less-developed countries for forgoing or abandoning carbon-intensive technologies. The question is not only who foots the bill but also how financing should be delivered. The history of development aid is not particularly encouraging. And although it is well established that a global price for carbon is necessary to deal with the negative externality that greenhouse-gas emissions represent, implementing such a regime is difficult. Carbon markets remain mostly underdeveloped.
The deal adopted by almost 200 countries at COP26 will allow countries to meet their climate targets by buying offset credits representing emissions cuts made by others. This system will bring more clarity, but it is open to manipulation. Worse, it permits countries to carry forward carbon credits registered since 2013 and created under the Kyoto Protocol, potentially setting the stage for a flooding of the emissions market and an artificially low carbon price.
The COP26 agreement also encourages the public and private sectors to mobilize more climate finance, and to foster innovation in green technologies. To that end, one promising model is Operation Warp Speed, the US public-private partnership that made possible the extremely rapid development of COVID-19 vaccines.
The financial sector’s role in transferring resources from brown to green technologies will be crucial. Asset managers and financial intermediaries may act out of pure self-interest in divesting from dirty assets that they have come to see as too risky (owing either to the effects of climate change or to the transition that will render them obsolete). Alternatively, they may divest at the behest of others who have a green preference or a longer horizon over which to internalize climate problems. Universal owners such as large pension funds, for example, are increasingly aware of the systemic risks posed by climate change.
In any case, the financial sector is now coordinating to align itself more closely with the global climate agenda, as demonstrated by new initiatives such as the Glasgow Financial Alliance for Net Zero, chaired by former Bank of England Governor Mark Carney. It has become increasingly clear that the voluntary sustainable-finance mandates backed by financial intermediaries need to be significantly more stringent than they are today.
Green shareholder activism may force more disclosure of exposure to climate risk or even outright divestment; but mandatory disclosure under a clear framework will probably be needed to police greenwashing. The new International Sustainability Standards Board is a welcome development in this direction.
Finally, financial regulation and central bank policies also have key roles to play in promoting a green economy. Central banks, particularly after the 2007-09 financial crisis, have a mandate to ensure financial stability, and with climate change posing a systemic risk, they will have to incorporate it in their prudential frameworks. They also will need to foster a more transparent disclosure environment, so that climate risk is properly priced (although this is easier said than done). Many central banks already are engaging in climate stress tests and designing forward-looking transition scenarios.
More controversial are the questions of whether, and to what extent, central banks should favor green assets (or penalize brown ones) in their asset-purchase programs, and to what extent capital requirements should be attuned to sustainability criteria. Should brown loans have a capital surcharge over and above risk considerations (or should green loans carry a discount)? Such provisions would make no sense in a world where carbon is priced properly, but we are a long way from that scenario.
The international community’s climate goals remain highly ambitious, especially for a world characterized by great-power rivalries. It is rare for parties with disparate interests to work together as a team. Compromise is necessary, and “cheap talk” is the first step toward agreeing on a common course of action.
In collaboration with Project Syndicate.
