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SAP CEO Christian Klein is busy writing letters to Margrethe Vestager these days. Sometimes in cooperation with the trade association Digitaleurope, most recently together with 60 CEOs from the European Round Table for Industry (ERT). Their concern: The Data Act, which is supposed to be the basis for flourishing data traffic in the EU, could undermine Europe’s competitiveness. There is not much time left. Under the Swedish Council Presidency, the dossier is to be completed by the end of June.
Today, Tuesday, the second trilogue is scheduled at the political level. The topic will be the obligation of companies to share data with the state (B2G data sharing). At first, this doesn’t sound so dramatic. Until now, companies have also been obliged to make certain data available to the state. And companies largely accept the idea of handing over data in emergency situations.
However, they fear that the wording in the Data Act will be so broad that it will remain unclear what data (personal or not?) and in what form (anonymized or not?) they must release – or, for example, may release at all under the General Data Protection Regulation. They also fear the effort and costs involved.
In politics, there are concerns that a too far-reaching obligation to hand over data could be disadvantageous on an international level. How are European companies operating abroad supposed to defend themselves against the handover of certain data to other countries – such as China – if they are obliged to do so in the EU?
There is another issue that worries corporate CEOs: they fear for their trade secrets. The Commission wanted to prevent companies from being able to refuse to hand over data on the grounds of trade secrets. In their drafts, the Council and Parliament have approached the companies, for whom the protection of trade secrets and intellectual property is a key concern. In the Council, Germany supports this approach, but finds little resonance with it. But nothing has been decided yet…
By the way, if you want to read not only the most important news from Brussels, but also stay up to date on all things Berlin: From now on, Berlin.Table, our late-night memo for the capital, will appear five times a week in German – from Sunday night to Thursday night. I hope you enjoy reading it.
Ten years have passed since Edward Snowden gave documents about US data-mining programs to investigative journalists. “Spying among friends, that’s not possible at all”, German Chancellor Angela Merkel had said back then. Admittedly, this did not correspond to reality, not even in Europe. But the basic idea of European data protection law is exactly that.
The NSA affair gave the General Data Protection Regulation, which was already being negotiated between the EU Commission, the European Parliament and the member states at the time, the decisive push across the finish line. It also prevented any further watering down of the regulations.
That is precisely what has now become Meta’s undoing. Almost five years to the day after the end of the transitional period for the GDPR, the Irish data protection authority served and published the decision on the Facebook parent company. It had a remarkably difficult path behind it. Against the will of the Irish authority, it was massively tightened up by the joint committee of data protection supervisors. And the €1.2 billion are just one aspect of the 222-page decision.
The supervisory authorities state unequivocally in their notice: With the current US foreign surveillance regime, GDPR-compliant data processing is impossible: “US law does not provide a level of protection that is comparable in essence to that of EU law”, it says. And turning to Meta, “Meta Ireland has not taken any complementary measures to compensate for the inadequate protection provided by US law”. That was precisely the intention of the GDPR. It was to become the regulatory gold standard for the world, and companies were to have to comply with it if they wanted to do business in Europe.
Moritz Körner, a member of the European Parliament for the Free Democratic Party (FDP), nevertheless does not see Facebook as the main culprit. “Meta is less to blame for the problem of data transfers to the US than the data access practices of the American intelligence services”, he says. “If they respected the rights of European citizens in their snooping, Meta would not have to bear the brunt of the problem”.
At the end of 2023, some of the most important statutory authorities for foreign surveillance, the regulations of Section 702 of the Foreign Intelligence Surveillance Act (FISA), would have to be renewed again by Congress. But major changes appear unlikely at this time, even in light of the global political situation. Data privacy advocates have explicitly stated that while the specific resolution only obligates Meta, the problem affects all providers potentially covered by FISA.
Sean Hather of the US Chamber of Commerce also speaks of a “dangerous precedent”: “This problem goes far beyond Meta. The German IT trade association Bitkom is calling on politicians to take action. Just like Meta itself: If the Transatlantic Data Privacy Framework (TADPF) were to be put in place in time for the implementation deadline, Facebook would not face a shutdown in the EU. A scenario that has been looming for some time“.
At the core of the Data Privacy Framework is a package of measures from the US government. Instead of substantial changes to US law such as FISA, there are primarily changes to the implementing regulations. For these, presidential executive orders were sufficient. The easier path for US President Joe Biden, who announced the TADPF last spring together with Commission President Ursula von der Leyen.
But the TADPF is not yet in force. The spokesman for EU Justice Commissioner Didier Reynders announced yesterday that he expects “the data protection framework agreement to be fully implemented by the summer“. That would require the adequacy decision by the Commission, the approval of the member states and the absence of a veto by the European Parliament.
Austrian data protection activist Max Schrems, unlike European data protection regulators, thinks little of the measures promised in the TADPF. Schrems had already had the adequacy decisions on the predecessors Safe Harbor and Privacy Shield annulled by the European Court of Justice. With regard to the EU Commission, he says: “Even the people who are hammering out this deal know that it will probably be overturned by the ECJ”.
For him, it’s “de facto the same thing we already have, a few florets around it, and what the ECJ has rejected before. And now we’re just trying it again and again”. The Commission is trying to save itself from deal to deal, he said. He accuses the EU Commission of saying: “Well, I’ve actually had a decision overturned twice by the Supreme Court because it’s contrary to fundamental rights. And I just do the same shenanigans again and again and again”.
However, the Facebook case is likely to have a signal character here as well: If the penalty is upheld in court, such proceedings could become the norm – and expensive for companies in the long run. The TADPF would only solve the Meta problem in the short term. And if at all, then only for the future. The new agreement will have no effect on penalties that have already been imposed.
And that is the real leverage of the supervisory authorities: Non-compliant processing leads to heavy fines, even through no fault of their own. But for Europe to prevail, even the fine of €1.2 billion is still too low. It still pays for US providers not to comply with EU data protection law. But the supervisory authorities have now smelled blood for the first time.
The Industrial Emissions Directive is actually intended to reduce substances that are harmful to the environment and health, such as nitrogen oxides, mercury and ammonia, and to help achieve the EU’s zero-pollutant target. With the planned amendment, the regulations are now increasingly becoming a climate protection instrument and as such are being discussed and heavily criticized. In particular, the expansion of the areas of application to include methane from agricultural livestock farming is causing controversy.
On Wednesday, the responsible environment committee in the EU Parliament votes on the dossier and the fronts are hardened. While the rapporteur Radan Kanev (EPP) insists on leaving cattle farming completely out of the equation, the Commission’s proposal provides for it to be included starting at 150 livestock units (LU). This would mean that significantly more farms would be affected by the directive in the future – especially smaller companies. A compromise with the greatest majority chances aims at 300 LSU. This is also in line with the position of Federal Minister for Agriculture Cem Özdemir (Greens).
According to the Commission, agriculture is responsible for around ten percent of all greenhouse gases in the EU. But unlike the energy generation, transport or building sectors, emissions from food production occur through natural processes and cannot be replaced by alternative technologies. Moreover, emissions are very small-scale and depend on various factors, including location and weather.
Nevertheless, in order to achieve the goal of climate neutrality by 2050, the agricultural sector must also reduce its greenhouse gases. Most climate-damaging emissions from agriculture are generated in the form of methane during animal husbandry. The rumination of cattle and the open storage of manure set fermentation processes in motion.
It is true that the gas is very short-lived and decomposes into CO2 after about 15 years in the atmosphere. During this period, however, it is considerably more harmful to the climate. The usual observation period of 100 years used to determine the greenhouse gas potential compared to CO2 (Global Warming Potential, GWP) is correspondingly controversial. According to this, methane has a GWP of 28. However, reduced to 20 years, methane is 80 times more harmful to the climate than CO2, and the next two decades in particular are considered crucial.
That is why a global methane pledge was launched at the COP26 world climate conference in Glasgow. More than 100 participants, including Germany and the EU, pledged to reduce methane emissions by 30 percent by 2030 compared to 2020. The pledge states that this could lead to a reduction in global warming of more than 0.2 degrees.
Agriculture plays a decisive role in this context. After all, according to the Thünen Institute, the sector accounts for up to 50 percent of all methane emissions. However, the agricultural sector itself is calling for a more differentiated approach. The German Farmers’ Association (DBV), for example, is calling for methane from biogenic sources to be assessed differently from fossil fuels.
Background: Cows and cattle absorb natural carbon when they eat. Although rumination produces methane, this decomposes back into CO2, which would have been produced anyway as part of the natural carbon cycle. “So if the size of the herd remains the same, then there is no additional global warming effect“, says Robert Kero, DBV environmental policy and sustainability officer. In addition, he says, cattle farming mostly takes place on land where arable farming is not possible or only possible with difficulty. “This enhances the sites and the grassland stores a lot of CO2”.
However, this does not absolve agriculture of its responsibility, says agricultural scientist Bernhard Osterburg of the Thünen Institute. “We have it in our hands to control this. If you remove the sector from consideration, you remove it from the decisions of climate policy, and that wouldn’t be rational, because we need quick solutions”.
This is one of the reasons why MEP Jutta Paulus (Greens) is campaigning for the reduction targets of the EU methane regulation to also include agriculture. So far, the regulations have only targeted the energy sector. “But if 50 percent of our methane emissions come from agriculture, it makes no sense to exclude it from the regulation”, says Paulus, but expects difficult negotiations in the Council.
The same applies to the Industrial Emissions Directive (IED), which is intended to contribute at least in part to the implementation of the reduction targets. Among other things, technological specifications are to be made for barns above a certain size to capture and filter methane. These so-called “best available techniques” (BAT) will be agreed by industry, member state experts, the Commission and civil society.
Whether the IED actually leads to a significant climate protection effect, however, remains questionable. After all, around half of cattle farming in the EU takes place on pastures and is therefore not affected by the regulations. According to the current compromise, extensive livestock farming below a limit of two livestock units per hectare will also be exempted.
As a result, that would leave intensive indoor farming of 300 LSU or more. “That doesn’t even affect ten percent of farms”, says Jutta Paulus. For the farmers’ association, however, this is still too much. Even in this order of magnitude, numerous medium-sized family farms are still affected, which are neither sufficiently staffed nor financially positioned to meet the requirements.
Anja Karliczek, the responsible rapporteur for the CDU/CSU parliamentary group in the Bundestag, is in favor of open stables for greater animal welfare. But the exhaust air filters provided for in the directive only work in closed barns, she criticizes. “Approval procedures are being extended to the point of incalculability. That is crazy, what is to be decided there”, said the politician recently in the Bundestag.
Indeed, the threat of over-bureaucratization in agriculture is a problem, says Jutta Paulus. “But no alternatives are being presented either. And it can’t be that an entire sector gets a carte blanche, and society bears the social costs from the environmental damage”.
It is likely that the compromise proposal with 300 LU will find a majority in the Environment Committee. However, the cards will be reshuffled in the plenary vote, which is expected to take place in June, because the majorities here are not identical. The Council has already voted on its position and amended the scope of the directive to include intensive livestock farms with more than 350 LSU of cattle.
The Commission’s draft for the Critical Raw Materials Act (CRMA) is currently being processed in Parliament and the Council at an enormous pace. Ultimately, the trilogue negotiations should be completed as early as December. If possible, the first applications for strategic raw materials projects should be received in the first quarter of next year, said shadow rapporteur Hildegard Bentele (EPP) at a press briefing on Monday.
In the Parliament’s Industry Committee (ITRE), rapporteur Nicola Beer (Renew) presented the draft report published last week. She explained that the upcoming hearings should, among other things, provide room for discussion on the benchmarks (for domestic mining, processing, recycling and dependence on third countries). For example, she said, there could be discussion on whether the benchmark for maximum dependence on a third country (65 percent) is sufficient and would make the other three benchmarks redundant. Discussions on this issue have not yet been concluded, she said.
Hildegard Bentele highlighted the lack of financing instruments: The question of whether there will be a sovereignty fund and corresponding funds for raw materials projects has not yet been clarified; the European Investment Bank (EIB) has so far been very limited in financing raw materials projects. In addition, it is not yet clear whether mining will be included in the taxonomy – accordingly, further talks are still needed here.
With regard to the stress tests that companies should conduct for their supply chains, she disagreed with Beer’s draft. The latter had removed the requirement that the board be informed of the results. “Reporting to the board means political responsibility”, Bentele stressed.
The debate about conflicts of interest with important environmental legislation such as the Flora Fauna Habitat Directive or the Water Framework Directive is likely to be particularly heated. A rift had already opened up here in the negotiations on Parliament’s 2021 own-initiative report between the Greens and the Left, who called for a ban on mining in nature reserves, and the other groups. Bentele, who was rapporteur at the time, called for flexibility in this context. Shadow rapporteurs Henrike Hahn (Greens/EFA) and Cornelia Ernst (Left) continued to speak out against mining in Natura 2000 protected areas, at least yesterday.
The debate on a demand reduction target is also likely to be held in Parliament: Both Mohammed Chahim (S&D) and Henrike Hahn announced they would propose amendments. The Greens “propose a 70 percent reduction compared to a baseline scenario”, Hahn explained. Civil society actors such as the Working Group on Raw Materials have been calling for such a reduction target for primary raw material consumption for some time.
The CRMA is being given top priority by the Swedish Council Presidency. During yesterday’s debate in the Competitiveness Council, Economy Minister Ebba Busch called on member states to make a united effort by the summer break. “We have set ourselves a very ambitious timetable”, she said. By the end of June, she said, they want to decide on the negotiating mandate. The Council working group currently meets twice a week, according to Table.Media.
The member states agree above all on ambitious targets for the recycling of raw materials (the MEPs in the ITRE also want to sharpen up here), on the need for increased substitution of critical raw materials and corresponding research, and on the need for international partnerships at eye level. In addition, suitable financing instruments are still lacking, it was said during the debate.
Two points are also emerging as sticking points in the Council. One is the application of environmental law: Italy, for example, is calling for “flexibility in application”, while Germany is insisting on high standards. The other is social resistance to mining projects: Portugal referred to the protests against the controversial lithium mine in the north of the country.
State Secretary Sven Giegold, representing the German Federal Ministry for Economic Affairs and Technology (BMWK), emphasized the importance of high ESG standards and consistency with other legal acts such as the EU Duty of Care Act (CSDD). He said the German government would examine suitable additions in this regard. He also highlighted the quality requirements for due diligence certification and made clear: “Certification systems should not be able to replace companies’ own responsibility”.
The German government also believes it is necessary to make recognized international standards such as the core labor standards of the International Labor Organization (ILO) and, in particular, ILO Convention 169 on the Protection of the Rights of Indigenous Peoples “a precondition for the recognition of a strategic project“.
Since a large part of the world’s mining projects takes place on the land of indigenous communities, civil society organizations are also calling for the inclusion of corresponding co-determination rights in the draft law.
According to Giegold, in order to strengthen the targets for the circular economy, the BMWK is examining whether, in addition to the recycling benchmark of 15 percent, minimum targets for recycling capacities for individual raw materials could also be introduced – similar to the proposals Beer presented in her draft report.
Philipp Nimmermann fully meets the most important criterion that Minister for Economic Affairs Robert Habeck had set internally for Patrick Graichen’s successor as State Secretary for Energy: He is not part of the closely interwoven energy scene that was Graichen’s undoing. On the contrary, the 57-year-old economist has had little to do with the subject of energy. Accordingly, hardly anyone had his name on their radar beforehand.
However, sources close to the minister say that Nimmermann is by no means second choice because other traded candidates, such as network agency president Klaus Müller, were not available. Habeck knows him from the government in Schleswig-Holstein, where Nimmermann was State Secretary in the Ministry of Finance while Habeck was State Environment Minister there – and he apparently trusts him very much. Nimmermann is “an experienced head of administration”, “has been secretary of state for many years” and “is a good economist”, Habeck said on Monday – visibly relieved to have the issue off the table.
Habeck apparently does not see the lack of experience in energy policy as a problem but rather as an opportunity. Nimmermann will “take another look at the processes with a fresh eye”, the minister said. In fact, many of the remaining major projects – from the heating law to the wind and solar package to industrial electricity pricing and LNG terminals – have already been largely worked out; the work that remains concerns him managing political processes and communication. The doctor of economics had repeatedly demonstrated in the past to have already mastered this.
Nimmermann is considered the architect of a deal that saved Hamburg and Schleswig-Holstein billions. Their joint Landesbank, HSH Nordbank, had accumulated the highest ratio of bad loans “outside of Greece and Cyprus”, as Nimmermann went on record in 2014 as a newly appointed state secretary in Schleswig-Holstein’s finance ministry. Three and a half years later, exactly eleven hours before the EU’s deadline for selling the indebted bank expired, Nimmermann was pleased with the “photo finish”. “We have managed to avert an existential crisis”, praised a relieved Olaf Scholz, then mayor of the Hanseatic city.
You wouldn’t know the economist from looking at him. On the contrary, from his leather shoes to his bald head, the Frankfurt native always looks freshly polished, likes to wear a tie, a three-piece suit, even an extravagant frock coat. But the slim man has only outwardly left behind his influence in one of the first anti-authoritarian children’s stores in the left-wing alternative district of Nordend.
Nimmermann holds a doctorate in international tax law. Until his doctorate in 1998, he worked for five years at Johann-Wolfgang-Goethe University on state fiscal equalization and European integration and regional development. He then moved to BHF Bank AG, where he had risen to the position of Chief Economist when the then Green Party Finance Minister Monika Heinold brought him to Kiel. From the waterfront, Nimmermann provided templates for the law on mandatory reporting of cross-border tax models, which has been in force since 2020. These templates were gladly taken up by the Federal Ministry of Finance, which was led by Scholz at the time.
The word “taxes” is not related to “stealing” (German: “Steuern” and “stehlen”), is one of Nimmermann’s bon mots. The word comes from the Middle High German “stiure”, and means “to support”. In his view, the fact that the state has allowed itself to be exploited by tax models such as “Cum Ex”, but also by real estate constructs such as the notorious “share deals”, endangers the common good. If he remains true to this line, the powerful lobbies, which also abound in the energy sector, are unlikely to have an easier time in the future than they did under Graichen.
On another topic, however, it is likely to be expressly desirable for Nimmermann to distance himself from Graichen. At the BHF-Bank, as is expressly emphasized by the ministry, the future state secretary was responsible, among other things, for adherence to compliance rules. Annette Bruhns and Malte Kreutzfeldt
SAP CEO Christian Klein is busy writing letters to Margrethe Vestager these days. Sometimes in cooperation with the trade association Digitaleurope, most recently together with 60 CEOs from the European Round Table for Industry (ERT). Their concern: The Data Act, which is supposed to be the basis for flourishing data traffic in the EU, could undermine Europe’s competitiveness. There is not much time left. Under the Swedish Council Presidency, the dossier is to be completed by the end of June.
Today, Tuesday, the second trilogue is scheduled at the political level. The topic will be the obligation of companies to share data with the state (B2G data sharing). At first, this doesn’t sound so dramatic. Until now, companies have also been obliged to make certain data available to the state. And companies largely accept the idea of handing over data in emergency situations.
However, they fear that the wording in the Data Act will be so broad that it will remain unclear what data (personal or not?) and in what form (anonymized or not?) they must release – or, for example, may release at all under the General Data Protection Regulation. They also fear the effort and costs involved.
In politics, there are concerns that a too far-reaching obligation to hand over data could be disadvantageous on an international level. How are European companies operating abroad supposed to defend themselves against the handover of certain data to other countries – such as China – if they are obliged to do so in the EU?
There is another issue that worries corporate CEOs: they fear for their trade secrets. The Commission wanted to prevent companies from being able to refuse to hand over data on the grounds of trade secrets. In their drafts, the Council and Parliament have approached the companies, for whom the protection of trade secrets and intellectual property is a key concern. In the Council, Germany supports this approach, but finds little resonance with it. But nothing has been decided yet…
By the way, if you want to read not only the most important news from Brussels, but also stay up to date on all things Berlin: From now on, Berlin.Table, our late-night memo for the capital, will appear five times a week in German – from Sunday night to Thursday night. I hope you enjoy reading it.
Ten years have passed since Edward Snowden gave documents about US data-mining programs to investigative journalists. “Spying among friends, that’s not possible at all”, German Chancellor Angela Merkel had said back then. Admittedly, this did not correspond to reality, not even in Europe. But the basic idea of European data protection law is exactly that.
The NSA affair gave the General Data Protection Regulation, which was already being negotiated between the EU Commission, the European Parliament and the member states at the time, the decisive push across the finish line. It also prevented any further watering down of the regulations.
That is precisely what has now become Meta’s undoing. Almost five years to the day after the end of the transitional period for the GDPR, the Irish data protection authority served and published the decision on the Facebook parent company. It had a remarkably difficult path behind it. Against the will of the Irish authority, it was massively tightened up by the joint committee of data protection supervisors. And the €1.2 billion are just one aspect of the 222-page decision.
The supervisory authorities state unequivocally in their notice: With the current US foreign surveillance regime, GDPR-compliant data processing is impossible: “US law does not provide a level of protection that is comparable in essence to that of EU law”, it says. And turning to Meta, “Meta Ireland has not taken any complementary measures to compensate for the inadequate protection provided by US law”. That was precisely the intention of the GDPR. It was to become the regulatory gold standard for the world, and companies were to have to comply with it if they wanted to do business in Europe.
Moritz Körner, a member of the European Parliament for the Free Democratic Party (FDP), nevertheless does not see Facebook as the main culprit. “Meta is less to blame for the problem of data transfers to the US than the data access practices of the American intelligence services”, he says. “If they respected the rights of European citizens in their snooping, Meta would not have to bear the brunt of the problem”.
At the end of 2023, some of the most important statutory authorities for foreign surveillance, the regulations of Section 702 of the Foreign Intelligence Surveillance Act (FISA), would have to be renewed again by Congress. But major changes appear unlikely at this time, even in light of the global political situation. Data privacy advocates have explicitly stated that while the specific resolution only obligates Meta, the problem affects all providers potentially covered by FISA.
Sean Hather of the US Chamber of Commerce also speaks of a “dangerous precedent”: “This problem goes far beyond Meta. The German IT trade association Bitkom is calling on politicians to take action. Just like Meta itself: If the Transatlantic Data Privacy Framework (TADPF) were to be put in place in time for the implementation deadline, Facebook would not face a shutdown in the EU. A scenario that has been looming for some time“.
At the core of the Data Privacy Framework is a package of measures from the US government. Instead of substantial changes to US law such as FISA, there are primarily changes to the implementing regulations. For these, presidential executive orders were sufficient. The easier path for US President Joe Biden, who announced the TADPF last spring together with Commission President Ursula von der Leyen.
But the TADPF is not yet in force. The spokesman for EU Justice Commissioner Didier Reynders announced yesterday that he expects “the data protection framework agreement to be fully implemented by the summer“. That would require the adequacy decision by the Commission, the approval of the member states and the absence of a veto by the European Parliament.
Austrian data protection activist Max Schrems, unlike European data protection regulators, thinks little of the measures promised in the TADPF. Schrems had already had the adequacy decisions on the predecessors Safe Harbor and Privacy Shield annulled by the European Court of Justice. With regard to the EU Commission, he says: “Even the people who are hammering out this deal know that it will probably be overturned by the ECJ”.
For him, it’s “de facto the same thing we already have, a few florets around it, and what the ECJ has rejected before. And now we’re just trying it again and again”. The Commission is trying to save itself from deal to deal, he said. He accuses the EU Commission of saying: “Well, I’ve actually had a decision overturned twice by the Supreme Court because it’s contrary to fundamental rights. And I just do the same shenanigans again and again and again”.
However, the Facebook case is likely to have a signal character here as well: If the penalty is upheld in court, such proceedings could become the norm – and expensive for companies in the long run. The TADPF would only solve the Meta problem in the short term. And if at all, then only for the future. The new agreement will have no effect on penalties that have already been imposed.
And that is the real leverage of the supervisory authorities: Non-compliant processing leads to heavy fines, even through no fault of their own. But for Europe to prevail, even the fine of €1.2 billion is still too low. It still pays for US providers not to comply with EU data protection law. But the supervisory authorities have now smelled blood for the first time.
The Industrial Emissions Directive is actually intended to reduce substances that are harmful to the environment and health, such as nitrogen oxides, mercury and ammonia, and to help achieve the EU’s zero-pollutant target. With the planned amendment, the regulations are now increasingly becoming a climate protection instrument and as such are being discussed and heavily criticized. In particular, the expansion of the areas of application to include methane from agricultural livestock farming is causing controversy.
On Wednesday, the responsible environment committee in the EU Parliament votes on the dossier and the fronts are hardened. While the rapporteur Radan Kanev (EPP) insists on leaving cattle farming completely out of the equation, the Commission’s proposal provides for it to be included starting at 150 livestock units (LU). This would mean that significantly more farms would be affected by the directive in the future – especially smaller companies. A compromise with the greatest majority chances aims at 300 LSU. This is also in line with the position of Federal Minister for Agriculture Cem Özdemir (Greens).
According to the Commission, agriculture is responsible for around ten percent of all greenhouse gases in the EU. But unlike the energy generation, transport or building sectors, emissions from food production occur through natural processes and cannot be replaced by alternative technologies. Moreover, emissions are very small-scale and depend on various factors, including location and weather.
Nevertheless, in order to achieve the goal of climate neutrality by 2050, the agricultural sector must also reduce its greenhouse gases. Most climate-damaging emissions from agriculture are generated in the form of methane during animal husbandry. The rumination of cattle and the open storage of manure set fermentation processes in motion.
It is true that the gas is very short-lived and decomposes into CO2 after about 15 years in the atmosphere. During this period, however, it is considerably more harmful to the climate. The usual observation period of 100 years used to determine the greenhouse gas potential compared to CO2 (Global Warming Potential, GWP) is correspondingly controversial. According to this, methane has a GWP of 28. However, reduced to 20 years, methane is 80 times more harmful to the climate than CO2, and the next two decades in particular are considered crucial.
That is why a global methane pledge was launched at the COP26 world climate conference in Glasgow. More than 100 participants, including Germany and the EU, pledged to reduce methane emissions by 30 percent by 2030 compared to 2020. The pledge states that this could lead to a reduction in global warming of more than 0.2 degrees.
Agriculture plays a decisive role in this context. After all, according to the Thünen Institute, the sector accounts for up to 50 percent of all methane emissions. However, the agricultural sector itself is calling for a more differentiated approach. The German Farmers’ Association (DBV), for example, is calling for methane from biogenic sources to be assessed differently from fossil fuels.
Background: Cows and cattle absorb natural carbon when they eat. Although rumination produces methane, this decomposes back into CO2, which would have been produced anyway as part of the natural carbon cycle. “So if the size of the herd remains the same, then there is no additional global warming effect“, says Robert Kero, DBV environmental policy and sustainability officer. In addition, he says, cattle farming mostly takes place on land where arable farming is not possible or only possible with difficulty. “This enhances the sites and the grassland stores a lot of CO2”.
However, this does not absolve agriculture of its responsibility, says agricultural scientist Bernhard Osterburg of the Thünen Institute. “We have it in our hands to control this. If you remove the sector from consideration, you remove it from the decisions of climate policy, and that wouldn’t be rational, because we need quick solutions”.
This is one of the reasons why MEP Jutta Paulus (Greens) is campaigning for the reduction targets of the EU methane regulation to also include agriculture. So far, the regulations have only targeted the energy sector. “But if 50 percent of our methane emissions come from agriculture, it makes no sense to exclude it from the regulation”, says Paulus, but expects difficult negotiations in the Council.
The same applies to the Industrial Emissions Directive (IED), which is intended to contribute at least in part to the implementation of the reduction targets. Among other things, technological specifications are to be made for barns above a certain size to capture and filter methane. These so-called “best available techniques” (BAT) will be agreed by industry, member state experts, the Commission and civil society.
Whether the IED actually leads to a significant climate protection effect, however, remains questionable. After all, around half of cattle farming in the EU takes place on pastures and is therefore not affected by the regulations. According to the current compromise, extensive livestock farming below a limit of two livestock units per hectare will also be exempted.
As a result, that would leave intensive indoor farming of 300 LSU or more. “That doesn’t even affect ten percent of farms”, says Jutta Paulus. For the farmers’ association, however, this is still too much. Even in this order of magnitude, numerous medium-sized family farms are still affected, which are neither sufficiently staffed nor financially positioned to meet the requirements.
Anja Karliczek, the responsible rapporteur for the CDU/CSU parliamentary group in the Bundestag, is in favor of open stables for greater animal welfare. But the exhaust air filters provided for in the directive only work in closed barns, she criticizes. “Approval procedures are being extended to the point of incalculability. That is crazy, what is to be decided there”, said the politician recently in the Bundestag.
Indeed, the threat of over-bureaucratization in agriculture is a problem, says Jutta Paulus. “But no alternatives are being presented either. And it can’t be that an entire sector gets a carte blanche, and society bears the social costs from the environmental damage”.
It is likely that the compromise proposal with 300 LU will find a majority in the Environment Committee. However, the cards will be reshuffled in the plenary vote, which is expected to take place in June, because the majorities here are not identical. The Council has already voted on its position and amended the scope of the directive to include intensive livestock farms with more than 350 LSU of cattle.
The Commission’s draft for the Critical Raw Materials Act (CRMA) is currently being processed in Parliament and the Council at an enormous pace. Ultimately, the trilogue negotiations should be completed as early as December. If possible, the first applications for strategic raw materials projects should be received in the first quarter of next year, said shadow rapporteur Hildegard Bentele (EPP) at a press briefing on Monday.
In the Parliament’s Industry Committee (ITRE), rapporteur Nicola Beer (Renew) presented the draft report published last week. She explained that the upcoming hearings should, among other things, provide room for discussion on the benchmarks (for domestic mining, processing, recycling and dependence on third countries). For example, she said, there could be discussion on whether the benchmark for maximum dependence on a third country (65 percent) is sufficient and would make the other three benchmarks redundant. Discussions on this issue have not yet been concluded, she said.
Hildegard Bentele highlighted the lack of financing instruments: The question of whether there will be a sovereignty fund and corresponding funds for raw materials projects has not yet been clarified; the European Investment Bank (EIB) has so far been very limited in financing raw materials projects. In addition, it is not yet clear whether mining will be included in the taxonomy – accordingly, further talks are still needed here.
With regard to the stress tests that companies should conduct for their supply chains, she disagreed with Beer’s draft. The latter had removed the requirement that the board be informed of the results. “Reporting to the board means political responsibility”, Bentele stressed.
The debate about conflicts of interest with important environmental legislation such as the Flora Fauna Habitat Directive or the Water Framework Directive is likely to be particularly heated. A rift had already opened up here in the negotiations on Parliament’s 2021 own-initiative report between the Greens and the Left, who called for a ban on mining in nature reserves, and the other groups. Bentele, who was rapporteur at the time, called for flexibility in this context. Shadow rapporteurs Henrike Hahn (Greens/EFA) and Cornelia Ernst (Left) continued to speak out against mining in Natura 2000 protected areas, at least yesterday.
The debate on a demand reduction target is also likely to be held in Parliament: Both Mohammed Chahim (S&D) and Henrike Hahn announced they would propose amendments. The Greens “propose a 70 percent reduction compared to a baseline scenario”, Hahn explained. Civil society actors such as the Working Group on Raw Materials have been calling for such a reduction target for primary raw material consumption for some time.
The CRMA is being given top priority by the Swedish Council Presidency. During yesterday’s debate in the Competitiveness Council, Economy Minister Ebba Busch called on member states to make a united effort by the summer break. “We have set ourselves a very ambitious timetable”, she said. By the end of June, she said, they want to decide on the negotiating mandate. The Council working group currently meets twice a week, according to Table.Media.
The member states agree above all on ambitious targets for the recycling of raw materials (the MEPs in the ITRE also want to sharpen up here), on the need for increased substitution of critical raw materials and corresponding research, and on the need for international partnerships at eye level. In addition, suitable financing instruments are still lacking, it was said during the debate.
Two points are also emerging as sticking points in the Council. One is the application of environmental law: Italy, for example, is calling for “flexibility in application”, while Germany is insisting on high standards. The other is social resistance to mining projects: Portugal referred to the protests against the controversial lithium mine in the north of the country.
State Secretary Sven Giegold, representing the German Federal Ministry for Economic Affairs and Technology (BMWK), emphasized the importance of high ESG standards and consistency with other legal acts such as the EU Duty of Care Act (CSDD). He said the German government would examine suitable additions in this regard. He also highlighted the quality requirements for due diligence certification and made clear: “Certification systems should not be able to replace companies’ own responsibility”.
The German government also believes it is necessary to make recognized international standards such as the core labor standards of the International Labor Organization (ILO) and, in particular, ILO Convention 169 on the Protection of the Rights of Indigenous Peoples “a precondition for the recognition of a strategic project“.
Since a large part of the world’s mining projects takes place on the land of indigenous communities, civil society organizations are also calling for the inclusion of corresponding co-determination rights in the draft law.
According to Giegold, in order to strengthen the targets for the circular economy, the BMWK is examining whether, in addition to the recycling benchmark of 15 percent, minimum targets for recycling capacities for individual raw materials could also be introduced – similar to the proposals Beer presented in her draft report.
Philipp Nimmermann fully meets the most important criterion that Minister for Economic Affairs Robert Habeck had set internally for Patrick Graichen’s successor as State Secretary for Energy: He is not part of the closely interwoven energy scene that was Graichen’s undoing. On the contrary, the 57-year-old economist has had little to do with the subject of energy. Accordingly, hardly anyone had his name on their radar beforehand.
However, sources close to the minister say that Nimmermann is by no means second choice because other traded candidates, such as network agency president Klaus Müller, were not available. Habeck knows him from the government in Schleswig-Holstein, where Nimmermann was State Secretary in the Ministry of Finance while Habeck was State Environment Minister there – and he apparently trusts him very much. Nimmermann is “an experienced head of administration”, “has been secretary of state for many years” and “is a good economist”, Habeck said on Monday – visibly relieved to have the issue off the table.
Habeck apparently does not see the lack of experience in energy policy as a problem but rather as an opportunity. Nimmermann will “take another look at the processes with a fresh eye”, the minister said. In fact, many of the remaining major projects – from the heating law to the wind and solar package to industrial electricity pricing and LNG terminals – have already been largely worked out; the work that remains concerns him managing political processes and communication. The doctor of economics had repeatedly demonstrated in the past to have already mastered this.
Nimmermann is considered the architect of a deal that saved Hamburg and Schleswig-Holstein billions. Their joint Landesbank, HSH Nordbank, had accumulated the highest ratio of bad loans “outside of Greece and Cyprus”, as Nimmermann went on record in 2014 as a newly appointed state secretary in Schleswig-Holstein’s finance ministry. Three and a half years later, exactly eleven hours before the EU’s deadline for selling the indebted bank expired, Nimmermann was pleased with the “photo finish”. “We have managed to avert an existential crisis”, praised a relieved Olaf Scholz, then mayor of the Hanseatic city.
You wouldn’t know the economist from looking at him. On the contrary, from his leather shoes to his bald head, the Frankfurt native always looks freshly polished, likes to wear a tie, a three-piece suit, even an extravagant frock coat. But the slim man has only outwardly left behind his influence in one of the first anti-authoritarian children’s stores in the left-wing alternative district of Nordend.
Nimmermann holds a doctorate in international tax law. Until his doctorate in 1998, he worked for five years at Johann-Wolfgang-Goethe University on state fiscal equalization and European integration and regional development. He then moved to BHF Bank AG, where he had risen to the position of Chief Economist when the then Green Party Finance Minister Monika Heinold brought him to Kiel. From the waterfront, Nimmermann provided templates for the law on mandatory reporting of cross-border tax models, which has been in force since 2020. These templates were gladly taken up by the Federal Ministry of Finance, which was led by Scholz at the time.
The word “taxes” is not related to “stealing” (German: “Steuern” and “stehlen”), is one of Nimmermann’s bon mots. The word comes from the Middle High German “stiure”, and means “to support”. In his view, the fact that the state has allowed itself to be exploited by tax models such as “Cum Ex”, but also by real estate constructs such as the notorious “share deals”, endangers the common good. If he remains true to this line, the powerful lobbies, which also abound in the energy sector, are unlikely to have an easier time in the future than they did under Graichen.
On another topic, however, it is likely to be expressly desirable for Nimmermann to distance himself from Graichen. At the BHF-Bank, as is expressly emphasized by the ministry, the future state secretary was responsible, among other things, for adherence to compliance rules. Annette Bruhns and Malte Kreutzfeldt