Sixth sanctions package + New dependenci • Table.Briefings

Dear reader,

No time to waste: The EU wants to present the sixth sanctions package against Russia as early as today or on Wednesday at the latest. The measures will in all likelihood include a long-disputed oil embargo previously blocked by Germany, among others.

Europe should also reduce dependencies on other raw materials such as lithium, magnesium, or rare earths. Without sufficient access to these materials for wind turbines, photovoltaics, or batteries, the EU is unlikely to achieve its ambitious climate targets. However, for many of these critical raw materials, local companies rely on a few suppliers – often from China. We discussed how we can avoid simply replacing fossil dependencies with new ones with high-ranking experts at the Berlin Energy Days. Leonie Düngefeld has more infos for you.

To get clean electricity faster, some people are looking to Africa. Wind on the coast, sun in the Sahara, wide streams in the Congo – almost 40 percent of the potential for renewable energies lies there. However, not every tempting-sounding idea is a good and ethically justifiable one, reports Katja Scherer.

The showdown on ETS 2 could come this week. Peter Liese, rapporteur for the ETS reform, fears that the second emissions trading system, which has recently come under heavy criticism, will soon have to be buried. Read more about this in the News.

Let’s take another look at digital: The controversial Pegasus spy software was found on the cell phones of Spanish Prime Minister Pedro Sanchez and Spanish Defense Minister Margarita Robles. It is not yet clear who could be behind the attack with the software from the Israeli manufacturer NSO Group.

Your
Lisa-Martina Klein

Energy transition brings new dependencies

By

Leonie Düngefeld

Lithium, magnesium, rare earths: Europe is heavily dependent on imports of important raw materials for the energy transition. Chinese companies dominate many production stages of photovoltaic plants, for example, and the EU also obtains important components for wind turbines and electric cars almost entirely from China.

Politicians and industry agree: This has to change. Europe must be more resilient than before to withstand global shocks such as the COVID pandemic and the war in Ukraine. There is also broad agreement on the solutions, at least in principle. The import sources of raw materials must become more diverse, domestic production should be strengthened again, and reserves for critical raw materials should be built up.

“We have to enable the further processing of raw materials in Europe again, at least in part,” said Matthias Wachter, head of department for raw materials at the BDI, yesterday at a Europe.Table event at the Berlin Energy Days. These processes are energy-intensive and pollute the environment – with imports from other countries, Europe has increasingly circumvented these problems in recent years. If companies in Europe are to produce more raw materials again, these costs must be considered, and the framework conditions changed, Wachter said. “Areas are often overplanned in such a way that domestic extraction is no longer possible at all. And politically, it has not been wanted so far.”

No business case in Europe

Kerstin Jorna, Director General for Internal Market and Industry at the European Commission, calls for greater industry involvement. The European Raw Materials Alliance (ERMA), for example, is trying to build a business case for rare earth refining and recycling in Europe. “At the moment, however, it is not making any progress because the industry is keeping a very low profile,” Jorna said.

Until it is certain that buyers will be willing to pay prices for raw materials produced to European standards, he said, producers will not have the investment security they need – and governments will not need to get involved. “It can’t be that the industry has the outlets and the supply risk is covered by the government,” Jorna said. “We need to work together on both.”

Matthias Wachter of the BDI counters: “Companies are prepared to pay higher prices if this ensures long-term security of supply – but not infinitely high prices either.” The problem is that smelters and smelters in Europe have to pay much higher energy prices than in other countries. He brought up special tariffs for supplying these very energy-intensive plants.

Jorna countered that instead of such individual measures, a comprehensive approach was needed. This would include partnerships with other countries. For example, the Commission is in talks with the United States within the framework of the Trade and Technology Council (TTC) on strategic cooperation in raw materials policy.

Specifically, the idea is to exchange information on new mining projects, Jorna said. “That way, we can also make an offer together that is better than the quick offer from China.” The EU wants to work with peers in the planning and development process, in training local workers, and in technology transfer. “To do that, we now need to talk to our companies about how far they are willing to go in,” Jorna said. “It’s not about doing everything in Europe. But where we can, we should.”

Strategic stockpiling

Henrike Hahn, shadow rapporteur for the Greens/EFA on the European raw materials strategy, calls for an accurate calculation of demand for raw materials. According to a study by the Öko-Institut, far fewer raw materials are needed for the green transformation than assumed, she said at the event. “Companies know their raw material needs much more accurately than policymakers,” Hahn said. “The commission needs to become more professional in terms of costing. That’s the only way we can create proper structures on the part of policymakers.”

For natural gas and oil, strategic reserves in the EU guarantee energy supplies for at least a few weeks in an emergency. However, if imports of rare earths from China, for example, were interrupted, there would be no reserves – with immediate consequences for the entire economy. The European Council, therefore, proposed strategic stockpiling in March. According to Matthias Wachter of the BDI, however, this should not be done at the political level. “We propose stockpiling at the company level. For this, tax incentives must be set and the accounting disadvantage of stockpiling must be dissolved.”

Can renewable energy from Africa solve Europe’s energy problem?

Strong winds on the coasts, and countless hours of sunshine in the Sahara. When energy experts look at the African continent, they see one thing above all: huge potential for unused green electricity. Africa is “a superpower for renewable energy with 39 percent of global potential“, the British think tank Carbon Tracker wrote early last year. A vision that is now receiving new encouragement from the Ukraine war and the associated energy crisis in Europe.

Two-thirds of the fossil natural gas that the EU buys from Russia is to be replaced this year. This is the European Commission’s REPowerEU plan. Russian oil and gas are to become completely superfluous by 2030. And the best way to do that is with green alternatives because the EU wants to become climate-neutral by 2050. The solution to this challenge is obvious to some commentators. “Russia’s invasion could usher in an African energy renaissance,” writes South African thought leader and author Jakkie Cilliers, for example.

Cilliers is the founder of the Institute for Security Studies, a non-governmental organization in Pretoria that works to secure peace in Africa. Specifically, Cilliers proposes a fresh start on the “Desertec” project: Companies should build large solar plants in North Africa and transport the electricity generated directly to southern Europe. That would require new submarine cables between Africa and Europe – but some of those are already in the planning stages. “Since Europe has the largest synchronous power grid in the world, it’s relatively easy to inject additional capacity and find ways to transport power north.”

Energy export enormously loss prone

In addition, Cilliers advocates implementing another highly controversial construction project: a gigantic dam on the Congo River. This “Grand Inga” dam has been discussed for years. So far, however, there are not enough investors for it. Exporting energy to Europe would make the project much more attractive, Cilliers writes. “Grand Inga becomes immediately commercially viable if it uses its vast electricity production to generate hydrogen at the source and convert iron ore and bauxite deposits into steel,” Cilliers writes. The finished products, green hydrogen and green steel, could then be shipped by sea to Europe.

Solar power from the north, hydropower from the west of Africa – and all Europe’s energy problems are solved? That sounds tempting. However, on closer inspection, Cillier’s solutions are anything but easy to implement, and above all, not all of them make sense. Exporting electricity from North Africa to Europe on a large scale is considered technically difficult by most experts alone. “Transferring electricity over long distances often involves high energy losses,” says Günter Nooke, until recently, ex-Chancellor Angela Merkel’s Africa envoy. Plus: Both Africa and Europe lack the necessary transmission lines to do so.

It is more promising to use the green electricity from Africa to produce hydrogen in Africa and export it. This is something that the German government is currently working hard to achieve. Hydrogen can replace Russian oil and gas in the chemical industry or in fertilizer production, for example, and thus ensure a better climate balance in Germany. The German government is currently commissioning the Jülich Research Center to draw up an “H2 Atlas”. This is intended to show where there is potential for hydrogen production and export throughout Africa.

Stable legal situation important for investors

At first glance, the results of this atlas look very good. 33 percent of the land areas in West Africa are suitable for photovoltaics, 76 percent for onshore wind turbines. The Jülich experts have already found this out. The hydrogen produced in this way would be significantly cheaper than production in Germany. For Rainer Baake, head of the Climate Neutrality Foundation and former energy state secretary, Namibia has so far been the most suitable partner country on the African continent. “Namibia is a democratic state with a stable legal system,” he says. “That’s an important prerequisite for getting private investors interested in setting up hydrogen production.”

In contrast, Baake gives other countries a worse report card. South Africa is also pursuing a hydrogen strategy and working on the energy transition. Morocco also has ambitious goals in this regard. But in all these countries, the political systems are significantly more unstable than in Namibia, says Baake. “There, after the experience with Russia, we should already ask ourselves how strongly we make our energy supply dependent on such states.” South American partners such as Chile or Uruguay are more attractive.

In addition, individual energy projects on the African continent are also highly controversial – for example, the dam on the Congo River proposed by Jakkie Cilliers. The Congo is already being used for two small hydroelectric power plants: Inga I and Inga II. The plan is to further expand the energy supply with Inga III. And some even dream of “Grand Inga” as an absolute giga-dam. Former Africa envoy Günter Nooke thinks at least the plans for Inga III make sense. It is to generate around 11,000 megawatts of energy, as much as eight nuclear power plants.

Not repeating colonialist mindset

For Nooke, it is clear that whether only Europe or also the people of the Congo will benefit depends above all on how the contract is drawn up. “The construction work on Inga III can give Congo an industrialization boost,” he says. That will create jobs. And the country can invest the revenue from electricity exports in its own energy supply. The government in the Democratic Republic of Congo is therefore pushing ahead with the plans. At the end of last year, it commissioned the Australian mining company Fortescue to plan the dam.

Critics of the project, on the other hand, point out that the World Bank withdrew from financing the dam for a good reason. In Congo, only nine percent of people currently have access to energy, says Franziska Müller, a professor of globalization at the University of Hamburg. And the power grids to distribute the electricity from Inga III around the country are lacking. “To produce energy there for export to Germany and Europe, I think is difficult from an ethical point of view.” Especially since numerous people would have to be resettled for the construction of the dam, and untouched nature would be destroyed.

The example shows: Just setting up energy plants in Africa and producing green hydrogen won’t work. The export of hydrogen is a great opportunity for the continent. But not all projects that are theoretically possible make practical sense. Many countries would also need more stable legal and political frameworks. Only then will the private investors who make the development of a hydrogen economy possible come.

Moreover, Western countries should not repeat a mistake from the past, Müller advises. “Africa is not a big empty space that can be used at will,” she says. That is a colonialist way of thinking. The EU and German government should look much more closely at the existing energy strategies of African countries – and then consider how they could usefully complement them. “So far, this is still happening too little,” according to Müller. A partnership of equals looks different. Katja Scherer

Katja Scherer is an economic journalist and runs the blog Wirtschaft in Afrika. As a freelance journalist she works for Die Zeit, NDR, DLF, WDR, and 3tn among others.

Habeck expects sixth sanctions package including oil embargo today

EU energy ministers held a special meeting on Monday to discuss the situation following the suspension of Russian gas supplies to Poland and Bulgaria. A major topic on the sidelines was the sixth sanctions package, which the EU Commission is to present today. Now, things are supposed to move quickly: He expects the EU Commission to present the sixth sanctions package this Tuesday, said German Economics Minister Robert Habeck after the special meeting.

Habeck expects the Russian oil phase-out to be part of it. While the extent of the embargo is still under discussion, oil will definitely be on the list. The EU Commission plans to adopt the sixth sanctions package today at its meeting in Strasbourg. Commission President Ursula von der Leyen is expected to present a result in the afternoon or on Wednesday at the latest. It will then take a few more days for the deliberations of the member states, said Robert Habeck. He couldn’t say whether the process would be completed before the weekend. Until recently, it was unclear how a veto by the Hungarian government could be prevented. Long transition periods or exemption clauses for countries like Hungary and Slovakia, which are particularly dependent on Russian oil, are being discussed.

Similar to the coal embargo, there is likely to be a transitional period of three to four months to process existing contracts. It is also possible that, as a first step, only certain product groups and transport routes will be affected by the embargo. The phase-out for gasoline and diesel could happen more quickly, while the end of the year was still considered for crude oil. Deliveries by ship could also fall under a ban. Germany receives one-third of its Russian oil by ship, while two-thirds arrives at refineries in Leuna in Saxony-Anhalt and Schwedt an der Oder in Brandenburg via the Druzhba pipeline. Germany could bear an oil embargo now, Habeck affirmed. Since the start of the Ukraine war, the share of Russian oil in German oil consumption has fallen from 35 percent to 12 percent. Other countries, however, have not yet reached that point.

Supply disruptions possible

However, the main topic and reason for the special meeting was the situation after the supply stop of Russian gas to Poland and Bulgaria. After the meeting, French Energy Minister and current Council President Barbara Pompili emphasized the strong solidarity among the member states. She said that the representatives of Poland and Bulgaria had stressed that there was no risk to supply in the short term. Bulgaria receives gas from Greece and Poland from Germany. There is no direct risk to energy security in Europe, EU Energy Commissioner Kadri Simson also said. Storage facilities are reportedly over 32 percent of their capacity. But it could now hit any member state. Vladimir Putin was trying to divide the EU. It is necessary to prepare for possible supply disruptions.

Robert Habeck also emphasized the high degree of cohesion, cooperation, and solidarity with regard to the gas stop to Bulgaria and Poland. The German Federal Minister of Economics spoke of a qualitative leap: “You don’t read out statements, but refer to each other in the discussion.” Each country is not just acting for itself, but for all the others. Germany is pulling up capacity at LNG terminals in a short time, filling gas storage facilities. Germany has leased four floating LNG terminals, two of which could begin operations by the end of the year. Filling gas storage facilities is not only reassurance from a nation-state perspective but for the EU as a whole. The shift away from Russian energy is also seen as a step away from fossil energy in general. This is new. sti

Crisis resilience of the energy transition: focus on renewables

Even though the focus has shifted to LNG as an alternative to Russian natural gas over the Ukraine crisis, representatives of various think tanks and associations consider LNG to be a partial solution at best. Casimir Lorenz, economist at Aurora Energy Research, made it clear at the Berlin Energy Days that the planned LNG capacities in Germany are not sufficient to replace Russian gas in the short term. Of global production capacity of 500 bcm there is only about 120 bcm available. This would not suffice. Industry outages would be the consequence of a gas embargo.

Lorenz believes that summer 2024 is the earliest possible point to achieve complete independence from Russian energy supplies. In the meantime, coal-fired power plants could help reduce gas consumption in power generation or secure freed-up capacities for the industry. According to Lorenz, this would not jeopardize the coal phase-out by 2030, as more LNG would be available in 2026 anyway and coal-fired power plants could be shut down as planned.

However, renewable energies should be at the center of supply security, emphasizes Tilman Schwencke, Director of Policy and Strategy at the German Association of Energy and Water Industries (BDEW). The goals have remained the same as before the war: Expanding renewables, increasing the efficiency and renovation of buildings. The only things that have changed are the rate at which this needs to happen and the substitution of Russian energy supplies, and the diversification of suppliers.

LNG dirtier and more expensive than natural gas

He is critical of overdependence on LNG. It also was not entirely stupid to rely on Russian natural gas because LNG is dirtier and more expensive. In addition, other nations would be deprived of LNG in the coming years, as Qatar and the United Arab Emirates, for example, would not be able to significantly increase their production volumes before 2024.

For the future of European energy supply, Georg Zachmann of the Brussels-based think tank Bruegel warns that each individual element must be replaceable. This means that no new dependencies should be created when it comes to energy supply. He also sees renewables in the most suitable position in this respect.

In the short term, according to Zachmann, Russia urgently needs to be made clear that the EU is not dependent on its energy supplies. He did not explain how. With regard to possible peace negotiations between Russia and Ukraine, it is “politically an absolute imperative” to stand by Ukraine instead of stabbing it in the back. To cushion the impact on the industry, Zachmann called for “European solutions”. Germany cannot supply its own industry with subsidized energy while draining the storage facilities of neighboring countries, the energy expert said. luk

Hydrogen: mainly local projects till 2030

According to expert estimates, European key industries will not be able to obtain sufficient supplies of hydrogen and its derivatives until after 2030. Even a steady supply to the German steel industry is unlikely to be secured by 2030, even with imports, Maike Schmidt of the Center for Solar Energy and Hydrogen Research Baden-Württemberg (ZSW) said Monday at the Berlin Energy Days. “I rather believe that smaller hydrogen applications will grow domestically,” the scientist said.

According to a meta-analysis by the German Academy of Science and Engineering (acatech), 50 to 250 terawatt-hours (TWh) of hydrogen would be required to meet the hydrogen needs of all sectors in Germany by 2030. This would require electrolyzers with 17 to 90 gigawatts (GW). By the mid-2030s, however, only 4 GW of generation plants have been planned in Germany so far, said acatech scientist Andrea Lübcke. The German government is pursuing a goal of 10 GW of electrolysis capacity by 2030.

Sustainability of hydrogen vs. market ramp-up

Even if there were sufficient generation capacity, distribution within Europe via ships, trucks, or pipelines is another unresolved issue. “To prevent individual regions from becoming disconnected, one challenge is to achieve simultaneous development in Europe,” said Kirsten Westphal, board member of the German government’s H2Global import project and member of the National Hydrogen Council.

To speed up technology development, several experts advised against overly strict sustainability requirements. An initial phase with lower requirements and gradual tightening is an approach worth discussing, Schmidt stated. Japan and South Korea would not impose strict sustainability requirements for hydrogen production in procurement, reported Christoph Stemmler of acatech.

One important technical limitation, for example, is the continuous utilization of electrolyzers and synthesis plants for the production of hydrogen and its derivatives. This could hardly be guaranteed with fluctuating renewable energies alone. According to Schmidt, if additional green hydrogen were to be kept on hand for reconversion to electricity for supply gaps, significantly larger electrolysis capacities and very large hydrogen storage facilities would have to be planned at the generation sites. At current costs, however, this would be uneconomical. ber

ETS reform: Negotiations in the EU Parliament enter critical stage

This week is likely to be a crucial one on the road to a revised European Emissions Trading Scheme (ETS). Rapporteur Peter Liese (EPP, DE) and the shadow rapporteurs will hold several rounds of negotiations simultaneously. Today (Tuesday) there is, among other things, a joint meeting of the negotiating groups on the two fit-for-55 dossiers ETS and CBAM. There, the duration of the phase-in period of the border adjustment mechanism and the reduction of free CO2 allowances for the industry will be the key topic.

On Thursday, there might be a showdown at an open-end meeting. It is quite possible that Liese and the shadow rapporteurs will discuss compromises on the most problematic point of the negotiations until late in the evening. The introduction of a second emissions trading scheme for road transport and building heating (ETS 2) continues to cause the biggest headaches for the negotiators.

Rapporteur Liese fears for the ETS 2 as a whole, as it is increasingly criticized for placing too heavy a burden on citizens. Even after his proposed compromises, skepticism remains. Green shadow rapporteur Michael Bloss sees the compromises as positive, but he does not yet know whether the ETS 2 will be adopted as a result. The mood within the negotiating group is “testy”, Bloss reported Monday.

The German Ministry of Economics continues to support the introduction of ETS 2, provided that there is social compensation in the form of the Climate Social Fund. This means that the opposition of the European Greens to ETS 2 appears to be greater than that of the German Green-led Federal Ministry for Economic Affairs. luk

Scholz and Modi practice solidarity despite differences

Germany and India want to cooperate more closely, despite differences over the Ukraine war. Chancellor Olaf Scholz and India’s Prime Minister Narendra Modi announced a greater partnership during a joint appearance in Berlin on Monday. Scholz said the German government would provide €10 billion through 2030 for cooperation on climate protection or renewable energy. A joint statement outlines the planned cooperation.

Among other things, both countries are pressing for a seat on the UN Security Council. Both heads of government strove to find common ground. There are differences, for example, over the war in Ukraine. Modi warned that the war would not produce winners, only losers. Developing countries,, in particular, would suffer from price increases and supply bottlenecks.

Both governments signed a series of Memoranda of Understanding. Against the backdrop of the so-called “Bonn Challenge,” India wants to restore around 26 million hectares of forest by 2030 and increase its share of forest land from 21 to 33 percent.

In addition, Economics Minister Robert Habeck (Greens) and Indian Energy Minister R.K. Singh signed a declaration of intent on German-Indian hydrogen cooperation. A task force, the so-called Indo-German Energy Forum, is to be set up for this purpose. Furthermore, both countries plan to sign agreements on the exchange of confidential information and encrypted connections between the foreign ministries of both countries. The next government consultations are to take place in India in 2024. rtr

Finnish consortium cancels NPP project with Russia

A consortium of Finnish companies has stopped a project with Russia for the construction of a nuclear power plant. The Fennovoima group announced on Monday that it had terminated the contract with Russian state-owned Rosatom for the construction of the plant in central Finland. Fennovoima cited delays and growing risks from the war in Ukraine as the reason.

Since the Russian invasion of Ukraine, Finnish Economy Minister Mika Lintilä had repeatedly ruled out the final approval of the nuclear power plant project. Lintilä welcomed the consortium’s decision. Traditionally neutral Finland has recently considered NATO membership in light of Russia’s actions in Ukraine.

Uniper’s parent company Fortum, along with the Finnish steelmaker Outokumpu and the Swedish company SSAB, holds two-thirds of the shares in the consortium, with the Russian Rosatom Group holding the remainder via RAOS Voima. What will happen to this stake is still unclear at this time, said Fennovoima Chairman of the Board Esa Härmälä.

Clear decision

It was also too early to consider whether the consortium could look for another partner to build the plant. The group has so far spent between €600 million and €700 million on the project. The total cost of the plant had been put at €7.5 billion. Härmälä did not want to comment on write-downs that could hit Fennovoima owners.

The NPP is to be constructed on the Hanhikivi peninsula in Finland. The deadline for the final construction permit was the end of 2022, and Economics Minister Lintilä said on Monday that Fennovoima’s decision was clear. “It would have been practically impossible to carry on with the project.” The war in Ukraine had exacerbated the risks for the project. “RAOS has been unable to mitigate any of the risks.” No details were provided.

Finland is separated by a 1300-kilometer border from Russia, which calls the war in its other neighbor a “special operation”. Consortium member Fortum is the parent company of German energy company Uniper, which in turn is the largest foreign client of Russian gas company Gazprom. Uniper posted a billion-dollar loss in the first quarter, attributed to write-downs related to the Nord Stream 2 gas pipeline, which has been scrapped for the time being, and its Russian subsidiary Unipro.

No comment on the development was initially available from Rosatom on Monday, and the Finnish subsidiary RAOS refused to comment. rtr

Ministry: further fine rules for violations of EU sanctions

Violations of the EU’s sanctions packages in response to Russia’s war in Ukraine are to be punished more effectively, according to the German government. According to the Ministry of Economics, the amendment to the Foreign Trade and Payments Ordinance, which came into force on Monday, also introduces new rules on fines for the financial sector. For example, anyone who engages in prohibited deposit or stock exchange transactions for Russian persons could be fined up to €500,000. Violations of “classic” sanctions regulations, such as import and export bans or the “freezing” of financial assets, are reportedly criminal offenses and can be punished as before with a prison sentence of up to five years. dpa

Pegasus spyware: Spanish prime minister and defense minister affected

According to government sources, the Pegasus spy software from the Israeli manufacturer NSO Group has been found on the cell phone of Spanish Prime Minister Pedro Sanchez. Presidential Minister Felix Bolanos told a news conference Sanchez’s phone was infected in May 2021 and at least one data leak occurred then. The program was also found on Defense Secretary Margarita Robles’ cell phone, according to the report. Bolanos did not comment on who the government believes could be behind the spying attack. Sanchez’s left-wing minority government is currently under political pressure, even in connection with “Pegasus”.

According to the Canadian-based research institute Citizen Lab, more than 60 people associated with the Catalan separatist movement were spied on using the software. The Catalan ERC party, which advocates independence for the region and supports Sanchez’s government in Madrid, is now demanding clarification from the prime minister. The ERC stated that it would not support the government in votes until trust had been restored.

According to the Israeli manufacturer NSO, the “Pegasus” software is intended solely for use by intelligence services and the police in the fight against terrorism and crime. However, there are repeated accusations that the spy program is being used by governments to spy on politicians, human rights activists, and journalists. EU Justice Commissioner Didier Reynders and EU Commission staff have also been victims of spying attacks. The European Parliament has set up a special committee on the use of Pegasus and similar software. The European Data Protection Supervisor has called for a ban on “Pegasus” and similar software. rtr

Commission takes action against Apple over payment service

Apple is facing a heavy antitrust fine in the European Union. On Monday, the EU Commission sent the US company a list of complaints about the Apple Pay payment service.

“We have evidence that Apple has restricted third-party access to key technologies needed to develop competing mobile wallets for Apple devices,” EU Commissioner for Competition Margrethe Vestager announced. “In our statement of objections, we provisionally find that Apple may have restricted competition in favor of its own Apple Pay solution.”

Apple announced that it would continue to cooperate with the EU Commission. So far, the company has not made its payment system, in which payment options stored in the Apple digital wallet interact with point-of-sale systems via NFC proximity technology, available to third-party providers. Apple Pay is currently used by over 2,500 banks and over 250 fintech companies.

The statement of objections is a formal part of the Commission’s investigations into alleged antitrust violations. If Apple is found guilty, the US company could be forced to open up its system. In addition, it could then face a heavy antitrust fine.

The Digital Markets Act (DMA), which was only recently unified by the negotiators, is also likely to further increase the pressure on Apple to open up its largely closed ecosystem in Europe. The DMA is not yet relevant for the current Apple Pay process: It has yet to be approved by the European Parliament, after which a six-month transition period will come into effect. In the event of a repeat offense, however, the penalties for Apple could be significantly higher.

Google asks to cancel antitrust fine

Alphabet subsidiary Google, meanwhile, has asked the European Union’s second-highest court, the European Court of Justice, to overturn a €1.49 billion antitrust fine imposed by the EU Commission in 2019. Some of the EU Commission’s assumptions were wrong, Google said at the start of the three-day hearing before the European Union court in Luxembourg. The EU Commission had justified the fine on the grounds that the US technology group was abusing its dominant position in online advertising with its Adsense service. It was one of three cases that resulted in total fines of more than €8 billion. fst/rtr

EU’s Vestager assessing if tech giants should share telecoms network costs

Tech giants such as Google, Meta and Netflix may have to bear some of the cost of Europe’s telecoms network, Europe’s digital chief Margrethe Vestager said on Monday, following EU telecoms operators’ complaints.

“I think there is an issue that we need to consider with a lot of focus, and that is the issue of fair contribution to telecommunication networks,” Vestager told a news conference. “Because we see that there are players who generate a lot of traffic that then enables their business but who have not been contributing actually to enable that traffic. They have not been contributing to enabling the investments in the rollout of connectivity,” she said.

“And we are in the process of getting a thorough understanding of how could that be enabled,” Vestager said, adding that she was looking into how data traffic evolves over time and that related to the COVID-19 pandemic. According to a study released by telecoms lobbying group ETNO on Monday, Meta, Alphabet, Apple, Amazon, Microsoft and Netflix accounted for over 56 percent of all global data traffic last year.

The study said an annual contribution of 20 billion euros to network costs by the tech giants could give a €72-billion boost to the EU economy. ETNO’s members include Deutsche Telekom and Orange.

Vestager, however, gave short shrift to the telecoms industry’s calls to loosen EU merger rules to allow more consolidation. “The problem is that the arguments that we hear, like the need for scale in order to invest, they are not new,” she said. rtr

Carsten Rolle (BDI): ‘It will be painful’ for German industry

**Carsten Rolle** is Head of Department Energy and Climate Policy at the BDI.

The war in Ukraine and its consequences for German industry have kept Carsten Rolle on his toes for weeks. As Head of Department Energy and Climate Policy at the BDI, it is above all the dependence on Russian gas that concerns him. Both the economic sanctions and the conflict itself are hurting German industry, he says. Rolle is convinced, “There is no scenario in which the industry would not suffer from the conflict.” Should the gas tap be turned off – whether by Russia or Germany – it is still unclear to date how this gap would be filled within the next three to four years. He did not mean to question the need for sanctions. But however Russian natural gas is compensated, “It will be painful, expensive and more difficult than before.”

Carsten Rolle holds a doctorate in economics. It was already clear to him during his studies that he wanted to work at the interface between politics and economics. The focus on energy and climate issues came later. “During my studies, I was particularly interested in questions at the interface between economic rationality and political reality,” he recalls.

CBAM could lead to trade conflicts

Today, he is not only head of department at the BDI, but since 2005 has also been managing director of the World Energy Council, i.e., the German section in the World Energy Council. In these two roles, Rolle sits at the forefront of Germany’s economic transformation. He sees carbon leakage as one of the major dangers of this transformation, i.e., the relocation of primarily emissions-intensive production to countries with less stringent climate protection requirements than in the EU. This can already be seen today, says Rolle. It’s not necessarily the factory gate that slams shut with a loud bang but the capital stock in these industries has shrunk noticeably.

This problem is also being hotly debated in the EU. Until now, it was mainly free CO2 certificates that were supposed to counteract the migration of production. The new instrument is the Carbon Border Adjustment Mechanism CBAM. It will enter the trial phase next year and is expected to replace the free CO2 certificates step by step from 2026. There has already been criticism of the concept from many quarters. The BDI is also not convinced. The exact implementation is unclear in many places, says Rolle. “This is a completely new and untested instrument.” He also expects that other countries will not simply accept the taxation of their exports to the EU. The fear is that trade conflicts will arise.

Positive memories of EU enlargement to the East

Rolle has seen in the World Energy Council that the role of the state with regard to climate protection is assessed very differently in different countries: “A CO2 tax is really seen as theft by large sections of the population in some countries, such as the USA.” It was important to find common strategies that worked and were accepted internationally. Including and understanding different political and cultural backgrounds is challenging but also exciting. How difficult this sometimes is can also be seen in the EU.

Rolle has positive memories of his time as a member of the European Student’s Forum. He had an immense amount of fun helping to organize language courses and cultural events. “European integration, especially eastward enlargement, had such a positive spin back then.” Today, when he looks at Poland or Hungary, he has the feeling that they are moving away from a united Europe a bit again. How the war in Ukraine will affect Europe remains to be seen. “If this terrible war has any positive effect, it might be that it leads to more cohesion in Europe again.” David Zauner

EUROPE.TABLE EDITORS

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Charlotte
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Corinna
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Eric
Bonse

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Manuel
Berkel

Lisa-Martina
Klein

Markus
Grabitz

Stephan
Israel

Claire
Stam

Dear reader,

No time to waste: The EU wants to present the sixth sanctions package against Russia as early as today or on Wednesday at the latest. The measures will in all likelihood include a long-disputed oil embargo previously blocked by Germany, among others.

Europe should also reduce dependencies on other raw materials such as lithium, magnesium, or rare earths. Without sufficient access to these materials for wind turbines, photovoltaics, or batteries, the EU is unlikely to achieve its ambitious climate targets. However, for many of these critical raw materials, local companies rely on a few suppliers – often from China. We discussed how we can avoid simply replacing fossil dependencies with new ones with high-ranking experts at the Berlin Energy Days. Leonie Düngefeld has more infos for you.

To get clean electricity faster, some people are looking to Africa. Wind on the coast, sun in the Sahara, wide streams in the Congo – almost 40 percent of the potential for renewable energies lies there. However, not every tempting-sounding idea is a good and ethically justifiable one, reports Katja Scherer.

The showdown on ETS 2 could come this week. Peter Liese, rapporteur for the ETS reform, fears that the second emissions trading system, which has recently come under heavy criticism, will soon have to be buried. Read more about this in the News.

Let’s take another look at digital: The controversial Pegasus spy software was found on the cell phones of Spanish Prime Minister Pedro Sanchez and Spanish Defense Minister Margarita Robles. It is not yet clear who could be behind the attack with the software from the Israeli manufacturer NSO Group.

Your
Lisa-Martina Klein

Energy transition brings new dependencies

By

Leonie Düngefeld

Lithium, magnesium, rare earths: Europe is heavily dependent on imports of important raw materials for the energy transition. Chinese companies dominate many production stages of photovoltaic plants, for example, and the EU also obtains important components for wind turbines and electric cars almost entirely from China.

Politicians and industry agree: This has to change. Europe must be more resilient than before to withstand global shocks such as the COVID pandemic and the war in Ukraine. There is also broad agreement on the solutions, at least in principle. The import sources of raw materials must become more diverse, domestic production should be strengthened again, and reserves for critical raw materials should be built up.

“We have to enable the further processing of raw materials in Europe again, at least in part,” said Matthias Wachter, head of department for raw materials at the BDI, yesterday at a Europe.Table event at the Berlin Energy Days. These processes are energy-intensive and pollute the environment – with imports from other countries, Europe has increasingly circumvented these problems in recent years. If companies in Europe are to produce more raw materials again, these costs must be considered, and the framework conditions changed, Wachter said. “Areas are often overplanned in such a way that domestic extraction is no longer possible at all. And politically, it has not been wanted so far.”

No business case in Europe

Kerstin Jorna, Director General for Internal Market and Industry at the European Commission, calls for greater industry involvement. The European Raw Materials Alliance (ERMA), for example, is trying to build a business case for rare earth refining and recycling in Europe. “At the moment, however, it is not making any progress because the industry is keeping a very low profile,” Jorna said.

Until it is certain that buyers will be willing to pay prices for raw materials produced to European standards, he said, producers will not have the investment security they need – and governments will not need to get involved. “It can’t be that the industry has the outlets and the supply risk is covered by the government,” Jorna said. “We need to work together on both.”

Matthias Wachter of the BDI counters: “Companies are prepared to pay higher prices if this ensures long-term security of supply – but not infinitely high prices either.” The problem is that smelters and smelters in Europe have to pay much higher energy prices than in other countries. He brought up special tariffs for supplying these very energy-intensive plants.

Jorna countered that instead of such individual measures, a comprehensive approach was needed. This would include partnerships with other countries. For example, the Commission is in talks with the United States within the framework of the Trade and Technology Council (TTC) on strategic cooperation in raw materials policy.

Specifically, the idea is to exchange information on new mining projects, Jorna said. “That way, we can also make an offer together that is better than the quick offer from China.” The EU wants to work with peers in the planning and development process, in training local workers, and in technology transfer. “To do that, we now need to talk to our companies about how far they are willing to go in,” Jorna said. “It’s not about doing everything in Europe. But where we can, we should.”

Strategic stockpiling

Henrike Hahn, shadow rapporteur for the Greens/EFA on the European raw materials strategy, calls for an accurate calculation of demand for raw materials. According to a study by the Öko-Institut, far fewer raw materials are needed for the green transformation than assumed, she said at the event. “Companies know their raw material needs much more accurately than policymakers,” Hahn said. “The commission needs to become more professional in terms of costing. That’s the only way we can create proper structures on the part of policymakers.”

For natural gas and oil, strategic reserves in the EU guarantee energy supplies for at least a few weeks in an emergency. However, if imports of rare earths from China, for example, were interrupted, there would be no reserves – with immediate consequences for the entire economy. The European Council, therefore, proposed strategic stockpiling in March. According to Matthias Wachter of the BDI, however, this should not be done at the political level. “We propose stockpiling at the company level. For this, tax incentives must be set and the accounting disadvantage of stockpiling must be dissolved.”

Can renewable energy from Africa solve Europe’s energy problem?

Strong winds on the coasts, and countless hours of sunshine in the Sahara. When energy experts look at the African continent, they see one thing above all: huge potential for unused green electricity. Africa is “a superpower for renewable energy with 39 percent of global potential“, the British think tank Carbon Tracker wrote early last year. A vision that is now receiving new encouragement from the Ukraine war and the associated energy crisis in Europe.

Two-thirds of the fossil natural gas that the EU buys from Russia is to be replaced this year. This is the European Commission’s REPowerEU plan. Russian oil and gas are to become completely superfluous by 2030. And the best way to do that is with green alternatives because the EU wants to become climate-neutral by 2050. The solution to this challenge is obvious to some commentators. “Russia’s invasion could usher in an African energy renaissance,” writes South African thought leader and author Jakkie Cilliers, for example.

Cilliers is the founder of the Institute for Security Studies, a non-governmental organization in Pretoria that works to secure peace in Africa. Specifically, Cilliers proposes a fresh start on the “Desertec” project: Companies should build large solar plants in North Africa and transport the electricity generated directly to southern Europe. That would require new submarine cables between Africa and Europe – but some of those are already in the planning stages. “Since Europe has the largest synchronous power grid in the world, it’s relatively easy to inject additional capacity and find ways to transport power north.”

Energy export enormously loss prone

In addition, Cilliers advocates implementing another highly controversial construction project: a gigantic dam on the Congo River. This “Grand Inga” dam has been discussed for years. So far, however, there are not enough investors for it. Exporting energy to Europe would make the project much more attractive, Cilliers writes. “Grand Inga becomes immediately commercially viable if it uses its vast electricity production to generate hydrogen at the source and convert iron ore and bauxite deposits into steel,” Cilliers writes. The finished products, green hydrogen and green steel, could then be shipped by sea to Europe.

Solar power from the north, hydropower from the west of Africa – and all Europe’s energy problems are solved? That sounds tempting. However, on closer inspection, Cillier’s solutions are anything but easy to implement, and above all, not all of them make sense. Exporting electricity from North Africa to Europe on a large scale is considered technically difficult by most experts alone. “Transferring electricity over long distances often involves high energy losses,” says Günter Nooke, until recently, ex-Chancellor Angela Merkel’s Africa envoy. Plus: Both Africa and Europe lack the necessary transmission lines to do so.

It is more promising to use the green electricity from Africa to produce hydrogen in Africa and export it. This is something that the German government is currently working hard to achieve. Hydrogen can replace Russian oil and gas in the chemical industry or in fertilizer production, for example, and thus ensure a better climate balance in Germany. The German government is currently commissioning the Jülich Research Center to draw up an “H2 Atlas”. This is intended to show where there is potential for hydrogen production and export throughout Africa.

Stable legal situation important for investors

At first glance, the results of this atlas look very good. 33 percent of the land areas in West Africa are suitable for photovoltaics, 76 percent for onshore wind turbines. The Jülich experts have already found this out. The hydrogen produced in this way would be significantly cheaper than production in Germany. For Rainer Baake, head of the Climate Neutrality Foundation and former energy state secretary, Namibia has so far been the most suitable partner country on the African continent. “Namibia is a democratic state with a stable legal system,” he says. “That’s an important prerequisite for getting private investors interested in setting up hydrogen production.”

In contrast, Baake gives other countries a worse report card. South Africa is also pursuing a hydrogen strategy and working on the energy transition. Morocco also has ambitious goals in this regard. But in all these countries, the political systems are significantly more unstable than in Namibia, says Baake. “There, after the experience with Russia, we should already ask ourselves how strongly we make our energy supply dependent on such states.” South American partners such as Chile or Uruguay are more attractive.

In addition, individual energy projects on the African continent are also highly controversial – for example, the dam on the Congo River proposed by Jakkie Cilliers. The Congo is already being used for two small hydroelectric power plants: Inga I and Inga II. The plan is to further expand the energy supply with Inga III. And some even dream of “Grand Inga” as an absolute giga-dam. Former Africa envoy Günter Nooke thinks at least the plans for Inga III make sense. It is to generate around 11,000 megawatts of energy, as much as eight nuclear power plants.

Not repeating colonialist mindset

For Nooke, it is clear that whether only Europe or also the people of the Congo will benefit depends above all on how the contract is drawn up. “The construction work on Inga III can give Congo an industrialization boost,” he says. That will create jobs. And the country can invest the revenue from electricity exports in its own energy supply. The government in the Democratic Republic of Congo is therefore pushing ahead with the plans. At the end of last year, it commissioned the Australian mining company Fortescue to plan the dam.

Critics of the project, on the other hand, point out that the World Bank withdrew from financing the dam for a good reason. In Congo, only nine percent of people currently have access to energy, says Franziska Müller, a professor of globalization at the University of Hamburg. And the power grids to distribute the electricity from Inga III around the country are lacking. “To produce energy there for export to Germany and Europe, I think is difficult from an ethical point of view.” Especially since numerous people would have to be resettled for the construction of the dam, and untouched nature would be destroyed.

The example shows: Just setting up energy plants in Africa and producing green hydrogen won’t work. The export of hydrogen is a great opportunity for the continent. But not all projects that are theoretically possible make practical sense. Many countries would also need more stable legal and political frameworks. Only then will the private investors who make the development of a hydrogen economy possible come.

Moreover, Western countries should not repeat a mistake from the past, Müller advises. “Africa is not a big empty space that can be used at will,” she says. That is a colonialist way of thinking. The EU and German government should look much more closely at the existing energy strategies of African countries – and then consider how they could usefully complement them. “So far, this is still happening too little,” according to Müller. A partnership of equals looks different. Katja Scherer

Katja Scherer is an economic journalist and runs the blog Wirtschaft in Afrika. As a freelance journalist she works for Die Zeit, NDR, DLF, WDR, and 3tn among others.

Habeck expects sixth sanctions package including oil embargo today

EU energy ministers held a special meeting on Monday to discuss the situation following the suspension of Russian gas supplies to Poland and Bulgaria. A major topic on the sidelines was the sixth sanctions package, which the EU Commission is to present today. Now, things are supposed to move quickly: He expects the EU Commission to present the sixth sanctions package this Tuesday, said German Economics Minister Robert Habeck after the special meeting.

Habeck expects the Russian oil phase-out to be part of it. While the extent of the embargo is still under discussion, oil will definitely be on the list. The EU Commission plans to adopt the sixth sanctions package today at its meeting in Strasbourg. Commission President Ursula von der Leyen is expected to present a result in the afternoon or on Wednesday at the latest. It will then take a few more days for the deliberations of the member states, said Robert Habeck. He couldn’t say whether the process would be completed before the weekend. Until recently, it was unclear how a veto by the Hungarian government could be prevented. Long transition periods or exemption clauses for countries like Hungary and Slovakia, which are particularly dependent on Russian oil, are being discussed.

Similar to the coal embargo, there is likely to be a transitional period of three to four months to process existing contracts. It is also possible that, as a first step, only certain product groups and transport routes will be affected by the embargo. The phase-out for gasoline and diesel could happen more quickly, while the end of the year was still considered for crude oil. Deliveries by ship could also fall under a ban. Germany receives one-third of its Russian oil by ship, while two-thirds arrives at refineries in Leuna in Saxony-Anhalt and Schwedt an der Oder in Brandenburg via the Druzhba pipeline. Germany could bear an oil embargo now, Habeck affirmed. Since the start of the Ukraine war, the share of Russian oil in German oil consumption has fallen from 35 percent to 12 percent. Other countries, however, have not yet reached that point.

Supply disruptions possible

However, the main topic and reason for the special meeting was the situation after the supply stop of Russian gas to Poland and Bulgaria. After the meeting, French Energy Minister and current Council President Barbara Pompili emphasized the strong solidarity among the member states. She said that the representatives of Poland and Bulgaria had stressed that there was no risk to supply in the short term. Bulgaria receives gas from Greece and Poland from Germany. There is no direct risk to energy security in Europe, EU Energy Commissioner Kadri Simson also said. Storage facilities are reportedly over 32 percent of their capacity. But it could now hit any member state. Vladimir Putin was trying to divide the EU. It is necessary to prepare for possible supply disruptions.

Robert Habeck also emphasized the high degree of cohesion, cooperation, and solidarity with regard to the gas stop to Bulgaria and Poland. The German Federal Minister of Economics spoke of a qualitative leap: “You don’t read out statements, but refer to each other in the discussion.” Each country is not just acting for itself, but for all the others. Germany is pulling up capacity at LNG terminals in a short time, filling gas storage facilities. Germany has leased four floating LNG terminals, two of which could begin operations by the end of the year. Filling gas storage facilities is not only reassurance from a nation-state perspective but for the EU as a whole. The shift away from Russian energy is also seen as a step away from fossil energy in general. This is new. sti

Crisis resilience of the energy transition: focus on renewables

Even though the focus has shifted to LNG as an alternative to Russian natural gas over the Ukraine crisis, representatives of various think tanks and associations consider LNG to be a partial solution at best. Casimir Lorenz, economist at Aurora Energy Research, made it clear at the Berlin Energy Days that the planned LNG capacities in Germany are not sufficient to replace Russian gas in the short term. Of global production capacity of 500 bcm there is only about 120 bcm available. This would not suffice. Industry outages would be the consequence of a gas embargo.

Lorenz believes that summer 2024 is the earliest possible point to achieve complete independence from Russian energy supplies. In the meantime, coal-fired power plants could help reduce gas consumption in power generation or secure freed-up capacities for the industry. According to Lorenz, this would not jeopardize the coal phase-out by 2030, as more LNG would be available in 2026 anyway and coal-fired power plants could be shut down as planned.

However, renewable energies should be at the center of supply security, emphasizes Tilman Schwencke, Director of Policy and Strategy at the German Association of Energy and Water Industries (BDEW). The goals have remained the same as before the war: Expanding renewables, increasing the efficiency and renovation of buildings. The only things that have changed are the rate at which this needs to happen and the substitution of Russian energy supplies, and the diversification of suppliers.

LNG dirtier and more expensive than natural gas

He is critical of overdependence on LNG. It also was not entirely stupid to rely on Russian natural gas because LNG is dirtier and more expensive. In addition, other nations would be deprived of LNG in the coming years, as Qatar and the United Arab Emirates, for example, would not be able to significantly increase their production volumes before 2024.

For the future of European energy supply, Georg Zachmann of the Brussels-based think tank Bruegel warns that each individual element must be replaceable. This means that no new dependencies should be created when it comes to energy supply. He also sees renewables in the most suitable position in this respect.

In the short term, according to Zachmann, Russia urgently needs to be made clear that the EU is not dependent on its energy supplies. He did not explain how. With regard to possible peace negotiations between Russia and Ukraine, it is “politically an absolute imperative” to stand by Ukraine instead of stabbing it in the back. To cushion the impact on the industry, Zachmann called for “European solutions”. Germany cannot supply its own industry with subsidized energy while draining the storage facilities of neighboring countries, the energy expert said. luk

Hydrogen: mainly local projects till 2030

According to expert estimates, European key industries will not be able to obtain sufficient supplies of hydrogen and its derivatives until after 2030. Even a steady supply to the German steel industry is unlikely to be secured by 2030, even with imports, Maike Schmidt of the Center for Solar Energy and Hydrogen Research Baden-Württemberg (ZSW) said Monday at the Berlin Energy Days. “I rather believe that smaller hydrogen applications will grow domestically,” the scientist said.

According to a meta-analysis by the German Academy of Science and Engineering (acatech), 50 to 250 terawatt-hours (TWh) of hydrogen would be required to meet the hydrogen needs of all sectors in Germany by 2030. This would require electrolyzers with 17 to 90 gigawatts (GW). By the mid-2030s, however, only 4 GW of generation plants have been planned in Germany so far, said acatech scientist Andrea Lübcke. The German government is pursuing a goal of 10 GW of electrolysis capacity by 2030.

Sustainability of hydrogen vs. market ramp-up

Even if there were sufficient generation capacity, distribution within Europe via ships, trucks, or pipelines is another unresolved issue. “To prevent individual regions from becoming disconnected, one challenge is to achieve simultaneous development in Europe,” said Kirsten Westphal, board member of the German government’s H2Global import project and member of the National Hydrogen Council.

To speed up technology development, several experts advised against overly strict sustainability requirements. An initial phase with lower requirements and gradual tightening is an approach worth discussing, Schmidt stated. Japan and South Korea would not impose strict sustainability requirements for hydrogen production in procurement, reported Christoph Stemmler of acatech.

One important technical limitation, for example, is the continuous utilization of electrolyzers and synthesis plants for the production of hydrogen and its derivatives. This could hardly be guaranteed with fluctuating renewable energies alone. According to Schmidt, if additional green hydrogen were to be kept on hand for reconversion to electricity for supply gaps, significantly larger electrolysis capacities and very large hydrogen storage facilities would have to be planned at the generation sites. At current costs, however, this would be uneconomical. ber

ETS reform: Negotiations in the EU Parliament enter critical stage

This week is likely to be a crucial one on the road to a revised European Emissions Trading Scheme (ETS). Rapporteur Peter Liese (EPP, DE) and the shadow rapporteurs will hold several rounds of negotiations simultaneously. Today (Tuesday) there is, among other things, a joint meeting of the negotiating groups on the two fit-for-55 dossiers ETS and CBAM. There, the duration of the phase-in period of the border adjustment mechanism and the reduction of free CO2 allowances for the industry will be the key topic.

On Thursday, there might be a showdown at an open-end meeting. It is quite possible that Liese and the shadow rapporteurs will discuss compromises on the most problematic point of the negotiations until late in the evening. The introduction of a second emissions trading scheme for road transport and building heating (ETS 2) continues to cause the biggest headaches for the negotiators.

Rapporteur Liese fears for the ETS 2 as a whole, as it is increasingly criticized for placing too heavy a burden on citizens. Even after his proposed compromises, skepticism remains. Green shadow rapporteur Michael Bloss sees the compromises as positive, but he does not yet know whether the ETS 2 will be adopted as a result. The mood within the negotiating group is “testy”, Bloss reported Monday.

The German Ministry of Economics continues to support the introduction of ETS 2, provided that there is social compensation in the form of the Climate Social Fund. This means that the opposition of the European Greens to ETS 2 appears to be greater than that of the German Green-led Federal Ministry for Economic Affairs. luk

Scholz and Modi practice solidarity despite differences

Germany and India want to cooperate more closely, despite differences over the Ukraine war. Chancellor Olaf Scholz and India’s Prime Minister Narendra Modi announced a greater partnership during a joint appearance in Berlin on Monday. Scholz said the German government would provide €10 billion through 2030 for cooperation on climate protection or renewable energy. A joint statement outlines the planned cooperation.

Among other things, both countries are pressing for a seat on the UN Security Council. Both heads of government strove to find common ground. There are differences, for example, over the war in Ukraine. Modi warned that the war would not produce winners, only losers. Developing countries,, in particular, would suffer from price increases and supply bottlenecks.

Both governments signed a series of Memoranda of Understanding. Against the backdrop of the so-called “Bonn Challenge,” India wants to restore around 26 million hectares of forest by 2030 and increase its share of forest land from 21 to 33 percent.

In addition, Economics Minister Robert Habeck (Greens) and Indian Energy Minister R.K. Singh signed a declaration of intent on German-Indian hydrogen cooperation. A task force, the so-called Indo-German Energy Forum, is to be set up for this purpose. Furthermore, both countries plan to sign agreements on the exchange of confidential information and encrypted connections between the foreign ministries of both countries. The next government consultations are to take place in India in 2024. rtr

Finnish consortium cancels NPP project with Russia

A consortium of Finnish companies has stopped a project with Russia for the construction of a nuclear power plant. The Fennovoima group announced on Monday that it had terminated the contract with Russian state-owned Rosatom for the construction of the plant in central Finland. Fennovoima cited delays and growing risks from the war in Ukraine as the reason.

Since the Russian invasion of Ukraine, Finnish Economy Minister Mika Lintilä had repeatedly ruled out the final approval of the nuclear power plant project. Lintilä welcomed the consortium’s decision. Traditionally neutral Finland has recently considered NATO membership in light of Russia’s actions in Ukraine.

Uniper’s parent company Fortum, along with the Finnish steelmaker Outokumpu and the Swedish company SSAB, holds two-thirds of the shares in the consortium, with the Russian Rosatom Group holding the remainder via RAOS Voima. What will happen to this stake is still unclear at this time, said Fennovoima Chairman of the Board Esa Härmälä.

Clear decision

It was also too early to consider whether the consortium could look for another partner to build the plant. The group has so far spent between €600 million and €700 million on the project. The total cost of the plant had been put at €7.5 billion. Härmälä did not want to comment on write-downs that could hit Fennovoima owners.

The NPP is to be constructed on the Hanhikivi peninsula in Finland. The deadline for the final construction permit was the end of 2022, and Economics Minister Lintilä said on Monday that Fennovoima’s decision was clear. “It would have been practically impossible to carry on with the project.” The war in Ukraine had exacerbated the risks for the project. “RAOS has been unable to mitigate any of the risks.” No details were provided.

Finland is separated by a 1300-kilometer border from Russia, which calls the war in its other neighbor a “special operation”. Consortium member Fortum is the parent company of German energy company Uniper, which in turn is the largest foreign client of Russian gas company Gazprom. Uniper posted a billion-dollar loss in the first quarter, attributed to write-downs related to the Nord Stream 2 gas pipeline, which has been scrapped for the time being, and its Russian subsidiary Unipro.

No comment on the development was initially available from Rosatom on Monday, and the Finnish subsidiary RAOS refused to comment. rtr

Ministry: further fine rules for violations of EU sanctions

Violations of the EU’s sanctions packages in response to Russia’s war in Ukraine are to be punished more effectively, according to the German government. According to the Ministry of Economics, the amendment to the Foreign Trade and Payments Ordinance, which came into force on Monday, also introduces new rules on fines for the financial sector. For example, anyone who engages in prohibited deposit or stock exchange transactions for Russian persons could be fined up to €500,000. Violations of “classic” sanctions regulations, such as import and export bans or the “freezing” of financial assets, are reportedly criminal offenses and can be punished as before with a prison sentence of up to five years. dpa

Pegasus spyware: Spanish prime minister and defense minister affected

According to government sources, the Pegasus spy software from the Israeli manufacturer NSO Group has been found on the cell phone of Spanish Prime Minister Pedro Sanchez. Presidential Minister Felix Bolanos told a news conference Sanchez’s phone was infected in May 2021 and at least one data leak occurred then. The program was also found on Defense Secretary Margarita Robles’ cell phone, according to the report. Bolanos did not comment on who the government believes could be behind the spying attack. Sanchez’s left-wing minority government is currently under political pressure, even in connection with “Pegasus”.

According to the Canadian-based research institute Citizen Lab, more than 60 people associated with the Catalan separatist movement were spied on using the software. The Catalan ERC party, which advocates independence for the region and supports Sanchez’s government in Madrid, is now demanding clarification from the prime minister. The ERC stated that it would not support the government in votes until trust had been restored.

According to the Israeli manufacturer NSO, the “Pegasus” software is intended solely for use by intelligence services and the police in the fight against terrorism and crime. However, there are repeated accusations that the spy program is being used by governments to spy on politicians, human rights activists, and journalists. EU Justice Commissioner Didier Reynders and EU Commission staff have also been victims of spying attacks. The European Parliament has set up a special committee on the use of Pegasus and similar software. The European Data Protection Supervisor has called for a ban on “Pegasus” and similar software. rtr

Commission takes action against Apple over payment service

Apple is facing a heavy antitrust fine in the European Union. On Monday, the EU Commission sent the US company a list of complaints about the Apple Pay payment service.

“We have evidence that Apple has restricted third-party access to key technologies needed to develop competing mobile wallets for Apple devices,” EU Commissioner for Competition Margrethe Vestager announced. “In our statement of objections, we provisionally find that Apple may have restricted competition in favor of its own Apple Pay solution.”

Apple announced that it would continue to cooperate with the EU Commission. So far, the company has not made its payment system, in which payment options stored in the Apple digital wallet interact with point-of-sale systems via NFC proximity technology, available to third-party providers. Apple Pay is currently used by over 2,500 banks and over 250 fintech companies.

The statement of objections is a formal part of the Commission’s investigations into alleged antitrust violations. If Apple is found guilty, the US company could be forced to open up its system. In addition, it could then face a heavy antitrust fine.

The Digital Markets Act (DMA), which was only recently unified by the negotiators, is also likely to further increase the pressure on Apple to open up its largely closed ecosystem in Europe. The DMA is not yet relevant for the current Apple Pay process: It has yet to be approved by the European Parliament, after which a six-month transition period will come into effect. In the event of a repeat offense, however, the penalties for Apple could be significantly higher.

Google asks to cancel antitrust fine

Alphabet subsidiary Google, meanwhile, has asked the European Union’s second-highest court, the European Court of Justice, to overturn a €1.49 billion antitrust fine imposed by the EU Commission in 2019. Some of the EU Commission’s assumptions were wrong, Google said at the start of the three-day hearing before the European Union court in Luxembourg. The EU Commission had justified the fine on the grounds that the US technology group was abusing its dominant position in online advertising with its Adsense service. It was one of three cases that resulted in total fines of more than €8 billion. fst/rtr

EU’s Vestager assessing if tech giants should share telecoms network costs

Tech giants such as Google, Meta and Netflix may have to bear some of the cost of Europe’s telecoms network, Europe’s digital chief Margrethe Vestager said on Monday, following EU telecoms operators’ complaints.

“I think there is an issue that we need to consider with a lot of focus, and that is the issue of fair contribution to telecommunication networks,” Vestager told a news conference. “Because we see that there are players who generate a lot of traffic that then enables their business but who have not been contributing actually to enable that traffic. They have not been contributing to enabling the investments in the rollout of connectivity,” she said.

“And we are in the process of getting a thorough understanding of how could that be enabled,” Vestager said, adding that she was looking into how data traffic evolves over time and that related to the COVID-19 pandemic. According to a study released by telecoms lobbying group ETNO on Monday, Meta, Alphabet, Apple, Amazon, Microsoft and Netflix accounted for over 56 percent of all global data traffic last year.

The study said an annual contribution of 20 billion euros to network costs by the tech giants could give a €72-billion boost to the EU economy. ETNO’s members include Deutsche Telekom and Orange.

Vestager, however, gave short shrift to the telecoms industry’s calls to loosen EU merger rules to allow more consolidation. “The problem is that the arguments that we hear, like the need for scale in order to invest, they are not new,” she said. rtr

Carsten Rolle (BDI): ‘It will be painful’ for German industry

The war in Ukraine and its consequences for German industry have kept Carsten Rolle on his toes for weeks. As Head of Department Energy and Climate Policy at the BDI, it is above all the dependence on Russian gas that concerns him. Both the economic sanctions and the conflict itself are hurting German industry, he says. Rolle is convinced, “There is no scenario in which the industry would not suffer from the conflict.” Should the gas tap be turned off – whether by Russia or Germany – it is still unclear to date how this gap would be filled within the next three to four years. He did not mean to question the need for sanctions. But however Russian natural gas is compensated, “It will be painful, expensive and more difficult than before.”

Carsten Rolle holds a doctorate in economics. It was already clear to him during his studies that he wanted to work at the interface between politics and economics. The focus on energy and climate issues came later. “During my studies, I was particularly interested in questions at the interface between economic rationality and political reality,” he recalls.

CBAM could lead to trade conflicts

Today, he is not only head of department at the BDI, but since 2005 has also been managing director of the World Energy Council, i.e., the German section in the World Energy Council. In these two roles, Rolle sits at the forefront of Germany’s economic transformation. He sees carbon leakage as one of the major dangers of this transformation, i.e., the relocation of primarily emissions-intensive production to countries with less stringent climate protection requirements than in the EU. This can already be seen today, says Rolle. It’s not necessarily the factory gate that slams shut with a loud bang but the capital stock in these industries has shrunk noticeably.

This problem is also being hotly debated in the EU. Until now, it was mainly free CO2 certificates that were supposed to counteract the migration of production. The new instrument is the Carbon Border Adjustment Mechanism CBAM. It will enter the trial phase next year and is expected to replace the free CO2 certificates step by step from 2026. There has already been criticism of the concept from many quarters. The BDI is also not convinced. The exact implementation is unclear in many places, says Rolle. “This is a completely new and untested instrument.” He also expects that other countries will not simply accept the taxation of their exports to the EU. The fear is that trade conflicts will arise.

Positive memories of EU enlargement to the East

Rolle has seen in the World Energy Council that the role of the state with regard to climate protection is assessed very differently in different countries: “A CO2 tax is really seen as theft by large sections of the population in some countries, such as the USA.” It was important to find common strategies that worked and were accepted internationally. Including and understanding different political and cultural backgrounds is challenging but also exciting. How difficult this sometimes is can also be seen in the EU.

Rolle has positive memories of his time as a member of the European Student’s Forum. He had an immense amount of fun helping to organize language courses and cultural events. “European integration, especially eastward enlargement, had such a positive spin back then.” Today, when he looks at Poland or Hungary, he has the feeling that they are moving away from a united Europe a bit again. How the war in Ukraine will affect Europe remains to be seen. “If this terrible war has any positive effect, it might be that it leads to more cohesion in Europe again.” David Zauner