Table.Briefing: Europe

Deal after jumbo trilogue + Iratxe García Pérez under pressure

  • Jumbo trilogue: Emissions trading for buildings and transport will come
  • Corruption scandal: S&D leader Iratxe García Pérez under pressure
  • Electricity market reform: Commission considers longer revenue limitation
  • Timmermans: Combustion engine phase-out will not be reversed
  • Power cable to be built under the Black Sea
  • Apéro: Dancing and pancakes at the jumbo trilogue
Dear reader,

At just before 2 a.m. on Sunday, the deal for one of Europe’s most important climate action instruments was finalized: In a jumbo trialogue, the EU Parliament, the Council and the Commission agreed to reform European emissions trading in such a way that emissions will fall more quickly by 2030 and the carbon price will rise. For a long time, the second emissions trading system for heating and road traffic was hanging in the balance. It is now on its way, but with significantly reduced social compensation. I summarized all the results of the jumbo trilogue for you.

The Commission plans to respond to high energy prices with a proposal for a new electricity market design in March. The consultation on this is still pending, but the draft of an accompanying letter has been leaked. Manuel Berkel summarizes the key plans.

In the corruption affair in the European Parliament, the leader of the heavily incriminated Socialist Group came under pressure. Although Iratxe García is not accused of any wrongdoing, she is blamed for a “culture of small gifts” within the group, in which posts are distributed in exchange for political compliance. Markus Grabitz has the details.

Your
Lukas Knigge
Image of Lukas  Knigge
  • Digitization

Feature

Emissions trading for buildings and transport is coming

The phase-out of free carbon allowances for the industry had been the biggest battle, said a relieved Michael Bloss (Greens) on Sunday morning. Negotiators from the EU Parliament, Council and Commission reached an agreement earlier at 2 a.m. in the jumbo trilogue on the reform of the EU Emissions Trading System (ETS).

It envisages that the free carbon allowances for the industry will be completely replaced by the Carbon Border Adjustment Mechanism (CBAM) in 2034. Prior to this, they will be gradually phased out starting in 2026, while CBAM will be introduced in parallel (see chart). Sectors not covered by CBAM, such as the chemical industry, are exempt. They will continue to receive free emission allowances for the time being. CBAM covers iron and steel, aluminum, cement, fertilizers and hydrogen.

The export sector will also continue to receive free allocations, but only to a limited extent. Industrial plants that do not submit decarbonization plans can lose up to 40 percent of their free allowances even before the phaseout. Half of the allowances released will go to the Innovation Fund and the other half to the export industry as protection against carbon leakage.

Emissions are to be reduced by 62 percent

The ambition level of the ETS reform is raised by removing surplus allowances from the market. In 2024, 90 million emission allowances will be removed, and in 2026 another 27 million. In addition, the linear reduction factor (LRF), which determines the annual reduction in total ETS emissions, will be raised to 4.3 percent in 2024 and 4.4 percent in 2028.

The elimination of allowances means that affected sectors will be forced to reduce their emissions by 62 percent by 2030 compared to 2005 levels, down from the previous 43 percent. The 62 percent represents a compromise between the positions of the Parliament (63 percent) and the Council (61 percent).

Emissions trading for buildings and transport

The second emissions trading system for fuels for heating buildings and fuels for road transport was considered a key issue in the negotiations before the jumbo trilogue. The compromise now provides for the introduction of ETS 2 in parallel with the existing ETS in 2027. However, if the gas price a year before the introduction exceeds the level before the start of the Ukraine war (around 106 euros/Mwh), the launch of the new ETS will be postponed by another year.

Furthermore, the ETS 2 will include a form of a price cap. The trilogue agreement provides for a price stability mechanism that will release 20 million additional allowances if the price per metric ton of carbon in ETS 2 exceeds €45.

It was open whether only commercial use of the fuels would be subject to a carbon price, or private use as well. Parliament demanded this split in order to avoid burdening private households with additional costs. The trilogue agreement now provides: The ETS 2 carbon price will apply to all uses.

Smaller social climate fund in 2026

To ease the burden, the Social Climate Fund was passed. However, it is significantly smaller than the Commission and Parliament initially proposed. Starting in 2026, the fund will be pre-financed by the revenue from the auctioning of 50 million ETS allowances from ETS 1 (around €4 billion). Once ETS 2 is introduced, €65 billion from its revenues will go to the fund. On top of this, another €22 billion will be contributed by the member states.

Parliament and the Commission insisted on a €144 billion fund, but the member states refused to go along with this. The compromise is now a volume of around €87 billion. However, the Parliament’s demand for the fund to take effect one year before the launch of ETS 2 has been taken into account. In addition, the other revenues from ETS 2, which do not flow into the fund but into the national budgets of the countries, must also be spent on climate action.

With the trilogue agreement on the ETS reform and the introduction of CBAM and the Social Climate Fund, the essential part of the Fit for 55 package has been adopted. It still needs to be formally confirmed in the Environment Council and Parliament. This may still take until spring 2023.

  • Climate & Environment
  • Climate Policy
  • Emissions
  • Emissions trading
  • Fit for 55

Corruption affair: S&D head under pressure for crisis management

In the corruption affair in the European Parliament, Socialist group leader Iratxe García Pérez is under massive pressure for her crisis management. The Greek MEP and leader of the socialist party PASOK, Nikos Androulakis, accused her in the last parliamentary group meeting that she already had information about the unethical behavior of arrested Eva Kaili in September, but ignored it.

It has now become known that Iratxe García’s closest associate and office manager maintained a friendly relationship with Kaili: photos emerged showing her and Garcìa’s confidante, Laura Ballarin Cereza, on vacation with Kaili and her partner. Questions are now being raised about whether Morocco’s influence on the European Parliament also involves links with Spain’s Socialist Party.

Many traces lead to Italy

The 145-member parliamentary group led by Iratxe Garcia is deeply shaken by the arrests of Kaili and former Socialist MP Pier Antonio Panzeri, as well as the office raids of MPs Maria Arena and Andrea Cozzolino. Kaili’s partner, Francesco Giorgi, has confessed to accepting money from Morocco.

Surprisingly, the Spanish government under Socialist Pedro Sánchez radically changed its policy toward Morocco in April, welcoming Rabat’s plans to integrate the territory of Western Sahara into Moroccan territory as an autonomous region. Cozzolino, who has since been expelled from his Italian party, led the Maghreb delegation in parliament.

Iratxe García posts ‘Bye, bye Strasbourg’

In the beginning, only Qatar was considered to be the source of corruption. Now, Morocco has begun to shift into focus. On Tuesday, when mainly Italian employees of the Socialists were still under suspicion, Iratxe García was asked in front of the press whether she had trust in the delegation of Italy. She warned against generalizations, saying the accusations concerned “individuals”. She said they had broken the rules, but there was no reason to put a country or a group under general suspicion.

Did she know of any other cases? She denied it, then said, “In any case, I did not participate.” Iratxe García is said to have made an overwhelmed impression in the parliamentary group on Monday. She cried repeatedly, the word was from the group. On Wednesday she traveled back to Brussels early, posting “bye, bye Strasbourg” leaving the group meeting leaderless.

At the moment, no one accuses her of any wrongdoing. She supports the concerns of Western Sahara and is unhappy with Madrid’s change of course. In the parliamentary group, however, more and more voices do not believe in individual cases, but question the structures. Members from Scandinavia and Austria as well as PASOK leader Androulakis have expressed their views accordingly. They think Iratxe García should relieve her office manager of her duties until the case is cleared up. But so far she is not willing to do so.

‘Culture of small gifts’

The head of the Spanish S&D deputies, Javier Moreno Sánchez, has also come under criticism. Along with office manager Ballarin Cereza, he is Iratxe García’s closest employee. He is considered to be the hand of the head of the Spanish government in the EP. Within the parliamentary group, Moreno Sánchez is said to have created a “culture of small gifts“. For example, he managed to have Kaili appointed Vice President of the European Parliament at the start of the year. In exchange, he is expected to make political concessions.

An outraged Greek MP Androulakis last week raised the question in the parliamentary group why Kaili was made vice without the support of the PASOK party leader. Kaili, he said, had played it cool in the Greek spy affair, when Androulaki’s cell phone was bugged with spyware, and sided with head of government Kyriakos Mitsotakis (Nea Demokratia). She was the “Trojan horse” of the conservatives, Androulakis said.

The voting behavior of Kaili and another Socialist Vice President, Pina Picierno, in the election of Alessandro Chiocchetti as the new Secretary General of Parliament was also criticized. Although the group opposed it, Kaili and Picierno had given their votes to the Christian Democrat. Iratxe García never raised the issue or scandalized this behavior in the parliamentary group, they say. A Socialist deputy told Europe.Table that Iratxe must now prove that she can put an end to the unpleasant influence of southern Europeans in the group.

  • Corruption
  • Digitization
  • Europäische Kommission
  • Europäisches Parlament
  • European Parliament
  • Lobbying

Electricity market: Commission considers expansion of revenue limitation

With a reform of the electricity market, the Commission wants to ensure lower prices in response to pressure from member states. The proposal is to be presented by March; observers expected the consultation to begin last Friday. Instead, Europe.Table obtained a non-paper in which the Commission explains the goals of the consultation.

In it, further developed crisis support is envisaged and even a recurring revenue limitation for existing renewable energy plants. Commission spokesman Eric Mamer, however, clarified on Friday that the draft does not reflect the Commission’s view. Since the start of the consultation has been postponed, the document is unlikely to have been leaked by accident.

New remuneration for power plants

On the wholesale market, the Commission wants to use several measures to lower electricity prices. According to the non-paper, the short-term spot market is to be maintained in principle. Storage facilities and more flexible demand are to ensure that gas-fired power plants will set the price less frequently. However, it completely omits how the construction of new, hydrogen-capable gas-fired power plants is to be stimulated.

Furthermore, it is unclear which revenues renewable energies can still generate on the spot market, which would have direct consequences for their significance in this market. In fact, the stated goal is that short-term markets “determine the revenues of generators to a much lesser extent.” The Commission’s reform proposals focus on “inframarginal generation” like renewables and nuclear power plants. In the future, their revenues should reflect the specific production costs.

Incentives for long-term electricity supply contracts

Even for existing power plants, parts of the already passed but temporary revenue limitation could be applied “more permanent and harmonized basis” or reactivated in the event of new crises, the non-paper says. Energy companies had already strongly criticized the crisis measure. The green power provider Lichtblick, for example, advocated a windfall tax instead of a revenue limitation.

For new inframarginal generators, the commission wants to incentivize generators, traders, and “industrial and non-industrial customers” to conclude long-term power supply agreements (PPAs). These are considered a market-based financing method that does not require government subsidies.

The non-paper calls for a switch from government subsidies to bilateral contracts for difference (CfDs), which allow the government to skim off revenues from the outset in the event of high electricity prices. But according to the commission, combinations of PPAs and CfDs are also possible. However, energy economist Ingmar Schlecht argues that CfDs are less efficient than derivatives, which allow generators to already financially hedge their electricity sales on exchanges.

Basic supply for electricity customers

As a crisis measure, EU states have been given the option of setting regulated electricity prices for households and businesses and paying subsidies. Subsidies for investment in efficiency and home generation have also been facilitated. In the non-paper, the Commission now considers “further developing” the crisis measures. “This could ensure that certain consumers have access to a minimum level of electricity at a reasonable price in emergency situations.” The German parliament already passed such a minimum supply last week with gas and electricity price caps. However, the EU framework on state aid expires at the end of 2023.

The non-paper states that electricity suppliers of a certain size could be required to offer households such block rates with a favorable base consumption and freely priced additional consumption. These could supplement the existing obligation to offer dynamic rates, which are intended to encourage electricity customers to align their consumption with the electricity supply. However, households would require smart meters for this. With this initiative, the Commission apparently responds to the stalling rollout of smart metering systems in member states such as Germany (Europe.Table reported).

Obligation to hedge

Electricity suppliers could also be forced to “adequately hedge” their supply obligations. During the energy crisis, some suppliers filed for insolvency because they had speculated on continued low prices and failed to hedge with derivatives. Customers slipped into backup supply, whereupon the new suppliers wanted to burden the new customers alone with the exorbitant procurement costs for the unexpected demand. The Commission now wants to clarify in greater detail the rights and obligations of suppliers and customers regarding backup and minimum supply.

As another measure to counter high market prices, the self-supply of electricity from generating systems not mounted on one’s own building could also be strengthened. Tenant electricity models in social housing are mentioned as one example. So far, such models have mostly been limited to solar technology.

Market supervision in cross-border electricity trading

Some governments identified speculation in energy trading as the culprit behind the “inflated” prices. The Commission now considers strengthening supervision specifically in cross-border trading by revising the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT).

The non-paper cites “very high volatility, interference from external players, lower supply, and new behaviors in trading” as reasons. Due to the coal and nuclear phase-out and outages of nuclear power plants, there has recently been less and less competition for generation capacity. This increased the importance of foreign power plants, the German Federal Network Agency and the German Federal Cartel Office recently wrote.

In the non-paper, the Commission announces plans to harmonize fines imposed by national competition authorities for REMIT violations across Europe. It will also be interesting to see whether there will be a separate initiative in the electricity sector to push back the influence of Russia as an “external player”.

  • Digitization
  • Energy crisis
  • Energy policy
  • Energy Prices
  • Renewable energies
  • Strommarkt

News

Timmermans: Combustion engine phase-out will not be reversed

Frans Timmermans, EU Commission Vice President in charge of the Green Deal, warns against casting political doubt on the 2035 phase-out of the internal combustion engine. In a guest article for several media outlets, he wrote that the EU Commission would not reverse the internal combustion phase-out in the review scheduled for 2026: “Review clauses are in every EU law.” The review of CO2 fleet limits will only be about “how we reach 2035, not whether we still want to reach it,” Timmermans said.

Without mentioning Industry Commissioner Thierry Breton by name, it is clear that Timmermans addressed him. In an interview with Europe Table and several other media outlets a few weeks ago, Breton voiced doubts about the end of the internal combustion engine and called on manufacturers to continue producing internal combustion engines on a large scale for the global market after 2035.

‘The future belongs to the EV’

Timmermans explicitly warned against politically unsettling manufacturers and suppliers. “The industry cannot plan the transformation if we want to sow doubts or even start a transformation in the second attempt.” Leaving ways out and pointing to back doors would not help the industry in any way.

Timmermans went on to write that the future belonged to the EV, not just in Europe, but also in the rest of the world: “We need to send zero-emission cars out into the world, not Europeans’ jobs and our economic opportunities.” The answer to securing jobs in the challenges of the transformation cannot be “to continue to build internal combustion engine vehicles for other countries”. On other continents, Timmermans added, the transformation to e-mobility may be slower. But the electrification of entire economies is an integral part of international climate diplomacy. mgr

  • Burners
  • Car Industry
  • Climate & Environment
  • Electromobility
  • Mobility
  • Transport turnaround

EU trade delegation travels to Taiwan

For the first time, a delegation from the European Parliament’s Trade Committee visits the island of Taiwan. The seven MEPs will stay in Taipei from Monday to Wednesday, where they will meet President Tsai Ing-wen and other government members, as well as representatives of the semiconductor industry. Meetings with trade unions as well as environmental, women’s rights and consumer organizations are also planned.

German European politician Reinhard Buetikofer (Greens) is part of the delegation. It is led by Greek MEP Anna-Michelle Asimakopoulou. Taiwan plays an important role in the EU’s long-term priorities, Asimakopoulou stressed before the trip. ari

  • Digitization
  • Semiconductor
  • Trade Policy

Power cable under the Black Sea is built

The heads of state and government of Romania, Azerbaijan, Georgia and Hungary have signed an agreement on the construction of an undersea electricity cable under the Black Sea. The ceremony at Bucharest’s presidential palace on Saturday was also attended by EU Commission President Ursula von der Leyen. The cable is expected to be completed in three to four years.

It will then contribute to the diversification of Europe’s electricity supply. Electricity from the South Caucasus will also further reduce the continent’s dependence on Russian energy. “The two shores of the Black Sea have never been closer,” von der Leyen wrote on Twitter.

Earlier, President Ilham Aliyev (Azerbaijan) and Prime Ministers Nicolae Ciuca (Romania), Irakli Garibashvili (Georgia) and Viktor Orban (Hungary) signed the document. Von der Leyen added that she was glad that “the energy agreement puts such a strong emphasis on renewables.”

Georgia and Azerbaijan are located on the Caucasus Mountains. Both countries have considerable hydropower potential. Georgia and Romania are located on the Black Sea, while Hungary borders Romania. dpa

  • Digitization
  • Energy policy
  • European policy
  • Renewable energies

Apéro

It was not all that long ago that parliamentary negotiators for the reform of European emissions trading (ETS) were enemies. When the first vote failed in June, parties and MEPs blamed each other for the embarrassment (Europe.Table reported).

Six months later, there is no sign of these hostilities. On Friday morning, shortly before the start of the jumbo trilogue, Emma Wiesner (Renew), Mohammed Chahim (S&D) and Michael Bloss (Greens) displayed unity at a joint breakfast with pancakes and fresh fruit.

In other respects, too, the rapporteurs, who negotiated under a joint mandate in the trilogue, hardly indicated any political differences. ETS rapporteur Peter Liese (EPP) promised that he and his shadow rapporteur Chahim were completely on the same page in the negotiations. After the agreement Sunday night, a Twitter post showed them dancing together. Yet it was these two actors who manifested the dispute in June.

And so it is amazing to see how political relationships can change when people argue with each other instead of against each other. It is equally remarkable to see how quickly this relationship turns back into the opposite, when political differences will resurface in the Commission’s next legislative proposal. That is just the way (European) parliamentarism is. Lukas Scheid

  • Digitization

Europe.Table Editorial Office

EUROPE.TABLE EDITORS

Licenses:
    • Jumbo trilogue: Emissions trading for buildings and transport will come
    • Corruption scandal: S&D leader Iratxe García Pérez under pressure
    • Electricity market reform: Commission considers longer revenue limitation
    • Timmermans: Combustion engine phase-out will not be reversed
    • Power cable to be built under the Black Sea
    • Apéro: Dancing and pancakes at the jumbo trilogue
    Dear reader,

    At just before 2 a.m. on Sunday, the deal for one of Europe’s most important climate action instruments was finalized: In a jumbo trialogue, the EU Parliament, the Council and the Commission agreed to reform European emissions trading in such a way that emissions will fall more quickly by 2030 and the carbon price will rise. For a long time, the second emissions trading system for heating and road traffic was hanging in the balance. It is now on its way, but with significantly reduced social compensation. I summarized all the results of the jumbo trilogue for you.

    The Commission plans to respond to high energy prices with a proposal for a new electricity market design in March. The consultation on this is still pending, but the draft of an accompanying letter has been leaked. Manuel Berkel summarizes the key plans.

    In the corruption affair in the European Parliament, the leader of the heavily incriminated Socialist Group came under pressure. Although Iratxe García is not accused of any wrongdoing, she is blamed for a “culture of small gifts” within the group, in which posts are distributed in exchange for political compliance. Markus Grabitz has the details.

    Your
    Lukas Knigge
    Image of Lukas  Knigge
    • Digitization

    Feature

    Emissions trading for buildings and transport is coming

    The phase-out of free carbon allowances for the industry had been the biggest battle, said a relieved Michael Bloss (Greens) on Sunday morning. Negotiators from the EU Parliament, Council and Commission reached an agreement earlier at 2 a.m. in the jumbo trilogue on the reform of the EU Emissions Trading System (ETS).

    It envisages that the free carbon allowances for the industry will be completely replaced by the Carbon Border Adjustment Mechanism (CBAM) in 2034. Prior to this, they will be gradually phased out starting in 2026, while CBAM will be introduced in parallel (see chart). Sectors not covered by CBAM, such as the chemical industry, are exempt. They will continue to receive free emission allowances for the time being. CBAM covers iron and steel, aluminum, cement, fertilizers and hydrogen.

    The export sector will also continue to receive free allocations, but only to a limited extent. Industrial plants that do not submit decarbonization plans can lose up to 40 percent of their free allowances even before the phaseout. Half of the allowances released will go to the Innovation Fund and the other half to the export industry as protection against carbon leakage.

    Emissions are to be reduced by 62 percent

    The ambition level of the ETS reform is raised by removing surplus allowances from the market. In 2024, 90 million emission allowances will be removed, and in 2026 another 27 million. In addition, the linear reduction factor (LRF), which determines the annual reduction in total ETS emissions, will be raised to 4.3 percent in 2024 and 4.4 percent in 2028.

    The elimination of allowances means that affected sectors will be forced to reduce their emissions by 62 percent by 2030 compared to 2005 levels, down from the previous 43 percent. The 62 percent represents a compromise between the positions of the Parliament (63 percent) and the Council (61 percent).

    Emissions trading for buildings and transport

    The second emissions trading system for fuels for heating buildings and fuels for road transport was considered a key issue in the negotiations before the jumbo trilogue. The compromise now provides for the introduction of ETS 2 in parallel with the existing ETS in 2027. However, if the gas price a year before the introduction exceeds the level before the start of the Ukraine war (around 106 euros/Mwh), the launch of the new ETS will be postponed by another year.

    Furthermore, the ETS 2 will include a form of a price cap. The trilogue agreement provides for a price stability mechanism that will release 20 million additional allowances if the price per metric ton of carbon in ETS 2 exceeds €45.

    It was open whether only commercial use of the fuels would be subject to a carbon price, or private use as well. Parliament demanded this split in order to avoid burdening private households with additional costs. The trilogue agreement now provides: The ETS 2 carbon price will apply to all uses.

    Smaller social climate fund in 2026

    To ease the burden, the Social Climate Fund was passed. However, it is significantly smaller than the Commission and Parliament initially proposed. Starting in 2026, the fund will be pre-financed by the revenue from the auctioning of 50 million ETS allowances from ETS 1 (around €4 billion). Once ETS 2 is introduced, €65 billion from its revenues will go to the fund. On top of this, another €22 billion will be contributed by the member states.

    Parliament and the Commission insisted on a €144 billion fund, but the member states refused to go along with this. The compromise is now a volume of around €87 billion. However, the Parliament’s demand for the fund to take effect one year before the launch of ETS 2 has been taken into account. In addition, the other revenues from ETS 2, which do not flow into the fund but into the national budgets of the countries, must also be spent on climate action.

    With the trilogue agreement on the ETS reform and the introduction of CBAM and the Social Climate Fund, the essential part of the Fit for 55 package has been adopted. It still needs to be formally confirmed in the Environment Council and Parliament. This may still take until spring 2023.

    • Climate & Environment
    • Climate Policy
    • Emissions
    • Emissions trading
    • Fit for 55

    Corruption affair: S&D head under pressure for crisis management

    In the corruption affair in the European Parliament, Socialist group leader Iratxe García Pérez is under massive pressure for her crisis management. The Greek MEP and leader of the socialist party PASOK, Nikos Androulakis, accused her in the last parliamentary group meeting that she already had information about the unethical behavior of arrested Eva Kaili in September, but ignored it.

    It has now become known that Iratxe García’s closest associate and office manager maintained a friendly relationship with Kaili: photos emerged showing her and Garcìa’s confidante, Laura Ballarin Cereza, on vacation with Kaili and her partner. Questions are now being raised about whether Morocco’s influence on the European Parliament also involves links with Spain’s Socialist Party.

    Many traces lead to Italy

    The 145-member parliamentary group led by Iratxe Garcia is deeply shaken by the arrests of Kaili and former Socialist MP Pier Antonio Panzeri, as well as the office raids of MPs Maria Arena and Andrea Cozzolino. Kaili’s partner, Francesco Giorgi, has confessed to accepting money from Morocco.

    Surprisingly, the Spanish government under Socialist Pedro Sánchez radically changed its policy toward Morocco in April, welcoming Rabat’s plans to integrate the territory of Western Sahara into Moroccan territory as an autonomous region. Cozzolino, who has since been expelled from his Italian party, led the Maghreb delegation in parliament.

    Iratxe García posts ‘Bye, bye Strasbourg’

    In the beginning, only Qatar was considered to be the source of corruption. Now, Morocco has begun to shift into focus. On Tuesday, when mainly Italian employees of the Socialists were still under suspicion, Iratxe García was asked in front of the press whether she had trust in the delegation of Italy. She warned against generalizations, saying the accusations concerned “individuals”. She said they had broken the rules, but there was no reason to put a country or a group under general suspicion.

    Did she know of any other cases? She denied it, then said, “In any case, I did not participate.” Iratxe García is said to have made an overwhelmed impression in the parliamentary group on Monday. She cried repeatedly, the word was from the group. On Wednesday she traveled back to Brussels early, posting “bye, bye Strasbourg” leaving the group meeting leaderless.

    At the moment, no one accuses her of any wrongdoing. She supports the concerns of Western Sahara and is unhappy with Madrid’s change of course. In the parliamentary group, however, more and more voices do not believe in individual cases, but question the structures. Members from Scandinavia and Austria as well as PASOK leader Androulakis have expressed their views accordingly. They think Iratxe García should relieve her office manager of her duties until the case is cleared up. But so far she is not willing to do so.

    ‘Culture of small gifts’

    The head of the Spanish S&D deputies, Javier Moreno Sánchez, has also come under criticism. Along with office manager Ballarin Cereza, he is Iratxe García’s closest employee. He is considered to be the hand of the head of the Spanish government in the EP. Within the parliamentary group, Moreno Sánchez is said to have created a “culture of small gifts“. For example, he managed to have Kaili appointed Vice President of the European Parliament at the start of the year. In exchange, he is expected to make political concessions.

    An outraged Greek MP Androulakis last week raised the question in the parliamentary group why Kaili was made vice without the support of the PASOK party leader. Kaili, he said, had played it cool in the Greek spy affair, when Androulaki’s cell phone was bugged with spyware, and sided with head of government Kyriakos Mitsotakis (Nea Demokratia). She was the “Trojan horse” of the conservatives, Androulakis said.

    The voting behavior of Kaili and another Socialist Vice President, Pina Picierno, in the election of Alessandro Chiocchetti as the new Secretary General of Parliament was also criticized. Although the group opposed it, Kaili and Picierno had given their votes to the Christian Democrat. Iratxe García never raised the issue or scandalized this behavior in the parliamentary group, they say. A Socialist deputy told Europe.Table that Iratxe must now prove that she can put an end to the unpleasant influence of southern Europeans in the group.

    • Corruption
    • Digitization
    • Europäische Kommission
    • Europäisches Parlament
    • European Parliament
    • Lobbying

    Electricity market: Commission considers expansion of revenue limitation

    With a reform of the electricity market, the Commission wants to ensure lower prices in response to pressure from member states. The proposal is to be presented by March; observers expected the consultation to begin last Friday. Instead, Europe.Table obtained a non-paper in which the Commission explains the goals of the consultation.

    In it, further developed crisis support is envisaged and even a recurring revenue limitation for existing renewable energy plants. Commission spokesman Eric Mamer, however, clarified on Friday that the draft does not reflect the Commission’s view. Since the start of the consultation has been postponed, the document is unlikely to have been leaked by accident.

    New remuneration for power plants

    On the wholesale market, the Commission wants to use several measures to lower electricity prices. According to the non-paper, the short-term spot market is to be maintained in principle. Storage facilities and more flexible demand are to ensure that gas-fired power plants will set the price less frequently. However, it completely omits how the construction of new, hydrogen-capable gas-fired power plants is to be stimulated.

    Furthermore, it is unclear which revenues renewable energies can still generate on the spot market, which would have direct consequences for their significance in this market. In fact, the stated goal is that short-term markets “determine the revenues of generators to a much lesser extent.” The Commission’s reform proposals focus on “inframarginal generation” like renewables and nuclear power plants. In the future, their revenues should reflect the specific production costs.

    Incentives for long-term electricity supply contracts

    Even for existing power plants, parts of the already passed but temporary revenue limitation could be applied “more permanent and harmonized basis” or reactivated in the event of new crises, the non-paper says. Energy companies had already strongly criticized the crisis measure. The green power provider Lichtblick, for example, advocated a windfall tax instead of a revenue limitation.

    For new inframarginal generators, the commission wants to incentivize generators, traders, and “industrial and non-industrial customers” to conclude long-term power supply agreements (PPAs). These are considered a market-based financing method that does not require government subsidies.

    The non-paper calls for a switch from government subsidies to bilateral contracts for difference (CfDs), which allow the government to skim off revenues from the outset in the event of high electricity prices. But according to the commission, combinations of PPAs and CfDs are also possible. However, energy economist Ingmar Schlecht argues that CfDs are less efficient than derivatives, which allow generators to already financially hedge their electricity sales on exchanges.

    Basic supply for electricity customers

    As a crisis measure, EU states have been given the option of setting regulated electricity prices for households and businesses and paying subsidies. Subsidies for investment in efficiency and home generation have also been facilitated. In the non-paper, the Commission now considers “further developing” the crisis measures. “This could ensure that certain consumers have access to a minimum level of electricity at a reasonable price in emergency situations.” The German parliament already passed such a minimum supply last week with gas and electricity price caps. However, the EU framework on state aid expires at the end of 2023.

    The non-paper states that electricity suppliers of a certain size could be required to offer households such block rates with a favorable base consumption and freely priced additional consumption. These could supplement the existing obligation to offer dynamic rates, which are intended to encourage electricity customers to align their consumption with the electricity supply. However, households would require smart meters for this. With this initiative, the Commission apparently responds to the stalling rollout of smart metering systems in member states such as Germany (Europe.Table reported).

    Obligation to hedge

    Electricity suppliers could also be forced to “adequately hedge” their supply obligations. During the energy crisis, some suppliers filed for insolvency because they had speculated on continued low prices and failed to hedge with derivatives. Customers slipped into backup supply, whereupon the new suppliers wanted to burden the new customers alone with the exorbitant procurement costs for the unexpected demand. The Commission now wants to clarify in greater detail the rights and obligations of suppliers and customers regarding backup and minimum supply.

    As another measure to counter high market prices, the self-supply of electricity from generating systems not mounted on one’s own building could also be strengthened. Tenant electricity models in social housing are mentioned as one example. So far, such models have mostly been limited to solar technology.

    Market supervision in cross-border electricity trading

    Some governments identified speculation in energy trading as the culprit behind the “inflated” prices. The Commission now considers strengthening supervision specifically in cross-border trading by revising the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT).

    The non-paper cites “very high volatility, interference from external players, lower supply, and new behaviors in trading” as reasons. Due to the coal and nuclear phase-out and outages of nuclear power plants, there has recently been less and less competition for generation capacity. This increased the importance of foreign power plants, the German Federal Network Agency and the German Federal Cartel Office recently wrote.

    In the non-paper, the Commission announces plans to harmonize fines imposed by national competition authorities for REMIT violations across Europe. It will also be interesting to see whether there will be a separate initiative in the electricity sector to push back the influence of Russia as an “external player”.

    • Digitization
    • Energy crisis
    • Energy policy
    • Energy Prices
    • Renewable energies
    • Strommarkt

    News

    Timmermans: Combustion engine phase-out will not be reversed

    Frans Timmermans, EU Commission Vice President in charge of the Green Deal, warns against casting political doubt on the 2035 phase-out of the internal combustion engine. In a guest article for several media outlets, he wrote that the EU Commission would not reverse the internal combustion phase-out in the review scheduled for 2026: “Review clauses are in every EU law.” The review of CO2 fleet limits will only be about “how we reach 2035, not whether we still want to reach it,” Timmermans said.

    Without mentioning Industry Commissioner Thierry Breton by name, it is clear that Timmermans addressed him. In an interview with Europe Table and several other media outlets a few weeks ago, Breton voiced doubts about the end of the internal combustion engine and called on manufacturers to continue producing internal combustion engines on a large scale for the global market after 2035.

    ‘The future belongs to the EV’

    Timmermans explicitly warned against politically unsettling manufacturers and suppliers. “The industry cannot plan the transformation if we want to sow doubts or even start a transformation in the second attempt.” Leaving ways out and pointing to back doors would not help the industry in any way.

    Timmermans went on to write that the future belonged to the EV, not just in Europe, but also in the rest of the world: “We need to send zero-emission cars out into the world, not Europeans’ jobs and our economic opportunities.” The answer to securing jobs in the challenges of the transformation cannot be “to continue to build internal combustion engine vehicles for other countries”. On other continents, Timmermans added, the transformation to e-mobility may be slower. But the electrification of entire economies is an integral part of international climate diplomacy. mgr

    • Burners
    • Car Industry
    • Climate & Environment
    • Electromobility
    • Mobility
    • Transport turnaround

    EU trade delegation travels to Taiwan

    For the first time, a delegation from the European Parliament’s Trade Committee visits the island of Taiwan. The seven MEPs will stay in Taipei from Monday to Wednesday, where they will meet President Tsai Ing-wen and other government members, as well as representatives of the semiconductor industry. Meetings with trade unions as well as environmental, women’s rights and consumer organizations are also planned.

    German European politician Reinhard Buetikofer (Greens) is part of the delegation. It is led by Greek MEP Anna-Michelle Asimakopoulou. Taiwan plays an important role in the EU’s long-term priorities, Asimakopoulou stressed before the trip. ari

    • Digitization
    • Semiconductor
    • Trade Policy

    Power cable under the Black Sea is built

    The heads of state and government of Romania, Azerbaijan, Georgia and Hungary have signed an agreement on the construction of an undersea electricity cable under the Black Sea. The ceremony at Bucharest’s presidential palace on Saturday was also attended by EU Commission President Ursula von der Leyen. The cable is expected to be completed in three to four years.

    It will then contribute to the diversification of Europe’s electricity supply. Electricity from the South Caucasus will also further reduce the continent’s dependence on Russian energy. “The two shores of the Black Sea have never been closer,” von der Leyen wrote on Twitter.

    Earlier, President Ilham Aliyev (Azerbaijan) and Prime Ministers Nicolae Ciuca (Romania), Irakli Garibashvili (Georgia) and Viktor Orban (Hungary) signed the document. Von der Leyen added that she was glad that “the energy agreement puts such a strong emphasis on renewables.”

    Georgia and Azerbaijan are located on the Caucasus Mountains. Both countries have considerable hydropower potential. Georgia and Romania are located on the Black Sea, while Hungary borders Romania. dpa

    • Digitization
    • Energy policy
    • European policy
    • Renewable energies

    Apéro

    It was not all that long ago that parliamentary negotiators for the reform of European emissions trading (ETS) were enemies. When the first vote failed in June, parties and MEPs blamed each other for the embarrassment (Europe.Table reported).

    Six months later, there is no sign of these hostilities. On Friday morning, shortly before the start of the jumbo trilogue, Emma Wiesner (Renew), Mohammed Chahim (S&D) and Michael Bloss (Greens) displayed unity at a joint breakfast with pancakes and fresh fruit.

    In other respects, too, the rapporteurs, who negotiated under a joint mandate in the trilogue, hardly indicated any political differences. ETS rapporteur Peter Liese (EPP) promised that he and his shadow rapporteur Chahim were completely on the same page in the negotiations. After the agreement Sunday night, a Twitter post showed them dancing together. Yet it was these two actors who manifested the dispute in June.

    And so it is amazing to see how political relationships can change when people argue with each other instead of against each other. It is equally remarkable to see how quickly this relationship turns back into the opposite, when political differences will resurface in the Commission’s next legislative proposal. That is just the way (European) parliamentarism is. Lukas Scheid

    • Digitization

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    EUROPE.TABLE EDITORS

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