Table.Briefing: Europe

Waste management in the ETS + EU debt + Green hydrogen + Profile: Martin Selmayr

  • Emission rights for waste incineration
  • Brussels postpones the debt problem
  • Hydrogen: Plant engineering fears national solo efforts
  • Better conditions for magnesium production in Europe
  • Auditors: EU must do more to guard its funds against fraudsters
  • Profile: Martin Selmayr – ‘I won’t be sad if I am called back to Brussels again’
Dear reader,

The municipal waste management sector is to become part of the European emissions trading system from 2026; the European Parliament’s Committee on Environment had voted in favor of this. Germany, however, has other plans and wants to include emissions from waste incineration in national law. Leonie Düngefeld and Lukas Scheid analyze why German associations are calling for a uniform solution across Europe.

Now is not the time to tighten the belt, EU Economic Affairs Commissioner Paolo Gentiloni said yesterday in Brussels – but that does not mean a return to unlimited spending. Investments, especially in climate protection and digitization, are necessary despite the current situation, according to Brussels. That’s why the government will not return to strict debt rules until 2024. However, there still doesn’t seem to be an adequate solution to the growing debt problem in the eurozone, as Eric Bonse reports.

After the EU Commission published the drafts of two delegated acts one-fuels in the transport sector, the German Mechanical Engineering Industry Association (VDMA) fears that national solo efforts could put the brakes on the production of large quantities of green hydrogen. Read more about this in the News.

Martin Selmayr‘s political mentor Jean-Claude Juncker gave him the nickname “monster”. In the EU Commission (and beyond), the former secretary general and head of cabinet was feared for his work mania and hunger for power. Juncker’s successor Ursula von der Leyen sent the top official to Vienna as a representative, but Selmayr is by no means taking it slow there either. Hans-Peter Siebenhaar and David Zauner met the 51-year-old and talked to him about his motivation and ambitions – the result is a Profile that is well worth reading.

Your
Lisa-Martina Klein
Image of Lisa-Martina  Klein

Feature

Emission rights for waste incineration

The European Parliament’s Committee on Environment voted last week to include municipal waste incineration in the European Emissions Trading Scheme (ETS). Until now, it had been exempt. If the MEPs’ plan becomes reality, operators of waste incineration plants would have to buy emission rights for the CO2 emissions they cause from 2026. The goal is to avoid greenhouse gas emissions and make recycling more attractive. Will the plan work?

137 kilograms of waste were incinerated per EU citizen 2020, a total of around 61 million tons. This means that the amount of waste incinerated each year has almost doubled since 1995. The method does offer advantages: Waste volumes can be reduced quickly, and the energy released is converted into electricity and heat (waste to energy, WtE). However, according to an analysis by the NGO Zero Waste Europe, the incineration of one ton of municipal waste produces around 0.7 to 1.7 tons of CO2.

Currently, the price per ton of CO2 in the ETS is around €80 (as of May 23, 2022). This price premium is intended to serve as an incentive to recycle more – because emissions from the recycling industry are already subject to a CO2 price. So inclusion in the ETS would provide a level playing field. “CO2 pricing for waste incineration is an important building block for rapidly advancing waste avoidance, separate collection of recyclables and recycling in the EU,” said Barbara Metz, national director of Environmental Action Germany (Deutsche Umwelthilfe).

Associations welcome European solution

Waste industry associations had previously warned against Germany solo efforts. This is because the German government is planning to include emissions from waste incineration in the Fuel Emissions Trading Act (BEHG) from January 1, 2023. In a joint letter to Federal Ministers Lemke and Habeck, the Association of Municipal Companies (VKU) and the Federation of the German Waste Management, Water and Raw Materials Management Industries (BDE), among others, spoke out in favor of a uniform solution across Europe.

Otherwise, the risk of legal and illegal waste exports would increase, they warned. “We need a regulation at European level so that emissions are not simply outsourced to other countries with inferior facilities,” said Peter Kurth, president of the BDE. He, therefore, welcomed the vote of the Environment Committee in the European Parliament.

The VKU also warned against significantly increasing waste charges that are not based on the source of the waste: These would be passed on to all households as incidental rental costs, regardless of how high their individual waste volumes were. An expert opinion commissioned by the Federal Environment Ministry had previously calculated that waste charges would rise by at least three to eight percent due to CO2 pricing at a price of €65 euros per ton of CO2. In addition, costs would be incurred for monitoring, measurement technology, and waste analyses. Instead of an ecological steering effect, there would only be an increase in fees, according to the VKU.

According to BDE President Kurth, however, the amount of waste incinerated will decrease anyway, which is why the development of fees cannot yet be predicted. “Everyone is aware that today we are still incinerating material that doesn’t belong there,” he told Europe.Table. “A large number of materials can and should be recycled.” VKU and BDE also call for all waste treatment processes to be priced equally. Incentives should not be created to return more municipal waste to landfills. This would be more harmful to the climate than incineration.

Parliament commissions impact assessment

The majority of the associations support the fact that an impact assessment will now be carried out as the next step. This is what the Parliament has asked the European Commission to do. Janek Vähk of Zero Waste Europe sees this as nothing but an unnecessary delay: “Both waste shipments and landfills are well regulated and have specific objectives, such as minimizing landfilling and requiring pre-treatment.” Currently, the EU’s Waste Shipment Regulation and Waste Framework Directive are also being revised, further tightening the rules.

Although the Parliament still has to approve the inclusion of waste incineration in the ETS, this part of the ETS reform has already met with broad approval in the Environment Committee. Adoption in plenary during the EP session week in June is therefore considered a mere formality. The trilogue with the Council and the Commission will be more exciting. Germany is expected to support the Parliament’s initiative. Broader approval depends on the results of the impact assessment. Leonie Düngefeld & Lukas Scheid

  • Circular Economy
  • Climate & Environment
  • Emissions trading
  • Sustainability

Brussels postpones the debt problem

The EU Commission recommends that the general escape clause of the Stability and Growth Pact be applied in 2023 as well and that the strict debt rules for the eurozone not be returned to until 2024. Because of major uncertainties and downside risks, the rules – new debt below 3 percent of economic output, debt level not exceeding 60 percent – could not be fully implemented next year either, Commission Vice President Valdis Dombrovskis said on Monday in Brussels. However, that was no carte blanche to run up debts.

“We are not proposing a return to unlimited spending,” Economic Affairs Commissioner Paolo Gentiloni also stressed. However, this was not the time to tighten the belt either. Brussels continues to recommend investments in climate protection and digitization. A new goal is “energy independence” from Russia. Last week, the EU Commission presented a plan for this (“REPowerEU”). It involves massive new spending, with up to €300 billion earmarked from EU funds alone. The member states are also to invest heavily to replace fossil fuels from Russia and promote green energy.

The task now is to link “REPowerEU” with the European Semester and the Recovery and Resilience Facility (ARF), according to the Brussels-based authority. This provides “a solid framework for effective strategic coordination and thus addressing the current challenges,” the Commission said. However, Dombrovskis and Gentiloni again failed to provide answers to the question of how the growing debt problem in the eurozone is to be solved. The Brussels experts seem at a loss and are already pushing the problem along for the third year. Even the promised reform of the debt rules is making no headway.

Ending ‘addiction’ to more and more debt as soon as possible

The French EU presidency wanted to bag this reform in the spring. However, now concrete proposals are not expected until the summer. It could be many months before the reform is implemented. France, which would prefer to scrap the Stability Pact, and Germany are worlds apart. Meanwhile, warnings of a new crisis are mounting. “During the pandemic, government debt literally exploded,” said CSU financial expert and MEP Markus Ferber. “Now interest rates are also rising. This is an explosive mixture.”

“Break the debt shackles,” demands Martin Schirdewan of the Left Party. The EU debt rules are outdated and belong in the history books. In view of the many crises, what is needed is “a strong economic and investment policy – not debt brakes”. The European Trade Union Confederation expressed similar views. It was wrong to exhort EU countries to save, said ETUC General Secretary Luca Visentini . The suspension of debt rules shows that they no longer serve their purpose. What was needed was investment and higher wages.

In contrast, German Finance Minister Christian Lindner appealed to the EU to end “the addiction to ever more debt as quickly as possible”. Germany will again comply with the debt brake from 2023, he said on the sidelines of a meeting of the finance and economics ministers of the euro countries in Brussels.

  • European policy
  • Finance
  • Financial policy

News

Hydrogen: Plant engineering fears national solo efforts

According to the German Mechanical Engineering Industry Association (VDMA), the production of large quantities of green hydrogen is in danger of being thwarted by exemption rules in European legislation. Over the weekend, the EU Commission had published the drafts of two delegated acts on e-fuels in the transport sector (Europe.Table reported).

For climate protection reasons, among other things, rules apply to the spatial correlation between electrolyzers and renewable energy plants. “We are very critical of the point that member states can set additional criteria with regard to spatial correlation,” said Carola Kantz of VDMA on Monday. “Here, there is a risk of a patchwork at the national level, which can significantly slow down the ramp-up.”

The association takes a positive view of the fact that the Commission now also wants to allow storage facilities and the use of electrolyzers for redispatch. However, the transitional rules until the end of 2026 are too short for VDMA; because of the long approval period for renewables, they should apply until 2030. “We are concerned with the existing plants that are leaving the German EEG, for example. They are looking for a new business model in perspective. Now they are only credited if there is investment in repowering.”

EPP and Greens at odds on gas and nuclear energy

Markus Pieper (EPP), Parliament’s rapporteur on the Renewable Energies Directive, is also in favor of transitional rules until 2030. He calls for facilitations for hydrogen production from old plants and during power purchases from the grid. “For the case of wind or sun lulls, a replacement power purchase from the general power grid is still far too complicated,” Pieper also informed. “This bottleneck must still be resolved by the Commission through simplified verification procedures and acceptance also for energy from nuclear power or gas for hydrogen production.”

This is precisely the point on which the Greens disagree. “I very much welcome the fact that the Commission has stood firm and made renewable hydrogen production conditional on the construction of new wind and solar plants,” said MEP Jutta Paulus. “The other concerns of the industry, such as economists, that overly strict conditions would make the production of renewable hydrogen impossible, have also been defused with clever regulations.” ber

  • Climate & Environment
  • E-Fuels
  • Energy
  • Hydrogen
  • Renewable energies

Better conditions for magnesium production in Europe

Faster permits, reliable standards, and protection against price dumping: To rebuild magnesium production in Europe, industry representatives are calling for a secure framework. “We see that it is possible to develop these projects,” said Bernd Martens of Verde Magnesium at the RawMaterials Summit of the European Institute of Innovation and Technology (EIT) in Berlin.

Verde Magnesium will restart a former magnesium production site in Romania from 2025. A quantity of 90,000 tons of magnesium would be available there for the European market. However, faster approval procedures are needed to make such projects possible. In addition, the EU must develop reliable standards with which the industry can plan. Martens also called for mechanisms to combat price dumping.

Almost 90 percent of global magnesium production takes place in China. The EU obtains the majority of its imports from there. In the fall of 2021, there were severe supply bottlenecks in Europe due to energy shortages in the People’s Republic. Industry and politicians agree that this dependence must be reduced. Magnesium is used for the alloying of aluminum and is thus required above all for automobile production and also for renewable energy technologies.

Until twenty years ago, there was also a magnesium industry in Europe, explained Joaquin Nunes de Almeida from the European Commission’s Directorate General for Internal Market and Industry. This now needs to be rebuilt. The Commission sees the urgency, de Almeida said. He referred to the “complex bureaucratic structures” involved in the energy revolution and industrial transformation. leo

  • China
  • Industrial policy
  • Raw materials
  • Raw materials strategy

Auditors: EU must do more to guard its funds against fraudsters

The European Commission and EU governments are not doing enough to prevent the misuse of the bloc’s money, auditors said on Monday, warning that fraudulent or corrupt businesspeople may receive funds because too few of them are blacklisted.

The EU’s current blacklisting systems – set up in 2016 to stop potentially risky people and bodies from getting EU cash – were much less rigorous than those used by the United States and the World Bank, the report said.

Nearly all 448 entities barred by the EU in 2020 were excluded because of bankruptcy, which would have prevented them from getting EU money anyway, auditors said. Only two were blacklisted for corruption or fraud. EU member states, who in practice hand out most of the bloc’s funding, are currently not obliged to set up blacklisting systems at all, the EU auditors added in their report.

300 million EU funds misspent

“Blacklisting is not used effectively to prevent EU funds from being paid out to individuals, businesses or public organisations involved in illegal acts such as fraud and corruption,” they said. The report focuses on funds disbursed in 2020, when the EU paid out around €150 billion of its budget to farmers, researchers, companies and other beneficiaries, in line with previous years.

None of the four countries assessed for the report – Estonia, Italy, Poland, Portugal – had a blacklisting system in place, the report said. The Commission usually cannot access national data on fraudsters easily, and often relies on the word of applicants to offer grants, the report added.

In 2020, the EU anti-fraud office OLAF recommended the recovery of about €300 million of EU funds that were misspent. rtr

  • European policy
  • Finance
  • Financial policy

Profile

‘I won’t be sad if I am called back to Brussels again’

Martin Selmayr is Head of the Representation of the EU Commission in Austria.

The setting for Martin Selmayr and the grandees of Europe could not have been more magnificent. In Salzburg’s Castle Leopoldskron, the Head of the EU Commission’s representation in Austria assumed the role of the host. This magnificent 18th-century building, surrounded by a large pond and park, is the intimate setting for the Global Europe Seminar organized by Austrian Commissioner Johannes Hahn.

Selmayr relishes in the elegant stage he can provide for the great and powerful. The guest list includes Commission Vice-President Maroš Šefčovič, Economic Affairs Commissioner Paolo Gentiloni, Croatian Prime Minister Andrej Plenković, and Finland’s Governing Council member Olli Rehn.

In 2019, Martin Selmayr had to give up his post as Secretary-General of the EU Commission. Instead of pulling the strings in the labyrinth of Brussels’ Berlaymont, the German now leads nearly two dozen employees in the Commission’s Vienna representation. When the former Head of Cabinet of Commission President Jean-Claude Juncker moved to Austria in November 2019, sadness about his departure was limited among many officials in Brussels.

The top official was reviled by his opponents as Rasputin. His meteoric rise even earned him the scandal hashtag #selmayrgate in 2018. Even then, the envy of the smart and power-conscious lawyer with a talent for moderating was great. Extremely hard-working string-pullers are seldom held in the highest esteem – be it in the Commission or other organizations.

Bike tour across Austria

Selmayr has kept his tireless diligence in his task in Austria. Under his direction, the Commission’s representation is omnipresent in the country. Whether in the media, on social networks, or at events – no one can get past Selmayr in the Austrian capital. And if someone doesn’t want to come to Selmayr, he will come to them. The 51-year-old has cycled more than 2,000 kilometers from Lake Constance to Lake Neusiedl on his non-electric renovated bicycle from school days to discuss and argue about the future of the Union.

In the process, the EU official on two wheels also had to endure harsh criticism. “I also felt a lot of frustration. People spoke to us without any inhibitions,” Selmayr recounts. The border closures in the first phase of the pandemic, for example, were sharply criticized by his interlocutors. The EU does not have the best reputation in Austria.

But that does not faze Selmayr. The staunch European has held 700 discussions. He is proud of this: “The bicycle tour was a contact with reality.” To understand the sensitivities of the member states, he says, the representations are very valuable to the Commission: “They are the eyes, ears, and voice of the Commissions in the national capitals.”

The passionate man from Brussels has grown fond of Austria. “I am very happy in Austria,” he affirms during his marathon of appointments at Castle Leopoldskron. When asked whether he had felt a phantom pain after moving from Brussels to Vienna, Selmayr answered with a clear “No”.

In the same breath, the son of a civil servant from the Rhineland adds: “Austria has given me a very warm welcome. Here, there is no arrogance of a large member state. Here, Europe is a natural part of domestic politics.” That has its advantages. Selmayr comes and goes to the Chancellor’s Office in Vienna and other control centers of the Republic of Austria. The government’s more pro-European course after the unglamorous end of the Sebastian Kurz era has helped him.

‘The mantle of civilization is very thin’

However, Selmayr does not reveal whether the task truly fulfills him. After all, the part-time law professor is only 51 years old. What’s his plan? “I’m a commission official until I’m 67, and I’m passionate about it,” he said evasively. “My task in Austria could last a long time, but it could also end any day,” he adds ambiguously.

Selmayr has naturally devoted his academic work to project Europe. He is the Honorary Director of the Center for European Law in Passau. He also lectures on European law as an Honorary Professor at the University of Saarland and the Donau University Krems.

Selmayr sees himself as a passionate diplomat for Europe, especially in times of war. His grandparents’ confirmation present, a trip to Verdun, was a particularly defining experience, he says. He still thinks of the white crosses stretching all the way to the horizon.

His grandfather Heinz Gaedcke was himself still a child during the 1st World War. As a general in the Wehrmacht, he had later experienced the horror of war firsthand and created it with his own hands. “It is up to your generation to make sure that this never happens again. That was the end of civilization,” his grandfather told him. To him, that made it clear that peace was not a certainty, that people had to work for it. “The mantle of civilization is very thin.”

Many insiders believe that Austria is just a cozy waiting room for new tasks for Selmayr. The ambitious official certainly does not lack loyalty. “I serve the President of the Commission wherever she pleases.” Such devotion is never a bad thing for a public servant. And Selmayr is patient: “I supported the representation of the EU Commission in Austria for many years in Brussels. At that time, it had a model function within the Commission representations. That’s why I also wanted the job in Vienna.”

Juncker called him ‘monster

Selmayr has repeatedly proven that he can work until he drops. As Juncker’s “sherpa”, he has negotiated delicate and complex issues such as Brexit. In the process, he has also learned to endure media criticism. The British media have not exactly treated him with kid gloves. However, the nickname “monster” originates from his political foster father, Jean-Claude Juncker himself, Selmayr emphasizes. It refers to his iron discipline and therefore has a positive connotation.

Selmayr also works tirelessly on and off stage during the conference in Salzburg. He updates his network and forges new contacts. Selmayr is both a sprinter and a cross-country skier. He is already thinking about the day after tomorrow, say his critics. At the end of 2024, Ursula von der Leyen’s current term of office ends. Then the cards for top positions in the Commission will also be reshuffled.

He is ready for new tasks in the “most efficient administration in the world” in the near or distant future. “I won’t be sad if I am called back to Brussels again. There are many exciting tasks in the Commission,” he says. Meanwhile, his critics can hope for a new Selmayr. “I never stop working on myself,” he says very seriously. All that’s left now is the call to the European capital. Hans-Peter Siebenhaar and David Zauner

  • Austria
  • European policy

Europe.Table Editorial Office

EUROPE.TABLE EDITORS

Licenses:
    • Emission rights for waste incineration
    • Brussels postpones the debt problem
    • Hydrogen: Plant engineering fears national solo efforts
    • Better conditions for magnesium production in Europe
    • Auditors: EU must do more to guard its funds against fraudsters
    • Profile: Martin Selmayr – ‘I won’t be sad if I am called back to Brussels again’
    Dear reader,

    The municipal waste management sector is to become part of the European emissions trading system from 2026; the European Parliament’s Committee on Environment had voted in favor of this. Germany, however, has other plans and wants to include emissions from waste incineration in national law. Leonie Düngefeld and Lukas Scheid analyze why German associations are calling for a uniform solution across Europe.

    Now is not the time to tighten the belt, EU Economic Affairs Commissioner Paolo Gentiloni said yesterday in Brussels – but that does not mean a return to unlimited spending. Investments, especially in climate protection and digitization, are necessary despite the current situation, according to Brussels. That’s why the government will not return to strict debt rules until 2024. However, there still doesn’t seem to be an adequate solution to the growing debt problem in the eurozone, as Eric Bonse reports.

    After the EU Commission published the drafts of two delegated acts one-fuels in the transport sector, the German Mechanical Engineering Industry Association (VDMA) fears that national solo efforts could put the brakes on the production of large quantities of green hydrogen. Read more about this in the News.

    Martin Selmayr‘s political mentor Jean-Claude Juncker gave him the nickname “monster”. In the EU Commission (and beyond), the former secretary general and head of cabinet was feared for his work mania and hunger for power. Juncker’s successor Ursula von der Leyen sent the top official to Vienna as a representative, but Selmayr is by no means taking it slow there either. Hans-Peter Siebenhaar and David Zauner met the 51-year-old and talked to him about his motivation and ambitions – the result is a Profile that is well worth reading.

    Your
    Lisa-Martina Klein
    Image of Lisa-Martina  Klein

    Feature

    Emission rights for waste incineration

    The European Parliament’s Committee on Environment voted last week to include municipal waste incineration in the European Emissions Trading Scheme (ETS). Until now, it had been exempt. If the MEPs’ plan becomes reality, operators of waste incineration plants would have to buy emission rights for the CO2 emissions they cause from 2026. The goal is to avoid greenhouse gas emissions and make recycling more attractive. Will the plan work?

    137 kilograms of waste were incinerated per EU citizen 2020, a total of around 61 million tons. This means that the amount of waste incinerated each year has almost doubled since 1995. The method does offer advantages: Waste volumes can be reduced quickly, and the energy released is converted into electricity and heat (waste to energy, WtE). However, according to an analysis by the NGO Zero Waste Europe, the incineration of one ton of municipal waste produces around 0.7 to 1.7 tons of CO2.

    Currently, the price per ton of CO2 in the ETS is around €80 (as of May 23, 2022). This price premium is intended to serve as an incentive to recycle more – because emissions from the recycling industry are already subject to a CO2 price. So inclusion in the ETS would provide a level playing field. “CO2 pricing for waste incineration is an important building block for rapidly advancing waste avoidance, separate collection of recyclables and recycling in the EU,” said Barbara Metz, national director of Environmental Action Germany (Deutsche Umwelthilfe).

    Associations welcome European solution

    Waste industry associations had previously warned against Germany solo efforts. This is because the German government is planning to include emissions from waste incineration in the Fuel Emissions Trading Act (BEHG) from January 1, 2023. In a joint letter to Federal Ministers Lemke and Habeck, the Association of Municipal Companies (VKU) and the Federation of the German Waste Management, Water and Raw Materials Management Industries (BDE), among others, spoke out in favor of a uniform solution across Europe.

    Otherwise, the risk of legal and illegal waste exports would increase, they warned. “We need a regulation at European level so that emissions are not simply outsourced to other countries with inferior facilities,” said Peter Kurth, president of the BDE. He, therefore, welcomed the vote of the Environment Committee in the European Parliament.

    The VKU also warned against significantly increasing waste charges that are not based on the source of the waste: These would be passed on to all households as incidental rental costs, regardless of how high their individual waste volumes were. An expert opinion commissioned by the Federal Environment Ministry had previously calculated that waste charges would rise by at least three to eight percent due to CO2 pricing at a price of €65 euros per ton of CO2. In addition, costs would be incurred for monitoring, measurement technology, and waste analyses. Instead of an ecological steering effect, there would only be an increase in fees, according to the VKU.

    According to BDE President Kurth, however, the amount of waste incinerated will decrease anyway, which is why the development of fees cannot yet be predicted. “Everyone is aware that today we are still incinerating material that doesn’t belong there,” he told Europe.Table. “A large number of materials can and should be recycled.” VKU and BDE also call for all waste treatment processes to be priced equally. Incentives should not be created to return more municipal waste to landfills. This would be more harmful to the climate than incineration.

    Parliament commissions impact assessment

    The majority of the associations support the fact that an impact assessment will now be carried out as the next step. This is what the Parliament has asked the European Commission to do. Janek Vähk of Zero Waste Europe sees this as nothing but an unnecessary delay: “Both waste shipments and landfills are well regulated and have specific objectives, such as minimizing landfilling and requiring pre-treatment.” Currently, the EU’s Waste Shipment Regulation and Waste Framework Directive are also being revised, further tightening the rules.

    Although the Parliament still has to approve the inclusion of waste incineration in the ETS, this part of the ETS reform has already met with broad approval in the Environment Committee. Adoption in plenary during the EP session week in June is therefore considered a mere formality. The trilogue with the Council and the Commission will be more exciting. Germany is expected to support the Parliament’s initiative. Broader approval depends on the results of the impact assessment. Leonie Düngefeld & Lukas Scheid

    • Circular Economy
    • Climate & Environment
    • Emissions trading
    • Sustainability

    Brussels postpones the debt problem

    The EU Commission recommends that the general escape clause of the Stability and Growth Pact be applied in 2023 as well and that the strict debt rules for the eurozone not be returned to until 2024. Because of major uncertainties and downside risks, the rules – new debt below 3 percent of economic output, debt level not exceeding 60 percent – could not be fully implemented next year either, Commission Vice President Valdis Dombrovskis said on Monday in Brussels. However, that was no carte blanche to run up debts.

    “We are not proposing a return to unlimited spending,” Economic Affairs Commissioner Paolo Gentiloni also stressed. However, this was not the time to tighten the belt either. Brussels continues to recommend investments in climate protection and digitization. A new goal is “energy independence” from Russia. Last week, the EU Commission presented a plan for this (“REPowerEU”). It involves massive new spending, with up to €300 billion earmarked from EU funds alone. The member states are also to invest heavily to replace fossil fuels from Russia and promote green energy.

    The task now is to link “REPowerEU” with the European Semester and the Recovery and Resilience Facility (ARF), according to the Brussels-based authority. This provides “a solid framework for effective strategic coordination and thus addressing the current challenges,” the Commission said. However, Dombrovskis and Gentiloni again failed to provide answers to the question of how the growing debt problem in the eurozone is to be solved. The Brussels experts seem at a loss and are already pushing the problem along for the third year. Even the promised reform of the debt rules is making no headway.

    Ending ‘addiction’ to more and more debt as soon as possible

    The French EU presidency wanted to bag this reform in the spring. However, now concrete proposals are not expected until the summer. It could be many months before the reform is implemented. France, which would prefer to scrap the Stability Pact, and Germany are worlds apart. Meanwhile, warnings of a new crisis are mounting. “During the pandemic, government debt literally exploded,” said CSU financial expert and MEP Markus Ferber. “Now interest rates are also rising. This is an explosive mixture.”

    “Break the debt shackles,” demands Martin Schirdewan of the Left Party. The EU debt rules are outdated and belong in the history books. In view of the many crises, what is needed is “a strong economic and investment policy – not debt brakes”. The European Trade Union Confederation expressed similar views. It was wrong to exhort EU countries to save, said ETUC General Secretary Luca Visentini . The suspension of debt rules shows that they no longer serve their purpose. What was needed was investment and higher wages.

    In contrast, German Finance Minister Christian Lindner appealed to the EU to end “the addiction to ever more debt as quickly as possible”. Germany will again comply with the debt brake from 2023, he said on the sidelines of a meeting of the finance and economics ministers of the euro countries in Brussels.

    • European policy
    • Finance
    • Financial policy

    News

    Hydrogen: Plant engineering fears national solo efforts

    According to the German Mechanical Engineering Industry Association (VDMA), the production of large quantities of green hydrogen is in danger of being thwarted by exemption rules in European legislation. Over the weekend, the EU Commission had published the drafts of two delegated acts on e-fuels in the transport sector (Europe.Table reported).

    For climate protection reasons, among other things, rules apply to the spatial correlation between electrolyzers and renewable energy plants. “We are very critical of the point that member states can set additional criteria with regard to spatial correlation,” said Carola Kantz of VDMA on Monday. “Here, there is a risk of a patchwork at the national level, which can significantly slow down the ramp-up.”

    The association takes a positive view of the fact that the Commission now also wants to allow storage facilities and the use of electrolyzers for redispatch. However, the transitional rules until the end of 2026 are too short for VDMA; because of the long approval period for renewables, they should apply until 2030. “We are concerned with the existing plants that are leaving the German EEG, for example. They are looking for a new business model in perspective. Now they are only credited if there is investment in repowering.”

    EPP and Greens at odds on gas and nuclear energy

    Markus Pieper (EPP), Parliament’s rapporteur on the Renewable Energies Directive, is also in favor of transitional rules until 2030. He calls for facilitations for hydrogen production from old plants and during power purchases from the grid. “For the case of wind or sun lulls, a replacement power purchase from the general power grid is still far too complicated,” Pieper also informed. “This bottleneck must still be resolved by the Commission through simplified verification procedures and acceptance also for energy from nuclear power or gas for hydrogen production.”

    This is precisely the point on which the Greens disagree. “I very much welcome the fact that the Commission has stood firm and made renewable hydrogen production conditional on the construction of new wind and solar plants,” said MEP Jutta Paulus. “The other concerns of the industry, such as economists, that overly strict conditions would make the production of renewable hydrogen impossible, have also been defused with clever regulations.” ber

    • Climate & Environment
    • E-Fuels
    • Energy
    • Hydrogen
    • Renewable energies

    Better conditions for magnesium production in Europe

    Faster permits, reliable standards, and protection against price dumping: To rebuild magnesium production in Europe, industry representatives are calling for a secure framework. “We see that it is possible to develop these projects,” said Bernd Martens of Verde Magnesium at the RawMaterials Summit of the European Institute of Innovation and Technology (EIT) in Berlin.

    Verde Magnesium will restart a former magnesium production site in Romania from 2025. A quantity of 90,000 tons of magnesium would be available there for the European market. However, faster approval procedures are needed to make such projects possible. In addition, the EU must develop reliable standards with which the industry can plan. Martens also called for mechanisms to combat price dumping.

    Almost 90 percent of global magnesium production takes place in China. The EU obtains the majority of its imports from there. In the fall of 2021, there were severe supply bottlenecks in Europe due to energy shortages in the People’s Republic. Industry and politicians agree that this dependence must be reduced. Magnesium is used for the alloying of aluminum and is thus required above all for automobile production and also for renewable energy technologies.

    Until twenty years ago, there was also a magnesium industry in Europe, explained Joaquin Nunes de Almeida from the European Commission’s Directorate General for Internal Market and Industry. This now needs to be rebuilt. The Commission sees the urgency, de Almeida said. He referred to the “complex bureaucratic structures” involved in the energy revolution and industrial transformation. leo

    • China
    • Industrial policy
    • Raw materials
    • Raw materials strategy

    Auditors: EU must do more to guard its funds against fraudsters

    The European Commission and EU governments are not doing enough to prevent the misuse of the bloc’s money, auditors said on Monday, warning that fraudulent or corrupt businesspeople may receive funds because too few of them are blacklisted.

    The EU’s current blacklisting systems – set up in 2016 to stop potentially risky people and bodies from getting EU cash – were much less rigorous than those used by the United States and the World Bank, the report said.

    Nearly all 448 entities barred by the EU in 2020 were excluded because of bankruptcy, which would have prevented them from getting EU money anyway, auditors said. Only two were blacklisted for corruption or fraud. EU member states, who in practice hand out most of the bloc’s funding, are currently not obliged to set up blacklisting systems at all, the EU auditors added in their report.

    300 million EU funds misspent

    “Blacklisting is not used effectively to prevent EU funds from being paid out to individuals, businesses or public organisations involved in illegal acts such as fraud and corruption,” they said. The report focuses on funds disbursed in 2020, when the EU paid out around €150 billion of its budget to farmers, researchers, companies and other beneficiaries, in line with previous years.

    None of the four countries assessed for the report – Estonia, Italy, Poland, Portugal – had a blacklisting system in place, the report said. The Commission usually cannot access national data on fraudsters easily, and often relies on the word of applicants to offer grants, the report added.

    In 2020, the EU anti-fraud office OLAF recommended the recovery of about €300 million of EU funds that were misspent. rtr

    • European policy
    • Finance
    • Financial policy

    Profile

    ‘I won’t be sad if I am called back to Brussels again’

    Martin Selmayr is Head of the Representation of the EU Commission in Austria.

    The setting for Martin Selmayr and the grandees of Europe could not have been more magnificent. In Salzburg’s Castle Leopoldskron, the Head of the EU Commission’s representation in Austria assumed the role of the host. This magnificent 18th-century building, surrounded by a large pond and park, is the intimate setting for the Global Europe Seminar organized by Austrian Commissioner Johannes Hahn.

    Selmayr relishes in the elegant stage he can provide for the great and powerful. The guest list includes Commission Vice-President Maroš Šefčovič, Economic Affairs Commissioner Paolo Gentiloni, Croatian Prime Minister Andrej Plenković, and Finland’s Governing Council member Olli Rehn.

    In 2019, Martin Selmayr had to give up his post as Secretary-General of the EU Commission. Instead of pulling the strings in the labyrinth of Brussels’ Berlaymont, the German now leads nearly two dozen employees in the Commission’s Vienna representation. When the former Head of Cabinet of Commission President Jean-Claude Juncker moved to Austria in November 2019, sadness about his departure was limited among many officials in Brussels.

    The top official was reviled by his opponents as Rasputin. His meteoric rise even earned him the scandal hashtag #selmayrgate in 2018. Even then, the envy of the smart and power-conscious lawyer with a talent for moderating was great. Extremely hard-working string-pullers are seldom held in the highest esteem – be it in the Commission or other organizations.

    Bike tour across Austria

    Selmayr has kept his tireless diligence in his task in Austria. Under his direction, the Commission’s representation is omnipresent in the country. Whether in the media, on social networks, or at events – no one can get past Selmayr in the Austrian capital. And if someone doesn’t want to come to Selmayr, he will come to them. The 51-year-old has cycled more than 2,000 kilometers from Lake Constance to Lake Neusiedl on his non-electric renovated bicycle from school days to discuss and argue about the future of the Union.

    In the process, the EU official on two wheels also had to endure harsh criticism. “I also felt a lot of frustration. People spoke to us without any inhibitions,” Selmayr recounts. The border closures in the first phase of the pandemic, for example, were sharply criticized by his interlocutors. The EU does not have the best reputation in Austria.

    But that does not faze Selmayr. The staunch European has held 700 discussions. He is proud of this: “The bicycle tour was a contact with reality.” To understand the sensitivities of the member states, he says, the representations are very valuable to the Commission: “They are the eyes, ears, and voice of the Commissions in the national capitals.”

    The passionate man from Brussels has grown fond of Austria. “I am very happy in Austria,” he affirms during his marathon of appointments at Castle Leopoldskron. When asked whether he had felt a phantom pain after moving from Brussels to Vienna, Selmayr answered with a clear “No”.

    In the same breath, the son of a civil servant from the Rhineland adds: “Austria has given me a very warm welcome. Here, there is no arrogance of a large member state. Here, Europe is a natural part of domestic politics.” That has its advantages. Selmayr comes and goes to the Chancellor’s Office in Vienna and other control centers of the Republic of Austria. The government’s more pro-European course after the unglamorous end of the Sebastian Kurz era has helped him.

    ‘The mantle of civilization is very thin’

    However, Selmayr does not reveal whether the task truly fulfills him. After all, the part-time law professor is only 51 years old. What’s his plan? “I’m a commission official until I’m 67, and I’m passionate about it,” he said evasively. “My task in Austria could last a long time, but it could also end any day,” he adds ambiguously.

    Selmayr has naturally devoted his academic work to project Europe. He is the Honorary Director of the Center for European Law in Passau. He also lectures on European law as an Honorary Professor at the University of Saarland and the Donau University Krems.

    Selmayr sees himself as a passionate diplomat for Europe, especially in times of war. His grandparents’ confirmation present, a trip to Verdun, was a particularly defining experience, he says. He still thinks of the white crosses stretching all the way to the horizon.

    His grandfather Heinz Gaedcke was himself still a child during the 1st World War. As a general in the Wehrmacht, he had later experienced the horror of war firsthand and created it with his own hands. “It is up to your generation to make sure that this never happens again. That was the end of civilization,” his grandfather told him. To him, that made it clear that peace was not a certainty, that people had to work for it. “The mantle of civilization is very thin.”

    Many insiders believe that Austria is just a cozy waiting room for new tasks for Selmayr. The ambitious official certainly does not lack loyalty. “I serve the President of the Commission wherever she pleases.” Such devotion is never a bad thing for a public servant. And Selmayr is patient: “I supported the representation of the EU Commission in Austria for many years in Brussels. At that time, it had a model function within the Commission representations. That’s why I also wanted the job in Vienna.”

    Juncker called him ‘monster

    Selmayr has repeatedly proven that he can work until he drops. As Juncker’s “sherpa”, he has negotiated delicate and complex issues such as Brexit. In the process, he has also learned to endure media criticism. The British media have not exactly treated him with kid gloves. However, the nickname “monster” originates from his political foster father, Jean-Claude Juncker himself, Selmayr emphasizes. It refers to his iron discipline and therefore has a positive connotation.

    Selmayr also works tirelessly on and off stage during the conference in Salzburg. He updates his network and forges new contacts. Selmayr is both a sprinter and a cross-country skier. He is already thinking about the day after tomorrow, say his critics. At the end of 2024, Ursula von der Leyen’s current term of office ends. Then the cards for top positions in the Commission will also be reshuffled.

    He is ready for new tasks in the “most efficient administration in the world” in the near or distant future. “I won’t be sad if I am called back to Brussels again. There are many exciting tasks in the Commission,” he says. Meanwhile, his critics can hope for a new Selmayr. “I never stop working on myself,” he says very seriously. All that’s left now is the call to the European capital. Hans-Peter Siebenhaar and David Zauner

    • Austria
    • European policy

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