Neglect of CBAM + Sanctions against Gazprom + Finland wants to join NATO • Europe.Table

CBAM: in Berlin only a distant second
Electricity Island Switzerland
Finland wants to join NATO – Russia announces reaction
Gazprom: concern and relief
Commission announces aid for wheat exports from Ukraine
Facilitated aid schemes to expire at end of June
EU wants bigger role in Asian ‘tension field’
Massive criticism of Johansson’s child protection proposal
What’s cooking in Brussels?

Dear reader,

In the next few days, Finland’s government plans to take the formal decisions still needed to join NATO. The country, which shares a border of more than 1,300 kilometers with Russia, wants to join the defense alliance immediately, and Sweden could soon follow. Russia’s angry reaction was not long in coming.

After Russia announced sanctions against parts of the gas company Gazprom Germania on Wednesday, Economics Minister Robert Habeck yesterday gave a slight all-clear. He said Russia did not want to stop trade but was using energy as a weapon.

Progress on the Carbon Boundary Adjustment Mechanism (CBAM) is slow to none. Lukas Scheid and Till Hoppe have analyzed why one of the most important instruments for decarbonizing industry and protecting against carbon leakage is so neglected by the German government.

These days, Switzerland is struggling less with the fear of a gas supply freeze than with the fear of a lack of electricity. The country is in danger of losing its connection to the EU’s internal electricity market, at the latest when, from 2025, neighboring countries will have to reserve a good part of their capacities for trade with EU countries. Stephan Israel explains the background.

Your
Lisa-Martina Klein

Feature

CBAM: in Berlin only a distant second

The CO2 cap-and-trade mechanism is one of the most important instruments for decarbonizing the industry and protecting against carbon leakage. However, the German government has so far neglected the issue. Industry and climate activists alike are now criticizing this move.

European heavy industry is facing a massive transformation in the coming years. Sectors such as the steel and chemical industries will have to switch to climate-neutral production, which will require enormous investment. At the same time, however, the companies’ products must be competitive on the world market – otherwise production will move abroad.

This is particularly true for Germany: The Federal Republic is Europe’s largest steel producer with an annual production of around 40 million tons of crude steel (2021) and the largest cement producer with over 34 million tons per year (2019). Currently, the industries still benefit from free CO2 certificates, so they do not have to pay the full price in the European emissions trading system and thus remain internationally competitive.

The Carbon Border Adjustment Mechanism (CBAM) would change the principle. Industry would henceforth pay in full for its CO2 emissions, and to ensure fair competition, imports to Europe would be subject to border adjustment. However, the mechanism has not yet been tested, which is why there is great hesitation in both industry and politics.

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