The Green Brief: France’s awkward ‘business as usual’ in Russia

Subscribe to EURACTIV's Green Brief, where you’ll find the latest roundup of news covering energy & environment from across Europe.

Welcome to EURACTIV’s Green Brief. Below you’ll find the latest roundup of news on energy and environment from across Europe. You can subscribe to the weekly newsletter here.

This week, Total Energies faced the wrath of Yannick Jadot, the Green candidate in the French presidential elections, who criticised the oil giant for maintaining its activities on Russian soil despite the war in Ukraine and calls for French companies to withdraw from the country. 

Jadot went so far as to accuse Total Energies of being “complicit in war crimes” in Ukraine before saying that the company “completely discredits France” in its diplomatic attempt to stop the war, making it a state matter.

The day before, however, Total Energies announced in a statement its decision to stop buying Russian oil or petroleum products “by the end of 2022 at the latest” – a decision Jadot deems insufficient.

Total Energies CEO Patrick Pouyanné defended his company’s position on RTL radio on 23 March. “If I decide to stop importing Russian gas, I don’t know how to replace it, I don’t have any available,” he said, adding that “I have 25-year long contracts and I don’t know how to get out of these contracts.”

The company’s operations are therefore being maintained, in strict compliance with the policy of the European Union – which has still not decided on an embargo against Russia. This means that alongside the thousands of victims of Putin’s war in Ukraine, a major French company is continuing business as usual from which the Russian state benefits and finances its war.

That is at least the Manichean view of the situation, but as is often the case in times of war, the reality is more complex. 

Hauts-de-France region president Xavier Bertrand put it this way on France Bleu Nord on 23 March: If tomorrow, “all the French firms that are there cease their activities, what happens? They will be expropriated and either Russian or international companies will take their place. This is enough to make one wonder whether they should withdraw from Russia, especially since selling Russian oil and gas in Europe is still legal at present.”

Caroline Mini, senior project manager at the French think tank La Fabrique de l’industrie also highlighted the industrial consequences of an energy import ban. “If we do without Russian gas, there will be gas rationing in France during the winter of 2023 and it is the manufacturers who could be affected first,” she told EURACTIV in an interview.

Moreover, gas is the raw material for making ammonia and therefore for making fertilisers, which are important for cereals and livestock farmers. The whole sector could be affected,” she added.

Total Energies is not the only French company to be singled out for its activities in Russia. Engie, the energy utility, is also being questioned for its links with Russia. In a statement on 2 March, the company said that “the group has no industrial activity in Russia and is not developing investment projects there”, even though “in 2021, the share of the group’s supplies resulting from long-term contracts with Gazprom was around 20% of its global gas sales and consumption”.

Total Energies and Engie do not have the same strategy, however. While Total sells the oil and gas it mines for the benefit of its private shareholders, Engie only resells gas to its customers. The consequences of a potential withdrawal from Russia are therefore not the same. “Engie is more inclined to withdraw from Russia, smoothly, whereas Total is less favourable to it,” says Thierry Bros, a Professor at Science Po Paris.

Apart from the energy sector, which has been widely covered in the media in recent weeks, other industries are also being scrutinised. With about 160,000 employees and “more than 500 French subsidiaries in various fields (including 35 listed companies)”, France is the leading foreign employer in Russia, the French economy ministry pointed out.

Today, companies like the Société Générale bank, the pharmaceutical laboratory Sanofi, the car manufacturer Renault, the food giant Danone, and the retailer Auchan have been called upon by a number of politicians to withdraw from Russia.

Expressing his irritation over the situation, Ukrainian Foreign Minister Dmytro Kouleba even directly attacked Auchan on Twitter on Sunday (27 March), calling for a boycott of the supermarkets following the company’s announcement that it would carry on its activities in Russia.

On 23 March, Ukrainian President Volodymyr Zelenskyy had already called on French companies to “leave the Russian market. Renault, Auchan, Leroy Merlin and others must stop being sponsors of Russia’s war machine.”

Some, like Renault, are speeding things up, while others, like Total Energies, are limiting themselves to what is strictly necessary to ease the situation.

According to Jadot, it is up to President Emmanuel Macron to order Total’s withdrawal from Russia. But the president has decided otherwise. On 24 March, at a press conference after the NATO summit, Macron said that the French “position is to let companies decide for themselves”.

“It is the choice of the heads of these companies to appreciate, according to their balance, their activities, to choose what is appropriate”, Macron added.

Leaving Russia can undoubtedly be a difficult choice from a business perspective, as it could mean a loss in investments, massive layoffs of Russian employees, the obligation to respect contracts… Business executives can feel trapped. 

Morally though, the matter is much clearer. Especially since, as the Ukrainian President reminded us in his speech to the French parliament, “values are more important than profits”.

And values also make the reputation of companies. “Total is a little more reluctant than other companies like BP or Shell to stay in Russia,” according to Bros. “What can happen is that the big shareholders turn away from Total,” he added, suggesting that large funds could change the game and push Total Energies to withdraw.

The big financial players, who are notoriously risk-averse, may indeed have the last word. In the meantime, French corporate groups will have an increasingly hard time justifying their presence in a country whose leaders are responsible for war crimes.

– By Nelly Moussu


This week’s top stories

More stories:


News from the capitals

BERLIN. German economists pitch Russian energy levy as alternative to sanctions. Germany should introduce a levy on Russian energy imports as an alternative to sanctions on energy as it would curb Russia’s profits while generating revenue for the West, experts have said. Read more.

THE HAGUE. Dutch finally present EU recovery fund plans. The Dutch government presented its list of measures for the country’s recovery and resilience plan to parliament’s lower house on Monday – making it the last EU member state to do so. Read more.

WARSAW. Polish government to stop importing coal from Russia. Poland will not wait for the rest of Europe to give up Russian coal, rather it will do so on its own despite calls for experts to enforce a joint EU embargo. Read more.

LJUBLJANA | ZAGREB. Slovenia and Croatia plan closer nuclear, gas ties. Slovenia and Croatia appear on track to forge a closer energy partnership, with Croatia interested in joining the construction of a new unit at Slovenia’s only nuclear power plant and Slovenia keen on getting natural gas through the LNG terminal on Krk Island. Read more.

THE HAGUE. Dutch parliamentarians urge minister to decide on nuclear plant construction. Members of the lower house of parliament have been pushing for Economic and Climate Minister Rob Jetten to confirm when construction of the two promised nuclear power plants is set to start. Read more.

WESTERN BALKANS. EU funds should not pay for Balkan gas projects, Bankwatch. Billions of EU funds could be set for infrastructure projects in the Western Balkans that are not needed, are non-transparent, and could lock the region into fossil fuels, particularly gas, for decades to come. Read more.

BELGRADE. Serbian ecological uprising sends protest letter to Xi Jinping. The Serbian Ecological Uprising movement sent an open letter to Chinese President Xi Jinping saying that Chinese companies were “complicit in horrific poisoning” that had “unforeseeable and irreversible consequences” on the health of Serbian citizens, children and nature. Read more.

ZAGREB. Croatia to consider increase in capacity of Krk LNG terminal. Croatia is considering increasing the capacity of its LNG terminal on the island of Krk from the current 2.6 billion cubic metres of gas to 2.9 billion cubic metres annually, Prime Minister Andrej Plenković said. Read more.

SKOPJE. North Macedonia to take part in EU’s joint LNG purchase. Prime Minister Dimitar Kovačevski thanked the EU for deciding for North Macedonia to become part of the Platform for joint purchase of liquefied natural gas. Read more.

DOHA. EU top diplomat: Putin won’t cut off Europe’s oil, gas. The EU’s chief diplomat Josep Borrell has dismissed the prospect of Russian President Vladimir Putin cutting oil and gas supplies to Europe in retaliation to the tough economic sanctions imposed on Moscow following its invasion of Ukraine. Read more.

LJUBLJANA. Slovenia to consider gas supplies from Qatar. Slovenia hopes to secure supplies of Qatari natural gas to wean itself off its reliance on Russia, Infrastructure Minister Jernej Vrtovec said after meeting senior Qatari officials yesterday. Read more.

ROME. Italian police to fight energy price speculation. Finance Guard Commander General, Giuseppe Zafarana, announced a plan to detect speculation in connection with rising fuel prices during a hearing at the Senate on Thursday. Read more.

BELGRADE. EU ambassador in Belgrade warns of risks as energy is becoming weaponised. Russia’s attack on Ukraine has underscored the importance of energy independence because “resources have become weaponised,” the chief of the EU Delegation in Serbia, Emanuele Giaufret, has said, adding that the bloc would work on overcoming these challenges together with Western Balkan countries. Read more.

THE HAGUE. ING to stop funding oil and gas drilling. Dutch bank giant ING has announced that it will no longer finance new oil and gas fields and that it plans to invest more money in developing renewable energy such as solar and wind power. Read more.


News in brief

LEAK: EU countries remain divided on ETS reform. EU countries are still divided on the European Commission’s proposal to create a carbon price for road transport and buildings (ETS II), according to a leaked document, seen by EURACTIV, prepared by the French EU Council Presidency ahead of a meeting of the 27 EU member states representatives in Brussels (COREPER). 

The French presidency plans to devote two meetings to the controversial ETS II and the social climate fund with a view to advance discussions and identify political compromises.

It follows a meeting of environment ministers on 17 March, where ministers shared differing opinions on the file. For some, like fiscally conservative Denmark, Sweden, Germany and the Netherlands, the ETS II is welcomed, but there is concern about using more EU money to create a social climate fund to support vulnerable households affected by it. Meanwhile, other countries like Poland and Slovakia are concerned about the social impacts of ETS II.

The document notes these differences, saying there are diverging views on the subject, with some EU countries in favour of it as they see no alternative to reducing emissions in road transport and buildings and others concerned about social acceptability. Some EU countries would prefer to keep the choice of measures they use to reduce emissions in this sector, the document says.

To prepare for the meeting, national representatives are asked to prepare two questions (this is our rough translation from French):

  1. Which arrangements for the introduction and implementation of a new ETS for buildings and road transport (timeframe, scope, control of price volatility, other) and of a Social Climate Fund would seem to you the most relevant to improving the acceptability of the system while guaranteeing its effectiveness?
  2. What concrete proposals would you make to make the achievement of the objectives set by this fund more effective?

Read our article on the environment ministers’ meeting here and check out our Twitter coverage of it here. (Kira Taylor | EURACTIV.com)

////

CBAM drama in Parliament. There was unexpected drama in the European Parliament’s international trade committee (INTA) when lawmakers voted on 28 February to adopt their stance on CBAM, the EU’s carbon border adjustment mechanism. 

Despite an agreement between the Parliament’s four main political groups – the EPP, the S&D, Renew and the Greens – the report was rejected by just one vote. 

Karin Karlsbro, a Swedish MEP from the centrist Renew group, was the author of the report for INTA, which has exclusive competence on the trade-related aspects of CBAM (for all other aspects, it is the Parliament’s environment committee which is in the lead). She told EURACTIV that the amendments to her draft report were adopted without problem, thanks to the political agreement found earlier between the four political groups in the committee. 

But when MEPs voted on the whole report just hours later, it was surprisingly rejected. According to Karslbro, some EPP lawmakers apparently changed their minds at the last minute or did not observe voting instructions. And one S&D MEP failed to get their vote certified when voting remotely, she explained.

“I’m deeply disappointed that the INTA committee failed – with only one vote – to support the compromise that was negotiated between the groups,” Karslbro told EURACTIV. “It’s especially worrying how the EPP group not only went back on their own word and abandoned the compromise that was negotiated, but also failed to recognise the importance of making CBAM happen – to combat climate change and pushing for global carbon pricing,” she added.

As a result, the INTA amendments to the CBAM proposal will be voted through directly during a plenary session on 7 June. Karlsbro is currently preparing those amendments, which she says reflect the political agreement passed with the other political groups. The INTA amendments are mainly related to the question of export rebates to industry, which are supported by steelmakers and other industries covered by CBAM. Export rebates are considered a no-go for environmentalists who say they would amount to double compensation and violate WTO rules. (Frédéric Simon | EURACTIV.com)

////

EU’s first climate scientific advisory body named. The 15 members of the new European Scientific Advisory Board on Climate Change were designated on Thursday (24 March). The group will provide independent scientific advice on climate measures and targets adopted by the EU and their coherence with the European Climate Law, which sets out a binding objective of reaching climate neutrality by 2050, in accordance with the Paris Agreement. Politico’s senior climate correspondent, Karl Mathiesen, called it a “big moment for EU climate politics” and outlined three key steps to ensure the new EU body works as intended. More detail and CVs of the 15 members of the board here. (Frédéric Simon | EURACTIV.com)


Opinions


Upcoming events

30 MARCH. How to develop the heating sector to ensure better air quality? Join this EURACTIV Virtual Conference to discuss the link between pollution and district heating systems, and the impact that the proposal for the recast energy efficiency directive plays in this regard. Speakers include Piotr Sprzaczak, director of the District Heating Department at the Polish Ministry of Climate and Environment, Claudia Canevari, head of unit for energy efficiency at the European Commission and Ciarán Cuffe, rapporteur for the “Energy performance of buildings” revision in the European Parliament. Programme and registration here. (Supported by PKEE)

29 APRIL. Circularity of bottles: contributing to the Green Deal. Join this EURACTIV Virtual Conference to discuss what’s the best recipe for meeting circular economy and climate objectives and whether deposit return schemes are an efficient way to meet collection and recycling targets for EU natural mineral and spring water producers. Speakers include Martin Hojsík from the European Parliament’s environment committee and more. Programme and registration here. (Supported by Natural Mineral Waters Europe)


On our radar

30 MARCH. Circular economy package 1:

  • Sustainable products policy initiative, including a revision of the Ecodesign Directive
  • Review of the Construction Product Regulation
  • Proposal for a Regulation on substantiating environmental claims using the Product / Organisation Environmental Footprint methods (green claims)
  • Strategy on sustainable textiles
  • Empowering consumers for the green transition 

5 APRIL. Emissions and pollutants package:

  • Revision of the Industrial Emissions Directive and update of the European Pollutant Release and Transfer Register (E-PRTR)
  • Review of EU rules on fluorinated greenhouse gases
  • Regulation on substances that deplete the ozone layer
  • Development of post-Euro 6/VI emission standards for cars, vans, lorries and buses 

3 MAY. International partnerships and energy package:

  • New strategy on international energy engagement
  • Joint Communication on a partnership with the Gulf

25-27 MAY. G7 meeting of climate and energy ministers.

7 JUNE. Joint Communication on international ocean governance

27 JUNE. Energy Council.

28 JUNE. Environment Council.

5 JULY. New design requirements and consumer rights for electronics tbc

20 JULY. Circular Economy Package 2:

  • Policy framework for bio-based, biodegradable and compostable plastics
  • Review of the Packaging and packaging waste directive to reinforce the essential requirements for packaging and establish EU level packaging waste prevention measures and targets
  • Review of the Urban Wastewater Treatment directive 

(Date tbc). Nature protection package: Revision of rules around sustainable use of pesticides and nature restoration targets.

Subscribe to our newsletters

Subscribe