The Green Brief: Nord Stream 2, Poland and rule of law

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The Nord Stream 2 gas pipeline linking Germany to Russia is a gift that keeps on giving. The latest development in the saga of the controversial Kremlin-backed project saw Berlin add a new twist, suggesting it is ready to leverage the pipeline in the EU’s ongoing rule of law spat with Poland.

“The geopolitical assessment will always have an influence on the approval of Nord Stream 2,” said Germany’s Robert Habeck, who spoke alongside Deputy Prime Minister Jacek Sasin during a visit to Warsaw on Friday (11 February).

For the Polish government – a long-time opponent of the pipeline – this must have sounded like news from heaven. It is certainly an olive branch extended by Habeck during his first trip to Warsaw as German Vice-Chancellor.

But Habeck’s next words likely dragged Sasin back down to earth – the German Vice-Chancellor then connected the pipeline’s approval to Warsaw’s ongoing standoff with Brussels over the independence of its judiciary.

“The concept of the rule of law” will be central to Germany’s decision on Nord Stream 2, whether it is positive or negative, Habeck said.

Rule of law “must also apply accordingly to all other standards between the states, so that the security of being able to rely on the partners is never called into question,” he added in a series of statements, the connection of which was obviously intentional.

Germany has delayed the certification of Nord Stream 2 until at least the second half of 2022, but has not cancelled the project. The process, Habeck said, will take the broader geopolitical implications into account, in full accordance with European law.

Habeck’s words signal a departure from Germany’s previous policy on the rule of law. Angela Merkel, the previous Chancellor, sought to play down disagreements between the EU and Poland on the matter.

During her last EU summit in Brussels, she kicked the ball into the long grass by deferring the discussion to the Conference on the Future of Europe.

But by linking Nord Stream 2 to the rule of law, Habeck not only wielded a stick at Warsaw –  he also meant to extend a carrot. Respect for the rule of law is a necessary precondition to increase mutual investments, he said.

“This [legal] security is ultimately also an economic security,” the Vice-Chancellor underlined. 

And it wouldn’t be the German way if there wasn’t a pot of gold to sweeten the deal. On investments, Habeck said, “that’s what you do when you know that the rules are always respected”.

Respect for the rule of law is also a precondition to unlock billions in EU funds for Warsaw, which are currently being held back because of the standoff.

“Overall, I believe that we will quickly be able to address concrete issues, to address them together,” Habeck concluded.

– Nikolaus J. Kurmayer


This week’s top stories

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News from the capitals

BRATISLAVA. Slovakia does not expect boom of gas projects despite new taxonomy. Key Slovak investors have for now ruled out the revival of several big projects involving natural gas and nuclear despite the government welcoming the European Commission’s decision to include these energy sources in the new green taxonomy. Read more.

ROME. Italian gas, electricity prices surge despite government interventions. Electricity and gas prices have rocketed 94% and 131% in the first quarter of 2022, compared to the same quarter last year, the Italian regulatory authority for energy, networks and environment (ARERA) told the Senate on Tuesday. Read more.

WARSAW. Polish government accused of manipulating energy lobby in anti-Brussels ad campaign. The Ministry of State Assets manipulated energy companies to participate in a TV and billboard campaign worth over €2,600,000, blaming the EU for the rise in energy prices reported news service Wirtualna Polska (WP). Read more.

PARIS. France to build up to 14 new nuclear reactors by 2050. French President Emmanuel Macron expressed his desire to develop nuclear energy and renewable energies to produce “more decarbonised electricity” and announced the construction of six new nuclear reactors. Read more.

BRATISLAVA. Slovak government plans to tax nuclear power plants, owners threaten bankruptcy. The “excessive profits” of nuclear power plants should be taxed as this would open up millions to compensate for the soaring energy prices, the economy ministry has said. But Slovenské elektrárne a.s, the owner of both Slovak nuclear power plants, claims the bill would lead to the private company filing for bankruptcy. Read more.


News in brief

German MEP drops RED III bombshell in Parliament. Markus Pieper, a German conservative MEP from the centre-right European People’s Party (EPP), presented his amendments to the EU’s draft Renewable Energy Directive on Tuesday (15 February). The revised directive, now in its third iteration, was tabled by the European Commission in July last year and aims to raise the share of renewable energies consumed in Europe to 40% by 2030, up from 23% currently. The existing target is 32%.

While Pieper does not dispute the 40% target, his draft report contains a number of far-reaching amendments, which he grouped into eight categories: 1) Boosting the single market by doubling the share of cross-border energy connections; 2) Speeding up the approval process of renewable energy projects, including new wind farms; 3) Boosting green hydrogen imports into Europe; 4) Supporting the production of biogas with a revised system of Guarantees of Origin (GOs); 5) Lower the 50% target for green hydrogen used in industry; 6) Further support biofuels in transport; 7) Reducing constraints on biomass; 8) Cutting red tape by deleting requirements for green industrial products and the cascade principle for biomass.

Summing up his approach, Pieper said the EU’s 40% target “is realistic” and underpins Europe’s claim for global leadership on climate change. “But instruments are too timid,” he added, saying “we need to focus more on the internal market,” cross-border energy projects, and shortening permitting procedures. The draft Pieper report can be downloaded here. (Frédéric Simon | EURACTIV.com) 

Nord Stream 2 loses a key German ally. The biggest proponent of Nord Stream 2 in Germany, Manuela Schwesig, the minister-president of Mecklenburg-Vorpommern, will be out of active politics for an unknown period as she undergoes urgent surgery. A flare-up of after-effects of her won battle against cancer is expected to leave the social democrat unable to continue defending the contentious pipeline as she had done until now. (Nikolaus J. Kurmayer | EURACTIV.de)

Gases at the table with Putin and Scholz. It was no surprise that German Chancellor Olaf Scholz raised the issue of gas in his talks with the Russian leader Vladimir Putin, seeing as Germany is largely reliant on Russian gas imports pumped into Europe via pipelines.

Yet, despite Germany’s “hydrogen diplomacy” being widely derided in Ukraine just one month prior, Putin brought the topic up as the situation at the Ukrainian border is most dire. “We talked about hydrogen today,” Putin said after the meeting with Scholz, noting efforts to expand the production of “green” hydrogen. For the country reliant energy exports, participating in a future hydrogen economy appears crucial. (Nikolaus J. Kurmayer | EURACTIV.de)

Energy stock exchange associations worried about EU intervention. In a letter sent to the EU’s Green Deal Vice-Chief Frans Timmermans, energy commodity trading places engaged in emissions trading (via the EU ETS) ask that the executive abstain from intervention. Lauding the transparency of emissions trading and the market based functioning of the scheme, the associations like the Association of European Energy Exchanges (Europex) warn against introducing “position limits or restricting the participation of financial and non-financial actors.” (Nikolaus J. Kurmayer | EURACTIV.de)


Opinions


Upcoming events

22 FEBRUARY. (Re)constructing Europe: What challenges are Member States facing? 

Join Fulvia Raffaelli, head of unit construction at DG Grow, Maria Spyraki from the European Parliament’s energy and environment committees and more to discuss the new economic and environmental challenges for the construction sector, particularly for South-Eastern Europe. Programme and registration here. (Supported by Glavbolgarstroy)

3 MARCH. Efficient district heating systems: How to achieve cost-effective decarbonisation? Join this EURACTIV Virtual Conference to discuss the new definition of efficient district heating systems in the EED proposal, and how stakeholders can best cooperate to achieve cost-effective decarbonisation. Speakers tbc. Programme and registration here. (Supported by PGE)


On our radar

23 FEBRUARY. European Commission proposal on sustainable corporate governance

2 MARCH. Communication on energy.

17 MARCH. Environment Council.

23 MARCH. Nature protection package: Revision of rules around sustainable use of pesticides and nature restoration targets.

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.

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

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