“Next Generation EU” and the framework
It goes without saying that coronavirus is on the agenda. The crisis overshadows Germany’s six-month Council presidency, which begins on 1 July. It will be a time to “find compromises and solutions to tackle the challenges posed by the coronavirus pandemic by working together in a far-sighted fashion”, as the German government’s spokesman Steffen Seibert put it in a press conference. However, there is another crisis to be addressed. “In the long term, an unchecked climate crisis is much more serious than coronavirus,” said Gunda Röstel, Managing Director of Stadtentwässerung Dresden, former Chair of the party Bündnis 90/Die Grünen and a member of the German Council for Sustainable Development (RNE). She added that the pandemic was bad, but it was forcing an often divided European Union together: “When push comes to shove, the EU is capable of action.”
The European Commission hopes to link the two topics – coronavirus and the climate. It is proposing a €750 billion recovery package entitled “Next Generation EU”, with funds going towards the ecological transformation of the economy – charging points, the renovation of buildings and the hydrogen economy. As the whole scheme is financed by borrowing, with repayments stretching through to 2058, Röstel warns against ploughing the funds into “one-sided, consumption-driven flashes in the pan”. “Anything we spend in Europe now and don’t refinance will have to be paid off by the next generation. The investments must benefit the environment and the climate. Otherwise, we will burden our children twice over,” says Röstel Germany’s Presidency of the Council is so important because – even without coronavirus – a number of fundamental decisions need to be made, as the German Council for Sustainable Development (RNE) explains in its recommendation paper [German only].
New climate targets
In March, the European Commission presented a proposal for a new climate regulation as a central element of its Green Deal. This entails the EU achieving net climate neutrality by 2050, meaning that climate gases may still be emitted, but they must be offset elsewhere. The major criticism levelled at the Commission’s draft is that it does not yet contain any interim targets for 2030 or 2040. However, the Commission has already clearly advocated reductions of at least 50 and as much as 55 per cent by 2030, using 1990 as a baseline, in connection with the Green Deal. Brussels intends to present an analysis of the proposal in September, at which time Germany will also have to take a stance on it. In April, Chancellor Angela Merkel “welcomed” the target of reducing emissions by as much as 55 per cent in a speech at the Petersberg Climate Dialogue.
In March, the Commission also presented a package for working towards a circular economy as part of the Green Deal put forward by Ursula von der Leyen. It comprises a right to repairs, the recycling of batteries, replacing disposable packaging with reusable alternatives, and collecting and recycling more textiles and electrical appliances, or ensuring that they last longer. So far, this has been criticised for lacking concrete targets stipulating how much of a reduction should be made in the EU’s use of resources. The RNE advocates introducing such a target in Germany as part of the revision of the German Sustainable Development Strategy. This would represent an absolute target for the consumption of raw materials. Numerous details concerning the circular economy will be discussed in the next three years. Some of these talks fall during the German Council Presidency, such as the discussion about how the goal of a circular economy can be implemented in free trade agreements.
Industrial strategy and energy
As yet, the German federal government’s website does not include many details of its work programme for the Council Presidency. However, the Federal Ministry for Economic Affairs and Energy (BMWi) plans to hold an industrial conference in Berlin in November. It hopes to boost “competitiveness, prosperity and economic growth within the European Union”. The European Commission also presented its industrial strategy in connection with the Green Deal in March. One of its focal areas is decarbonising energy-intensive industry and establishing a hydrogen economy.
The aim is to produce the gas with the aid of renewable energy and use it to make sectors such as steel production or heavy vehicle traffic more climate-friendly. Now, the Commission intends to further promote this topic using funds from the multi-billion coronavirus recovery package. The German government also sees this energy source as a “key element of the energy transition”. Likewise, the RNE states: “We believe that social and technological innovations which support sustainability should be introduced quickly, e.g. in digitalisation (education and health), energy (solar, wind and hydrogen) and infrastructure (energy and data networks).”
According to a mid-April draft of Germany’s work programme for its Presidency of the Council of the EU quoted by Euractiv, the country intends to place hydrogen partnerships for energy imports on the agenda for its period of office. The German government is planning a conference on European energy policy in October. The EU’s draft European offshore wind strategy is also due to be completed by the end of 2020 as planned.
Multiannual Financial Framework
On 27 May, Brussels presented a revised proposal for the Union’s regular Multiannual Financial Framework which is to total €1,100 billion for the 2021–2027 period at the European Commission’s request. This does not include the funds for the debt-financed “Next Generation EU” package. According to the Commission, a quarter of the budget will still go towards climate investments, as pledged in the original draft in 2018.
The Commission writes: “public investments in the recovery should take into account the green ethos ‘do no harm’”, meaning they should not damage the environment and the climate. However, environmental associations point out that this sentence apparently only applies to the €750 billion from the envisaged coronavirus recovery programme, and not to the €1,100 billion from the regular EU budget. Yet, both budgets are only Commission proposals anyway. All of the associated negotiations will take place during Germany’s Council Presidency and should be completed in December.
Delays to some Commission plans
A large number of European Commission plans relating to sustainability have been delayed until next year due to the pandemic. This means they will be dealt with after the German Council Presidency. The Commission’s revised Work Programme dated 27 May shows which projects are affected. According to this, the following elements of the Green Deal have been postponed:
- The new strategy for sustainable finance will be put back by six months to the first quarter of 2021.
- The strategy for adapting to climate change and the new forest strategy will be delayed by three months to the first quarter of 2021.
- An initiative to strengthen consumers for the green transformation will be rolled out in the second quarter of 2021 instead of in late 2020.
- Similarly, the 8th Environment Action Programme will be postponed by six months until the second quarter of 2021.
How will the German government approach the EU’s new “Farm to Fork” strategy for more sustainable agriculture and greater biodiversity during its Council Presidency? Read more about this in a special article here [German only].