European Union

On 24 March 2022, the European Council adopted conclusions on the Russian military aggression against Ukraine.

Council and European Parliament reach agreement on clear rules for large online platforms

Washington will increase supply of liquefied natural gas before the end of the year, US president Joe Biden and EU Commission president Ursula von der Leyen announced on Friday, amid warnings that such a move could push prices even higher.

With Russia's propaganda machine in full swing, we are seeing firsthand the devastating consequences of allowing free media to fall under government control.

Written by Kjeld van Wieringen with Julia Hüntemann.

Within the scope of the European Union’s new industrial strategy, the European Commission acknowledges the need for a more strategic approach to renewable energies. Following up on the presentation of the strategy, the European Parliamentary Research Service organised a webinar, in cooperation with Parliament’s Directorate-General for External Policies of the Union, to assess developments in the global solar photovoltaic (PV) industry. The event identified opportunities as well as challenges – not only for the EU – but also for India, to reduce their dependence on solar PV technologies manufactured in China.

China emerged as the dominant producer of PV modules by 2008. By 2012, it accounted for 64 % of worldwide production, and as of 2017, 8 of the top-10 solar manufacturers were Chinese, supplying ca. three quarters of the world’s solar panels. China’s unprecedented surge as a global provider of solar panels was also enabled by a 75 % decline in production costs. While China’s success in this industry has been deemed a result of Beijing’s commitment to establish market leadership, the country has not always dominated the supply chain. In 2007, 30 % of PV manufacturing was in Europe, making the region the initial front-runner in the solar revolution. However, the swift price decreases achieved by cost reductions among Chinese PV manufacturers in combination with significant state subsidies allowed them to outcompete their European counterparts, driving them into bankruptcy. In 2012, a proposal by the Commission to implement anti-dumping duties of up to 67.9 percent was aborted, following Chinese threats to retaliate with tariffs on French wine and German cars, and thus failed to save the European solar panel industry. Currently, Europe holds less than 0.2 % of PV cell production capacities. While PV manufacturers in the EU can no longer match the cheap prices offered by Chinese competitors, Indian PV manufacturers were never able to do so, as the country joined the ‘solar race’ at a time when the China had already established market leadership.

Solar installation companies have been incentivised to rely on the cheap equipment exported from China, both in Europe and in India. Without them, solar installations – and therefore green transition plans – could not have advanced at the pace they did. Nevertheless, an unpleasant aftertaste lingers, as the dependency on Chinese solar equipment is increasingly deemed a cause for concern both in the EU and in India. 

Both Europe and India consider a domestic PV manufacturing industry important because it would provide lucrative employment opportunities, and a source of technological leadership and international prestige. More importantly however, in-house PV manufacturing would make the solar sector a source of energy security, allowing the EU and India to cut the unwanted dependencies that accompany imported oil and gas. With Europe importing 80 % of its solar panels from China, and India up to 90 % of its required solar equipment, dependencies are simply shifting from imported oil or gas to imported solar equipment, leaving much to be desired when it comes to the solar sector as a genuine source of energy security. 

In May 2020, India’s Prime Minister Narendra Modi deemed this dependence on foreign suppliers untenable and proclaimed a new policy focus on domestic (solar) manufacturing, through the ‘Atmanirbhar Bharat Abhiyan’ (Self-Sufficient India) and ‘Make in India’ initiatives. Around the same time, a letter signed by Ministers from Austria, Estonia, Greece, Latvia, Lithuania, Luxembourg, Poland and Spain called on the Commission to consider solar PV to be a strategic value chain, to receive more support under Covid‑19 recovery packages. Similarly, in the summer of 2020, 90 organisations from the European solar sector urged for solar PV manufacturing and research and development (R&D) to be at the core of the Green Deal.

With pleas to re-shore PV manufacturing capacities to Europe gaining renewed momentum, the question remains how Europe will go about providing its domestic manufacturers with a business environment in which they can compete with their Chinese counterparts, without igniting another round of solar trade disputes, as experienced in 2012‑2013. The Commission’s anti-dumping and anti-subsidy investigation, valued at more than €20 billion but cut short following Chinese threats to increase tariffs on European wines and luxury cars, became one of the largest EU-China trade disputes. The European Union could consider diversifying its supply of solar equipment, a process which will require the navigation of domestic and international pressures, and thus demands – first and foremost – a careful study of mid- to long-term trends in the global solar industry. In an attempt to help the EU anticipate these pressures, the webinar concluded with an assessment of scenarios for cooperation and competition between the EU and its Indian and Chinese counterparts respectively. These scenarios were presented within a foresight ‘Best Case’, ‘Anticipated Case’ and ‘Worst Case’ framework. 

Best CaseAnticipated CaseWorst CaseEU-IndiaIndia and the EU find effective ways of cooperating more closely within the framework of the already existing EU-India Clean Energy and Climate Partnership. The EU has been collaborating closely with India in deployment of climate friendly energy sources, collaboration that could be extended to include the manufacturing, as well as the research and development arm of the supply chain. Energy cooperation could also be embedded deeper in the recently ratified EU-India Connectivity Partnership to find investment opportunities for automated production lines. This could be particularly valuable in trying to bring next generation solar technologies onto the market (see below).Narendra Modi has pledged to achieve self-sufficiency, cutting dependencies on PV imports irrespective of their country of origin. Under current circumstances, this goal seems unfeasible given that:
1)      PV manufacturing companies in India have poor access to debt capital, meaning they have difficulties in securing loans (unlike their Chinese competitors);
2)      PV manufacturing companies in India face high electricity prices, which make operations expensive in the first place;
3)      PV manufacturing companies in India face severe difficulties in establishing economies of scale, owing to strict labour laws enshrined in the Industrial Disputes Act of 1947.
If self-sufficiency is an unfeasible goal, we can expect India to diversify its supply of solar equipment away from China, favouring producers in Europe, Japan and the USA. Given the scale of India’s Nationally Determined Contributions, the ambition of its National Solar Mission and the according demand for solar equipment, European PV manufacturers should consider India a promising market.A number of scenarios could be envisaged.
1)      India decides to pursue closer energy cooperation with Quadrilateral Security Dialogue (QUAD) partners, particularly Japan, rather than the EU.
2)      In an attempt to offer its PV manufacturers a more competitive environment, India decides to launch a safeguard duty on solar equipment imports, irrespective of their country of origin, including those imported from Europe. (NB: India already imposed such a duty in 2018. This was gradually phased out in 2020.)
India’s solar energy ambitions are seriously slowed due to a government that creates an insecure investment climate while trying to negotiate between the incompatible interest of two stakeholder groups. On the one hand, the Government of India is committed to fast and cheap solar installations, an objective which requires cheap inputs from China. On the other hand, the Government of India has pledged verbal support to domestic PV manufacturers that compete with precisely those supplying cheap equipment to India. This policy flip-flop has resulted in the imposition of trade defence instruments, e.g. the safeguard duty in 2018‑2020, which was too low to support PV manufacturers in becoming globally competitive, but high enough to create bureaucratic hurdles and confusion, discouraging investors in solar installation.EU-ChinaImports of subsidised Chinese solar panels are regulated by country-neutral instruments such as anti-subsidy rules or safeguard duties.
This creates opportunities to diversify solar panel imports through partnerships with India, Japan, South Korea and Association of Southeast Asian Nations (ASEAN) countries.
Other European green energy industries (wind, hydrogen etc.) are not out-competed.Increased regulation of solar panel imports from China cause tensions but not a trade war.
The possible introduction of the Carbon Border Adjustment Mechanism raises tariffs on Chinese solar panels using energy from coal. Possible measures following human rights concerns about the solar panel value chain in Xinjiang and worsening EU-China relations could also raise further barriers.
Increased price of solar panels due to tariffs and increased reliance on domestic manufacturing slow solar installations in Europe to a small extent.Chinese counter measures cause another massive dispute or trade war.
Tariffs cause internal divisions and civil society protest in the EU, in light of economic and climate interests.
Higher solar panel prices (domestically or foreign manufactured, but hit by tariffs), slowing solar installations significantly. 
Alternatively, a lack of (carbon emission) tariffs on solar panel imports and other protective measures to protect European solar panel industries against unfair competition result in next generation European solar technologies and production being out-competed and supplanted. The same could be true for other green energy industries such as hydrogen and wind energy. Conclusions:

The webinar discussion led to the participants suggesting a number of options for further EU action.

1. Monitoring the supply chain: The European Parliament could monitor the solar PV supply chain, an exercise that could help the European Commission identify energy partnerships with countries sharing compatible production capabilities, manufacturing processes and quality systems. Similar scenarios of cooperation and competition could be conducted with regard to the USA, Taiwan, Malaysia and Japan.
2. Steer strategic discussions on the trade-off between strategic autonomy and Green Deal: Regular exchanges of views could be held between Parliament and the relevant Commissioners, to discuss the trade-off between strategic autonomy versus an uninterrupted implementation of the Green Deal that necessitates access to cheap solar equipment imported from China. The EU could take a clear stance in this trade-off, to avoid creating confusing signals for investors.
3. Encourage access to international investors and R&D institutes: At the European level, PV manufacturing companies have already joined forces with Europe’s leading R&D institutes to develop state-of-the-art solar technologies. Now, the EU needs to ensure that European PV manufacturers also have access to international R&D institutes as well as investors. Here, the International Solar Alliance, spearheaded by India and France, could be extremely important in advancing technology transfer and finding appropriate funding sources for R&D. Parliament could look into how multiannual financial framework (MFF) instruments, such as Horizon Europe, could help achieve investment partnerships beyond the EU.
4.  It is unclear whether PV manufacturing companies in the EU, or those anywhere else, could catch up with China in this generation of solar PV technologies (i.e. crystalline silicon PV which currently still accounts for 90 % of all installed solar panels globally.). However, Japanese, US and EU companies are still on a relatively equal footing with China when it comes to R&D in ‘next generation’ solar technologies, including perovskite and organic PV. Given that these solar technologies are largely still in the ‘lab’ stage and have not yet been commercialised, scope remains for European companies to enter the market. Oxford Photovoltaics, for instance, recently set a world record, with a 29.52 % conversion efficiency using a solar cell combining perovskite and silicon. Its investments of over €150 million and the expansion of its manufacturing by 2022 indicate that future next generation technology solar panel production in Europe is still within reach.

Right of Reply: Permanent Mission of the Russian Federation to the European Union's press attaché, Sergey Kovalevskiy, responds to EUobserver.

The European Union adopted new rules, known as the Digital Markets Act, that promises to stop Big Tech from abusing its market powers.

United States President Joe Biden joined EU leaders for a discussion on support for Ukraine and its people and on strengthening transatlantic cooperation in response to Russia’s aggression.

On 24 March 2022, the European Council re-elected Charles Michel as its president for a second term of two and a half years, from 1 June 2022 to 30 November 2024.

The Leaders of the G7 met in Brussels at the invitation of the German G7 Presidency.

Press briefing ahead of Employment, Social Policy, Health and Consumer Affairs Council will take place on Monday 28 March 2022 at 9:00.

The press briefing ahead of the extraordinary Justice and Home Affairs Council will take place on 28 March 2022 at 10:00. The briefing will be "off the record".

Written by Zsolt G. Pataki.

The fifth-generation mobile network (5G) is not just a performance booster for current mobile communication networks, but is also a technology enabling the convergence of communication networks with another fundamental block of the digital era – computing. 5G technology is defined by a complex ecosystem, composed of heterogeneous stakeholders, technologies, methodologies and best practices.

On the one hand, this ecosystem offers new opportunities for digitalisation, a key reason for which 5G technology is envisaged as providing a cornerstone of European resilience and as one of the seven flagship areas of the European Recovery and Resilience Facility. On the other hand, the complexity of this ecosystem poses unexplored security and privacy concerns, risks and challenges that might threaten the feasibility of the future development of 5G. These issues, along with a possible lack of awareness about them, are factors that might lead to serious vulnerabilities regarding personal data and sensitive information. Protecting information is essential for EU citizens’ security and privacy. Information leaks can severely damage the European Union: 5G network security has become an intense battlefield between Western countries and China, where some of the main providers of 5G network equipment are established.

In this context, and in addition to two earlier studies on the impact of 5G (on human health and on the environment respectively), the European Parliament’s Panel for the Future of Science and Technology (STOA)commissioned another important study. This study aims at identifying the risks that the deployment of 5G technology could pose to EU citizens’ privacy, security, and businesses, and exploring their potential implications.

The unrivalled capability and flexibility of 5G have been made possible by a decades-long process of convergence between computing and telecommunications. Their merger brings to light a new ecosystem, where telecommunications and computing collaborate to enable new scenarios, and where stakeholders can extend their business offering and compete with each other. Throughout this epochal shift, a wide debate around privacy and security has unfolded. The complexity of the 5G ecosystem requires a deep insight into its main components, and especially into how the components affecting privacy and security interact with each other. To this end, the authors of the study performed an impact assessment based on a research conceptual map divided into four categories (privacy, security, technologies, ethics/politics), focused on the identification and analysis of the new potential risks, challenges and opportunities that 5G technology entails with respect to privacy and security.

On this basis, they formulated a set of policy options for potential enhancements of the next releases of technical specifications and regulations, organised into three dimensions (privacy, security and ethics):

• The policy options for mitigating privacy risks and challenges include, inter alia, that any organisation involved in the EU 5G ecosystem should establish a controller or a processor and should encourage its own legal departments to perform a transfer impact assessment (TIA). A potential alternative path would be to adopt a hybrid approach where personal or sensitive data is stored locally, close to and within an individual’s national boundaries (edge cloud) and less-sensitive data is stored in the cloud. Adopting a personal data wallet – a digital area where individuals can access data, provide consent and receive notifications – could be considered as a fundamental tool for exercising the rights to privacy and data protection. New European legislation will also have to monitor the evolution of the privacy issue in the next specifications and deployments of 5G technology, and ensure data sovereignty, as the 5G ecosystem requires the cooperation of several stakeholders located worldwide.
• Options to reduce security risks and challenges include network softwareisation and flexibility, with standard rules and procedures to be considered for reducing ambiguities between network components, monitoring the evolution of multiconnectivity, and accelerating cybersecurity standards – as existing cybersecurity guidelines are implemented by service and component providers in line with their internal procedures, 5G should adopt common standards for cybersecurity.
• Ethics risks and challenges may be related to a lack of citizen awareness of the impacts of 5G on ethical issues. More democratic access to adequate information on 5G ethics impacts should be provided. Awareness and critical thinking should be nurtured in the context of digital and data literacy within lifelong education projects, as well as in schools. A tailored regulatory framework for applied ethics in 5G (in the same way as there are other kinds of applied ethics, such as AI ethics, roboethics, etc.), may be needed at the EU level. The accountability, trustworthiness and reliability of 5G and related technologies (e.g. AI, IoT, robotics, etc.) has to be considered in the regulatory framework governing the implementation of 5G verticals (e.g. eHealth, smart cities, energy, etc.).

The STOA Options Brief linked to the study contains an overview of several policy options. Read the full report to find out more, and let us know what you think via stoa@europarl.europa.eu.

Committee and political groups’ meetings, Brussels

Source : © European Union, 2022 - EP

Written by Clare Ferguson and Katarzyna Sochacka.

With the war in Ukraine high on Parliament’s agenda, the highlight of the March II 2022 plenary session in Brussels was a formal address by Justin Trudeau, Prime Minister of Canada. Members held a debate with the Council and the European Commission on the need for an urgent EU action plan to ensure food security inside and outside the EU, in the light of the Russian invasion of Ukraine. They also debated the power of the proposed joint European action to secure more affordable, reliable and sustainable energy. Turning to the ‘Suisse Secrets’ scandal, Members debated how to encourage anti-money-laundering standards in third countries. Members also discussed the outcome of the European Council meeting in Paris on 10 March 2022, and the preparations for the 24‑25 March 2022 meeting. Several legislative files were adopted, inter alia on roaming charges; the cohesion action for the presence of refugees in Europe and use of funds under the Asylum, Migration and Integration Fund (AMIF) Regulation, both in light of the war in Ukraine; and on the Status Agreement between the EU and Moldova on Frontex operations.

Roaming Regulation

Members debated extending and adapting current EU legislation on roaming charges. In interinstitutional negotiations on the proposal to revise the rules to increase transparency and network quality, Parliament succeeded in capping the wholesale roaming charges at €2 per gigabyte from this year, with a progressive reduction to reach €1 in 2027. Now that the Parliament has adopted the provisional agreement, it goes to the Council for confirmation, before citizens are able to ‘roam like at home‘ for a further 10 years.

Pilot regime for market infrastructure based on distributed ledger technology

Parliament is always keen to encourage technological solutions that benefit citizens in their daily lives. Members debated and adopted, by a large majority, the agreement reached between the co-legislators on a pilot regime developing trading and transactions in crypto-assets – usually known as cryptocurrencies (such as bitcoin and ethereum). Parliament is in favour of encouraging crypto-assets, as long as they do not pose a risk to financial stability, transparency or market integrity, or permit legal loopholes. Parliament’s Committee on Economic and Monetary Affairs (ECON) therefore proposed stricter limits on trading. Market capitalisation will be allowed up to €500 million in shares and issuance of bonds up to €1 billion.

Macro-financial assistance to the Republic of Moldova

Moldova has found itself on the frontline in Russia’s most recent aggression against its neighbours. The country has experienced Russian interference in its own democratic process in recent years, added to an economic downturn exacerbated by the pandemic. Moldova has nevertheless opened its borders to welcome large numbers of Ukrainian refugees. The country enjoys good political and economic relations with the EU, and signed association and free trade agreements with the bloc – Moldova’s largest trading partner – in 2014. The EU has provided €160 million in EU macro-financial assistance since 2017. In response to a Moldovan request for further assistance, the Commission proposed (before the outbreak of the war), to start allocating €30 million in grants and up to €120 million in medium-term loans. Members adopted this proposal by an overwhelming majority.

The fight against oligarch structures, protection of EU funds from fraud and conflict of interest

The Parliament has long stressed that corruption threatens democracy, fundamental rights and the rule of law, and undermines citizens’ trust in the EU and its institutions. The sanctions necessitated by Russia’s war on Ukraine have highlighted the presence of Russian oligarchs and oligarchic structures on EU territory. Denouncing the current situation, especially in certain countries where EU funding is sometimes diverted to such persons (and not just Russians), Parliament’s Budgetary Control (CONT) Committee tabled a hard-hitting own-initiative report highlighting the need to protect EU funding against the risks of fraud and conflict of interest. Members debated and adopted a resolution which particularly condemns the use of EU agricultural funding for personal benefit, and warns against the threat to EU values of allowing oligarchs to gain control over the media and the judiciary.

Opening of trilogue negotiations

A number of committee decisions to enter into interinstitutional negotiations were announced: from the Legal Affairs (JURI) Committee on the proposal for a directive on corporate sustainability reporting, from the Employment and Social Affairs (EMPL) and Women’s Rights and Gender Equality (FEMM) Committees on the proposal for a directive to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms, and from the ECON committee on the proposal for a regulation on markets in crypto-assets.

Read this ‘at a glance’ on ‘Plenary round-up – March II 2022‘ in the Think Tank pages of the European Parliament.

On Thursday, the representatives of Nato, the EU and the G7 met in Brussels, primarily to discuss their course of action with the war in Ukraine. Ahead of the meeting, Ukrainian President Voldymyr Zelensky had once again asked for heavy weapons. This request will not be fulfilled but the Nato members did agree on massive weapons deliveries to Ukraine. The European press evaluates the summit meeting.