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Geopolitics: The Green Deal’s great game

As the European Green Deal turns two, its geopolitical implications are questioned. EEB President Johanna Sandahl weighed in on this debate at the European Economic and Social Committee’s conference Geopolitics of the European Green Deal. Nick Meynen reports.

Lithium consumption in the EU is projected to increase by 6000% and the dreams of connecting mega solar farms in North Africa with Europe seem revived, now with green hydrogen for Europe as a newly proposed end product. The European Green Deal’s continued tolerance of gas import dependency is directly linked to the conflicts around the Nord Stream 2 pipeline from Russia to Germany and Ukraine. And then there is also the political impact of increasing EU dependence on rare earth materials from China. In Europe’s geologically static but highly dynamic geopolitical context, the European Green Deal is making geopolitics a hot topic. 

Reducing dependency on critical raw materials

European Commissioner for Energy, Kadri Simson spoke at the European Economic and Social Committee (EESC) about the risks coming from dependency on the importation of raw materials. Barbara Pompili, France’s Minister of Ecological Transition, agreed that there is a need for more sovereignty but proposed to focus on solutions other than mining, such as recycling and substitution of critical raw materials.

Upcycling through urban mining creates another shift in dynamics. It is linked to the ongoing debate on the formulation of an EU strategy for critical raw materials. The EEB made its position clear in the report ‘Green mining’ is a myth: the case for cutting EU resource consumption and in a policy brief with science-based tips for the green transition, as part of the HORIZON 2020 project LOCOMOTION. As EEB President Johanna Sandahl said during the conference:

“Europe consumes more than 25% of all raw materials, while we are less than 10% of the world population. We can and need to set binding targets to reduce the extraction of raw materials. The EU must reduce its material footprint by 30% by 2030, 50% by 2040 and 65% by 2050. To do this, we need to halve energy demand from 2015 to 2050. The cost of not doing this results in a harmful dependency and more conflicts.”

The CBAM as the beginning of a new trade paradigm?

Another much-discussed policy file was the Carbon Border Adjustment Mechanism (CBAM). In a public debate between this reporter and Green MEP Sara Matthieu one week before the EESC event, the latter said: “The CBAM will force non-EU countries to improve their climate policies. After years of relying on soft power to set higher global climate goals, this comes not a moment too soon.” At the EESC, Pompili made it clear that France would make this a top priority during the French Presidency in the first half of 2022: “Without the CBAM there will be carbon leakage or unfair competition. We owe it to our workers to prevent this.” 

While the EEB has argued for long about having a robust, ambitious and socially just CBAM in place and is therefore pleased to see it emerging, it also shares the fears expressed by some at the conference. As a broad coalition of NGOs wrote in a joint letter, without the immediate cancellation of free allowances, the CBAM risks becoming an ineffective climate measure.

The question that remains is how ambitious the CBAM can in fact become, having started with just a select number of products. Wolff Guntram, Director of the European think tank Bruegel, said that he sees no technical reason why agricultural products cannot become part of the CBAM in the future – provided that domestic producers face the same strict climate-related rules as non-domestic ones. In other words, before the EU can consider widening the use of the CBAM, it needs to get its own house in order; a task it did not manage when it failed to insert carbon sequestration criteria in the Common Agricultural Policy (CAP).

The trade paradigm will not change based on what happens in the CBAM file alone. There are several contradictions between existing trade rules and the EGD. Dr Muhammad Hidayat Greenfield, Regional (Asia/Pacific) Secretary of the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Associations underlined that we need to rewrite the trade rules to fit the European Green Deal and not vice versa. He talked about the regulatory chill that comes from the current investor-state dispute settlement (ISDS) mechanisms, making it impossible for governments to take much needed action. An example is the Energy Charter Treaty (ECT), which protects fossil fuel companies against the actions that European governments need to take in order to achieve the goals of the European Green Deal. The EEB has taken a strong position on this: EU Member States need to leave the ECT as soon as possible.

 How can Europe even the odds?

With high gas prices, a globally unstable political environment and strong resistance within Europe to bring dirty mining projects back to the continent, the need to step up the EGD’s ambition is tangible. It is imperative that we halve the EU’s energy demand between 2015 and 2050, for the consequences of complacency will continue fuelling a dangerous dependency on energy suppliers, more regional conflicts and more climate chaos.