DATE: Monday, 13th May
TIME: 16h00 – 17h30 CET
LOCATION: Berlin

Our panel of speakers include:
1. Wolfgang Dierker, General Manager at Microsoft
2. Semjon Rens, Public Policy Director at Meta
3. Deniz Özcan, General Manager at GMH Systems, GMH Gruppe
4. Marco-Alexander Breit Breit, Deputy Director General for AI at the Federal Ministry for Economic Affairs and Climate Action

The distinguished panel will explore the intricate relationship between AI, regulation, and geopolitics, with a particular focus on the implications of the EU AI Act on economic growth. From industry perspectives to governmental insights, this discussion promises to offer a comprehensive view of the current landscape and the road ahead.

Your presence and participation will greatly enrich this discussion.

Please RSVP by May 7th to confirm your attendance at events@united-europe.eu and secure your place at this event. Should you have any questions or require further information, please do not hesitate to contact us.

We look forward to welcoming you!

Our seminar will commence with a presentation by Markus Oermann, Professor of Digital Ethics and Media Law at Technical University of Applied Sciences Würzburg-Schweinfurt (THWS). Mr Oermann will shed light on AI powered disinformation as a threat to the integrity of elections.
To dive deeper into understanding opportunities based on AI, Harmen Zell, Public Policy Manager at Meta, will conduct an industry workshop titled “Opportunities for the European economy in applying AI”. A second perspective will be introduced by René Delbé, Climate Pact Lead at Microsoft, who will host a workshop on “Opportunities in Sustainable AI”. Subsequently, a policy workshop on “Digital Sovereignty: A robust Strategy for Europe” will be led by Professor Key Pousttchi, founder of the wi-mobile Institute for Digital Transformation, discussing strategies for Europe to maintain sovereignty in AI successfully.

The day will start at 9:00 AM and conclude at 5:30 PM with a Panel Discussion: “AI between regulation and geopolitical tensions – How the EU AI Act impacts economic growth” featuring Wolfgang Dierker, General Manager at Microsoft, Semjon Rens, Public Policy Director at Meta and Marco-Alexander Breit, Deputy Director General for Artificial Intelligence at the Federal Ministry for Economic Affairs and Climate Action.

📧 To apply please send your CV to events@united-europe.eu. We are looking forward to receiving your application!

While government support and European programs have traditionally been primary sources of funding for universities, there is room for improvement, especially in terms of engaging the business sector. European universities have set exemplary practices in this regard compared to their counterparts in the Western Balkans, including Albania. Albanian universities having more than 30 years functioning under democratic principles, still face the challenge of strengthening their financial capabilities by tapping into the business sector.

The business sector and academia often seem isolated from each other in terms of funding and collaboration, which is likely a reflection of their historical separation: To bridge this gap, universities, especially in Albania, must develop their strategies to proactively engage the business sector. While there may not be a legal mandate enforcing this approach, it should be a smart institutional strategy to secure long-term results in research and innovation.

European practice demonstrates that some companies provide consultations on EU law and regulations, and they can be valuable partners in connecting universities with the business sector. Albanian universities should seek to

understand these structures’ mission and vision, which can help them prepare their own strategies. Additionally, universities can encourage the Ministry of Education t

o strengthen business ties, rather than solely relying on governmental support. This might involve involving the Ministry in the process of establishing and developing relationships between universities and businesses by also involving the scheme into the national strategies or relevant documents in this regard.

Universities can play a pivotal role in attracting business investments by fostering collaboration and involvement of the business sector in research and development projects. In the past decade, Albanian universities have been primarily focused

on accessing EU funding schemes for research and innovation, neglecting potential opportunities with the business sector. Many EU grant programs promote collaboration between academia, communities, and government, and while these programs may offer limited opportunities for business sector involvement, universities may need to take calculated risks during the application process.

Adding business sector participation as an eligible component in grant programs like Horizon Europe, EU for Europe and Marie Skodowska Curie would encourage closer collaboration. To enhance collaboration, universities can explore models like SPARK and Dr2Consultants, companies that offer consultancy services related to EU law implementation for business stakeholders. Albanian universities can establish collaboration agreements with these entities to gain updated insights in this area. The Albanian National Institution for Research and Innovation (AKKSHII) can provide a list of EU programs that promote business involvement in academia and university development, particularly those focused on entrepreneurship. The potential benefits of such collaboration are numerous, including offering new forms of support, advancing technology and innovation, facilitating recruitment of graduates into businesses, and bridging the gap between theory and evidence, thereby creating a steady pipeline of talent and mentoring future data storytellers.

As Albania moves closer to EU integration, the imperative to engage more effectively with the business sector is evident, aligning with the EU’s strategic goals. The concept of University Business Cooperation (UBC) is gaining attention at the European Commission, and although it remains a relatively underdeveloped area, there are promising practices emerging. European universities have already demonstrated the value of forging collaborations, and there is no need to wait for a formal EU policy document to drive such initiatives.[1] The absence of such an EU policy document, should not be viewed as a void hindering universities and the business sector from independently cultivating collaborative relationships. On the contrary, the absence of a dedicated EU-level policy on UBC has not deterred these entities from forging their own collaborations. Yet, considering the potential impact and recognition such a policy could bring, it becomes apparent that having a specific document addressing UBC at the EU level would significantly elevate its importance. This could catalyze increased attention and commitment from both universities and the business sector towards fostering sustained collaboration.

The current ambiguity in the position of UBC within European policymaking diverges from the successful initiatives undertaken by numerous European universities, which have proactively established diverse levels of collaboration. A brief exploration of websites belonging to well-known European universities reveals an abundance of exemplary practices in this arena. This wealth of examples negates the necessity of awaiting national, regional, or European documents explicitly addressing university-business collaboration. Instead, universities can take the lead as initiators in bridging the gap with the business sector, contributing to the enhancement of capacity building, research, and innovation.

Turning our focus to Albania, still on the path of EU integration, there are valuable hints and tips that warrant promotion and spotlighting:

1. Annual Progress Reports on Integration highlight the potential to align business development with research and innovation, presenting an opportunity for academia and business sector collaboration.
2. INSTAT (Institute of Statistics) should provide data correlating business development with academia, shedding light on how many graduates are employed in the business sector and the extent of collaboration between businesses and universities.
3. The National Strategy of Education emphasizes the need for cooperation between business associations and universities, with the aim of aligning curricula and qualifications with market needs.
4. The National Plan of EU Integration (2022-2024) can potentially incorporate indicators that encourage the implementation of University Business Cooperation (UBC), even though it may not be a formal requirement.
5. The National Agency of Research and Innovation has already taken steps to support UBC projects, with a focus on community development, SMEs, environmental issues, and technology research.
6. Regional collaboration as seen in the Stars EU Alliance, offers opportunities for universities to engage with international partners and explore best practices for UBC.

In conclusion, the collaboration between universities and the business sector is not solely dependent on national policies but also on the proactive efforts of universities themselves. Albanian universities should work toward pushing the government to diversify and enhance instruments for promoting UBC. They must also craft their strategies to leverage national resources and engage with EU and regional structures. While the European Commission’s attention to UBC is increasing and certainly more is needed regarding specific EU programmes, waiting for formal EU policies is not necessary. Albanian universities can take the initiative in building stronger ties with the business sector, which will benefit academia, business, and the broader community in the long run.

We would like to thank the author, Olta Quejvani, for her contribution and participation at the United Europe Mentoring Program (Class 2022/23).

Moreover, urban areas, often overlooked in

discussions about climate change, are not immune to its effects. The rise in temperatures has transformed some cities with little vegetation into heat islands. By storing and amplifying heat from the sun and other sources, these so called “heat islands” are endangering public health and increasing mortality rates (during 2022, heatwaves in Europe were responsible for at least 20,000 deaths). Periods of heat and drought are often followed by heavy rain, and the improper absorption of heavy rainfall due to impermeable surfaces (roads, parking spaces, etc.) prevent the correct reabsorption of said water. 

All this takes place in a context in which green space is increasingly commodified and associated with status, as “leafy suburbs” are considered a marker of prosperity, whereas poverty is frequently characterised by urban spaces dominated by impermeable surfaces with very little greenery.

In this context, a separate issue is the problem of food deserts within urban areas (i.e. areas within cities with limited or no access to nutritious food options). As such, the frequent lack of alternatives to a poor supply chain condemns certain neighbourhoods and citizens to unhealthy food.

A positive development could be the use of flora for carbon sequestration. Improving the livability of cities within the context of a changing climate has garnered greater attention as a potential solution, with a particular emphasis on the pivotal role of urban parks.

These elements are often approached separately, resulting in ecosystem services such as carbon sequestration being seen as most relevant to rural areas. Reinforcing natural ecosystems in urban areas in the way to generate them is rarely discussed.

This is hampered by the prevailing tendency in urban design, using construction of infrastructure that involves “soil sealing” under impermeable surfaces such as tarmac or concrete.

This process eliminates biodiversity by reducing plant cover and preventing soil from carrying out its ecosystem services, such as sequestering carbon and retaining water.

Policy Objectives: 

The main goal of this policy proposal is to reestablish a harmonious relationship between natural and urban environments, moving away from their current isolation. 

Several specific objectives contribute to this overarching aim:

1. Increase carbon sequestration within urban areas.
2. Reduce impermeable surfaces and combat the heat island effect.
3. Prepare urban areas for extreme weather events.
4. Promote citizen involvement in the management of urban green spaces.
5. Combine carbon sequestration with increased local food production inside urban areas.

The policy proposal aims to obtain a greater combination of carbon sequestration, microclimate stabilization, and food production in urban areas. By reducing impermeable surfaces and addressing the heat island effect, the initiative seeks to pave the way for a more resilient urban landscape.  

Furthermore, this proposal acknowledges the importance of democratizing access to green spaces, ensuring that all citizens can participate in their creation, utilization and maintenance. By implementing this proposal, cities and their residents can actively contribute to addressing climate-related challenges rather than being passive victims of them. 

While the proposal seeks to enhance the integration of urban agriculture with green space, it is not intended to compete with large-scale conventional agriculture. Instead, the policy proposal will prioritize poly- and permaculture, both of which align with reinforcing ecosystems and improving biodiversity in urban areas. Simultaneously, it aims to foster better access to healthy food for underprivileged areas and citizens.

Democratizing the accessibility and oversight of green space is key to ensure they are not confined to affluent areas. Citizens who are concerned about these changes should have a direct voice in the development of these green spaces, and actively engage in their use and maintenance. 

As a result, citizens can not only enjoy the benefits of these green spaces, but also embrace the responsibilities that come with them, thereby having the opportunity to take ownership of their environment.

Moreover, this policy proposal presents an opportunity to implement the concept of ecosystem services while also advancing the democratization of green spaces in cities. By doing so, cities and citizens can actively contribute to tackling climate-related challenges, rather than merely exacerbating, and succumbing to them.

This shouldn’t be looked at as merely a means of increasing the number of gardens in cities, it should be regarded as an invitation for modern cities to embrace their identity as integral parts of nature.”

Over the course of 10-20 years, the policy proposal aims to achieve a meaningful reintegration of human spaces with nature. Throughout history, as humanity transitioned into a sedentary species, and especially during the industrial revolution, there has been a growing tendency to exclude nature from human spaces. Unfortunately, this has resulted in a gradual detachment of humans from the natural world, rather than fostering a harmonious integration of human structures within the broader natural environment.

Examples of existing policies that aim to provide a framework for addressing related issues, such as soil degradation and the increasing imbalances in land use to the detriment of natural spaces can be found in the endnotes of this paper.

Challenges:

The proposal must overcome several challenges that are inherent to urban environments. One major challenge involves determining costs, as different cities have diverse climates and terrains, making it difficult to provide generic pricing for the proposal’s implementation. Additionally, different plants also require different levels of maintenance, which entails considerable investment in expertise and materials. Varying soil conditions and the presence of industrial pollution may require extensive and time-consuming decontamination entailing high costs.

Furthermore, navigating relationships with local communities and authorities is crucial. Public engagement and support are essential for the success of the proposal, but existing conflicts or distrust between certain segments of society and authorities may hinder progress. 

The proposal’s potential impact on commercial food producers due to the urban agriculture element may also raise concerns, necessitating clear communication about the initiative’s objectives, which are not meant to compete with large-scale agriculture but rather to provide nutritious food to underserved communities. The structure of land ownership in urban areas must also be carefully reviewed to avoid proposals being blocked since in cities with a large proportion of private land ownership resistance could be greater resulting in a smaller workable area.

Another concern could be mobility within cities and the need to guarantee both individual mobility and supply chains. As such an initiative would mean a considerable reduction in impermeable surfaces in and around urban areas, this could result in initial difficulties for traffic flows. It is therefore necessary to evaluate what transport options are available and how supplies reach businesses in these cities to avoid disruption that could generate opposition to the proposal.

Solutions on the horizon

To address the challenges, the policy proposal outlines several stages, building on successful restoration projects.

Identifying suitable sites (I.e., strategic areas such as riverbanks, obsolete infrastructure, etc.), involving verified experts in each city and engaging citizens and local authorities will pave the way for successful implementation: Biologists or botanists must be consulted to determine the appropriate flora to survive in the area in question. That would help to understand which plants are more likely to thrive during the initial phase of their life and seamlessly integrate into the ecosystem shaped by the area’s unique climate and topography.

Once feasible areas have been identified, it is imperative to engage in consultations with citizens, local authorities and experts to establish a consensus for this proposal. Subsequently, the focus shifts to determining the viability of providing essential guidance to interested citizens, enabling them to actively participate in the maintenance of these green spaces.

If the above criteria is fulfilled, local authorities, experts and citizens can deliberate on the nature and timing of works to implement these environmental changes. Lastly, the stakeholders can then develop the necessary bodies charged with managing the ecosystem and training citizens to take care of it.

Learning from past restauration projects, like the Cheonggyecheon river restoration in Seoul, South Korea, as well as the renaturation (process of restoring an ecosystem to its original state) projects concerning the section of the Manzanares river that passes through Madrid, can offer valuable insights into best practices: 

The Cheonggyecheon river restoration has certain flaws that should not be repeated, such as a concrete riverbed which stops natural purification of the water. Nevertheless, it has succeeded in encouraging the return of biodiversity to the area and lowering the surrounding temperature by as much as 5ºC. The renaturation of the Manzanares river has not only allowed the river to resume natural flows and sedimentation processes (and therefore a partial restoration of the native ecosystem), but also allowed for better management of extreme temperatures as well as rare but violent flood events.

In practice: the Brussels Capital Region

As an illustrative example, the Brussels Capital Region showcases potential applications of the policy proposal. With an unequal distribution of green space and high percentages of impermeable surface in certain areas, this region can benefit from targeted efforts to address environmental disparities:

The Western flank of the Brussels Capital Region exhibits dense population concentrations, accompanied by higher levels of economic hardship and a significant proportion of impermeable surfaces.

Given this context, directing attention towards plants that occupy minimal space but actively contribute to reducing impermeable surfaces can serve as a starting point to address the inequality in coverage. This approach would enable these areas to benefit from the advantages offered by essential ecosystem services.

Despite the challenges posed by high building and population density, the presence of abandoned structures further compounds the issues in Brussels. These structures frequently remain vacant for extended periods, posing risks to both people and the environment.

Abandoned buildings that do not receive the necessary repairs and reconversion could be dismantled to create more green spaces and/or communal gardens for local food production. 

This would allow the terrain to resume a productive purpose while contributing to supporting biodiversity, reducing the area’s impermeable surfaces, and delivering ecosystem services.

Moreover, reviving the Senne river and the Brussels-Charleroi canal presents opportunities to restore natural flows and interactions with living ecosystems in the city center, thereby increasing resilience to climate change: As the canal within Brussels is no longer necessary for large-scale economic activity, an attempt can be made to identify sections of the Senne river that can be restored above ground, and sections of the canal that can be renatured to improve the area’s adaptability to a changing climate.

Conclusion

In conclusion, the proposed policy seeks to achieve a transformative paradigm shift in how we approach urban planning and climate change mitigation. By integrating urban areas with nature, fostering community involvement, and promoting sustainable agriculture, cities can become more resilient and livable in the face of climate change. 

humanity’s ongoing concentration in cities is set to continue hence urban spaces urgently need to be made more resilient to climate change to remain livable otherwise more people could suffer severe harm. It is crucial to remember that the cost of inaction will be far greater than the investment required for implementing resilience measures.

As urbanization continues, the urgency to reconnect cities with nature grows stronger. The proposed policy aims to create cities that understand themselves as part of nature, not apart from it. 

Addressing the climate crisis entails addressing the inequitable access to green space and their ecosystem services within cities, while also striving to reintegrate citizens with nature and empowering them as stakeholders in its well-being and maintenance.

Implementing such measures can also foster contemplation on food production and consumption, presenting an opportunity for a fraction of city residents’ fruit or vegetable intake to originate within the urban areas, consequently bridging the gap for populations excluded by high retail prices and providing them with access to fresh produce.

These measures should build upon prior expansions of urban green space and nature restoration, acting as a catalyst for a transformative paradigm shift. They must signal the end of piecemeal approaches aimed at reducing human artificialization of ecosystems, while incepting a unified movement to seamlessly integrate urban spaces with nature and reintroduce humanity to the natural world.

As with all other measures associated to climate change, though the cost of action may seem high, the cost of inaction will be catastrophic.

We would like to thank the author, Luca Contrino, for his contribution and participation at the United Europe Mentoring Program (Class 2022/23).

Recently, the introduction of the digital euro, has been the focus of much discussion and analysis within the European Union. The digital euro represents an advance in the field of currency and finance. Unlike physical bills and coins, the digital euro would exist solely in digital form and be stored in electronic wallets and accounts. By integrating cutting-edge technologies such as blockchain or distributed ledger technology, the digital euro promises to ensure secure and transparent transactions. It opens a new frontier in the development of modern currencies and could even be equipped with programmable functions that enable smart contracts and automated payments.

Given the increasing digitalization of the economy and the financial sector, the move to the digital euro is seen as necessary to ensure that this development is managed efficiently and securely. The digital euro aims to leverage the advantages of the euro as a stable currency while providing consumers and businesses with a fast, secure, and cost-effective payment method.

Particular attention is being paid to payment security in the introduction of the digital euro. The European Central Bank (ECB) aims to ensure that the digital currency is at least as secure as the physical euro. To this end, the digital euro will be built on a secure infrastructure and equipped with advanced security measures to prevent manipulation and fraud. Blockchain technology or distributed ledger technology offer revolutionary security systems that can help increase payment security within the European Union. This could also reduce the use of cryptocurrencies such as Bitcoin and other virtual currencies, which are often associated with fraudulent activities.

However, there are also some challenges and potential difficulties with the introduction of the digital euro. One potential consequence could be an increasing reliance on digital payments and related infrastructure. In this case, a targeted but also untargeted disruption of electronic payments, through e.g. cyberattacks, operational disruptions or natural disasters, could have a severe impact on the economy and consumers. This would pose a risk to financial stability and undermine confidence in digital currency. In addition, the traceability of transactions and the resulting limited privacy is often criticized, as some consumers have concerns about governments monitoring their transactions. In addition, the Russia-Ukraine war has changed the view of intense economic interdependence, as Burkhard Balz, a member of the Deutsche Bundesbank’s Executive Board, noted in a presentation delivered at Andrássy University in Budapest. Trade, he said, is no longer a guarantee of peace, and too much dependency, including and especially with regard to critical infrastructure, could pose significant problems.

Despite these potential challenges, the digital euro is expected to bring numerous benefits, including above all the reduction of transaction costs and the facilitation of cross-border payments. Much has already happened since the launch of the “Investigation Phase” in October 2021, and the goal and standards of a digital euro have been further elaborated. This year’s goals for 2023 include the development of compensation models, access to the digital euro ecosystem, prototype results, completion of user requirements, and preparations for the project implementation phase. In addition, a decision document will be prepared with advice on the possible issuance, design, and implementation of the digital euro. In October 2023, the next milestone is due, namely a decision by the Governing Council on the possible launch of the next phase. In the next phase, the ECB would further develop and test the technical solutions and business arrangements. A possible Governing Council decision on the issuance of a digital euro would be taken only after the adoption of the legal act.

Overall, the digital euro is expected to be an important step toward a digitized economy and a secure payment environment. It will usher in a new era of digital transformation and offer a wide range of benefits and opportunities.  The efficiency of the digital euro would revolutionize the way we conduct financial transactions, making our daily interactions smoother and more accessible by leveraging modern technologies. This offers the potential for more programmable features and smart contracts, providing a multitude of opportunities for financial innovation and automation. As the world becomes increasingly interconnected and digitized, the digital euro is a forward-looking and indispensable step toward a more inclusive, efficient, and resilient financial future. However, the ECB must ensure that the digital euro is secure, reliable, and beneficial to all stakeholders.

Ultimately, the introduction of the digital euro should take place in at least two phases in order to do justice to its dual focus. In the first phase, the immediate impact on capital markets, banking systems and their business models must be carefully assessed and managed. The introduction of the digital euro could lead to changes in financial behavior and alter the dynamics of money management and investment strategies. Banks and financial institutions may need to adapt their services and infrastructure to accommodate the new digital currency. At the same time, the second phase must focus on understanding the broader implications for financial transactions involving non-financial firms, governments, and households. The introduction of digital currency will change the way transactions occur across sectors and introduce new payment methods and business models. The non-financial industry will need to integrate the digital euro into their operations, while governments will need to address the regulatory and legal implications.

We would like to thank the author, Fabio De Santis Gomez, for participating at the United Europe Mentoring Program (Class 2022/23).

Transnational Giving Europe Network, established in 1995, aims to address some of the complexities surrounding cross-border philanthropy by simplifying the donations process across Europe while mitigating legal and tax risks [3]. However, the service comes at a cost, as a percentage of the donation is retained by the Transnational Giving Europe Network, thus reducing the actual amount of the donation intended NGO.

To explore potential solutions for simplifying cross-border corporate donations in the EU and maximizing their impact, it is crucial to identify the barriers that companies face when attempting to donate to NGOs based in another Member State. This article focuses primarily on Germany, which boasts the largest economy in the EU and exhibits a strong corporate culture with a considerable involvement in philanthropic activities.  Additionally, Germany’s thriving “donation market” and commitment to ESG (Environmental, Social and Governance) goals make it a pertinent case study.

In Germany, for a donation to be tax-exempt, a company based in Germany must demonstrate to the German tax service that the foreign NGO meets the exact same conditions as the equivalent German entity [4]. This requirement proves challenging, given the variations in national laws across Member State regarding NGOs. Although the European Court of Justice “has ruled that donations by a taxpayer to charitable entities resident in another EU member state must generally be tax deductible under the law of the donor’s jurisdiction” [4], the absence of harmonization regarding the criteria for NGOs eligible to receive tax-exempt donations complicates matters. [2]. While there is a clear desire on the European-level to facilitate cross-border donations and promote philanthropy, practical obstacles remain significant and numerous. It is possible that some of these barriers are in place to prevent potential tax evasion loopholes, particularly when the receiving NGO is in a Member State with a tax-friendly environment, limited oversight and law enforcement. [2].

In conclusion, the importance of philanthropy and corporate social responsibility among Member States cannot be overstated. However, despite the shared will in the European Union to encourage cross-border donations, complex legal, tax, and regulatory hurdles persist, discouraging companies from contributing to NGOs in other Member States. To truly facilitate cross-border philanthropy, harmonization of national laws and regulations across the EU is necessary. Such measures would encourage companies to support NGOs aligned with their values and further promote social and environmental causes on a pan-European scale.

We would like to thank the author, Stelios Kavvadias, for participating at the United Europe Mentoring Program (Class 2022/23).

Europe’s foreign policy towards Africa is failing for several reasons: It is often driven by a narrow focus on raw material, security and migration concerns, rather than taking a broader and more holistic approach. European policies are also perceived as paternalistic and lacking in genuine partnership with African countries, which undermines their effectiveness. Listening to local perspectives is essential because it allows for a more nuanced and accurate understanding of the African Continent.

Award-winning Journalist Mercy Abang, CEO of BigTech Fatu Ogwuche, Former Commissioner for Budget and Planning of Kaduna State Muhammad Sani Abdullahi and Senior Partner at SBM (Nigeria’s Leading Geopolitical Intelligence Platform) Cheta Nwanze will lead participants through the day.

The seminar takes place at the ESMT, Schloßplatz 1, 10178 Berlin, from 09h00 to 18h00 CET and promises engaging workshops and talks followed by a panel discussion with representatives from the German Foreign Office, African Journalists and representatives from the German business community to discuss: “Is Europe in Africa driven by its values or interests?”

If you would like to recommend an outstanding young professional please send us your  nomination. If You would like to participate please send your CV to advocate@united-europe.eu. Nominations and applications are due by May 31, 2023.

Europe’s economic transition is heavily reliant on imports of critical and rare raw materials needed for green energy, electronics, aerospace, automotive and defence. The lion’s share of the world’s raw material is covered by just over a dozen countries, with a heavy Chinese dominance. The battle for raw materials is central to rising geopolitical tensions around the world and thus Europe’s dependency is developing to become the next existential crisis for the industry in Europe.

These challenges must be addressed on a European level and must include a geopolitical strategy, as well as multiple perspectives. Therefore, we have invited the following experts to contribute their views:

Dr Josef Braml – Secretary-General at the Trilateral Commission
Dr Ferdinand Pavel – Director at EY
Dr Jennifer Pernau – Partner at Agora Strategy
Dr Tim Rühlig – Senior Research Fellow at DGAP

The panel discussion is followed by workshops, where participants will discuss several scenarios with their potential outcomes and develop a to-do list for Europe. The goal of the event is to exchange views from different professional perspectives and to derive approaches for solutions. The invited audience are the members of the participating organizations and students who are enrolled at the ESMT.

If you are interested in participating or if you know young talents feel free to apply or to forward this application call. Applications must include a brief cover letter indicating interest and a CV. All documents must be submitted electronically in PDF format in English.

Please send your application in one document by the 26th of January 2023 to advocate@united-europe.eu

We are looking forward to an exciting Advocacy Seminar in Berlin!

The seminar started with a keynote by Hildegard Bentele, Member of the European Parliament and a Member of the Development, Environment and Energy Committee:
Since the Ukraine war, dependencies have shifted. Europe needs Africa to diversify and transform its energy supplies: “Due to the geopolitical situation, the EU is repositioning towards Africa,” Bentele said. “There is lots of common ground with Africa and although Europe is Africa’s neighbour, China is faster and more anchored on the continent.” The new EU-Africa ‘Partnership of Equals’ promises more private sector engagement and large-scale investments: “We need to focus more on follow-up and tangible results in form of concrete projects on the ground. Rhetoric is not enough,” Bentele underlined. The EU wants more trade with Africa but new green policy instruments i.e. the Emission Trading System (ETS) and the Carbon Border Mechanism are putting pressure on African exporters. Whether the EU will help Africa to develop fossil fuels whilst phasing them out at home remains a sticking point in the partnership negotiations: “Africa should do it in a better and smarter way. If the rest of the world is going on this path of powering their development with fossil fuels, we are not going to have a livable planet in the near future. Let us do it the right way. Let us learn from past mistakes and use the abundance of green energy for Africa’s benefit. Africa has a chance to do it better.” Bentele sees the role of Europe in providing Africa with technology and know-how whilst setting the right frameworks for a green transition.

The countries of the so-called “Sahel”, Mali, Burkina Faso, Niger, Central African Republic, South Sudan, Sudan, Eritrea and Chad are forming a contingent crisis area spreading out further to the coastal regions. The Sahel is resource-rich and mostly landlocked. After the fall of Gadaffi, politically organized Islamist groups rapidly spread alongside trans-Sahelian organized crime. The geopolitical risk of a grand Islamist arch, long treated as an external terrorist threat in Europe, has been combatted militarily under French leadership and reinforced by European development aid in a top-down structure, the so-called “Sahel Alliance” based in Brussels. Despite nominally impressive military aid, stabilization missions and EU military training, Europe failed. Violence in the Sahel only accelerated and terrorist threats, as well as civilian collateral, increased.

Today the Sahel is territorially more disintegrated and the civilian governments lost control and are largely deposed and replaced by military rule. “The EU mantra has been supporting the return to democracy, to free and fair elections, wiping out corruption through good governance. The problem is that there is no postbox to whom these noble demands can be addressed. States in the Sahel are not only fragile or weak, they failed. The return to something that never was is simply senseless,” Professor Asche said. Whilst the French repeated the failures of Afghanistan in the Sahel, reconstruction of state and society started in villages bottom-up through talks on local levels. These negotiations on village levels were much more effective than the French coved military operations, without local partners and participation of national armies. Combining talks on the village level with training women to take leadership roles, and simply supporting locally identified projects, implies a paradigm shift in European Development Aid Cooperation and military doctrine, Professor Asche concluded.

Africa, our neighbour, is considered an energy source whilst still lacking universal energy access: roughly 24% of the African continent is electrified and only 40% of Africans have access to electricity.  The stabilization of power grids is one of Africa’s main concerns and although Africa is rich in natural resources and a continent with green energy resources in abundance, it depends on energy supply from abroad. Recent bilateral agreements between the EU and Africa provide Europe with resources in exchange for enhancing Africa’s own energy capacity, particularly in rural areas.

Large oil & gas cooperations operate for centuries on the African continent but for more private sector engagement, Africa and Europe need a better framework and better access to capital. The current energy cooperation is one-sided and not sustainable long-term. Developing fossil fuels has been outlawed since the Paris Agreement, however developing renewables is taking too long and there is simply not enough commitment, capital and know-how on the ground. The European engagement on the continent is neither united nor coordinated: Europe is not engaging as an entity and whilst we see encouraging Member State level engagements, a European approach could be more impactful and effective.

If Europe wants to develop projects and in particular hydrogen on a large scale, a united approach, better frameworks for the private sector and local capacity building are needed: “If we don’t think in that direction, hydrogen will simply be the next oil and nothing will change. Continental unity is a very important aspect in the equation to reach real African-European cooperation. We need to do more in terms of education and we need a more inclusive approach.” For Camara, Africa is not a short-term solution, it is a long-term necessity: “We need to diversify our raw material dependencies and eventually move parts of our energy-intensive industries into Africa where green power is available in abundance. We have to have that intrinsic motivation to strengthen the ties and to come closer to our African neighbour.”

The VDA operates through a partnership initiative with the African Association of Automotive Manufacturers (AAAM), supporting the partner associated with the establishment of framework conditions, infrastructure and private sector activation, knowledge transfer and innovation. The Federal Ministry for Economic Cooperation and Development (BMZ) supports this partnership within the framework of the “Special Initiatives (SI) Training and Employment”. The initiative creates suitable conditions for private investment in an organised African automotive industry for the economic development of the industrial sector, innovation and opening up of new markets in the African continent.

The initiative is a capacity-building partnership working towards the reduction of trade barriers, improvement of investment climate, marketing and image building and the design of PPD mechanisms with the vision to establish a pan-African Auto Pact. The auto pact will develop assembly hubs across Africa, and scale the industry through regional collaboration and shared value chains in order to support the collaboration of regions across Africa. “The support and engagement of the private sector is the main driver for the development of industry across Africa which is crucial for job and value chain creation,” Marius Ochel concluded. 

Heike Hoeffler from the GIZ (Gesellschaft für internationale Zusammenarbeit) talked about Africa’s agriculture between food security and modern value chains: 
When it comes to development aid it is important to identify spheres of influence and what can be done with existing structures and conditions on the ground to make a change. On climate change and population growth, there is very little to be done from an agro-economic perspective. In Africa, the agriculture growth rate is in sync with economic growth. Increasing Africa’s GDP depends on increasing productivity and agro-yields. Agriculture is the main employer on the continent and provides 65% of livelihoods in Africa, especially for women.

“In order to make Africa’s agriculture more productive within the given resource frame, we have to balance food security vs modern value chains. Tea crops in Kenya, for example, do not prevent food insecurities and are grown for high yield exports dependent on global market price: both are needed – global market access and production for the local market,” Hoeffler said. “The development approach is to invest in value, yields should not take the center stage only, also a sense of nutrition is important to value creation, alongside rules-based development, to make sure workers can earn a living wage from the crops as well as a more ecology-based approach, focusing on CO2 footprint and the environment.”  We already see the debate shifting from value chain to food system, taking nutritional status, quality vs. pure production yields more and more into account. “The private sector is the main driver for the transformation and needs to be supported financially,” Hoeffler remarked. Research, development, knowledge and innovation are of fundamental importance for securing food supplies:  how to use fertilisers efficiently, how to adapt cultivation to climate change and how to protect food from decay through suitable storage methods.

Hoeffler put this into perspective: “It is a dire situation and the war in Ukraine perpetuated existing problems into a storm – a very grim situation comprised of conflict, droughts, market trade distortions and economic shocks due to Covid19.  Also with a worrisome outlook on the supply of fertilizers; the Phosphorus boundary will hit our planet first and is irreversible, reserves will be out within 20 years. We will see a significant price increase for food in the coming years.”  The number of undernourished people worldwide has already been rising in 2020 – there are 768m people going hungry. 750,000 people are facing starvation of death in Ethiopia, Yemen, South Sudan, Somalia and Afghanistan. 276 million people are facing acute food insecurity in 81 countries, and this number could increase to 323 million people by the end of this year.

Matthias Wachter from the Federation of German Industries, BDI,  gave strategic examples of mining partnerships in Africa: Critical Raw Materials come mainly from Africa and China. The EU is currently hugely dependent on rare earth materials from China. This dependency is already bigger and more critical than the dependency on oil and gas. Since the War in Ukraine diversification of supply chains has taken strategic centre stage: Africa is a resource-rich continent and minerals are also produced there. Kobald from Congo counts for over 70% of the global supply for example and is needed for e-mobility. “The energy transformation is a key driver for raw materials and rare earth materials (IT, Windturbines, etc) and we will only need more of it in the future not less. New technologies will create more dependencies on rare earth. If we don’t diversify our dependency will only increase.” warned Wachter. Europe’s strategic question is how to cope with the increasing raw material demand in the future? Africa plays an important role here as Europe’s resource-rich neighbour. Europe has clearly been underrepresented on the African continent: “Only about 2% of our export goes to Africa and about 2% of our imports come from Africa,” concluded Wachter.  

Professor Asche (University of Mainz) on Africa’s Resource Curse: Half a dozen mineral resource-rich countries are located on the African continent alone and its geographic location close to Europe makes Africa a strategic partner to the EU. But the blessing of rich mineral endowments comes with the possibility of a “Resource Curse” (Auty, 1993) or the “Paradox of Plenty” (Karl 1997), which has political-economic, social, ecological and social dimensions, among them a subset of economic problems known as the “Dutch Disease” – a term coined in 1977 by the Economist to describe the decline of manufacturing and agricultural exports in the Netherlands after the discovery of large gas reserves. Professor Asche remarked that not one single African country has put its resources to good use: “It is not that they have achieved nothing but rather what would have been possible in regards to education health and infrastructure has largely been squandered for less useful purposes. There is one exception: Botswana has a relatively good education and health system and some of the resource-poor countries do relatively well.”

Mineral resource-rich countries suffer from the so-called “Enclave Syndrome” with very little spill-over to the local population: profits usually go abroad and the mineral sector actively depresses negative impact on the rest of the economy. The exchange rate appreciation hampers productive sectors including the export and import of essential goods. All capital and talent are drawn into the resource sector and the negative impact on the environment aggravates the problem for the rest of the economy. Also, infrastructure is monopolised and built to serve the resource sector only. Complicated policies are required to counter the challenge. So-called North-South partnerships and cooperation for knowledge and technology transfer could be part of the solution. 

Professor Andreas Freytag (University of Jena, l.) examined Europe’s conventional Development Aid Strategies: Unfortunately, Development Aid can have counter effects on the ground. If things are going to be provided from the outside there is no urgency to develop structures, new policies or local economies. “It actually promotes corruption and creates dependencies”, said Professor Freytag. “Development Aid sometimes hinders development, it creates the so-called Dutch-Disease phenomenon, promotes rent-seeking to the benefit of elites.” According to the LSE scholar Lord Bauer, public development aid is mainly counter-productive, except for centralized projects and emergency aid. The economic assessment of Development Aid concludes that it is most helpful in countries with functioning institutions and good governance. Despite these results, the EU is further expanding Development Aid initiatives: Germany for example has started Compact for Africa and Marshall Plan with Africa. “Eleven German Ministries have Africa Strategies none of which is coordinated. Remittances from the diaspora constitute more support to Africa than Development Aid – much more effective, more targeted and better used-bottom up.”
Freytag observes the so-called White Mans Burden (Kipling 1899): the agenda for aid programs is developed in the minds of the donors without taking the actual needs and priorities of recipient countries as the necessary political starter. Freytag suggests better use of aid money in sync with export or investment promotion measures (on which Manuel Fröling from Siemens Energy dwelled) and the provision of tangible infrastructure: “Europe is good at identifying gaps but really lacks tools and local understanding to help to close it,” Freytag concluded.

Professor Andreas Freytag (University of Jena) offered insights on China’s Engagement in Africa:
China cannot only be judged in a negative light. China’s engagement in Africa is mainly based on trade, i.e. construction material, mining and production. In recent years import-export relations rose steeply. China invests heavily in Africa’s infrastructure and manufacturing as well. Aid is being provided for huge infrastructure projects and 1.2 million Chinese permanently immigrated to Africa so far. China is firmly anchored in the African continent which underlines its long-term commitment. The Chinese government delegated up to 300 civil servants to each African country –  in comparison Germany is sending only 7 delegates to African countries. According to the Economist, Chinese loans peaked in 2016 and are now slightly decreasing. China doesn’t operate under OECD guidelines and lending conditions are rather opaque. “China is not only providing money but also basic infrastructure which creates desperately needed jobs in the African continent however under questionable conditions. Nevertheless, China offers Africa a different option to Europe,” Professor Freytag concluded: “There are lots of strings attached for example freedom of speech and humanitarian standards are being severely threatened. No strings attached is a myth and we can see China’s also meddling on the continent for example through strategic military investments along Africa’s coastline.”

Professor Helmut Asche, University of Mainz talked about Russia’s Engagement in Africa: Russia’s engagement in Africa is severely underresearched in regards to scope, dimension, cause and effect, which is the main difference from China’s engagement in Africa – currently filling libraries. The new Russia Africa policy started back in 2017 and constituted a recent phenomenon made up of four pillars of intervention: Mercenaries, Military, Mining and Propaganda with systematic and strategic campaigning unchartered by any other media, Russia is pushing anti-western narratives and exploits the narrative of colonisation to undermine Europe in the region.  Russian engagement focuses on key resource-rich countries such as Libya, Sudan, CAR, Mali, Cameroon and Mozambique. Russia’s engagement is centred on providing private security and military aid in fragile and failed states engaging in proxy and civil wars with organised groups like Wagner, designed to contain risks for Russia’s interests in extractives and its primary objective of geopolitical influence. Russia’s export is based on mineral resources and military power and although arguably a destructive approach, Russia’s policy finds acceptance in both Africa’s elite and parts of the population. Why is Russia’s new African policy so strikingly effective? The likely reasons are Africa’s genuine cause for disenchantment with former colonial powers and compelling economic interests in particular currently grain imports. Not to underestimate is also Russia’s effective propaganda through media. “Europe needs a communication strategy of its own on the African continent to counter Russia’s new Africa policy,” Professor Asche concluded. 

When doing business in Africa, the Africa Business Guide, the German-African Business Association and the German Chambers of Commerce abroad offer support to German companies. Alongside, the Federal Government provides different guarantee instruments to support German companies in Africa to secure access to challenging markets. Manuel Froeling touched upon the fundamentals of the export credit guarantees (also known as Hermes Cover) and the investment guarantees, both being used for large-scale projects in Africa: The Hermes guarantees are managed by Euler Hermes as the Export Credit Agency (ECA). The exporter can insure himself against default on repayment claims due to economic and political reasons. Banks can also use the Hermes Cover for financing these exports. Often, the funding of large transactions in African countries is only possible through the provision of the Hermes Cover. The Interministerial Committee (IMC) defines conditions for the granting of export guarantees for each country in Africa. Although the export credit guarantees are available to all German exporters doing business in Africa, only 1.5% of German exports were covered last year under this scheme. “It would be good to see even better conditions for African countries although a lot has been done by the German Government, especially in the past years,” said Manuel Fröling.

ECA support is highly regulated. The so-called “OECD consensus” has set uniform minimum standards for export credit and the consensus has been transposed into EU law. It covers all state-supported export credits which have a repayment term of two years or more. However, Non-Participants in the arrangement have become important providers of ECA-covered export finance solutions. “China, India and Brazil should be part of the OECD consensus otherwise we won’t see a level playing field for Europe in the near future,” Fröling remarked. There are also other important international regulations such as the OECD Recommendation of the Council on Common Approaches for Officially Supported Export Credits or the Recommendation on Sustainable Lending Practices and Officially Supported Exports Credits. Investment guarantees are another important instrument, offered by the German Government. This set of instruments can be used by a company to hedge eligible German direct investments in African countries against possible political risks. Commercial risks are not covered. Banks can also use the instruments of investment guarantees when financing the investment of a project. For example, a bank can have an investment-like loan secured with the help of investment guarantees. Also, for this instrument there is an IMC-similar composition as for the Hermes guarantees, only here is PwC the agent and responsible for the management. “Getting an investment guarantee for example for Mali for large investments is very challenging because of the limited cover available and this is exactly the dilemma because they need it most. And to stabilize those regions development is urgently needed,” Fröling concluded. There is a willingness to improve and drive investments into Africa and lots of barriers have already been lowered through initiatives such as Compact for Africa. However, there is still room for improvement.

We would like to thank our co-organizers Professors Andreas Freytag and Helmut Asche, presenters, participants from all across Europe and especially our members who have made this event possible.

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We are starting with a panel discussion  “Emerging from the Energy Price Crisis: How to build a sustainable backbone for Europe’s industry?” taking place on 31st May from 12h00 – 13h15 (CET). This will be followed by a flying buffet and networking until 14h30 (CET) at the Cercle Royal Gaulois, Rue de la Loi 5, 1000 Brussels.

The panel discussion with Simone Mori, Head of Europe at Enel, Johanna Schiele, Policy Officer Innovation Fund at the European Commission, Philip Lowe, Partner at Oxera, Torjbjorg Klara Fossum, VP at Equinor and Marc-Oliver Arnold, Plant Director at Georgsmarienhütte GmbH, will be moderated by Hanns Koenig, Head of Commissioned Projects at Aurora Energy Research.

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We are looking forward to seeing You in Brussels or Online.

“We would like people who travel internationally to look at the rail as the default option”, said Kathrin Obst from the European Commission. Together with the Member States, the EC makes sure that the legal framework is working. There are some challenges ahead such as interoperability,  taking rolling stock from one country to another, shortage of staff, establishing a level playing field with other transport modes, ticketing and harmonizing signaling systems.  Rail infrastructure has to be strengthened.  The Trans-European Transport Networks Regulation gives a blueprint of what the infrastructure in Europe should look like with a stronger focus on high-speed networks, especially in the East of Europe, and better inclusion of airports. It is not about rail against air but more about how to cooperate better and how to create climate-friendly options to travel. “Intermodality is key when discussing how to reach the climate targets and how to offer attractive services”, concluded Christoph Lerche from Deutsche Bahn.

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The panelists started off by talking about the current relief efforts rail operators are involved with when it comes to Ukraine:

Austrian Railways, the ÖBB, give free tickets to Ukrainian refugees and approximately 21,000 tickets have been issued so far. Iga Niznik highlighted that the ÖBB built on the experience they gained back in 2015 when they tackled a similar situation. OBB is also supporting Polish Railways with additional rolling stock. Poland’s borders are very crowded, and Polish Railways urgently need additional trains to move people away from the border.

Deutsche Bahn also provides free train tickets for people arriving from Ukraine with the so-called “help Ukraine” ticket. Until today Deutsche Bahn has issued about 128,000 help-Ukraine tickets, said Christoph Lerche. Deutsche Bahn also provides buses transporting people directly from Poland to different locations in Germany. At Berlin Central station a central welcome hub has been established together with volunteers, NGOs and local authorities. Deutsche Bahn also established a cargo subsidiary, a railway humanitarian bridge from Germany to Ukraine. The train is still the most secure mode of transport that works in Ukraine and Deutsche Bahn tries to ship as much humanitarian aid as possible as far as possible into Ukraine directly.

SNCF is seeing fewer refugees arriving in France by train simply because it is further west, Jeremie Pelerin said. SNCF is granting free tickets for Ukrainian refugees, who are arriving from Belgium or Germany to continue their journey. SNCF has installed special facilities in the main train stations across France in cooperation with the Red Cross and organized buses. SNCF is also participating in the humanitarian bridge together with Deutsche Bahn to bring goods from France to Germany and Romania to Ukraine.

“There is a huge communal effort from the transport operators to help”, Kathrin Obst from DG Move said. The European Commission activated the temporary protection scheme at the EU level, which gives Ukrainian refugees the possibility to settle freely within the EU and access to education and jobs. It is the first time the EU gives legal status to refugees without having to apply for it.

Matthew Parsons, Skift: The European Commission launched a rail action plan in December and said that cross-border trips account for just 7% of the kilometers traveled by train in Europe. Why is this such a low figure?

Kathrin Obst, DG Move: That figure just says the main business of railway companies today is taking commuters to work and domestic business travelers from A to B and the main focus of rail companies today is not yet international travel. It doesn’t mean that there’s a lack of performance on the rail side. It means that we would like to strengthen it. We would like people who travel internationally to look at rail as the default option: we are working with the Member States to make sure the legal framework is working, and we are encountering obstacles there. For example, technical problems with interoperability. Then there is the problem of taking rolling stock from one country to another. Harmonizing signaling systems is an important element: We are rolling out a signaling system called ERTMS that will make that easier. We’ve proposed a strengthened infrastructure network for rail. So together with the action plan, we presented the trans-European Transport Networks Regulation, which gives a blueprint of what the infrastructure in Europe should look like.

It has a stronger focus on high-speed networks, especially in the east of Europe and better inclusion of airports. It is not about rail against air but more about how to cooperate better. Then there’s a problem with rolling stock availability. It’s not easy, for new companies to get funding for rolling stock. There’s a shortage of train drivers and know-how of usage in different countries. If you want to run a train today, you must book yourself a train path. You can’t just decide to drive back on the motorway. You have to book the train path going and coming back. The way those train paths are allocated is quite complex. And the legal framework is a little rigid. It was built on a system where there was enough capacity for everyone. But today we find that capacity is actually quite scarce and it has to be managed a bit more efficiently.

There’s the question of track access charges we find that in particular passenger trains pay quite high track access charges. That charge brings up the price for the end consumer. If we are in competition with aviation, is that really the way we want it to be or is there another way of looking at that? Ticketing is a big issue. We will come up with a legal proposal on ticketing at the end of this year. There’s a question of the level playing field with other transport modes. There are tax exemptions for aviation, but not for rail. A Ryanair ticket costs €40 whilst the train ticket costs much more. We’ve addressed some of those questions already with the „FITFOR55“ package that the commission put forward last summer. We’re working with the Erasmus Program to strengthen the rules about how you travel to your destination, to make it more attractive to use the train. That’s not the biggest thing but it’s important that young people start using trains – that’s the aim of the action plan.

Matthew Parsons, Skift: Interesting to hear a lot about the infrastructure and ticketing. Jeremie, from your perspective, what did you make of the action plan?

Jeremie Pelerin, SNCF: I would say as far as the SNCF is concerned; we broadly support the action plan. We share the same vision as the Commission for a strong role for rail in the future of cross-border mobility. There is still a lot to do to improve the situation. If you take the issue of track access charges. This is an important issue in France because we have very high track charges. But it’s also a way to finance investments in infrastructure. So if you decrease the charges, you must find other sources to finance infrastructure investment. And although we are in a period where you see public spending increasing following COVID and probably also the Ukraine crisis, we are not reassured when we look at their long term.

Matthew Parsons, Skift: Iga, from your perspective, do you agree with the action plan or do you have any other priorities on the agenda?

Iga Niznik, ÖBB: We believe it’s a very positive step towards sustainable mobility. On the level playing field, we would have loved a little bit more ambition. And secondly what worries us, is the lack of finance. We need infrastructure where the trains can run. We need financing for digitalization to make things more efficient. And we don’t see the investment that is needed. In Austria, we have a very rail-friendly government now. But if we leave it to the member states to finance all those things, we are afraid it’s not going to happen.

Christoph Lerche, Deutsche Bahn: We also very much welcome the action plan. We think that it is pointing in the right direction. We welcome this clear commitment of the European Commission to foster cross-border transport in Europe. Regarding the level playing field: It is a strange situation that for flights within Europe there is no value-added tax and for many cross-border trains there still is. It’s good that the commission wants to tackle that. Infrastructure is the mother of rail transport: Without infrastructure, we can’t run attractive services. That‘s definitely the priority at the moment alongside initiatives of fostering technical interoperability. The Commission has done a lot already, but there are still some steps to be taken. One aspect where we don’t agree is ticketing: There is a lot of homework to be done by public stakeholders but also by the railways. We must do our homework to improve the quality of service to make travelling by rail more attractive.

Matthew Parsons, Skift: It’s in everyone’s interest to have a level playing field because otherwise, you’re not going to have people travelling as much between countries and in terms of infrastructure it all comes down to investment. Kathrin, what is your response? Who pays for making all these rail connections consistent? Is the EC responsible or is it on the member states individually to pump money into their infrastructure?

Kathrin Obst, DG Move, EC: The EU has the money that the member states decided to give the EU in long-term budget discussions. So at the end of the day, it’s taxpayer’s money and whether it comes from the EU or the Member States is maybe not the most relevant question. We invest very heavily in rail infrastructure; infrastructure is key. You can’t run a good train service if the infrastructure is not good. And if we look at our modelling of how we progress towards decarbonisation, the completion of the TEN-T network is a major point. Without that, we will not reach zero carbon. We have the Connecting Europe Funds which is a significant amount of money that we invest in cross-border projects. And we’ve also just injected as part of the COVID recovery, close to 50 billion dedicated for rail and rail projects only. And this is more money than we’ve ever had under the Connecting Europe Facility.

Matthew Parsons, Skift: Jeremie mentioned the ticketing aspect: I’m wondering if you think enough is being done between the rail companies when it comes to the ticket data. Is it easy to book cross-country rail tickets on one platform? Do some of the rail operators perhaps want to keep hold of that customer and not really share data?

Kathrin Obst, DG Move, EC: There are different things we would like from ticketing. It’s important that you look at ticketing from the passenger perspective, that’s who we’re doing it for. People find changing trains very stressful sometimes. And realistically, if you’re travelling over longer distances, it’s very rare that it’s like one train that takes you from A to B. You’re going to have to change trains. If you’re combining train offers between Deutsche Bahn and ÖBB or SNCF and Deutsche Bahn, you need to know that if something goes wrong when you miss a train, you’re not going to be left on your own. And to be fair to the rail companies, I think a lot of work has been done in the last years. Rail companies are in competition with each other sometimes. Obviously, Deutsche Bahn and ÖBBB, not so much. But if you were to take the Flix trains that are on the same market, then you would not want to sell your competitor’s tickets. As a passenger, you still want to be able to find the complete offer somewhere and buy those tickets. And I think that’s where the legislation is needed because it’s not actually fair to expect the companies to behave in a sort of counter-competitive way.

Matthew Parsons, Skift: There’s one ticket called the Climate Ticket, which offers unlimited travel. At Skift, we write a lot about subscription packages, which hotels are launching and even airlines. What’s your take on offering more of those to people who want to travel to other countries on a subscription basis?

Iga Niznik, ÖBB: I can tell you that the climate ticket has been very well received in Austria. The ticket costs €3 per day. So that’s about €1,100 a year. You can travel the whole of Austria. You can take any bus or train. It was very popular, but this also came at a price: the taxpayer financed it. And our Minister of Climate made it possible after having predecessors for 15 years not being able to do it.

Matthew Parsons, Skift: Jeremie in terms of ticketing, are you happy with how SNCF offers tickets?
Why can’t trains take a similar approach as flights? The airlines are in competition too and one can buy tickets for any route. What’s your take on that?

Jeremie Pelerin, SNCF: Train operators are already working together very strongly to bring improvements, and I mentioned the ticketing roadmap. We’ve joined forces for four high-speed connections with Deutsche Bahn, Eurostar, the Netherlands and ÖBB. We’ve created a red team alliance and the rating of alliance allows each passenger to board without a charge on the next available train if they miss a connection. So there’s already something coming from the industry directly to provide a solution to these cases of cross-border travel. So it’s not as if there was nothing done by the sector in terms of ticketing. Of course, there are different approaches, but each railway operator has its own ticketing system. And we have a big platform in France, which is called SNCF Connect, which has very much developed in the last year to offer connections to local public transport. In France, the focus was indeed firstly on domestic, but it’s also a way to sell through this platform international railway tickets. And of course, we also work with third-party ticket vendors. Trainline is selling SNCF tickets and cooperation with ticket vendors is already governed by competition law.

Matthew Parsons, Skift: Let’s talk about sustainability briefly. The FITFOR55 proposals aim at a reduction in carbon emissions by 55% by 2030. Due to the COVID impact, Air France was having state aid. And one of the conditions for the money from the government was to stop short-haul flights, under two and a half hours. Austria had a similar thing and obviously, rail companies are stepping up. So Christophe, let‘s talk about how you work with Lufthansa, for example. Are you taking more share from the airlines or are you working with them in a more collaborative way?

Christoph Lerche, Deutsche Bahn: Intermodality is key when discussing how to reach the climate targets and how to offer attractive services. And so we believe in close cooperation with airlines. They are, of course, competitors also. One of the important offers we are making is the so-called Lufthansa Express Rail, which means that the common aim is to reduce CO2 emissions. So also Lufthansa recognizes that for short-haul flights, there isn’t always a good reason here. And they should be abolished as much as possible. There are no regulatory measures in place in Germany. They are not planned, to my knowledge, at the moment by the German government. That is a little bit different from the situation in France. Lufthansa Express Rail means we offer rail connections from 24 cities in Germany to Frankfurt, which is the main hub for Lufthansa.

We have a CODESHARE collaboration with Lufthansa with one ticket for your train and flight: It’s a ticket with a Lufthansa ticket number, and you can use it for your Deutsche Bahn train as well. You can check-in before you board the train. You take the train from for example Berlin to Frankfurt with your Lufthansa ticket and you enjoy special conditions on the train. There is even additional staff on the train to care for those travelling with luggage. So it pretty much feels like flying already. When in Frankfurt there is also a very good infrastructure for the passengers: There is an air-rail terminal very close to the rail station where passengers can check-in and dispose of their luggage after arriving by train and walk to the terminal.

We are trying to offer a very attractive customer experience together with Lufthansa. It is a win-win. Of course, it helps us to have more passengers on our trains. On the other hand, it also helps Lufthansa to show that they are working to improve their climate balance and to concentrate on the routes where it really makes sense to fly.

Matthew Parsons, Skift: And Jeremie, from the SNCF, I guess you’re working with Air France a lot. Is there a huge uptake in rail journeys because of Air France being told, they can’t do these routes anymore?

Jeremie Pelerin, SNCF: For the routes where the ban is imposed, rail already had a significant market share. What I should underline is that the market works when there is a quality offer with high frequency and a short duration of the trip. Of course, it’s much easier to go from the city center to the city center without going to the airport and having transfers back to the city and to the city and back to the city. There is always the issue of price and here the issue of the level playing field comes in again. But the market works in terms of attracting passengers to high-speed connections that are really reliable, fast and working very well. And we’ve seen that already before airlines were banned for short hauls from Paris to Bordeaux, where rail already had a very significant market share. We have a very similar situation in France as the one described by the Christophe from Deutsche Bahn, we have partnerships with 12 airlines where we can buy tickets combining a long-distance flight with train tickets connecting more than 19 cities in France as well as Brussels to our airports.

Matthew Parsons, Skift: Kathrin, the EU has these quite ambitious carbon reduction goals for the member states. What’s stopping the European Union from just doing more to ban short-haul flights? And will banning short-haul flights push people towards rail in the end?

Kathrin Obst, DG Move: I think it’s a little bit like Jeremie said, either there’s an attractive alternative and then people will take the train anyway or there is no attractive alternative. And then you shouldn’t tell people that they can’t fly. The way to do it is to improve the offer. What the railways are doing with the airlines works very well. Where the infrastructure is good and the services are good, it’s totally feasible for railways to replace flights. More infrastructure is being built, for example, in Germany, you just had the completion of the Munich Berlin link which has brought down journey times considerably. This has a real impact on passenger numbers. What I don’t see being properly in focus is the offer for tourists. Someone who wants to go to Barcelona for the Easter holidays finds it very difficult to find a train offer.

Matthew Parsons, Skift: Someone working for a travel management company that works with multinational companies who want travellers living in one EU country flying to another to be able to book online within that travel agencies booking tool. And apparently, that’s currently very limited. Is it possible to book through one booking platform? If anyone wants to pick that one up.

Christoph Lerche, Deutsche Bahn: One really would have to look at the specific case. We have corporations with a lot of platforms. But of course, it doesn’t cover all the platforms. It’s based on commercial agreements, and we see it as a complementary offer. We sell the majority of our tickets through our own channel Bahn.de,  the most frequently used travel platform in Germany.

Matthew Parsons, Skift: It sounds like there are huge amounts of work being done behind the scenes and lots of reports and action plans. But there is still lots of work ahead. What is your priority for the year ahead? Catherine, obviously you’ve got the action plan in place, but what is at the top of the agenda for this year?

Kathrin Obst, DG Move: Top of the agenda is trying to make rail the default mode of transport that people want to use when they move around Europe. And I think the railways have a fantastic network as it is. It’s a really good product. It’s a very attractive service. So there’s a huge amount of things that are really good. And now it’s a question of making it better for those people that we’re not yet reaching. And some of it is up to the companies, some of that is up to member states because funding is an issue. Some of the ticketing things are domestic and some of it is up to the commission.

Christoph Lerche, Deutsche Bahn: We want to make rail the number one transport mode in Europe. I think railways really have a big chance at the moment. There is a window of opportunity. There is a lot of public support from the political state stakeholders. The climate discussion, of course, is helping a lot and is raising awareness. And I think at the moment pretty much everyone agrees that rail is part of the solution to reach the climate goals, the Green Deal goals, the climate goals of Europe and also worldwide. We appreciate the initiatives to improve level playing fields, to help in terms of infrastructure, as has been mentioned as a key decisive factor. And on the other hand, we are of course, happy and ready to do our homework in terms of improving the quality of service, in terms of working towards an intelligent European network, with intelligent hubs to connect the cities in Europe, the main cities and the regions. And we have to work on intermodality as well in terms of cooperation, for example with airlines, but also to improve door to door mobility. We can reach that goal to be the number one mode of transport in Europe.

Jeremie Pelerin, SNCF: At SNCF, we have the objective to double the traffic for rail passenger transport and rail freight transport. It also includes passengers cross-border. To reach this objective, we need to work all together and put a lot of effort as explained by Christoph, also into the quality of service. But we need also significant investments today. Rail infrastructure is not able to carry such an increase of modal share. There is a need for improvement, modernisation of the networks, new high-speed lines new tracks to go around the cities and so on and so forth. And I think we all share the political objective. We’ve seen emissions from the transport sector still increasing. They represent 25 to 30% of the CO2 emissions in the EU. We need to act on that and rail is part of the solution. But we still have a lot to do if we want to achieve this objective. So a lot of commitments are needed both from the sector and also from policymakers because eventually, they decide what they will invest.

Please find the full recording of the webinar on our YouTube channel.

Please see Skift’s article by Edward Russel who picked up on the Advocacy Webinar and contextualised it with air travel: “Trains offer new promise in Europe’s quest to cut aviation” on Skift.

Please find the recording of the webinar on our YouTube channel.

Summary:
The EU taxonomy is a classification aimed at helping financial markets define what is green or what is not
green, so as to avoid greenwashing and accelerate green investments. The EC proposed to include
nuclear and natural gas into the taxonomy, subject to them fulfilling certain criteria. Although the proposal
was highly controversial, the EC decided to move forward, hoping the two sectors can help the bloc meet
its ambitious roadmap to climate neutrality. Coincidentally, Russia invaded Ukraine on the same day of the
webinar, which in the meantime has pushed up natural gas prices significantly and resulted in a push in
Europe to reduce reliance on Russian gas. This may result in a strong move towards a financially viable
option of “green” hydrogen, as well as other alternatives to natural gas, over the long term, reducing at
least the impact of including natural gas in the taxonomy.

Key Conclusions:
Michael Müller (RWE) suggested that whether a company’s activities are “green” should be judged by
how it spends its CAPEX, rather than its legacy activities, because CAPEX clearly demonstrates how
much investment is put into new technologies. The automotive, chemical, and steel industries face huge
investment needs. Looking at the status quo alone will not help transform energy markets.

Although the Green Party has been traditionally against gas, Ingrid Nestle (Bündnis90/The Greens) sees
the need in providing energy security through gas-fired power plants. She took a strong stand against
nuclear, and pointed to the still unresolved issue of nuclear waste management and to delays in the buildup of new nuclear power plants in Western Europe: “They are a decade late and it doesn’t take a decade to build them. They are one decade behind schedule.” Nuclear Power is much more expensive than renewable power and Europe should not spend more money, time, and political energy on nuclear, but instead focus on green infrastructure, Ingrid Nestle concluded.

Valerie Faudon (SFEN) from the French Nuclear Association, countered that nuclear is necessary for
energy security and that nuclear forms an important part of the energy transformation process: It is a
question of Europe’s competitiveness, Valerie said. Europe needs to take an international perspective:
reducing emissions is a global issue and nuclear will be part of other taxonomies, for example in the US or
Canada.

Laurie Fitch (PJT) highlighted the urgency of energy security. The power sector is not an industry where
supply chain failures can be blamed on blackouts. It is essential, she said: “Given the sheer sums of
money and time horizons involved in investing in green infrastructure, it has to be very clearly classified.
Therefore the taxonomy is highly important and really matters to capital flows.” Consequently, the
taxonomy underpins a much wider definition of what might be considered sustainable. There’s a five
hundred billion per annum fast-growing green bond market, and capital flows will definitely pay attention to the taxonomy.

Full Interview (edited):

HK: RWE is investing in power generation assets across Europe. How does the taxonomy affect large
power generators?

Michael Müller, RWE
The taxonomy provides a classification for activities that are sustainable and supports investors or the
capital market to make decisions on where to invest. It provides a classification and in principle, this is a good approach: But in practice, it is an administrative burden in particular to large power generators. The
taxonomy criteria are based on sustainable and non-sustainable activity, which is a totally different
perspective to be documented and it takes huge effort to provide the reporting.

HK: The German Green Party has been traditionally quite critical of including gas and nuclear in
the taxonomy. Now the Green Party is in government in Germany, and supported a compromise
that included natural gas and nuclear as “green” – why?

Ingrid Nestle, Bündnis90/TheGreens: The taxonomy is a good approach but the inclusion of both
nuclear and gas makes it less credible. Nuclear is definitely treated too well and it is a huge mistake to
include it. A technology that delivers waste to be guarded for ten thousand years cannot be sustainable.
Natural gas is another story: here, one has to differentiate between fossil gas and gas-fired power plants,
which can run with different types of gas including hydrogen in the future. These power plants are not only
acceptable, but they are also necessary for the 100 percent renewable future.

HK: Is nuclear treated fairly in the taxonomy or are the restrictions in place too strong?
Valerie Faudon, SFEN, Nuclear is one of the lowest emission sources in France. Waste management is heavily regulated and controlled in Europe. There is for example a deep geological storage solution to store nuclear waste where it is not in contact with the biosphere. In the taxonomy, nuclear is classified in the “transition” category. Hence, technical conditions have to be revised every four years. This is difficult because nuclear plants are set to operate for 60 years. Even with renewables, Europe relies on nuclear power due to its ability to be stored and scaled. The current 2050 scenario of the European Commission includes that nuclear will produce 15% of electricity in Europe in 2050.

HK: Does the taxonomy matter in shifting capital flows, or are we attributing too much impact to
the discussion over the past month? Has that been overblown?
Laurie Fitch, PJT Partners: Sustainability really matters when it comes to capital flows. The taxonomy
underpins a much wider definition of what might be considered sustainable. If you look at the capital flows, there’s a five hundred billion per annum fast-growing green bond market, and capital flows will ultimately pay attention to the taxonomy.

HK: The taxonomy means micromanagement and administrative burden for energy generators.
Would it not be more sensible to get rid of it altogether and let market forces and ETS run their
course? We can get rid of the taxonomy or the micromanagement altogether. Would that not have
been a more sensible approach?

MM, RWE: The taxonomy could be more pragmatic but introducing classification is clearly helpful. To
make investments green, there needs to be some kind of green classification. For industry, it is very
important that the taxonomy looks at two different criteria: firstly, how much of your revenues are
sustainable and how much are not sustainable, and secondly CAPEX, the sustainability of investments.
That is a very important difference. RWE has a heavy legacy coal portfolio but also a clear commitment to
transform that portfolio into a renewables portfolio. This is the transition that needs financing. We are
strongly pushing for the taxonomy to look at CAPEX because it is clearly demonstrating how much
investment is put into new technologies and how much speed you really put into transition. The
automotive, chemical, and steel industries have huge costs ahead of them and that needs funding.
Looking at the status quo doesn’t help the energy transformation.

Ingrid Nestle: The current proposal is in the hand of the parliament and this is what we have to work with.
In regards to nuclear, I heartily disagree that we know how to deal with waste. They are very strict
regulations because it’s so extremely difficult to deal with. We still don’t have a solution, but also nuclear
will simply be too late and too expensive. In my opinion, it’s kind of a hoax. All three new nuclear power
plants that are being built in Western Europe are a decade late. It doesn’t take a decade to build them.
They are one decade behind schedule. And there’s so much more expensive than renewables that are just
tearing away money, time, and political energy.

We now need to start talking about green infrastructure. How do we make sure that existing gas networks
or converted gas networks are available for hydrogen? We have to get electrolysis up and running so that
we get to a hydrogen economy. We are talking about 15 years. That sounds a lot. But I give you an
example: the biggest electrolyzer that is currently operational has 10 megawatts. The target is 10
gigawatts by the end of 2030. So that’s a huge step to get there. That’s why I asked for pragmatism. I think
we now need to get it all running, get it going because otherwise, we won’t need it at all.

HK: Is this black and white distinction in the taxonomy helpful and would we not have been better
advised of having three statuses, of “not clean, but helping us to get cleaner”?
Laurie Fitch, PJT Partners: The power sector is not an industry where supply chain failures can be
blamed. It has to work! It is essential. Given the sheer, sums of money and time horizons involved in
investing in green infrastructure, it has to be very clearly classified.

Valerie Faudon, SFEN: I’d like to add an international perspective: The European taxonomy is not going
to be the only taxonomy. And there will be other taxonomies for example in Canada or the US taxonomy.
In the American taxonomy, nuclear will be included. American capital will be investing in Europe. There is
an opportunity for new nuclear reactors in Poland, and the Americans have promised to invest here. It’s a
question of competitiveness. Europe must be competitive in its own continent. It is important that we take
an international view at some point in time: We have to harmonize taxonomies worldwide. If we don’t align,
it is going to create disruptions in the competitiveness of European industries.

HK: How are you seeing the global landscape for taxonomies shaping up?

Michael Müller, RWE: There are tons of rating agencies out there with different ratings and different
perspectives. So from our point of view, it indeed would be helpful if there is some alignment going
forward. We need a global standard on sustainability reporting, as we have on financial reporting. That will
provide a single framework. If we have one standard in the EU, it is clearly helpful as an intermediate step.
In the medium term, we need to have international standards to make it comparable. But again, that’s the
pragmatism I’m talking about. There must be a clear ambition to move towards an international standard.
And if you look at what is currently happening, it is moving in this direction.

Ingrid Nestle: The European Commission’s energy strategy focuses predominantly on green hydrogen
when it comes to energy transformation. It is clear that there won’t be enough renewable resources in
Europe to produce the hydrogen we need to keep our lights on. We have to be careful not to go from one
dependency to the next i.e. sourcing green hydrogen from Africa or other faraway countries. In Africa, you
have several million people without electricity. We can’t ask these countries to provide us with low carbon
hydrogen before they can provide their own people with the basic electricity supply.

We would like to thank our Advocate Milena Oschmann, Governmental Affairs for Deutsche Bahn, for her contribution to this event.

If time permits, we will have a Q&A session at the end, where questions from the audience will be taken.

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