News

The European Commission published a communication on 08/03/2022 entitled ‘REPowerEU: Joint European Action for more affordable, secure and sustainable energy’, which was revised from the original working versions of the document to address the need to reduce energy dependence on Russia. The Communication was presented by European Commission Vice-President Frans Timmermans and Energy Commissioner Kadri Simson. The communication outlines a master's message on how to ensure Europe's independence from Russian fossil fuels by 2030, starting with gas, in view of the Russian invasion of Ukraine. The plan aims to diversify gas supplies to the EU, speed up the deployment of renewable energy sources (but the European Commission considers conventional biofuels to be unsustainable) and replace gas in heat and power generation. According to the European Commission, these measures could reduce the block's demand for Russian gas by 2/3 by the end of 2022. Commission President Ursula von der Leyen said in a statement to the communication that the EU must become independent of Russian oil, coal and gas, and that action must be taken now to mitigate the effects of rising energy prices, diversify gas supplies next winter and accelerate transition to clean energy. Timmermans said the Union would now focus on promoting renewable energy. According to Timmermans, renewables are a cheap, clean and potentially inexhaustible source of energy and, instead of financing the fossil fuel industry in third countries, the production of renewables creates jobs in Europe. To prepare for gas stocks for next winter, the Commission will propose that at least 90% of the EU's gas tanks will be filled by 01/10/2022. The Commission is also preparing price regulation, state aid and tax measures to protect European households and businesses from the effects of extremely high prices. The Communication includes the possibility of price regulation in exceptional circumstances, and the Commission notes that State aid rules allow member states to provide short-term support to companies affected by high energy prices, while helping them to reduce their exposure to energy price volatility in the long term. The Commission also plans to consult member states on a new temporary state aid crisis framework. Finally, the Commission plans to double the Fit for 55 targets for biomethane, which could allow production to reach up to 35 billion cubic meters per year by 2030. To this end, the national strategic plans for the CAP should target funds for biomethane produced from sustainable biomass sources, including agricultural waste and residues.
More information is available here and here.

According to UN Food and Agriculture Organization statistics, world food prices rose by 3.9% in February 2022 compared to January 2022. Over the past year, prices have risen by 20.7%, food prices are historically highest due to high input costs for energy, fertilizers, and feeds. The highest increase was recorded for vegetable oils and dairy products, followed by cereals and meat. Sugar prices, on the other hand, have fallen and are the lowest since July 2021.
More information is available here.

Agriculture ministers held an extraordinary meeting on 02/03/2022 to discuss the situation in Ukraine and its implications for the European agricultural sector (Ukraine represents 11% of the world wheat market, 16% of the barley market, 15% of the maize market, 16% of the rapeseed market, 50% of the sunflower oil market, 9% of the sunflower seed market and 61% of the sunflower cake market; Russia accounts for 20% of world wheat trade, 16% of barley market, 2% of maize market, 3% of rapeseed market and 20% of sunflower cake market).
More information is available here.

On 02/03/2022, the European Union approved a ban on all imports of potash and potassium chloride from Belarus. It is an important fertilizer that is in short supply in the EU. The agricultural sector is therefore concerned about further increasing pressure on the EU agricultural sector. A short three-month period has been introduced for trading, after which trading will no longer be possible. Nitrogen and phosphates are not yet banned. The Union is not self-sufficient in potash production, accounting for only 6% of global potash production. In 2020, potash imports into the EU amounted to 2.4 million tonnes, with the share of imported potash equalling 85% of total EU consumption. The largest European agricultural organization, Copa and Cogeca, said it expected price increases and market distortions in connection with the ban. The world's largest producer of potash will be Canada but replacing the necessary supply with imports of Canadian origin would be very time-consuming and costly, according to Copa and Cogeca. The new sanctions will also target the Belarusian steel and timber industry, building on sanctions that already affect the oil, tobacco, banking, and fertilizer sectors.
More information is available here.

Janusz Wojciechowski, Commissioner for Agriculture and Rural Development, said that the European Commission was ready to review some Farm to Fork and biodiversity targets, in particular the target of 10% of agricultural land being excluded from production, with a view to ensuring food security in view of the situation in Ukraine. The commissioner said the Commission should review the target in the next few weeks. According to the commissioner, the Commission will assess whether the land that was originally set aside could be used to grow protein crops. The commissioner also said that at a time when food security and food sovereignty in the European Union could be threatened, it may not be appropriate to take similar steps, such as the exclusion of land from production. The Commission should therefore carry out a further analysis of the objectives of both strategies however, the commissioner ruled out the possibility that the Commission would generally withdraw from the strategies as such.