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Monday, August 18, 2008

Economy in June, 2008

In this edition:
  • Business and Commission in plea for Nabucco pipeline
  • Baltic pipeline under fire despite industry assurances
  • Nuclear debate continues to stir up controversy
  • EU wants regional policy to become 'launch-pad' for SMEs
  • 'Green jobs' on the increase
  • EU to cut VAT and ease state aid for SMEs
The good news is that

Business and Commission in plea for Nabucco pipeline

4 July 2008

Top officials at the Commission and one of Central Europe's largest oil and gas groups yesterday (2 July) called for progress to be made on the Nabucco project, which aims to reduce Europe's dependency on Russian gas supplies. But they warned that its realisation would depend on "foreign policy scenarios".

Speaking at a round table organised by the Centre for European Policy Studies (CEPS), Wolfgand Ruttenstorfer, the CEO of OMV, and Mathias Ruete, the European Commission's Director General for Energy and Transport, agreed that high oil prices are making energy efficiency and environmentally-friendly policies less and less expensive, and could also favour the realisation of pipeline projects, necessary to guarantee Europe's energy security. They cautioned that gas diversification in Europe can come only through the Nabucco project.

Russia is a very reliable supplier, Ruttenstorfer said, but added that the concerns are that Russia will not be able to cover all Europe's additional needs, which in his words could be 100-150 billion cubic metres over the next one or two decades.

"Therefore our commitment is to build the Nabucco pipeline, to get direct access to the gas resources of the Caspian area, and tomorrow to the resources of Iraq and Iran", Ruttenstorfer said.

"If we look at scenarios from Eurogas, we will need to build not only South Stream, North Stream, Nabucco, but also a number of other pipelines," Ruete said. He also hinted that for the EU, Nabucco is not an alternative to supplies from Russia but a necessary additional channel of supply.

But Nabucco will not see the light of day if we cannot fill the pipeline, warned Ruttenstorfer. "We think it can, that there is enough gas in Azerbaijan, Turkmenistan, but we also hope that Iraq and Iran will come into the equation. It all depends on the overall foreign policy scenario"

The OMV CEO also described the current status of the Nabucco project. Six companies are currently in the group, since RWE from Germany recently joined. The next important stage is to reach an agreement with Turkey on the conditions under which Ankara would be prepared to let the gas cross its territory, and an agreement can possibly be signed in autumn. Then Nabucco will invite potential transporters and customers to declare how much they intend to transport and during which periods of time. Based on that, the final investment decision can be taken. source

My comment: I like the new attitude toward Nabucco. I see people really understand the gravity of the oil/gas demand in Europe and in the World. But I still don't see Nabucco happening any time soon, no matter how much OMV wants it.

Baltic pipeline under fire despite industry assurances

9 July 2008

The European Parliament is questioning the environmental impact and geopolitical implications of a planned Baltic Sea pipeline that would bring Russian gas into Germany, bypassing Poland and the Baltic states.

A large majority of MEPs - 542 in favour and 60 against - on 8 July voted in favour of an non-legislative own-initiative report by Polish MEP Marcin Libicki. It raises objections to the planned construction of Nord Stream, a 1220 kilometre pipeline that would stretch along the Baltic seabed.

Nord Stream is one of the EU's priority energy projects, seen as part of EU efforts to secure its supply of natural gas for the coming decades (see EurActiv's LinksDossier on the geopolitics of EU energy supply). If approved, construction could begin in 2010 and be finalised by the spring of 2011. Once operational, the pipe would bring 55 billion cubic metres of Russian gas per year into Germany, from where it could be sold off to other member states.

Gazprom, German energy giant E.ON and chemical firm BASF are backing the project along with Gasunie, a Dutch gas company.

The Libicki report acknowledges that Nord Stream is important for the EU's future energy security, but warns that the Baltic seabed is "especially vulnerable" to environmental damage caused by the laying of the large steel and concrete-reinforced pipes, which measure over 1.5 metres in diameter. There are also concerns that World War II era munitions still littering the seabed could be set off during construction.

Apart from environmental concerns, Poland and the Baltic States have also raised objections about being bypassed by the project. Re-routing the scheme over land would have brought transit fees to the countries concerned.

The Nord Stream consortium also scoffs at the idea of a further impact assessment. Maartje van Putten, a former Dutch MEP who now represents the consortium in Brussels, says Nordstream is taking care of "every detail" with respect to ensuring the safety of the project, and is investing around €100 million in impact assessments.

Ramboll, a Danish consultancy that is conducting a private impact assessment for Nord Stream, is expected to release its findings in October. source

My comment: Poland worried by environmental impact of something?! Is that a joke or what? Poland doesn't care about environment as long as the air is breathable and the water drinkable. Ok, the second may be excluded. In any case, the real problem is Poland being by-passed. But I think they should be angry only to themselves, because of they are so capricious no one want to work with them. In trade, you not only take, but also give. Something Poland don't like doing.

Nuclear debate continues to stir up controversy

4 July 2008

The role that nuclear should play in the EU's energy mix was the topic of heated debate at a 2 July Brussels conference that tackled a number of issues, including nuclear financing, safety and waste management.

The event was organised by the European Movement, a platform for pro-European and non-governmental organisations, and featured a range of panellists including MEPs and representatives of industry and a pro-nuclear environmental NGO.

There are also signs of a "nuclear renaissance" in the EU, with public opinion shifting somewhat in favour of the technology amid growing concerns over climate change and energy security.

While the conference included emotional interventions and charged discussions, a number of participants indicated that the essential elements of the debate have changed little in recent decades, with waste and security issues still high on the agenda. Meanwhile a Eurobarometer survey, published yesterday (3 July), shows that many citizens might change their opposition to nuclear if radioactive waste issues were satisfactorily resolved.

A number of speakers and participants also lamented that discussions on nuclear are seldom based on fact and scientific evidence, but rather on "ideology". source

My comment: Of course, it's all about ideology! I mean nuclear plants are safe and clean as long as the regulations are being followed. There was never a scientific or environmental problem with nuclear plants. The only question for me is who pays to Greenpeace to bash nuclear power and isn't it weird to take fossil money to fight fossil fuels?

EU wants regional policy to become 'launch-pad' for SMEs

10 July 2008

The Commission boosted its focus on SMEs yesterday (9 July) by presenting a new initiative aimed at helping EU cohesion policy to better assist small businesses. The move comes just a day after it pledged to cut tax and make state aid rules more flexible to boost their growth.

Regional Policy Commissioner Danuta Hübner announced the allocation of at least €27 billlion (7.9% of total community investment) out of the bloc's 2007-13 cohesion fund to SMEs, with the lion's share (65% or €17.5 billion) going to technology and innovation. The remaining €10 billion or so will be allocated to ICT activities (14%), start-ups (12%) and eco-friendly projects (9%), Hübner said.

"With only a small amount of investment, it is possible to achieve a high impact and raise the innovation capacity of small businesses," Hübner pointed out. source

My comment: The is here only to see the budget which I find fascinating.

'Green jobs' on the increase

14 July 2008

As employment in the fossil fuel sector declines, more and more people are finding work in the renewable energy sector and related professions, with the number of 'green jobs' expected to swell considerably in the coming years, says a new study.

"Growing automation and corporate consolidation are already translating into steadily fewer jobs in the oil, natural gas, and coal industries - sometimes even in the face of expanding production," according to the latest 'Vital Signs Update' from the Worldwatch Institute, a Washington DC-based research institute focused on sustainability issues.

Meanwhile, "renewables are poised to tackle our energy crisis and create millions of new jobs worldwide," says Michael Renner, senior researcher at Worldwatch.

EU estimates vary with respect to how many jobs might be created in Europe's green economy. The Commission's 2006 renewable energy 'roadmap' points to 650,000 jobs in the sector by 2020, while a renewable energy modelling initiative produced by the EU executive in 2003 nearly triples that figure to 2.5 million. Worldwatch says the wind and solar industries alone could provide over eight million jobs worldwide by 2030.

In the shorter term, financing, skills and materials supply shortages in key renewables sectors like wind are likely to put a dampener on job growth (see EurActiv 02/04/08).

But as fossil fuel prices continue to climb and concerns about climate change increase, the promise of green jobs is receiving "unprecedented attention", with more and more investors taking an interest, says Worldwatch. source

My comment: No comment, really. It's just interesting to see how industry finally realise the possibilities behind the green technologies.

EU to cut VAT and ease state aid for SMEs

8 July 2008

The Commission yesterday (7 July) proposed an overhaul of the bloc's VAT and state aid policies to allow governments to reduce VAT rates for labour-intensive businesses and provide small business with more aid for risk capital and innovation.

The proposed taxation plans would allow all member states to apply a reduced VAT rate as low as 5% for a greater number of labour-intensive services, such as haircuts, house cleaning and renovation, vehicle repairs and catering in restaurants.

The measures would also cover items such as childrens' nappies and audio books, but do not apply to environmentally-friendly products such as efficient light-bulbs or less CO2-emitting cars. Proposals for a so-called 'green tax', which emerged from a joint British-Franco initiative last summer (EurActiv 23/07/07 ) will nevertheless be included in a second package due in autumn, the Commission said.

Currently, only 18 member states are allowed to apply a rate below the 15% standard for very limited sectors - with the EU's newer members excluded from this possibility. Taxation Commissioner Laszlo Kovacs said he wants to harmonise these rules across the bloc and provide a "level playing field" until the end of 2010 when the current provisions expire.

"There is no reason why restaurant services, for example, should be allowed to benefit from a reduced rate in one half of the European Union but not in the other half," he said. The measures also aim to offer more flexibility for member states "without any real distortion," he added.

Kovacs said he expected the Parliament to approve the proposals next February or March, expressing his hope that they will be adopted by finance ministers next summer. But as changing the tax rules requires unanimity among all 27 member states, there is still a lot of negotiation required, especially to convince the more reticent Germans and Danes.

In parallel to the proposed VAT overhaul, the Commission also pledged to ease state aid requirements, a key part of the Small Business Act to promote SMEs presented on 26 June (EurActiv 26/06/08).

Under the new rules, which go into effect within 20 days of their publication in the EU's official journal (still foreseen for July), small businesses can receive investment aid of up to €7.5 million for a given project without having to notify the Commission. The initiative also aims to facilitate environmental protection projects and promote female entrepreneurship. source

My comment: Again, I can only approve such initiative. It's hight time to see the EU unifying the VAT and actually everything and letting the business flowrish.

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