EU carbon market reform: A major step forward for Europe's 2030 climate goal

An agreement was reached on Sunday between the Commission, the European Parliament and member states. The Council and MEPs still need to vote on it.

By Audrey Garric

Published on December 19, 2022

The European Parliament in Strasbourg, December 12, 2022. JEAN-FRANCOIS BADIAS / AP

It's the centerpiece of its climate plan. After lengthy negotiations, the European Union (EU) reached an agreement on Sunday, December 18, on a far-reaching reform of its carbon market. The agreement marks an important step in advancing the climate ambitions of the EU-27. It is part of the extensive legislative package presented by the Commission in July 2021 to reduce European emissions by at least 55% by 2030 compared to 1990 and to achieve carbon neutrality by 2050.

The agreement reached on Sunday in trialogue between the Commission, the European Parliament and member states, must still be confirmed by a vote by the Council in December and MEPs in January or February 2023.

Since 2005, the most polluting industries (power generation, steel, cement, and so on), which account for 40% of the EU's CO2 emissions, have been required to buy "polluter permits" on the emissions trading scheme (ETS). The idea is to encourage decarbonization and create revenue for the energy transition. But this "polluter pays" principle has not made heavy industry reduce its carbon emissions. It benefits from millions of free allowances, created to avoid relocation, and the price per ton of CO2 has long remained too low to be an incentive.

To put pressure on the market, the number of polluter rights will be gradually reduced. As a result, the sectors covered by the carbon market will have to reduce their emissions by 62% by 2030 compared to 2005, ahead of a previous target reduction of 43%. The price of carbon – currently around €85 per ton of CO2 – "will be around €100 for these industries. No other continent in the world has such an ambitious carbon price," said Pascal Canfin, Renew MEP and chair of the European Parliament's environment committee. He described the new European agreement as "major" for the climate. NGOs from Climate Action Network Europe noted that a 70% reduction in these emissions would have been necessary for the EU to do its "fair share" in limiting global warming to 1.5°C.

The carbon market will be extended for the first time to the maritime sector and to intra-European air travel. Waste incineration sites will also be subject to it from 2028, or 2030 at the latest, according to a study by the Commission.

Social Climate Fund

Revenues from this carbon market will have to be entirely devoted to "climate-related activities." While the majority of EU countries have not done so until now, "this is a step forward. "Unfortunately, the content of this spending remains at the discretion of member states. This means that they could continue, as before, to use this money to subsidize coal and fossil gas," warned Romain Laugier, climate and energy officer at WWF Europe, lead author of a study on the subject.

Sunday's agreement established a second carbon market (ETS 2) for road transport fuels and building heating, a reform pushed by the Commission and Germany in particular, but which is particularly controversial. Suppliers of fuel, gas and heating oil will have to buy allowances to cover their emissions, an additional cost that they could pass on to households. To limit the social impact in the context of soaring energy prices and the war in Ukraine, and four years after the Yellow Vests movement, MEPs argued for limiting this measure initially to office buildings and heavy vehicles.

Ultimately, households will be affected from 2027, but the price of carbon will not exceed €45 until 2030. "For France, it will be a matter of replacing the current carbon price of €44 with a European mechanism of €45," said Mr. Canfin. And if the current surge in energy prices continues, implementation would be postponed to 2028. All revenues from this new carbon market will have to be "devoted to an equitable transition," Mr. Canfin continued.

These revenues will be used to finance a social climate fund, the counterpart to the new carbon market, which will start operating in 2026. Forecast to raise €86.7 billion by 2032, it will finance both temporary measures to support vulnerable households and micro-enterprises, and long-term investments in building renovation and low-carbon transport.

'Billions of euros in gifts'

Another particularly thorny issue is that free allowances, which industrial companies benefited from under the first carbon market, will be gradually phased out between 2026 and 2034. By 2030, 48.5% of them will have disappeared. The pace of reduction adopted is less ambitious than that proposed by the Parliament, with a start that is also much slower than what the Commission proposed. "This is a step in the right direction. We will finally have a real carbon price for industry," enthused Thomas Pellerin-Carlin, director of the EU program at the Institute for Climate Economics.

Conversely, some associations are very disappointed. "The big polluters will continue to receive billions of euros in gifts over the next decade to the detriment of climate action," lamented Camille Maury, in charge of decarbonization at the WWF's European office. According to the NGO's calculations, industrialists, who have already received the equivalent of €98.5 billion in free allowances between 2013 and 2021, could still receive more than €200 billion between 2026 and 2032 (at the current price of a ton of carbon), which is two and a half times more than the social fund for the climate.

The border carbon tax, which the EU agreed to on Tuesday, will be ramped up at the same rate as free allowances are phased out. This mechanism – which will allow goods imported from third countries without comparable carbon pricing to be taxed in the most polluting sectors – will start in 2026 and be fully implemented in 2034. This was the condition to avoid double protection for European manufacturers.

The European Parliament also wanted to ensure that manufacturers who decarbonize their production are not at a disadvantage when exporting to third countries. By 2025, the Commission will assess the risk of "carbon leakage" and, if necessary, present legislative proposals to address it. Finally, the European Innovation Fund, which helps companies invest in the energy transition, will be increased to nearly €50 billion. "We now need to build a European investment plan over time, for example within 15 years, to enable families and businesses to make a success of their green transition," Mr. Pellerin-Carlin added.

Audrey Garric

Qatar Got the World Cup It Wanted

In the end, after a tournament shadowed by controversy since the host rights were awarded, Qatar had the turn in the global spotlight it sought.

By Tariq Panja

Tariq Panja has reported on Qatar’s quest to host and stage the World Cup since the start of its bid for the tournament in 2009.

Published Dec. 18, 2022Updated Dec. 19, 2022, 3:33 a.m. ET

DOHA, Qatar — In the end, Qatar got what it wanted.

The tiny desert state, a thumb-shaped peninsula, craved nothing more than to be better known, to be a player on the world stage, when in 2009 it launched what seemed like an improbable bid to stage the men’s soccer World Cup, the most popular sporting event on earth. Hosting the tournament has cost more than anyone could have imagined — in treasure, in time, in lives.

But on Sunday night, as the fireworks filled the sky above Lusail, as the Argentina fans sang and their star, Lionel Messi, beamed while clasping a trophy he had waited a lifetime to touch, everyone knew Qatar.

The spectacular denouement — a dream final pitting Argentina against France; a first World Cup title for Messi, the world’s best player; a pulsating match settled after six goals and a penalty shootout — made sure of that. And as if to make sure, to put the nation’s final imprint on the first World Cup in the Middle East, Qatar’s emir, Sheikh Tamim bin Hamad al-Thani, stopped a beaming Messi as he made his way to collect the biggest trophy in the sport and pulled him back. There was one more thing that needed to be done.

He pulled out a golden fringed bisht, the black cloak worn in the Gulf for special occasions, and wrapped it around Messi’s shoulders before handing over the 18-karat gold trophy.

The celebration ended a tumultuous decade for a tournament awarded in a bribery scandal; stained by claims of human rights abuses and the deaths and injuries suffered by the migrant workers hired to build Qatar’s $200 billion World Cup; and shadowed by controversial decisions on everything from alcohol to armbands.

Yet for one month Qatar has been the center of the world, pulling off a feat none of its neighbors in the Arab world had managed to achieve, one that at times had seemed unthinkable in the years since Sepp Blatter, the former FIFA president, made the stunning announcement inside a Zurich conference hall on Dec. 2, 2010, that Qatar would host the 2022 World Cup.

It is improbable the sport will see such an unlikely host again soon. Qatar was perhaps among the most ill-suited hosts for a tournament of the scale of the World Cup, a country so lacking in stadiums and infrastructure and history that its bid was labeled “high risk” by FIFA’s own evaluators. But it took advantage of the one commodity it had in plentiful supply: money.

Backed by seemingly bottomless financial resources to fuel its ambitions, Qatar embarked on a project that required nothing less than the building, or rebuilding, of its entire country in service to a monthlong soccer tournament. Those billions were spent within its borders — seven new stadiums were constructed and other major infrastructure projects were completed at enormous financial and human cost. But when that was not enough, it spent lavishly outside its boundaries, too, acquiring sports teams and sports rights worth billions of dollars, and hiring sports stars and celebrities to support its cause.

And all that was on display Sunday. By the time the final game was played in the $1 billion Lusail Stadium, Qatar could not lose. The game was being shown across the Middle East on beIN Sports, a sports broadcasting behemoth set up in the aftermath of Qatar’s winning the World Cup hosting rights. It also could lay claim to the two best players on the field, Argentina’s Messi and the French star Kylian Mbappé, both of whom are under contract to the Qatar-owned French club Paris St.-Germain.

Mbappé, who had scored the first hat trick in a final in over a half-century, finished the game sitting on the grass, consoled by President Emmanuel Macron of France, an invited guest of the emir, as Argentina’s players danced in celebration all around him.

The competition delivered compelling — and sometimes troubling — story lines from the outset, with the intensely political opening at Al Bayt Stadium, an enormous venue designed to look like a Bedouin tent. That night, Qatar’s emir had sat side by side with Crown Prince Mohammed bin Salman, Saudi Arabia’s de facto ruler, less than three years after the latter had led a punishing blockade of Qatar.

For a month, deals were discussed and alliances were made. Qatar’s team was not a factor in its World Cup debut; it lost all three of its games, exiting the competition with the worst performance of any host in the competition’s history.

There would also be other challenges, some of Qatar’s own making, like a sudden prohibition on the sale of alcohol within the stadium perimeters only two days before that first game — a last-minute decision that left Budweiser, a longtime sponsor of soccer’s world governing body, FIFA, to fume on the sideline.

On the tournament’s second day, FIFA crushed a campaign by a group of European teams to wear an armband to promote inclusivity, part of efforts promised to campaign groups and critics in their home countries, and then Qatar quashed efforts by Iranian fans to highlight ongoing protests in their country.

But on the field, the competition delivered. There were great goals and great games, stunning upsets and an abundance of surprising score lines that created new heroes, most notably in the Arab world.

First came Saudi Arabia, which can now lay claim to having beaten the World Cup champion in the group stage. Morocco, which had only once reached the knockout stage, became the first African team to advance to the semifinals, pulling off a succession of barely believable victories over European soccer heavyweights: Belgium, Spain and then Cristiano Ronaldo’s Portugal.

Those results sparked celebration across the Arab world and in a handful of major European capitals, while also providing a platform for fans in Qatar to promote the Palestinian cause, the one intrusion of politics that Qatari officials did nothing to discourage.

In the stands, the backdrop was a curious one, with several games appearing short of supporters and then mysteriously filling up in the minutes after kickoff, when gates were opened to grant spectators — many of them the South Asian migrants — entry free of charge. The true number of paying spectators is unlikely to ever be known, their empty seats filled by thousands of the same laborers and migrants who had built the stadium and the country, and who kept it running during the World Cup.

That group, largely drawn from countries like India, Bangladesh and Nepal, was the most visible face of Qatar to the estimated one million visitors who traveled to the tournament. They worked as volunteers at stadiums, served the food and manned the metro stations, buffed the marble floors and shined the hand rails and door knobs at the scores of newly built hotels and apartment complexes.

By the end of the tournament, most of those fans had gone, leaving the Argentines — an estimated temporary population of 40,000 — to provide the sonic backdrop to the final game. Dressed in sky blue and white stripes, they converged on the Lusail Stadium, creating the type of authentic World Cup atmosphere — bouncing and singing throughout 120 minutes of play, and then long afterward — that no amount of Qatari wealth could buy.

They had gotten exactly what they wanted from the World Cup. And so did Qatar.

Tariq Panja covers some of the darker corners of the global sports industry. He is also a co-author of “Football’s Secret Trade,” an exposé on soccer’s multibillion-dollar player trading industry. @tariqpanja

Our weapons are computers’: Ukrainian coders aim to gain battlefield edge

Delta software developed to help collect and disseminate information about enemy’s movements

Julian Borger in Zaporizhzhia

Sun 18 Dec 2022 14.11 GMT

In a nondescript office building on the outskirts of Zaporizhzhia, Ukrainian soldiers have been honing what they believed will be a decisive weapon in their effort to repel the Russian invasion.

Inside, the weapon glows from a dozen computer screens – a constantly updated portrayal of the evolving battlefield to the south. With one click on a menu, the map is populated with hordes of orange diamonds, showing Russian deployments. They reveal where tanks and artillery have been hidden, and intimate details of the units and the soldiers in them, gleaned from social media. Choosing another option from the menu lights up red arrows across the southern Zaporizhzhia region, showing the progression of Russian columns. Zooming in shows satellite imagery of the terrain in sharp detail.

It is called Delta, a software package developed by Ukrainian programmers to give their armed forces an advantage in a contest of which side can see the battlefield more clearly and therefore predict the enemy forces’ moves and strike them faster and more accurately.

While many scenes from the war in Ukraine look like a throwback to the first world war, with muddy trench networks and blasted landscapes, the conflict is also a testing ground for the future of warfare, where information and its dissemination in instantly usable form to individual soldiers will be critical to victory or defeat.

A screen showing battlefield positions, past and present. Photograph: Alessio Mamo/The Guardian

Vitalii, a computer expert at the defence’s ministry’s centre for innovation and development of defence technologies, said Ukraine had a natural advantage as it had a younger, less hierarchical political culture.

“The biggest differences between the Russian army and Ukrainian army are the horizontal links between the units,” Vitalii said. (Like other soldiers at the innovation centre, he provided only his first name.) “We are winning mainly because we Ukrainians are naturally horizontal communicators.”

The suite of offices in Zaporizhzhia house one of six “situational awareness centres” that Ukraine’s armed forces have set up on different fronts. A seventh is being established in the Donbas.

The Zaporizhzhia site, contributed by a local businessman, is the centre’s sixth location – it has had to move repeatedly for security and logistical reasons. It is due to be transferred to a more permanent, custom-fitted home underground this month.

Delta is run by the innovation centre, whose staff have been drawn to a large degree from a volunteer organisation of drone operators and programmers called Aerorozvidka (aerial reconnaissance).

Positions of Russian tanks spotted by drone. Photograph: Alessio Mamo/The Guardian

Tatiana, another official at the innovation centre, said the nature of its origins, as a private-public partnership, also gave it an edge.

“These were not bureaucrats from the defence ministry. They were from the corporate sector who were mobilised to serve in the army,” she said. “They started to make Delta with their own minds and hands, because they had this culture of agile development. The creative process has a short circle. You develop it, you test it, you launch it.”

Delta was first presented to Nato member states at the end of October, having been developed by Aerorozvidka coders in 2015 and been deployed on a growing scale over the past four years, during which time much of Aerorozvidka was absorbed into the innovation centre.

Its informal origins were evident inside the Zaporizhzhia hub, which had more the feel of a graduate computer science faculty than a military unit. The only person in uniform was a military intelligence officer, who went by the pseudonym Sergeant Shlomo.

The office at one end of the main corridor had been turned into a drone workshop where two engineers were working to perfect a bomb release mechanism activated by the light on commercially bought quadcopters. The release mechanism and the tailfin for the bombs were made on 3D printers. Boxes of armoured-piercing bomblets were stacked up by the door.

A drone with a bomblet to be used against Russian positions. Photograph: Alessio Mamo/The Guardian

At the other end of the corridor was the open source intelligence (Osint) department, where half a dozen young men were scrolling through masses of social media posts by Russian recruits, extracting date and location information from them, and feeding the results into Delta.

One screen showed a couple of soldiers from Dagestan striking martial poses for the camera. The picture and intelligence gleaned from it about their unit, its capabilities and orders would be accessible within minutes through one click on the Delta map near Melitopol, a Russian-held town 80 miles (130km) to the south, which is becoming one of the new focal points on the southern front.

The whiteboard in the Osint office recorded the fact that it was day 280 of the war, by which date it was estimated that 88,880 Russians had died. “Fuck them up” was the day’s message scrawled in marker alongside this tally.

The other main channels of information flowing into Delta come from satellite imagery supplied by Nato partners, which provided the foundation for the battlefield map; drone footage, which is uploaded daily; and photos and information supplied by a network of informers behind Russian lines, which are run in part by Shlomo.

All that information is embedded in layers on the Delta battlefield map, which is kept live and accessible to its military users through Starlink satellite communications. On the screen, Melitopol had the biggest concentration of orange diamonds and red arrows, showing Russian columns on the move.

A night-vision drone photo of a Russian tank. Photograph: Alessio Mamo/The Guardian

“We now understand their routes and how they have changed,” Shlomo said. “They are using Melitopol as a big logistics centre, and we are trying to understand the real purpose of the movements.”

They were looking in particular for sightings of tanks and mobile bridges, which could herald an intention to mount an imminent attack and warrant a particular red flag in the Delta chatrooms. Over recent days, Ukraine forces had targeted an army barracks and a bridge there.

Every day, each situational awareness centre puts together a digest of the latest developments in its sector, and there is a live briefing at 6pm summarising and discussing the conclusions.

“A small Soviet army cannot win against a large Soviet army. We have to evolve. We have to be smart,” Shlomo said. “The main task of the war for Ukraine now is to transform from a Soviet army to a Nato one. You have to change the army to a horizontal one.”

That change has been a struggle. The Ukrainian army grew out of its Soviet predecessors, and many of its older officers have been shaped by that experience. In 2020, the generals even shut down the Aerorozvidka unit; it was only restored by the defence ministry as the innovation centre months before the Russian all-out invasion.

The Donbas front is the last to establish its own situational awareness centre, in part because of resistance within the army, and as a result it has suffered most from lack of coordination and friendly fire, officials from the innovation centre argued. “It’s been total chaos,” one official said.

“I don’t think they’re quite there yet,” said Nick Reynolds, a land warfare analyst at the Royal United Services Institute in London. “There are some centres of excellence within the Ukrainian armed forces, but it’s not blanket. The military culture imposed under the Soviet Union casts a very long shadow.”

However, Reynolds said the Ukrainians were far ahead of Russian forces in making their forces more connected and agile. “Ultimately, the Russian side has not fundamentally changed their structures or practices. They have some level of technological enablement, but on the human level they are still very Soviet.”

A screen showing a drone photo of a Russian tank. Photograph: Alessio Mamo/The Guardian

A Nato report on 30 November about Ukraine’s Delta programme, seen by the Guardian, noted that the software had yet to be formally adopted by Ukraine’s armed forces, and therefore was not universally used, meaning that intelligence shared by Nato allies was not making its way down to all the regional commands.

The infowarriors at the innovations centre say they are breaking Ukrainian army official doctrine by establishing horizontal links between military units with the use of Delta. “We can’t rewrite doctrine and fight at the same time,” Tatiana said. “We will write the doctrine after victory.”

The next step in spreading Delta, she said, was the establishment of Istar (intelligence, surveillance, target acquisition, and reconnaissance) officers at the headquarters and brigade level, and then the creation of a dedicated Istar battalion.

Meanwhile, the innovation centre is asking western weapons donors to make available the software protocols that would allow new weapons systems to be seamlessly wired into Delta.

Shlomo said the integration of battlefield information across the army through Delta was a race Ukraine had to win. “This is the big story we are writing that will change the war,” he said. “Our weapons are computers. Our bullets are information.”

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