BRUSSELS — Access to confidential EU documents by the Russia-friendly Alternative for Germany party is raising concerns that sensitive deliberations are being exposed to Moscow, three EU diplomats and four German lawmakers have said. German MPs — including from the far-right AfD — have access to a databank containing thousands of EU files. Those include confidential notes from meetings of ambassadors where the bloc’s diplomats hash out their countries’ positions on geopolitical issues such as plans to fund Ukraine using frozen Russian assets. “The problem is that we have a party, the AfD, of which there are justified suspicions of information leaking to China or Russia,” said Greens lawmaker Anton Hofreiter, chair of the Bundestag’s EU affairs committee. Those suspicions are shaping how sensitive talks are conducted, as diplomats increasingly factor in the risk of exposure. Budapest was accused in media reports over the weekend of passing information about confidential discussions by EU leaders to Moscow, claims Hungary’s foreign minister described as “fake news.” EU countries already meet in smaller groups over concerns that “less-than-loyal” countries leak sensitive information to the government of Russian President Vladimir Putin, a European government official said. “We’re taking all kinds of precautions in Brussels to protect sensitive meetings and information,” said one senior EU diplomat. But the access that AfD MPs have to the confidential materials “leaves a giant, Putin-shaped hole in our security measures.”  “We’re all careful about sharing sensitive information in a format with 27 EU member states,” another diplomat said. “Whether because of [Hungarian leader Viktor] Orbán or because of the German system … we don’t freely share all information as you would among your closest confidants in a setting with 27 member states around the table. That’s the Hungarian factor, and that’s the AfD factor.” An “ambassador cannot guarantee that any sensitive things he says in Coreper [the EU ambassadors’ format] are not going straight to the Russians or China,” the diplomat continued. The diplomats POLITICO spoke to said they weren’t aware of these concerns being raised in any official capacity — “more at the watercooler,” the same diplomat said, adding there’s lots of chatter about concerns on the sidelines of meetings, particularly among countries in Europe’s northwest. The AfD denies it passes information from the system to Russia or China. “We do not comment on baseless allegations,” a spokesperson for the AfD’s parliamentary group said in response to a request for comment.   A LEAKY SYSTEM Unlike in other national parliaments, all MPs and their aides in Germany’s Bundestag have access to EuDoX, a databank containing thousands of EU files ranging from ministerial summit briefing notes to summaries of confidential meetings among ambassadors. The system was set up as a safeguard against unchecked executive power, a particular concern in Germany given its Nazi past. The documents — around 25,000 per year — are put into the system by a special unit within the Bundestag that gets them from the government. The databank contains “restricted” documents, the lowest classification of confidential information.   “In principle, this [access] is absolutely right and necessary in order to fulfill our task … to monitor the federal government, and since a great deal of this takes place at the EU level, it is, as I said, necessary,” the Greens’ Hofreiter said. Experts also noted that the government is well aware that a large number of people have access to the system and that this creates the possibility of leaks.   “Considering that EuDoX is a relatively open platform with 5,000 authorized users, there is nothing particularly sensitive in it. The federal government knows exactly what it is feeding into it,” said law professor Sven Hölscheidt from the Free University Berlin, who has studied the databank. But seven German lawmakers or their aides who use the databank told POLITICO the AfD’s access is a security risk. “The AfD’s apparent closeness to Putin, the contacts between numerous AfD lawmakers and the Russian embassy, their trips to Moscow, their adoption of Russian propaganda narratives, and their deliberate attempts to obtain security-related information through parliamentary inquiries are causing sleepless nights for all those who care deeply about the country’s security,” said Roland Theis, a senior lawmaker for German Chancellor Friedrich Merz’s conservatives in the Bundestag’s EU affairs committee. Centrist lawmakers have said AfD politicians expose information that could be of interest to Russian intelligence. That includes government information on local drone defenses, Western arms transports to Ukraine, and authorities’ knowledge of Russian sabotage and hybrid activities in the Baltic Sea region. Late last year, the party’s lawmakers were widely accused of using their right to submit parliamentary questions to gather information for the Kremlin, claims the party’s leadership rejected. Earlier in 2025, a former aide to MEP Maximilian Krah was convicted of spying for China. “In general, we view the AfD’s handling of sensitive information with great concern,” said Johannes Schraps, a senior SPD lawmaker in the Bundestag’s EU affairs committee, adding that this concern “stems from a broader pattern.” The Bundestag administration took some steps toward securing information last year, Schraps said, including denying some AfD staff members access to buildings and parliamentary IT systems. Chris Lunday and Max Griera contributed reporting.

BUDAPEST — If Brussels claws back €10 billion of EU funds controversially disbursed to Hungary, it will also have to recover as much as €137 billion from Poland too, Budapest’s EU affairs minister told POLITICO. The European Commission made a highly contentious decision in December 2023 to free up €10 billion of EU funds to Hungary that had been frozen because of weaknesses on rule of law deficiencies and backsliding on judicial independence. Members of the European Parliament condemned what looked like a political decision, offering a sweetener to Prime Minister Viktor Orbán just before a key summit where the EU needed his support for Ukraine aid. On Feb. 12, Court of Justice of the European Union Advocate General Tamara Ćapeta recommended annulling the decision, meaning Hungary may have to return the funds if the court follows in its final ruling in the coming months. Orbán has slammed the idea of a repayment as “absurd.” János Bóka, Hungary’s EU affairs minister, told POLITICO that clawing back the €10 billion from the euroskeptic government in Budapest would mean that Brussels should also be recovering cash from Poland, led by pro-EU Prime Minister Donald Tusk. “We believe that the Commission’s decision was lawful … the opinion, I think, it’s legally excessive,” Bóka said. He warned that “if the Advocate General’s opinion is followed then the Commission would be legally required to freeze all the EU money going to Poland as well, which I think in any case the Commission is not willing to do.” The legal opinion on Hungary states the the Commission was wrong in unfreezing the funds “before the required legislative reforms had entered into force or were being applied,” Ćapeta said in February. Bóka said that would seem to describe the situation in Poland too. In February 2024, the EU executive released €137 billion in frozen funds to Tusk’s government in exchange for promised judicial reforms. But these have since been blocked by President Karol Nawrocki as tensions between the two worsen — spelling trouble for Poland’s continued access to EU cash. “It’s very easy to get the EU funds if they want to give it to you, as we could see in the case of Poland, where they could get the funds with a page-and-a-half action plan, which is still not implemented because of legislative difficulty,” Bóka said. Fundamentally, that is why Bóka said he believed “the court will not issue any judgment that would put Poland in a difficult position.” Bóka risks leaving office with Orbán after the April 12 election, with opposition leader Péter Magyar leading in the polls on a platform of unlocking EU funds, tackling corruption, and improving healthcare and education. The Commission is, separately, withholding another €18 billion of Hungarian funds — €7.6 billion in cohesion funds and €10.4 billion from the coronavirus recovery package. “I think Péter Magyar is right when he says that the Commission wants to give this money to them … in exchange, like they did in the case of Poland, they want alignment in key policy areas,” he said, “like support for Ukraine, green-lighting progress in Ukraine’s accession process, decoupling from Russian oil and gas, and implementing the Migration Pact.” “Just like in the case of Poland, they might allow rhetorical deviation from the line, but in key areas, they want alignment and compliance.” Poland’s Tusk has been vocal against EU laws, such as the migration pact and carbon emission reduction laws. Bóka also accused the Commission of deciding “not to engage in meaningful discussions [on EU funds] as the elections drew closer.” He added that if Orbán’s Fidesz were to win the election, “neither us nor the Commission will have any other choice than to sit down and discuss how we can make progress in this process.” Legal experts are cautious about assessing the potential impact of such a ruling, noting that the funds for Poland and Hungary were frozen under different legal frameworks. However, there is broad agreement that the case is likely to set some form of precedent over how the Commission handles disbursements of EU funds to its members. If the legal opinion is followed, “there could be a strong case against disbursing funds against Poland,” said Jacob Öberg, EU law professor at University of Southern Denmark. He said, however, that it is not certain the court will follow Ćapeta’s opinion because the cases assess different national contexts. Paul Dermine, EU law professor at the Université Libre de Bruxelles agreed the court ruling could “at least in theory, have repercussions on what happened in the Polish case,” but said that he thought judges would follow the legal opinion “as the wrongdoings of the Commission in the Hungarian case are quite blatant.”

The U.S. State Department has urged people to “reconsider travel” to Cyprus and authorized the departure of nonemergency government personnel and their families, citing growing security risks as war in the Middle East ripples across the eastern Mediterranean. American and Israeli strikes on Iran have triggered a broader regional conflict as Tehran fires missiles and drones at countries across the Gulf. The State Department warned Americans to reconsider travel because of the “threat of armed conflict” and said “there have been significant disruptions to commercial flights” since hostilities between the United States, Israel and Iran began on Feb. 28. Cyprus is increasingly being pulled into the conflict. A drone strike hit a runway at the British RAF Akrotiri base earlier, Cypriot President Nikos Christodoulides said, prompting Nicosia to cancel an informal meeting of EU affairs ministers. U.K. Prime Minister Keir Starmer said Britain would deploy the destroyer HMS Dragon, while French President Emmanuel Macron announced France would send a frigate and air-defense systems to the island. With Greek F-16s now on the island and European warships moving into the eastern Mediterranean, Cyprus will continue to be the epicenter of EU concern about the war spilling over onto its territory.

LONDON — The British government should stop being “unnecessarily secretive” about its plans for closer relations with the European Union and be much clearer about what it wants, the chair of the U.K. parliament’s Foreign Affairs Committee said. In a report released on Wednesday, the cross-party committee of lawmakers urged ministers to publish a white paper outlining what they want the eventual relationship with the EU — billed as a Brexit “reset” — to look like. The Labour government should, they argued, “clarify” whether it is reconsidering its election manifesto red lines on trying to rejoin the bloc’s single market and customs union — and whether “it can envisage any circumstances in which it would be prudent to do so.” “We do feel that the government is being unnecessarily secretive about it all and isn’t sufficiently clear about what it is that it’s doing and why — which we think is unfortunate,” Emily Thornberry told POLITICO in an interview timed with the report’s launch. Thornberry, the veteran Labour MP for Islington South, whose constituency neighbors that of Prime Minister Keir Starmer, said she understood why the government had been “nervous” when starting talks with Brussels, but said it should now be more ambitious and open. “The truth is that the public have just sort of shrugged their shoulders and said, well, yeah, get on with it,” the committee chair said. “And so I think that it has been incumbent on the government to be more ambitious, to go further, and to be clearer about what it is that we want. Because it’s quite clear what the Europeans want, and that there are times when it is not necessarily as clear about what it is that we want to achieve.” Starmer last year struck a deal in principle with the EU that opened talks on a spread of agreements covering trade in agri-food, electricity interconnections, carbon markets, and visas for young people. Negotiations on the topics are currently ongoing, with most of the files expected to be completed by the summer. But the prime minister and his finance chief Rachel Reeves have since hinted that they want to go further and align the U.K. with the EU single market in other areas — while ruling out joining the EU customs union. The government is yet to say exactly which sectors it would prioritize, however — and Starmer has said he wants the U.K.-EU relationship to be “iterative” with new cooperation added on an annual basis at regular summits. SCRUTINY The new report also calls for the re-establishment of a dedicated European Scrutiny Committee in the House of Commons, to oversee the Brexit reset and Britain’s wider relationship with the continent. A version of the specialized EU affairs committee had existed since 1972, but it was disestablished by Starmer’s new government in 2024 — with responsibility for the topic passing to Thornberry’s Foreign Affairs Committee, as well as a group of unelected lawmakers in the House of Lords. Thornberry told POLITICO: “The truth is that there are only 11 of us … we had, at one stage, ten reports open, which sounds ridiculous, but then you think about the state of the world, and you think, well, yeah, of course. “We haven’t properly done a study into China yet. And how can we not have done an inquiry into China? The reason is because you just can’t do everything, although we are trying. So I think in order to give our developing relationship with the European Union the scrutiny that it definitely deserves, we do think that there needs to be another team working on it.” A U.K. government spokesperson said: “Our priorities are clear: working in the national interest to deliver a strategic shift in our relationship with the EU through improved diplomatic, economic, and security cooperation. “This includes securing a landmark food and drink trade deal and the carbon linking agreement by the next UK-EU Summit that will add £9 billion a year to the UK economy. “We are stripping away the costly bureaucracy and red tape that acts as a drag on growth, backing British jobs and putting more money in people’s pockets across the country.”

BRUSSELS — EU leaders are looking for ways to grant Viktor Orbán a face-saving win that would allow him to climb down from blocking funds for Ukraine while avoiding a full-blown legal fight between Brussels and Budapest, according to three EU diplomats. The win could come in the form of a pledge to resume oil flows via the Druzhba pipeline, which carries oil from Russia to Eastern Europe and was damaged in a Russian attack in Ukraine last month, the diplomats said. “He’ll [Orbán] have his goddamned pipeline,” said one of the diplomats with knowledge of the discussions. “This Druzhba story is not credible in any way, but he has to have a victory in his campaign.” Orbán threw the EU’s entire support package for Ukraine into doubt last weekend when he said he would block a €90 billion loan crucial to Ukraine’s wartime survival — as well as the EU’s 20th package of sanctions against Ukraine — unless the pipeline was repaired and oil once again started flowing to Hungary and Slovakia. The EU is caught between Kyiv’s looming cash crunch and avoiding giving the Hungarian leader a political gift, as they are wary Orbán could weaponize a legal showdown on the campaign trail. Ukraine could run out of money by April — the same month Hungarians head to the polls. Orbán’s move prompted outrage across the EU, with European Council President António Costa warning in a letter earlier this week that the Hungarian leader had violated the EU’s principle of “sincere cooperation.” That hinted at potential legal retribution, which could take the form of a so-called Article 7 procedure to strip Budapest of its EU voting rights. But the four diplomats and a senior EU official, all of whom were granted anonymity to speak freely, dismissed the notion of a legal solution to Hungary’s stonewalling. Instead, they argued that leaders should focus on pressuring and cajoling Budapest to drop its veto. “There isn’t time for the legal option,” said one of the diplomats, referring to the possibility of taking Budapest to court over blocking the funds. “There will have to be a political solution.” Coming up with a “piece of paper” that lays out a face-saving pledge to restore Russian oil flows through the Druzhba pipeline is a more feasible way around the problem, two of the diplomats said. This would echo the workaround EU leaders found in October 2025 to Slovakia’s opposition to a phaseout of Russian gas, they noted. Bratislava lifted its veto after leaders added a pledge to their joint post-summit statement that Russian energy should keep flowing to Slovakia. CHECK THE PIPELINE Orbán triggered one of the EU’s worst internal crises in years last weekend with his opposition to the EU’s support. Budapest’s surprise blockade came days before top EU officials including Costa and von der Leyen were due in Kyiv for the fourth anniversary of Russia’s war on Ukraine — derailing their plans. European Council President António Costa, Ukrainian President Volodymyr Zelenskyy and EU Commission President Ursula von der Leyen in Kyiv on the fourth anniversary of the Russian invasion. Budapest’s surprise blockade came just days before the Feb. 24 anniversary. | Denys Glushko/Apostrophe/Global Images Ukraine via Getty Images EU officials and leaders have reacted with outrage to Orbán’s latest move. In his letter to Orbán, Costa used uncharacteristically sharp language. “When leaders reach a consensus, they are bound by their decision,” he wrote, adding that refusal to follow through with the loan “constitutes a violation of the principle of sincere cooperation.”  That warning hinted to moves that Brussels has so far balked at taking with regard to Hungary — including suspending its voting rights around the EU leaders’ table. However, three diplomats told POLITICO that such legal moves were not among the measures discussed when ambassadors met in Brussels this week.  Instead, some diplomats meeting this week have called for an EU delegation in Ukraine to be able to go and inspect the pipeline in a bid to counter Orbán’s claims that it has not really been damaged. “But the visit depends on the Ukrainian authorities making this possible, as it is a highly protected site,” said an EU official with knowledge of the back and forth, who added there is an ongoing discussion with Ukrainian authorities about such a visit. Another possibility raised by top EU diplomat Kaja Kallas has been going back to the idea of using Russia’s frozen assets in Europe. Sweden’s EU Affairs Minister Jessica Rosencrantz told POLITICO earlier this week that Stockholm was ready to back the option should it be once again put on the table. But other diplomats poured cold water on that idea. “Costa has stressed that political agreements reached at the EUCO must be respected by member states. We stand by the decision that was taken on 18 December last,” a national official said. Jacopo Barigazzi, Camille Gijs and Gerardo Fortuna contributed reporting.

Listen on * Spotify * Apple Music * Amazon Music Die MSC geht jetzt in die Vollen. US-Außenminister Marco Rubio führt die amerikanische Delegation an. Er hat einen anderen Ton als Vizepräsident JD Vance, aber klar auf Trump-Linie ist er. Rixa Fürsen spricht mit POLITICO-Kollege Jonathan Martin darüber, welchen Kurs er verfolgt, wie realistisch ein Friedensplan für die Ukraine bis zum Sommer ist und welches Verhältnis Rubio zu Wolodymyr Selenskyj hat. Im 200-Sekunden-Interview erklärt die Grünen-Fraktionsvize Agnieszka Brugger, warum sie einen beschleunigten EU-Beitritt der Ukraine unterstützt, welche Reformen dort notwendig bleiben und wie Europa auf Spannungen mit den USA reagieren sollte. Danach geht es nach Israel. Bundestagspräsidentin Julia Klöckner hat als erste deutsche Spitzenpolitikerin seit dem 7. Oktober 2023 den Gazastreifen besucht. Rasmus Buchsteiner berichtet, wie es dazu kam, welche Kritik es gibt und was das für künftige Besuche deutscher Politiker bedeutet. POLITICO hat ein neues Podcast-Format: In „Power & Policy” geht es immer donnerstags um die wichtigsten wirtschaftspolitischen Entscheidungen in Deutschland. ⁠Das neue Format gibt es hier zu hören und auf allen Podcast-Plattformen⁠. Das Berlin Playbook als Podcast gibt es jeden Morgen ab 5 Uhr. Gordon Repinski und das POLITICO-Team liefern Politik zum Hören – kompakt, international, hintergründig. Für alle Hauptstadt-Profis: Der Berlin Playbook-Newsletter bietet jeden Morgen die wichtigsten Themen und Einordnungen. ⁠Jetzt kostenlos abonnieren.⁠ Mehr von Host und POLITICO Executive Editor Gordon Repinski: Instagram: ⁠@gordon.repinski⁠ | X: ⁠@GordonRepinski⁠. POLITICO Deutschland – ein Angebot der Axel Springer Deutschland GmbH Axel-Springer-Straße 65, 10888 Berlin Tel: +49 (30) 2591 0 ⁠information@axelspringer.de⁠ Sitz: Amtsgericht Berlin-Charlottenburg, HRB 196159 B USt-IdNr: DE 214 852 390 Geschäftsführer: Carolin Hulshoff Pol, Mathias Sanchez Luna **(Anzeige) Eine Nachricht von Netflix: Netflix – da klingelt was? Das Unternehmen hinter Film- und Serien-Hits wie Im Westen nichts Neues und Adolescence nimmt euch diese Woche im Berlin Playbook Newsletter mit ”behind the Streams”! Erfahrt, wie Netflix als fester Teil des Medienstandorts Deutschland mit Geschichten “made in Germany” weltweit begeistert und gesellschaftliche Debatten anstoßen kann. Eine ganze Woche für Fans von Politik und Popcorn. Aufmerksames Lesen lohnt sich – Gibt auch was zu Gewinnen!**

TERNEUZEN, the Netherlands — Europe’s huge chemicals sector is campaigning to weaken the European Union’s most important climate policy — and Brussels is listening. At a meeting in Antwerp on Wednesday, industry chiefs will attempt to persuade European Commission President Ursula von der Leyen and national leaders to water down the Emissions Trading System (ETS), a cap-and-trade strategy to cut greenhouse gas emissions. They come with a well-rehearsed pitch: Their sector, one of the biggest in Europe, is in crisis.  Factories are being squeezed by a perfect storm of high energy prices, intense competition from China, weak demand from downstream industries — and the world’s most expensive carbon pricing scheme. Virtually no other jurisdiction in the world faces carbon costs as high as the EU, they argue: If current plans to strengthen the scheme go ahead, Europe’s chemicals industry could be dead within a decade. “Our competitors abroad don’t face comparable ETS regimes,” Markus Steilemann, CEO of German chemicals producer Covestro, told POLITICO, calling for “an urgent reform of the EU ETS to align climate ambition with competitive reality.” For environmental advocates, however, touching the ETS is akin to sacrilege. The 20-year-old scheme — which puts strict limits on the amount of planet-warming gases industry can emit, and covers nearly half of the bloc’s emission — is the bedrock of EU climate policy, forcing industry to find cleaner energy sources. Industries currently pay around €80 for every ton of carbon they emit, and by 2039 will no longer be allowed to emit any carbon at all.  But the ETS legislation is up for review this year, and momentum is growing for it to be significantly weakened. Several member countries and political groups — including von der Leyen’s own center-right European People’s Party — have signaled they want to see reforms. “Becoming greener cannot be our goal; it means becoming poorer,” Austrian Chancellor Christian Stocker said on Tuesday, adding he would push for exemptions to the ETS to “ensure that domestic industry remains competitive and that our companies do not relocate.” If the ETS is substantially weakened, it would be the biggest green policy yet to fall victim to the green backlash that has defined the first 14 months of von der Leyen’s second term. ALARMED? YOU SHOULD BE EU chemicals industry body CEFIC — one of the richest lobby groups in Brussels, according to the Corporate Europe Observatory — has long warned that doomsday is near for Europe’s chemicals sector. It has released report after report outlining the loss of market share to China, the closure of plants and plummeting investment. It has even sponsored an advertising campaign in Brussels metro stations that booms out in bold letters: “Alarmed? You should be. Europe is losing production sites, quality jobs and independence.” It ends with a plea to “save our industry.” Industries currently pay around €80 for every ton of carbon they emit. | Nicolas Tucat/AFP via Getty Images That warning is echoed by industry chiefs. Markus Kamieth, CEO of BASF, Europe’s largest chemicals company, told reporters late last year that Europe “has the theoretical potential” to compete with the U.S. and China. “But [in] real life, I think we shoot ourselves in the foot way too often.” The chemicals lobby has come under fire for its outsized influence in Brussels. “CEFIC already maintains almost unparalleled access to EU decision-makers, registering the third-highest number of lobby meetings with the European Commission of all lobby organisations in the EU,” said Raphaël Kergueno, a senior policy officer at NGO Transparency International. Still, the sector has plenty of facts to back up its apocalyptic warnings. Since 2023 more than 20 major chemical sites have shut across Europe, costing some 30,000 jobs, according to trade union IndustriALL, which warns that a further 200,000 jobs in the sector could be lost over the next five years.  Chemical investments in Europe collapsed by more than 80 percent in 2025 from the year before, according to a recent report from CEFIC, while capacity closures continue to outpace new projects — turning Europe into a place to shut plants, not build them. Analysts say China’s rapid expansion into chemicals production is adding pressure. “European producers are especially hit, largely due to high energy costs and a reliance on uncompetitive liquid feedstocks, with the least competitive assets continuing to post negative margins,” said Andrew Neale, global head of chemicals at S&P Global Energy. As a result, he said, “longer-term investment in decarbonization and circularity have been deprioritized.” Dow’s recent investment decisions illustrate this well. The American chemical giant plans to close three plants in Europe and cut 800 jobs, citing the need to exit “higher-cost, energy-intensive assets” as the continent’s competitiveness erodes.  “It’s very clear that Europe currently suffers from a lack of competitiveness,” Julia Schlenz, president of Dow Europe, told POLITICO, warning that carbon costs and regulation are moving faster than the infrastructure needed to decarbonize. As the bad news keeps coming, the sector has increasingly called for the ETS to be weakened. In July last year CEFIC published its demands, including the issuance of free carbon allowances, a longer timeline for phasing out emissions, and the inclusion of carbon removal credits. BASF’s Kamieth, who is also president of CEFIC, repeated those calls this week in an interview with the Financial Times, calling the ETS in its current form “obsolete.” Member countries and the European Parliament have already agreed to consider these proposed changes in the upcoming review of the ETS. Germany’s environment minister, Carsten Schneider, said at an energy summit in January that it was “not the case that what has been set until 2039 can never be revised,” adding that it is possible “to allow further free allocations and to permit certificates beyond 2039 as well.” Some business groups and member countries have gone further, with Italy’s primary industry body Confindustria as well as the Czech and Slovak governments calling for the ETS to be temporarily suspended altogether. “In a deeply changed geopolitical context, the ETS, in its current configuration, has revealed all of its limitations,” Confindustria President Emanuele Orsini said in a statement Tuesday. “The ETS is an unbalanced system that fails to deliver the decarbonisation benefits it claims to pursue, while in practice undermining the competitiveness of European industry.” The European Commission sees the electrification of industry as not just a climate imperative but an energy security one. | John Thys/AFP via Getty Images Defenders of the ETS insist this is the wrong approach. They argue that the emphasis should be on more rapid decarbonization, which for the chemicals sector hinges on electrifying its industrial processes. But that, too, costs money. ELECTRIFY EVERYTHING The chimneys of Terneuzen chemical plant have been billowing out carbon-laden smoke for more than 60 years, as the Dutch factory sucks in an endless stream of natural gas and pumps out plastic products. But in June last year the industrial buzz subsided as Dow, the plant’s operator, shut down one of its three main “steam-cracker” units because it was too expensive to run — in what has become a common story across Europe’s chemicals sector. Steam-cracking is the crux of the chemicals industry’s reliance on energy. It turns oil or gas into the basic building blocks of plastics and chemicals by heating them to almost 1,000 degrees Celsius. The process uses vast amounts of energy because the furnaces are kept at these temperatures 24 hours a day, seven days a week, making it one of the most energy-intensive processes in Europe.  Electrifying steam-crackers would require huge amounts of clean electricity — which the industry insists is simply not yet available. “One thing we know is if we are going to switch to electric cracking, eventually, when the technology is there, is that we need significant amounts of renewable electricity delivered here,” says Dennis Kredler, Dow’s director for EU affairs in Brussels. Terneuzen is not an outlier. Across Europe’s chemical clusters, decarbonization targets are racing ahead of the power grids meant to support them. “If you can’t get renewable electricity off the grid, we said, okay, we need to do it ourselves and find these leading providers to secure wind and solar energy for our sites in Germany, Italy, the Netherlands, and so on,” LyondellBasell CEO Peter Vanacker told POLITICO. “But we need support from Brussels.” The European Commission sees the electrification of industry as not just a climate imperative but an energy security one. In an interview with POLITICO in December, EU energy chief Dan Jorgensen said the shift would be good for the bloc. “There is not one European country that will not benefit from Europe being more independent on the energy side,” he said. German Greens MEP Jutta Paulus agrees, arguing that Europe’s competitiveness will ultimately depend less on looser rules than on faster access to renewable power and new markets for low-carbon chemicals. “Every chemical industry on this planet will have to transition away from fossil fuels — that’s very clear,” she said. Some right-of-center MEPs also broadly agree. Peter Liese, from the European People’s Party, said the chemicals industry is the reason why the ETS debate is so difficult. “Chemical companies talk about their costs due to the ETS. However, they do not talk about how they intend to decarbonize. The purpose of the ETS is not to torment companies, but to encourage them to decarbonize.” Peter Liese, from the European People’s Party, said the chemicals industry is the reason why the ETS debate is so difficult. | Ian Forsyth/Getty Images However, others in the EPP take a less sympathetic approach, and the group’s overall position has yet to be clarified. Rob Ingram, head of the plastics division at British chemicals giant INEOS, insists the sector is dedicated to decarbonizing — just not as fast as current laws demand. “I’m convinced that all the peers in the industry absolutely know that we need to decarbonize and develop a second economy and want to do that,” Ingram told POLITICO. “The question is, how do we get there?”  He argues that if the EU over-regulates high-emitting sectors, those sectors will just go offshore to countries with weaker or no carbon controls.  “De-industrialization of Europe is actually worse for the planet,” he says. LEAKING CARBON It was this risk — known as “carbon leakage” — that prompted the EU initially to grant free ETS allowances to industries most at risk of moving offshore. But Brussels has now attempted to address that by charging a carbon tax on imports, and is phasing out free allowances.  Chemicals, though, don’t fall under the new Carbon Border Adjustment Mechanism, giving extra force to their call for continued free allowances. And they have evidence that the fear of leakage is being realized: While Europe debates how to keep its chemical plants alive, BASF is pressing ahead with its largest investment ever, a €10 billion fully integrated chemicals mega-plant — in China.  Tatiana Santos, head of chemicals policy at the European Environmental Bureau, says the EU’s response should not be to deregulate, arguing the EU’s selling point is precisely its higher environmental standards. “At the end of the day, we cannot compete with China or the U.S. in lower standards.” But that argument doesn’t persuade Peter Huntsman, CEO of chemicals producer Huntsman. “When is it time to step back and ask, are we accomplishing anything?” he asked, dismissing the argument that if you give the ETS time to work its magic, it will eventually force industry to find affordable, competitive, low-carbon means of production. “The chemical industry does not have 10 years left,” he said. Zia Weise and Francesca Micheletti contributed to this report.

Listen on * Spotify * Apple Music * Amazon Music Ist das transatlantische Verhältnis noch tragfähig – oder bereits irreparabel beschädigt? Kurz vor der Münchner Sicherheitskonferenz blickt Gordon Repinski auf die wachsenden Spannungen zwischen Europa und den USA. Der Graben ist tiefer geworden: Donald Trump ist zurück im Weißen Haus, die außenpolitischen Risiken nehmen zu und die Hoffnung auf verlässliche amerikanische Führung schwindet. ⁠ Der Kickoff zur Münchner Sicherheitskonferenz findet um 12 Uhr in Berlin statt und wird hier live übertragen⁠. Im 200-Sekunden-Interview spricht Gordon mit Metin Hakverdi, SPD-Politiker und Koordinator der Bundesregierung für die transatlantische Zusammenarbeit. Es geht um den Umgang mit einem schwieriger werdenden Partner USA, um die Rolle von Marco Rubio auf der Sicherheitskonferenz und um europäische Geschlossenheit. Die AfD startet angeschlagen ins Wahljahr. In mehreren Landesverbänden häufen sich Affären: Vetternwirtschaft, interne Machtzirkel und offene Flügelkämpfe. Besonders in Sachsen-Anhalt könnten Hoffnungen auf einen großen Wahlerfolg ins Wanken geraten. POLITICO-Reporterin Pauline von Pezold analysiert, wie sehr diese Skandale die Partei belasten. Das Berlin Playbook als Podcast gibt es jeden Morgen ab 5 Uhr. Gordon Repinski und das POLITICO-Team liefern Politik zum Hören – kompakt, international, hintergründig. Für alle Hauptstadt-Profis: Der Berlin Playbook-Newsletter bietet jeden Morgen die wichtigsten Themen und Einordnungen. ⁠Jetzt kostenlos abonnieren.⁠ Mehr von Host und POLITICO Executive Editor Gordon Repinski: Instagram: ⁠@gordon.repinski⁠ | X: ⁠@GordonRepinski⁠. **(Anzeige) Eine Nachricht von Netflix: Netflix – da klingelt was? Das Unternehmen hinter Film- und Serien-Hits wie Im Westen nichts Neues und Adolescence nimmt euch diese Woche im Berlin Playbook Newsletter mit ”behind the Streams”! Erfahrt, wie Netflix als fester Teil des Medienstandorts Deutschland mit Geschichten “made in Germany” weltweit begeistert und gesellschaftliche Debatten anstoßen kann. Eine ganze Woche für Fans von Politik und Popcorn. Aufmerksames Lesen lohnt sich – Gibt auch was zu Gewinnen!** POLITICO Deutschland – ein Angebot der Axel Springer Deutschland GmbH Axel-Springer-Straße 65, 10888 Berlin Tel: +49 (30) 2591 0 ⁠information@axelspringer.de⁠ Sitz: Amtsgericht Berlin-Charlottenburg, HRB 196159 B USt-IdNr: DE 214 852 390 Geschäftsführer: Carolin Hulshoff Pol, Mathias Sanchez Luna

European leaders descend on Brussels this evening for a crunch summit with the transatlantic relationship top of their agenda. U.S. President Donald Trump backed down Wednesday from his most belligerent threats about seizing Greenland from Denmark, but that hasn’t assuaged European concerns about America’s posture toward Europe. It’s another busy day in Davos too, with German Chancellor Friedrich Merz speaking and Trump potentially set to meet Ukrainian President Volodymyr Zelenskyy. And if that wasn’t enough, Trump’s everything envoy Steve Witkoff is headed to the Kremlin for talks with Russian President Vladimir Putin. Whew. Strap in.

Listen on * Spotify * Apple Music * Amazon Music Davos rückt in den Mittelpunkt der Weltpolitik. Zum Start des World Economic Forum stellt sich die zentrale Frage, wie geschlossen EU, NATO und G7 auf Donald Trump reagieren und welche geopolitischen Weichen in den kommenden Tagen in der Schweiz gestellt werden. Gordon Repinski über ein Forum, das von Trump, Grönland, Zoll-Drohungen und der Zukunft des transatlantischen Verhältnis geprägt wird. In Deutschland rückt derweil auch wegen Trump die Energiepolitik in den Fokus. Die deutschen Gasspeicher sind so leer wie selten zu Jahresbeginn. Was politisch gewollt war, könnte sich mittelfristig als Risiko erweisen. Im Gespräch mit Josh Groeneveld vom POLITICO Pro-Newsletter “Energie & Klima am Morgen” geht es um die Ursachen der niedrigen Füllstände, um Marktmechanismen, LNG-Abhängigkeiten von den USA und wie verwundbar Europa in einer angespannten geopolitischen Lage tatsächlich ist. Im 200-Sekunden-Interview spricht der CDU-Spitzenkandidat für die Landtagswahl in Rheinland-Pfalz, Gordon Schnieder, über Wirtschaftspolitik, Energiepreise und die Erwartungen an Friedrich Merz. Es geht um Vertrauen, Investitionen und Steuerpolitik. Das Berlin Playbook als Podcast gibt es jeden Morgen ab 5 Uhr. Gordon Repinski und das POLITICO-Team liefern Politik zum Hören – kompakt, international, hintergründig. Für alle Hauptstadt-Profis: Der Berlin Playbook-Newsletter bietet jeden Morgen die wichtigsten Themen und Einordnungen. Jetzt kostenlos abonnieren. Mehr von Host und POLITICO Executive Editor Gordon Repinski: Instagram: @gordon.repinski | X: @GordonRepinski. POLITICO Deutschland – ein Angebot der Axel Springer Deutschland GmbH Axel-Springer-Straße 65, 10888 Berlin Tel: +49 (30) 2591 0 information@axelspringer.de Sitz: Amtsgericht Berlin-Charlottenburg, HRB 196159 B USt-IdNr: DE 214 852 390 Geschäftsführer: Carolin Hulshoff Pol, Mathias Sanchez Luna