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EU/OECD: The OECD released the study Taxing Energy Use 2018 and called for an increase on coal taxes, pointing that they are few, considering that coal taxation exceed €5 per tCO2 in only five countries even if fossil fuel accounts for about 50% of carbon emissions in the total of 42 countries that were studied. In the same time, the price of an EU permit to emit a ton of CO2 briefly hit €10 on Wednesday, last week, for the first time since 2011. This is also triggered by to the fact that an update of the EU’s Emissions Trading Scheme (ETS) was approved last week by the European Parliament. However, the coal taxation is not of EU competence and the Commission can’t take a decision one way or another.
EU/G20/Germany: Germany’s new government coalition deal regarding the energy sector has been portrayed by the media as ambitious. However, the text notes an ample timeline for when Germany is supposed to be carbon neutral: “no later than by the second half of the century”. But, according to the deal, it is also planned that the next year, the parliament is supposed to vote a new law that covers several sectoral objectives to be reached by 2030. Germany pleads for the establishment of an international pricing system for CO2 concerning the heavy industries of the G20 countries, joining similar calls from nine of the G20 countries (France, Italy, the European Union, Canada, the United States, Mexico, China, South Korea, Japan). In the same time, research programs in the energy sector will receive more funding from the federal budget, considering one of the goals of the government is to maintain the leading position of the German industry.
EU/Baltics: As discussions and negotiation over the EU budget take shape, the Baltic states sent a letter last Thursday to the president of the European Council, urging the leaders of the EU to envisage funds in the new budget for the synchronization of the Baltic electricity networks with Western Europe. Considering that this is a strategic goal for Lithuania, Latvia and Estonia, they want that the next multiannual financial framework provide clarity so that work on developing transport, energy and digital infrastructure that allows better interconnection within the EU be continued past 2020, when the current budgetary framework expires. The draft of the future multiannual budget should be presented in May.
EU/Iran/Turkmenistan/Azerbaijan: On his visit to Azerbaijan, the European vice-president in charge of the Energy Union Maroš Šefčovič announced that the EU would be ready to negotiate with Iran the terms for its joining the Southern Gas Corridor (SGC). Taking into account that the SGC is a strategic initiative looking to bring Caspian, Central Asian, Middle Eastern and Black Sea resources to the European markets, Sefcovic also announced that talks were held with both Turkmenistan and Iran.
Hungary/Poland/Romania/Croatia: During the last week, editorials in Hungarian media talked about the regional energy security, pointing to both Polish and Romanian positions, considering Hungary’s recent move to further integrate with the region. While the Romanian gas that would be sold to Hungary would only partially be covering the country’s consumption needs, the Polish alternative – which is either US or Qatari LNG coming through the gas terminal in Swinoujscie would be more expensive and would necessitate new infrastructure. A new Slovak-Polish interconnector is discussed. Another route, also for long term development, is the one from Croatia into Hungary – where a new interconnector would also be needed. The main point raised by the Hungarian media and analysis is that of cost efficiency: for Hungary, the Russian gas is the cheapest at the moment, which makes little incentive for Budapest to develop alternatives.