Jul 14, 2023
Indonesian nickel export ban: EC moves to next level

New EU Foreign Subsidies Regulation – But no control over their own money? 

On 12 July 2023, the new EU Foreign Subsidies Regulation came into force. The regulation enables the European Commission to investigate financial contributions or subsidies from non-EU countries to companies operating in the EU. It also gives the Commission the power to eliminate any distorting effects of such subsidies on competition. The Commission may adopt procedural rules for the enforcement of this regulation. The new regulation on foreign subsidies is intended to complement existing measures against illegal subsidies on goods imported into the EU. 

The aim is, at least according to the EU, to ensure fair competition in the Union. All in all, however, it looks more like the next fig leaf to divert attention from the EU’s own problems. 

Has the EU lost control over its own subsidy billions? 

In response to the Corona pandemic, the EU has distributed a subsidy package worth almost 700 billion euros among the member states.  

In a revealing article, the German news magazine n-tv has scrutinised the distribution and, above all, the control over the use of the billions in subsidies. 

It says: “The EU’s Corona reconstruction fund is worth 723 billion euros. Actually, the European Parliament’s Committee on Budgetary Control is supposed to monitor how the funds are allocated. But it hardly gets any information about the final recipients, says Chair Hohlmeier.” 

Source: n-tv.de, “Lack of transparency in subsidies – Nobody knows where the EU billions disappear to”

Nobody knows where the tax payers money disappears to 

Overall, the article paints a frightening picture of the generous EU subsidies that were actually intended to strengthen the Digital Transformation and the Green Transformation. There were even conditions attached to their use. So far, however, only 14 out of 27 EU member states have reported back incomplete information on the actual use of the funds.  

No transparency in the allocation of EU subsidies 

Requests from EU parliamentarians to the European Commission for transparency are not answered or are incomplete. Where the money has gone, no one knows or wants to say. 

At the same time, the EU takes it upon itself to criticise, investigate and, if necessary, prosecute every non-EU subsidy. While it hangs the next prestigious task around its neck, it has completely lost control within the EU. 

Green EU steel subsidies: Where do the tax billions go? 

Once again, the legitimate question arises as to where all the green subsidies to EU steel producers actually go and what happens to the EU taxpayers’ money that is generously thrown out of the window and burnt in the next outdated EU blast furnace, where there has been no CO2 reduction since 2010. 

The European Commission obviously lost control a long time ago. Must have been hit on the head with a steel hammer…? 

Indonesian nickel export ban: EC launches next escalation stage 

The European Commission (EC) has launched public consultations to decide on further punitive measures against Indonesia’s export ban on nickel ore in autumn 2023.

The European Union is launching a consultation on the possible use of the Enforcement Regulation in its dispute with Indonesia on nickel export restrictions. Based on these results, the EU may proceed to propose countermeasures in the autumn. 

Source: europe.eu, “Information gathering on the Indonesian export ban and domestic processing requirement on nickel ore”

The dispute between the EU and Indonesia is thus entering the next round. Indonesia had previously appealed against the decision of the Dispute Settlement Body (DSB) of the World Trade Organisation (WTO) that the export ban would violate WTO regulations. This has postponed a decision in the case indefinitely, as the WTO’s Appellate Body has been unable to act for several years. 

Nickel export ban a bone of contention between EU and Indonesia for years 

The nickel export ban has been a thorn in the side of the EU, which urgently depends on imports of the battery and stainless steel raw material, ever since the Indonesian export restrictions came into force. On the other hand, Indonesia is also under pressure from the EU due to other measures. Most recently, the new EU Deforestation Regulation, which is aimed in particular at Indonesian palm oil and the extraction of raw materials there, has led to serious disgruntlement. 

EU pushes for end of Indonesian export restrictions 

While the EU is pushing for the lifting of Indonesian export restrictions on nickel, it has added to the existing anti-dumping, anti-subsidy and anti-circumvention measures against other Indonesian exports, such as stainless steel, with the Carbon Border Tax CBAM, due to start in October 2023.  

Nickel to blame for high CO2 stainless steel emissions? 

Because, according to critics in the EU, Indonesian stainless steel is particularly CO2 intensive. This is said to be due in particular to the high CO2 emissions from the production of nickel. But the interested reader can already guess that there are of course no CBAM restrictions against the import of nickel and other nickel products. Again, a “sustainable” proof of where the European Commission’s green double standards have struck. 

US inflationary pressure ease, US Dollar weakening 

US inflationary pressures ease as producer prices rise less than expected in June. After two years of painfully high prices, Americans are getting some much-needed relief, with inflation at its lowest since early 2021 – 3% year-on-year in June. The core rate of inflation is also slowing. Rising wages and a shortage of skilled labour are contributing to the upward pressure on the prices of labour-intensive services.  

The US dollar is weakening on the back of softer inflation data and signs of an end to the Federal Reserve’s rate hikes. The spot price of nickel rose by 0.1% and the price of oil rose by more than 1% on Thursday to its highest level in almost three months.