A starkly critical report of European Union economic policy was issued by former European Central Bank President Mario Draghi in early September, entitled “The Future of European Competitiveness.” The report warns that the bloc is facing long-term declining economic growth that threatens Europe’s prosperity, independence and social welfare.

To address the EU’s vulnerabilities, the near 400-page document proposes cutting geopolitical dependencies by securing supply chains and closing its innovation gap with the United States and China. From a policy standpoint, these objectives would be achieved through a mix of sectoral reforms, including development of the energy, artificial intelligence, transport and pharmaceutical industries. Mr. Draghi also suggests horizontal measures to boost innovation, skills and governance.

Large-scale investment key to achieving growth

The report is no less forthright about the unprecedented financial outlays needed to achieve the desired productivity and growth ambitions. Mr. Draghi asserts that Brussels needs to make additional combined public and private investments of 750-800 billion euros each year – equivalent to 5 percent of the bloc’s current gross domestic product (GDP). Such a rise in EU investment would, proportionately speaking, put it at levels not seen since the late-1960s and early-1970s.

Mr. Draghi also promotes new policies on slashing bureaucracy and championing lighter regulation. Accordingly, the report proposes reforming competition law by harnessing more of the benefits from the innovation aspects of mergers. New competition rules would also allow market consolidation in sectors such as telecoms and information technology. Meanwhile, efficiencies in capital markets vital for funding a large part of the bloc’s necessary investments would be achieved through the Capital Markets Union by facilitating the centralization of market supervision at the EU level.

In his remarks to the media during the unveiling of his report, Mr. Draghi warned, “The reasons for a unified response have never been so compelling – and in our unity we will find the strength to reform. … Do this, or it’s a slow agony.”

EU Commission refocusing on competitiveness

In her comments on Mr. Draghi’s report, European Commission President Ursula von der Leyen reiterated the importance of competitiveness, stating, “First, to be competitive, we need to master the clean and digital transition … we need to act on all the principal levers that are at our disposal … mobilizing public and private investment, improving the business environment and cutting unnecessary red tape.”

Ms. von der Leyen also highlighted this focus on competitiveness in her own report, “Europe’s Choice,” published in July. In this report, she pledged that the main priority of her new upcoming five-year term following her reelection in July will be boosting domestic competitiveness. She also advocated for making business “easier and faster in Europe.”

To implement these goals, newly appointed EU commissioners will be tasked with reducing administrative burdens and simplifying business-related rules. These would include less red tape and reporting, improved enforcement and faster permitting. “The whole college [Commission] is committed to competitiveness,” she said.

The new commissioners will hold regular dialogues on policy implementation with businesses. They will also work with a newly created EU representative for Implementation and Simplification to stress-test the entire scope of EU legislation on how it conforms to the interests of business.

Future regulations are to be simplified and designed with small businesses in mind. This will be done through a new small- and medium-sized enterprise and competitiveness check to help avoid unnecessary administrative burdens.

According to President von der Leyen, better lawmaking will have to be a joint task between all institutions involved and all legislative processes covered – from proposal to amendments to adoption. “In this spirit I will propose to renew interinstitutional agreement on simplification and better lawmaking so that each institution assesses the impact and cost of its amendments in the same way.”

A starting point for this envisaged collaborative, interinstitutional legislative approach may be to consider reforming key pieces of legislation widely slammed for stifling competitiveness.

Burdening companies with administrative obligations

The Corporate Sustainability Due Diligence Directive (CSDDD) was formally adopted in July 2024, and its provisions will come into force in graduated steps over several years. The directive introduces mandatory human rights and environmental due diligence requirements for large companies operating within the EU, both EU- and non-EU-based.

Obligations under the directive will apply in addition to other more specific, or potentially stricter, due diligence obligations under other EU laws. These include regulations on conflict minerals, batteries, deforestation and a forthcoming law on forced labor.

The EU has increasingly come under pressure from member states, trade associations and major European political parties to “halt and review” the application of the directive’s rules. The main criticism of the law stems from its imposition of an excessive administrative burden on businesses. A risk is that member states could transpose the obligations into national law without transparency and without being clear or understandable for businesses.

Companies hindered by sustainability laws

Onerous environmental legislation also incurs a heavy cost for business and is an area where Mr. Draghi sees room for streamlining. For instance, the framework to facilitate sustainable investment regulation (Taxonomy Regulation), which came into force in January 2022, establishes a classification system providing businesses with a common language to identify whether a given economic activity should be considered “environmentally sustainable.”

Companies applying the Taxonomy Regulation are facing additional costs and resources associated with new reporting requirements. This applies to collating and reporting a new information category, such as sustainability data, which played none or only a subordinate role in previous reporting. From the perspective of these companies, this work and expense requires greater investment.

Companies are also worried about the Carbon Border Adjustment Mechanism (CBAM), which forms part of the EU’s green deal package. This is a collection of initiatives aiming to secure the bloc’s goal of a 55 percent reduction in carbon emissions (compared to 1990 levels) by 2030.

CBAM will apply to financial charges on imported goods from January 1, 2026. The reporting will involve calculating an EU importer’s total imported goods and associated embedded emissions. This calculation would form the basis of purchasing CBAM certificates, minus any carbon price already paid abroad.

European industries have been largely skeptical of CBAM, voicing concerns over negative impacts on investment prospects for the sectors affected, as well as the efficacy of its implementation.

New digital laws hamper EU tech competitiveness

The EU’s Artificial Intelligence (AI) Act came into force in August 2024 and is the first such comprehensive regulation in any global jurisdiction. The law assigns risk categories to providers of AI systems. This involves companies that develop AI with a view to placing it on the EU market under their own name or trademark, whether for payment or free of charge.

Given the law was enacted recently, it is widely anticipated that its application will entail new expenses, particularly during the initial phase of implementation. Satisfying its requirements will also likely increase administrative burdens, resulting in delays for the launch of new AI products.

Another new set of laws regulating the digital realm is the Digital Services Act (DSA), which restricts the activities of digital services providers within the EU. Alongside the Digital Markets Act, the DSA is part of a comprehensive European digital strategy imposing far-reaching obligations on providers of very large online platforms (VLOPs) and very large online search engines (VLOSEs).

The DSA became mostly applicable by February 2024. Critical voices have expressed concerns regarding the DSA’s extensive and complex rules creating unnecessary bureaucracy for digital businesses and stifling innovation.

Source: GIS

About Brazil Potash and the Autazes Project

Financial Overview and Market Demand

Environmental and Economic Impact

Potential Risks and Challenges

Conclusion

Company Background

Therapeutic Focus and Product Pipeline

Market and Financials

IPO Details and Market Impact

Conclusion

Defining Arbitrage: The Basics

How Does Arbitrage Work?

Types of Arbitrage Strategies

The Role of Technology in Arbitrage Trading

Risks and Limitations of Arbitrage

Real-World Examples of Arbitrage

Is Arbitrage Still Profitable?

Conclusion

India could end up paying $30 billion annually for imported solar panels if it is to hit its 2030 capacity target of 500 GW in wind and solar.

The forecast comes from a local think tank, the Global Trade Research Initiative, which said such a path would deepen the dependence of the country on its neighbor China, the Business Standard reported. The think tank added that building its own solar components supply chain at home would be a challenge, requiring substantial investment, especially in polysilicon and wafers, ET Energy World noted in a report.

As things stand now, India does manufacture some equipment locally but it is heavily dependent on input imports, the founder of the Global Trade Research Initiative told the publication.

“Local production is import-dependent and mainly focuses on the final two stages,” he explained. “90 percent of solar manufacturing in India involves assembling solar modules from imported cells with 15% local value addition,” Ajay Srivastava said.

India is already installing solar and wind capacity fast but nowhere near fast enough if it wants to make that 2030 target. In fiscal 2023-24, total solar installations in the country stood at 15 GW, bringing the national total to 90.8 GW as of September.

That was up from a meager 2.8 GW in newly installed capacity back in 2014. However, it was way short of what needs to be added on an annual basis, which is between 65 GW and 70 GW, according to the Global Trade Research Initiative. As much as 80% of this would come from solar, the think tank said.

“This target seems ambitious, particularly given India's reliance on imports, which could push solar import to USD 30 billion annually,” GTRI said in its report. In its last fiscal year, India imported solar components and equipment worth $7 billion, with 62.6% of that total coming from China.

Source: OILPRICE

Germany’s government has approved plans for the development of a hydrogen network that would cost 19 billion euros, equivalent to $20.5 billion.

The plan would include converting natural gas pipelines into infrastructure for the transportation of hydrogen, building new pipelines as well, and connecting them all with big industrial energy consumers to help them decarbonize, Bloomberg reports.

The natural gas pipeline conversion would cost some 2 billion euros, the report notes. The whole network would span over 9,000 kilometers and be completed by 2032, with the first pipelines going online in 2025.

Germany has already signaled previously it has big ambitions in the hydrogen space, and more specifically in the green hydrogen space. However, that very same space has seen several project cancellations recently as their authors conclude the market conditions are not conducive to the success of these projects.

Denmark’s Ørsted said earlier this month it would abandon a project that was supposed to produce green hydrogen from wind power installations, saying that “a sub-scale demonstration plant like this no longer has a relevance in the current market.”

Spain’s Repsol just this week said it would suspend all investments in green hydrogen in its home market as it braces up for the possibility of windfall taxes for the energy industry becoming a permanent fixture of the local regulatory landscape. The company warned that tax would discourage investments in the nascent green hydrogen market.

Green hydrogen is the cleanest form of the element and an energy source that many transition advocates are placing great value on. However, it is an expensive process that involves considerable energy losses during the conversion of water into its constituent elements, prompting ample criticism that appears to have gone unheeded in Berlin. Germany plans to become climate-neutral by 2045.

Source: OILPRICE