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Rising Tensions in AU-EU Relations over Climate and Energy

spotlight 2022 02, 09.03.2022

The European Union had many plans for the summit with the African Union in February, especially in the area of energy transition. But apart from a new investment package, few results followed. When it comes to the climate-energy nexus, relations are strained because of European plans for a Carbon Border Adjustment Mechanism. Here, African partners feel that they are being treated unfairly and that their own interests are not adequately represented in the partnership. Thus, the European Union must reflect on whether it is an attractive partner for African countries.

Emmanuel Macron had big plans for the summit between the African Union (AU) and the European Union (EU) from 17–18 February. “The aim of the summit is to fundamentally reshape relations [...]” that have been “bureaucratised” and “fatigued”, said the Macron at the presentation of the French Council Presidency’s programme in December 2021.

The French Presidency highlighted that it wanted to work towards a common agenda between the two Unions, especially in the area of climate policy. The EU was to guide the African climate and energy transition, establishing new initiatives for financing green infrastructure and energy.

Little Enthusiasm for French Plans

The African side was cautious of the French proposals. Climate policy is one of the many sectors currently causing tensions between the two continents.

Many African states criticize the results of the COP26 in November 2021, where 34 countries and five public financial institutions pledged to end international public financing of fossil fuels by the end of 2022. Affected funders include the United Kingdom, the United States and the European Investment Bank (EIB). For African states, however, this step marks an “injustice”, at least as argued by Senegalese President and Chair of the AU Commission Macky Sall in January.

Africa: between Fossil Fuels and Renewable Energy

Statements like these set the tone for the summit. In general, all parties agree that emissions should be reduced and the green transformation implemented. But some members of the AU also have a strong interest in holding on to gas and fossil fuels.

Countries such as Nigeria, Algeria and Mozambique fear that decarbonisation of global energy production could cause a collapse in revenues from gas and oil exports. South Africa’s economy, too, is largely dependent on coal. Meanwhile, the largest wind farm on the continent is being built in the region surrounding Kenya’s Lake Turkana – directly beside an area where oil reserves are also being developed.

Dispute over the EU’s CO2 Border Adjustment Mechanism

One of the main points of contention between the parties is the EU’s proposed CO2 Border Adjustment Mechanism (CBAM). As part of the European Green Deal (EGD), it provides for a new form of taxation on imports from third countries based on the amount of CO2 that was emitted in their production. African states see this as a protectionist instrument, and they fear its potential negative impact on their economies, access to energy and production capacities. They demand guarantees from the EU that African companies will be exempt from the scheme.

With this in mind, African states saw the success of the summit as dependant on whether Brussels would make concessions in this area. However, the final declaration of the summit only states that the new 150 billion EUR investment package should contribute to a “fair, just and equitable” energy transition. It also notes that this so-called Global Gateway Africa (GGA) investment package will take into account the “specific and different orientations of the African countries with regard to access to electricity”. Otherwise, it offers little mention of the issue.

Climate-Energy Nexus: Climate Policy affects the African Energy Sector

Still, the declaration does consider access to energy and electricity, which is a core African interest and key challenge. While countries like Morocco pioneer renewable energy, the continent’s immense potential in terms of its energy resources remains largely untapped. It has the richest solar power resources in the world and therefore large capacities for green hydrogen, but both sectors lack investment. According to the AU, about half of the African population has no access to electricity. Hence, for many states, the energy transition is only possible if climate policy provides electricity supply.

Climate and Energy in Africa-Europe Relations

Climate and energy are central issues for both continents, and as such, have long been discussed within the framework of African-European relations. However, a commonly agreed upon agenda is still absent. In principle, both agree on the expansion of renewable energies and the so-called green recovery after the pandemic; but consensus is lacking when it comes to concrete measures on how this should be financed and what the path to green industrialisation would look like.

Nonetheless, Africa and Europe should cooperate closely in the area of climate policy. As a global megatrend, climate change is leading to political, social and economic transformations on both continents. European member states have historically been responsible for much of the globe’s CO2 emissions, while their neighbours to the south will have to shoulder much of the negative consequences of climate change. Indeed, the effects of a warming climate are already felt there.

This is why cooperation between Africa and the EU is an integral part of the external dimension of the EGD and the Partnership for Green Transition and Energy Access that is envisaged in the new Africa Strategy. “I sincerely hope that [the summit] will be an opportunity for a new paradigm, for a new approach, for a new alliance between Africa and Europe”, European Council President Charles Michel declared in January.

Is the EU an Attractive Partner?

But from the African perspective, the situation can also be summarised as follows: strained relations, unsatisfied interests and, with the EGD, a climate policy that feels forced upon them. So, in this case, can the EU be an attractive partner at all? This is what policymakers in Brussels and other European capitals must ask themselves.

They need to think of political offers that could prove compatible with African interests. One option could be to work towards synergising the EGD and African development goals. In the framework of the GGA, for example, the EU wants to focus on the expansion of green hydrogen production, the establishment of a single African market for electricity, and energy transition partnerships.

German Government backs Green Hydrogen, proposes Climate Club

Germany in particular has high expectations for green hydrogen production, which could be used to transform its emission-rich steel industry. Green hydrogen might also reduce European dependence on Russia for gas imports – a central goal of the EU since the Russian invasion of Ukraine. Still, climate-neutral hydrogen is not available in large quantities. Much of it needs to be imported, and this requires strong energy partnerships – for example with African partners.

Meanwhile, German Chancellor Olaf Scholz has offered African partners admission to the climate club he envisages, actively soliciting their participation at the summit in February. In this climate club, states are to be encouraged by means of economic incentives to actively combat climate change. The German government plans for the group to function in harmony with CBAM provisions, albeit while exempting its participants from “border adjustments”. Critics see this as a possible weakening of CBAM.

Desire for more Influence on International Climate Policy

In principle, however, African governments strive to exert more influence on international climate policy. This also means that AU members should agree to their own overarching agenda to combat climate change. But so far, this idea has been subsumed under the attitude that climate change mitigation is first and foremost a responsibility of the primary emitters, as adaptation to climate change is the priority for African countries. The next opportunity to make this case is at this year’s COP27 in Egypt, and it will be more effectively argued if all AU members unite behind a commonly adopted climate action plan.