High energy prices, risks on CBAM enforcement and promotion of lead markets, as well as increasing carbon costs are hampering domestic and export competitiveness with non-EU producers. The cement industry is fundamental to Europe’s construction value chain, which represents about 9 percent of the EU’s GDP. Its hard-to-abate production processes are also currently responsible for 4 percent of EU emissions, and it is investing heavily in measures aimed at achieving full climate neutrality by 2050, in line with the European Green Deal. Marcel Cobuz, CEO, TITAN Group  “We should take a longer view and ensure that the cement industry in EU stays competitive domestically and its export market shares are maintained.” However, the industry’s efforts to comply with EU environmental regulations, along with other factors, make it less competitive than more carbon-intensive producers from outside Europe. Industry body Cement Europe recently stated that, “without a competitive business model, the very viability of the cement industry and its prospects for industrial decarbonization are at risk.” Marcel Cobuz, member of the Board of the Global Cement and Concrete Association and CEO of TITAN Group, one of Europe’s leading producers, spoke with POLITICO Studio about the vital need for a clear policy partnership with Brussels to establish a predictable regulatory and financing framework to match the industry’s decarbonization ambitions and investment efforts to stay competitive in the long-term. POLITICO Studio: Why is the cement industry important to the EU economy?  Marcel Cobuz: Just look around and you will see how important it is. Cement helped to build the homes that we live in and the hospitals that care for us. It’s critical for our transport and energy infrastructure, for defense and increasingly for the physical assets supporting the digital economy. There are more than 200 cement plants across Europe, supporting nearby communities with high-quality jobs. The cement industry is also key to the wider construction industry, which employs 14.5 million people across the EU. At the same time, cement manufacturers from nine countries compete in the international export markets. PS: What differentiates Titan within the industry?  MC: We have very strong European roots, with a presence in 10 European countries. Sustainability is very much part of our DNA, so decarbonizing profitably is a key objective for us. We’ve reduced our CO2 footprint by nearly 25 percent since 1990, and we recently announced that we are targeting a similar reduction by 2030 compared to 2020. We are picking up pace in reducing emissions both by using conventional methods, like the use of alternative sources of low-carbon energy and raw materials, and advanced technologies. TITAN/photo© Nikos Daniilidis We have a large plant in Europe where we are exploring building one of the largest carbon capture projects on the continent, with support from the Innovation Fund, capturing close to two million tons of CO2 and producing close to three million tons of zero-carbon cement for the benefit of all European markets. On top of that, we have a corporate venture capital fund, which partners with startups from Europe to produce the materials of tomorrow with  very low or zero carbon. That will help not only TITAN but the whole industry to accelerate its way towards the use of new high-performance materials with a smaller carbon footprint. PS: What are the main challenges for the EU cement industry today?  MC: Several factors are making us less competitive than companies from outside the EU. Firstly, Europe is an expensive place when it comes to energy prices. Since 2021, prices have risen by close to 65 percent, and this has a huge impact on cement producers, 60 percent of whose costs are energy-related. And this level of costs is two to three times higher than those of our neighbors. We also face regulatory complexity compared to our outside competitors, and the cost of compliance is high. The EU Emissions Trading System (ETS) cost for the cement sector is estimated at €97 billion to €162 billion between 2023 and 2034. Then there is the need for low-carbon products to be promoted ― uptake is still at a very low level, which leads to an investment risk around new decarbonization technologies. > We should take a longer view and ensure that the cement industry in the EU > stays competitive domestically and its export market shares are maintained.” All in all, the playing field is far from level. Imports of cement into the EU have increased by 500 percent since 2016. Exports have halved ― a loss of value of one billion euros. The industry is reducing its cost to manufacture and to replace fossil fuels, using the waste of other industries, digitalizing its operations, and premiumizing its offers. But this is not always enough. Friendly policies and the predictability of a regulatory framework should accompany the effort. PS: In January 2026, the Carbon Border Adjustment Mechanism will be fully implemented, aimed at ensuring that importers pay the same carbon price as domestic producers. Will this not help to level the playing field? MC: This move is crucial, and it can help in dealing with the increasing carbon cost. However, I believe we already see a couple of challenges regarding the CBAM. One is around self-declaration: importers declare the carbon footprint of their materials, so how do we avoid errors or misrepresentations? In time there should be audits of the importers’ industrial installations and co-operation with the authorities at source to ensure the data flow is accurate and constant. It really needs to be watertight, and the authorities need to be fully mobilized to make sure the real cost of carbon is charged to the importers. Also, and very importantly, we need to ensure that CBAM does not apply to exports from the EU to third countries, as carbon costs are increasingly a major factor making us uncompetitive outside the EU, in markets where we were present for more than 20 years. > CBAM really needs to be watertight, and the authorities need to be fully > mobilized to make sure the real cost of carbon is charged to the importers.” PS: In what ways can the EU support the European cement industry and help it to be more competitive? MC: By simplifying legislation and making it more predictable so we can plan our investments for the long term. More specifically, I’m talking about the revamping of the ETS, which in its current form implies a phase-down of CO2 rights over the next decade. First, we should take a longer view and ensure that the cement industry stays competitive and its export market shares are maintained, so a policy of more for longer should accompany the new ETS. > In export markets, the policy needs to ensure a level playing field for > European suppliers competing in international destination markets, through a > system of free allowances or CBAM certificates, which will enable exports to > continue.” We should look at it as a way of funding decarbonization. We could front-load part of ETS revenues in a fund that would support the development of technologies such as low-carbon materials development and CCS. The roll-out of Infrastructure for carbon capture projects such as transport or storage should also be accelerated, and the uptake of low-carbon products should be incentivized. More specifically on export markets, the policy needs to ensure a level playing field for European suppliers competing in international destination markets, through a system of free allowances or CBAM certificates, which will enable exports to continue. PS: Are you optimistic about the future of your industry in Europe?  MC: I think with the current system of phasing out CO2 rights, and if the CBAM is not watertight, and if energy prices remain several times higher than in neighboring countries, and if investment costs, particularly for innovating new technologies, are not going to be financed through ETS revenues, then there is an existential risk for at least part of the industry. Having said that, I’m optimistic that, working together with the European Commission we can identify the right policy making solutions to ensure our viability as a strategic industry for Europe. And if we are successful, it will benefit everyone in Europe, not least by guaranteeing more high-quality jobs and affordable and more energy-efficient materials for housing ― and a more sustainable and durable infrastructure in the decades ahead. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Titan Group * The advertisement is linked to policy advocacy around industrial competitiveness, carbon pricing, and decarbonization in the EU cement and construction sectors, including the EU’s CBAM legislation, the Green Deal, and the proposed revision of the ETS. More information here.

BRUSSELS — Europe’s most energy-intensive industries are worried the European Union’s carbon border tax will go too soft on heavily polluting goods imported from China, Brazil and the United States — undermining the whole purpose of the measure. From the start of next year, Brussels will charge a fee on goods like cement, iron, steel, aluminum and fertilizer imported from countries with weaker emissions standards than the EU’s. The point of the law, known as the Carbon Border Adjustment Mechanism, is to make sure dirtier imports don’t have an unfair advantage over EU-made products, which are charged around €80 for every ton of carbon dioxide they emit. One of the main conundrums for the EU is how to calculate the carbon footprint of imports when the producers don’t give precise emissions data. According to draft EU laws obtained by POLITICO, the European Commission is considering using default formulas that EU companies say are far too generous. Two documents in particular have raised eyebrows. One contains draft benchmarks to assess the carbon footprint of imported CBAM goods, while the second — an Excel sheet seen by POLITICO — shows default CO2 emissions values for the production of these products in foreign countries. These documents are still subject to change. National experts from EU countries discussed the controversial texts last Wednesday during a closed-door meeting, and asked the Commission to rework them before they can be adopted. That’s expected to happen over the next few weeks, according to two people with knowledge of the talks. Multiple industry representatives told POLITICO that the proposed estimated carbon footprint values are too low for a number of countries, which risks undermining the efficiency of the CBAM. For example, some steel products from China, Brazil and the United States have much lower assumed emissions than equivalent products made in the EU, according to the tables. Ola Hansén, public affairs director of the green steel manufacturer Stegra, said he had been “surprised” by the draft default values that have been circulating, because they suggest that CO2 emissions for some steel production routes in the EU were higher than in China, which seemed “odd.” “Our recommendation would be [to] adjust the values, but go ahead with the [CBAM] framework and then improve it over time,” he said. Antoine Hoxha, director general of industry association Fertilizers Europe, also said he found the proposed default values “quite low” for certain elements, like urea, used to manufacture fertilizers. “The result is not exactly what we would have thought,” he said, adding there is “room for improvement.” But he also noted that the Commission is trying “to do a good job but they are extremely overwhelmed … It’s a lot of work in a very short period of time.” Multiple industry representatives told POLITICO that the proposed estimated carbon footprint values are too low for a number of countries, which risks undermining the efficiency of the CBAM. | Photo by VCG via Getty Images While a weak CBAM would be bad for many emissions-intensive, trade-exposed industries in the EU, it’s likely to please sectors relying on cheap imports of CBAM goods — such as European farmers that import fertilizer — as well as EU trade partners that have complained the measure is a barrier to global free trade. The European Commission declined to comment. DEFAULT VERSUS REAL EMISSIONS Getting this data right is crucial to ensure the mechanism works and encourages companies to lower their emissions to pay a lower CBAM fee. “Inconsistencies in the figures of default values and benchmarks would dilute the incentive for cleaner production processes and allow high-emission imports to enter the EU market with insufficient carbon costs,” said one CBAM industry representative, granted anonymity to discuss the sensitive talks. “This could result in a CBAM that is not only significantly less effective but most likely counterproductive.” The default values for CO2 emissions are like a stick. When the legislation was designed, they were expected to be set quite high to “punish importers that are not providing real emission data,” and encourage companies to report their actual emissions to pay a lower CBAM fee, said Leon de Graaf, acting president of the Business for CBAM Coalition. But if these default values are too low then importers no longer have any incentive to provide their real emissions data. They risk making the CBAM less effective because it allows imported goods to appear cleaner than they really are, he said. The Commission is under pressure to adopt these EU acts quickly as they’re needed to set the last technical details for the implementation of the CBAM, which applies from Jan. 1. However, de Graaf warned against rushing that process. On the one hand, importers “needed clarity yesterday” because they are currently agreeing import deals for next year and at the moment “cannot calculate what their CBAM cost will be,” he said. But European importers are worried too, because once adopted the default emission values will apply for the next two years, the draft documents suggest. The CBAM regulation states that the default values “shall be revised periodically.” “It means that if they are wrong now … they will hurt certain EU producers for at least two years,” de Graaf said.

PARIS — Emmanuel Macron was on a plane to Egypt when France faced the most serious crisis of his time in office. So why did the French president leave the country early Monday morning while there was such uncertainty at home? The answer, according to several current and former French officials, was to ensure his legacy. With fewer than 20 months left in the Elysée Palace, Macron is laser-focused on cementing his place in the history books — and believes he’s earned that distinction for his work in the Middle East, they said. The French president wasn’t going to miss his chance to be there for Monday’s peace summit in the Egyptian resort of Sharm el-Sheik, even with his house on fire and irrespective of it forcing his twice hand-picked prime minister, Sébastien Lecornu, to push back presenting his draft budget by a day, nearly missing the deadline. French officials in recent days have been working hard to craft a narrative that the Gaza peace plan pushed by U.S. President Donald Trump was triggered by Macron’s own proposal and his lead role in pushing for recognition of Palestinian statehood at the United Nations General Assembly last month.  That’s why Macron really wanted to make it to the summit in Egypt, said a government adviser who, like others quoted in this piece, was granted anonymity to speak candidly. An ally of Lecornu said the president was “very, very focused” on Gaza.  The French political system is designed so that the president can represent the country on the world stage while the prime minister looks after matters at home. But these are exceptional circumstances in France, with Lecornu resigning after just 14 hours before being reappointed and some politicians even speculating that Macron might not even see out his time in office. At first sight, Macron appears to be following in the footsteps of former presidents, such as François Mitterrand and Jacques Chirac, who pivoted to the international stage in the later years of their terms after losing their parliamentary majorities.   But Macron hasn’t let go of domestic policy. Unlike his predecessors, he isn’t adopting a “hands-off attitude,” said an early Macron backer.      “Macron has become very attentive to his European and international visibility,” said a former French official. “It’s what he’s got left to give himself the impression that he still has influence.” At first sight, Macron appears to be following in the footsteps of former presidents. | Joel Saget/AFP via Getty Images CHARM IN SHARM The Elysée last week went into lobbying mode, ramping up briefings with academics and journalists to drive home that Macron had been key to the success of Trump’s peace plan. “The Elysée’s priority was to spread the idea that their plan was very useful,” said a former diplomat, referencing the Franco-Saudi roadmap to end the war in Gaza. At the U.N. General Assembly last month, Macron risked drawing U.S. and Israeli ire with his push for Palestinian statehood, which was followed by close to a dozen Western states doing the same. His speech on the U.N. stage drew comparisons in Paris with other occasions when France stood up to Washington, in particular former Prime Minister Dominique de Villepin’s landmark 2003 address rejecting Washington’s march to war in Iraq. While in Egypt, Macron played carefully with the optics of power, of which he is an astute reader, to avoid being seen as playing second fiddle to Trump. He chose not to stand on the podium behind the U.S. president, instead sitting with Turkish President Recep Tayyip Erdoğan and Middle Eastern leaders, a move that was noted by Trump. Talking to reporters on the sidelines of the summit, Macron spoke about the efforts needed to keep the ceasefire in Gaza alive and the contribution France could make. Asked about national politics, he presented himself as “the guarantor of French institutions,” but could not help but lash out at opposition parties for trying to destabilize his prime minister. WINNING THE BATTLE, LOSING THE WAR Many officials say the French president is trying to remain above the fray. But there are several explanations as to why he’s doing so that go beyond the legacy argument. Some attribute it to the Jupiterian strategy of shrouding his office in mystique, communicating in grand gestures, and refusing to sully himself with the mudslinging of domestic politics.  One government official said Macron is “probably letting tensions dial down” and he is remaining silent to protect the institutional checks and balances of the French state.  Macron has cycled through centrist and center-right prime ministers in the past year. | Chip Somodevilla/Getty Images Others say the silence is strategic, even magnanimous. They say the president recognizes just how unpopular he is — a recent poll put his approval rating at 14 percent — and is trying to prevent his allies from being tarnished by his political toxicity.  But Macron never really lets go of anything. In his meeting with opposition parties last week, Macron made it very clear who calls the shots when, according to a presidential aide, he offered to partially delay his flagship pension law, which pushed back the age of retirement to 64 from 62 for most workers.  Macron has cycled through centrist and center-right prime ministers in the past year to fend off challenges to that law and other achievements such as his tax cuts. Many saw his decision to reappoint the loyal Lecornu, just days after he resigned in the aftermath of his 14-hour government, as the sharpest example of his dogged refusal to hand over power despite his camp losing last summer’s snap election.   Macron ended up being forced to sell off the crown jewel he had jealously been guarding, the pensions reform, at least for now. Lecornu announced Tuesday that he would freeze the law raising the retirement age until 2027, in order to secure support from the Socialist Party and survive a no-confidence vote on Thursday.  Macron might yet save his pensions reform as there are doubts swirling that the suspension might not pass through parliament.  But fighting tooth and nail to ensure his legacy might also destroy it if Macron can’t secure the future of his centrist movement and his potential successors, such as former prime ministers and likely presidential candidates Edouard Philippe and Gabriel Attal.   Macron’s handling of the current crisis will almost certainly affect the campaign of any centrist trying to stop Marine Le Pen, or someone else from the far-right National Rally, from winning the presidency.  “What image are we projecting? We’re in favor of pension reform, and then we give up. It’s not clear,” said the Lecornu ally quoted above. “The only one who appears to know what she represents is Marine Le Pen,” they said. “She has a populist message, but it’s simple and consistent: This circus must stop.” Pauline de Saint Remy and Giorgio Leali contributed reporting.

Chinese President Xi Jinping on Sunday rolled out the red carpet for Russia’s Vladimir Putin, India’s Narendra Modi and about 20 other national leaders arriving for the Shanghai Cooperation Organization summit. The Eurasian political and security summit — held in Tianjin this year — is a gathering designed to cement Beijing’s clout and champion its vision of a “multipolar world order.” Set up in 2001, it began with China, Russia and four Central Asian countries, as a counterweight to Western alliances such as NATO. It now boasts 10 members and 16 dialogue partners and observers. This year the summit will focus largely on U.S. President Donald Trump’s trade war. Trump has slapped 50 percent tariffs on Indian goods over New Delhi’s continued purchases of Russian oil. Putin meanwhile is facing fresh Western sanctions tied to his ongoing war in Ukraine. “How in the hell did Trump so alienate Modi that he’s now attending a summit with autocrats, Xi and Putin?” Michael McFaul, a Hoover Senior Fellow at Stanford University and former U.S. Ambassador to Russia, wrote on X. “Just last year, China and India were at war with each other!” he added. Both Xi and Modi appear to be seeking a reset in a relationship long strained by mistrust and unresolved border disputes. Analysts warn the stakes go far beyond Asia. As Chatham House’s Chietigj Bajpaee and Yu Jie put it: “What happens in this relationship matters to the rest of the world.”  “If Western countries — particularly the U.S. — are serious about supporting India as a bulwark against a rising China, they need to develop more realistic expectations of what India can deliver,” they wrote in a recent analysis paper. “India was never going to be the bulwark against China that the West (and the United States in particular) thought it was. … Modi’s China visit marks a potential turning point,” they wrote. Putin will be in China through Wednesday, when Xi is hosting a military parade to commemorate the end of World War II, following Japan’s formal surrender. Alongside Putin and North Korea’s Kim Jong Un, Slovakia’s Prime Minister Robert Fico will attend the parade, as well as Serbian President Aleksandar Vučić.

European Plastics Converters (EuPC) is the EU-level trade association representing the European plastics converting industry. Plastics converters use plastics raw materials and recycled polymers to manufacture new products. EuPC totals about 45 national as well as European plastics converting industry associations and represents more than 50,000 companies, producing over 50 million tons of plastic products every year. More than 1.6 million people are working in EU converting companies (mainly SMEs) to create a turnover in excess of € 260 billion per year.  > The results are clear: imposing blanket reuse targets for pallet packaging > will do more harm than good — both environmentally and economically.   As part of the EU’s new Packaging and Packaging Waste Regulation (PPWR), policymakers have introduced mandatory reuse targets for plastic pallet packaging — like stretch wrap and hoods — under Article 29. To understand the real-world impact of this proposal, EuPC commissioned two independent studies:  * A life cycle environmental assessment by IFEU (Germany)1  * An economic impact analysis by RDC Environment (Belgium)2  The results are clear: imposing blanket reuse targets for pallet packaging will do more harm than good — both environmentally and economically.  What the environmental study found   IFEU’s life cycle assessment shows that switching from single-use plastic wrap and hood to reusable systems could actually increase CO2 emissions from 35 percent to up to 1,700 percent, depending on the specific use case. In every application studied, single-use solutions performed better than reusable alternatives across all environmental impact categories — from emissions to resource use.  What the economic study found   RDC’s economic analysis looked at eight key industrial sectors — including retail, agriculture, cement and glass — and found that mandatory reuse systems could result in up to €4.9 billion in additional annual costs just for these eight sectors alone.  Some sectors would be hit particularly hard, seeing potential increased production costs of:  * Retail: up to €400 million   * Glass: up to €780 million  To clarify, these figures refer exclusively to the eight industrial sectors analyzed in the study, which represent only a portion of the product categories transported on pallets in the EU. Since other sectors are not included, the overall EU-wide impact would exceed the €4.9 billion estimated for this limited sample.  Enterprises are likely to face the greatest challenges under mandatory reuse systems. Many lack the reverse logistics or automation needed for reuse systems. For exporters, the burden is even greater, as they would be forced to operate two parallel packaging systems: one compliant with EU reuse requirements and another for non-EU markets. Currently, there are no large-scale reusable packaging systems in place, meaning an entirely new infrastructure would need to be developed within an extremely short timeframe. This raises serious legal, operational and economic concerns, especially for the most vulnerable segments of the market.   What it all means  Both studies agree that replacing recyclable single-use pallet wrap with reusable alternatives is neither greener nor cheaper. If enforced, the proposed reuse targets could undermine PPWR’s goals of creating a truly circular and efficient packaging economy.  That’s why EuPC is calling for the exclusion of pallet wrap and straps from Article 29, using the flexibility allowed through delegated acts under Article 29(18a) and 29(18c).  > If enforced, the proposed reuse targets could undermine PPWR’s goals of > creating a truly circular and efficient packaging economy. The smarter way forward  Single-use, recyclable plastic pallet packaging is already a reality aligned with Europe’s sustainability goals. Solutions that truly work in real-world logistics that are efficient, scalable and sustainable are already an economic reality.  -------------------------------------------------------------------------------- Notes Disclaimer: This document reflects EuPC’s independent position and communication. The data and analysis cited are based on studies commissioned by EuPC. 1 Comparative life cycle assessment of various single use and reuse transport packaging  2 Economic impact of switching to reusable options for pallet wrapping 

Donald Trump said he will unveil a “full and comprehensive” trade deal with the United Kingdom Thursday. The U.S. president teased the announcement in a Wednesday night post on Truth Social, promising a “Big News Conference” at 10 a.m. EDT. In a follow-up post Thursday morning, he said: “The agreement with the United Kingdom is a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come. “Because of our long time history and allegiance together, it is a great honor to have the United Kingdom as our FIRST announcement. Many other deals, which are in serious stages of negotiation, to follow!” Specifics of the agreement were not immediately available. But the pact would represent a significant step forward for the United States, which has been mired in negotiations with dozens of countries since slapping hefty tariffs on its global trading partners last month. It would also represent a win for U.K. Prime Minister Keir Starmer, who is struggling in the polls and has tried to prioritize building bridges with Washington at a time other world leaders have taken a confrontational approach. A spokesperson for Starmer said Thursday morning: “The Prime Minister will always act in Britain’s national interest — for workers, for business, for families. “The United States is an indispensable ally for both our economic and national security. Talks on a deal between our countries have been continuing at pace and the Prime Minister will update later today.” Starmer and his ministers want the deal to lower the White House’s 25 percent tariffs on imports from Britain’s automotive, steel and aluminum sectors and guard against further tariff rises on pharmaceutical exports. The deal is the first to be announced during the 90-day pause on Trump’s “Liberation Day” tariffs announced last month. Pressure for the Trump administration to announce trade agreements comes as Americans, manufacturers and retailers brace for higher prices in the coming weeks as shipments into West Coast ports plunge to levels not seen since the early days of the pandemic. Supply chain disruptions could result in shortages of a number of everyday items like cars, furniture, clothes and toys.

LONDON — The fifteenth time’s a charm, it would seem. After a series of false starts, missed Diwali deadlines and changes of government, the U.K. and India have finally put their differences aside to strike a free trade agreement. But the final pact — with some details set out Tuesday — is far from what negotiators imagined when they launched the talks back in 2022, with compromises made on both sides. From tariffs to visas and services, we talk through the key concessions in the long-awaited agreement, and what they could mean for U.K. businesses, as well as the big unanswered questions. WHAT WE KNOW Tariffs will be cut across the board The agreement will cut Indian tariffs on 90 percent of product lines, with 85 percent of those becoming fully tariff-free within a decade, according to basic details published by the U.K.’s Department for Business and Trade (DBT) on Tuesday. British alcoholic drink exporters look set to be big winners. Whisky and gin tariffs, currently set at 150 percent, will be halved to 75 percent before falling to 40 percent after 10 years. Mark Kent, chief executive of the Scotch Whisky Association, said the change would be “transformational” and create 1,200 jobs across the U.K..  There also appears to be positive news for another key sector: car manufacturing. DBT says automotive tariffs will be cut from over 100 percent to 10 percent — but crucially, subject to a quota. Trade Secretary Jonathan Reynolds told reporters on Tuesday that the U.K. would get access to a quota to sell 22,000 higher-value electric vehicles to India at the lower 10 percent tariff rate. India would meanwhile get a quota to sell low- and mid-range electric vehicles to the U.K. The government says this quota will be phased in over time in discussion with industry in order to align with their production plans. Industry group the SMMT welcomed the deal but said the details “will likely feature compromises, and might not offer unfettered market access to all UK automotive goods.” Other Indian tariffs cut under the FTA include those on imported British cosmetics, aerospace, lamb, medical devices, salmon, electrical machinery, soft drinks, chocolate, and biscuits. The U.K. has in turn cut tariffs on clothes, footwear, and some food products — including, the government is keen to note, frozen prawns. On the flipside, tariffs remain in areas like dairy and milled rice where both sides wanted to protect domestic industries from competition. Together with the other changes in the agreement, the government expects a steep 59.4 percent increase in U.K. exports to India — worth £15.7 billion. This is matched by a smaller 25 percent increase in Indian exports to Britain, worth £9.8 billion.  This all adds up to a 38.8 percent increase in trade worth £25.5 billion — or 0.1 percent of GDP by 2040. The number is tiny when compared to the much larger expected 4 percent hit from leaving the EU single market, but looks a bit more impressive when compared to the 0.08 percent expected benefit from, for example, the FTA the last government signed with Australia.  India scores concessions on social security payments Visas have become the most headline-grabbing issue in the negotiations. After the Indian side talked up an “unprecedented” win on its workers being exempt from employee tax contributions in Britain, Starmer’s political opponents hit back at the deal. Conservative Leader Kemi Badenoch said she refused to sign a deal on similar terms back when she was trade secretary, arguing: “When Labour negotiates Britain loses.” In the end, it’s a mixed bag when it comes to mobility concessions. Jonathan Reynolds said on Tuesday that an existing visa route for some temporary workers that’s not currently available to India — and capped at 1,800 people — will now be open to Indian employees. That list of professions includes musicians, yoga teachers and chefs. Indian applicants will still need to meet the usual visa requirements on salary and skills and the cap won’t be lifted. The U.K.’s visa concession is a long way from New Delhi’s first requests, with India originally proposing larger quotas for professionals, particularly in sectors like IT and healthcare. But there are already political fireworks over one big Indian demand in the talks — an easing of social security payments for Indian workers in the U.K. The U.K. and India have agreed to a Double Contributions Convention, which means that neither Indian nor British workers will be required to pay national insurance contributions in both their home country and the one they are working in — they will only pay it in one for the first three years of a placement.  The deal also covers employers, who do not have to pay social security contributions in the U.K. for three years.  This concession means “Starmer has hiked National Insurance on Brits while giving an exemption to Indian migrants,” Shadow Justice Secretary Robert Jenrick wrote as Tory MPs criticised the move in parliament Tuesday afternoon. There will be greater access to Indian government contracts “For the very first time British businesses will have guaranteed access to India’s vast procurement market covering good services and construction,” Trade Policy Minister Douglas Alexander told parliament on Tuesday. More than a decade ago, Indian PM Narendra Modi launched the country’s Make in India program, which prevents foreign competitors from accessing the government’s procurement market. India has since been pouring government stimulus into large infrastructure projects throughout the country. But in a major win for the U.K., Delhi has agreed a carve out allowing British firms to access some areas of the country’s procurement market and compete for tenders. British firms will now “be able to bid for approximately 40,000 tenders worth at least £38 billion a year,” Alexander said.  WHAT WE DON’T KNOW How will the UK and India resolve their differences over carbon taxes? India has been vocal about its distaste for the U.K.’s proposed carbon border tax. Wrangling over CBAM has at times seemed likely to sink talks.  In the end, the solution was to dodge the question entirely. The FTA won’t address the question of CBAM directly. Draft U.K. legislation for its CBAM anticipates that the levy will apply to imported goods from 1 January 2027, covering carbon-intensive industries like steelmaking, cement, aluminum and fertilizer. Some Indian sectors are expected to be hit hard. Dialogue is expected to continue on the issue, but not at the expense of doing this FTA.  Will the two sides sign a bilateral investment treaty? A key win for the City of London would have been a bilateral investment treaty, which appeared alongside the FTA text. But both sides weren’t able to get this over the finish line.  The proposed pact, controversial in India, would have given firms the right to sue governments over policy changes they claim would harm their investments, through a mechanism known as the Investor-State Dispute Settlement (ISDS).  In 2016, India scrapped a number of its older treaties with other countries, after facing a wave of arbitration claims, which now total at 29 cases against its domestic regulations and policy measures.  Although talks on the investment treaty continue, there’s still no clear timeline for when — or if — a deal will ever be agreed. How much will services firms really benefit? The British government insisted Tuesday that the pact includes India’s most ambitious services commitments to date, but details were hard to come by and some sectors are less than impressed. Trade Policy Minister Douglas Alexander said it will ensure U.K. banks and finance companies are placed on an equal footing with Indian suppliers. “It also encourages the recognition of professional qualifications, so that U.K. and Indian firms can access the right talent at the right time, whether they are in Mumbai or indeed in Manchester.” Yet a trade body for Britain’s legal services sector — the second largest in the world — called it a “failure” and a “a missed opportunity” that the deal doesn’t give them more market access. The sector is “disappointed to see that the U.K.-India FTA has been agreed without reference to legal services,” said Law Society president Richard Atkinson. Changes to India’s regulations that would allow foreign firms to practice without a domestic partner were unveiled by the Bar Council of India in March 2023, but they remain in limbo following pushback from local legal firms. The digital trade provisions in the deal also “don’t go as far as we’d have liked to see,” said Julian David, CEO of techUK which advocates for tech giants. David said business groups in both countries are looking forward to working with the U.K. and Indian governments “to turn this deal into real momentum for the sector.” How long will it take to ratify?  Opposition parties are already calling for parliament to be given a vote on the new free trade agreement.  Ed Davey, the leader of the Liberal Democrats, was quick out the gate on Tuesday warning that not consulting MPs would set a “dangerous precedent for future deals” — particularly one with the United States.  Under the Constitutional Reform and Governance Act 2010 (CRAG), parliament only has the power to delay ratification of a treaty and to force the government to formally explain its rationale. But even this can only happen if the government actively chooses to set aside time for a debate and vote on the agreement, which it is under no obligation to do. The last government was criticised by a parliamentary committee for not giving MPs time to debate its post-Brexit FTA with Australia.  The Labour government has only said in relation to the U.S. trade deal that it is committed to the CRAG process.  Douglas Alexander on Tuesday said the House would “need time to scrutinize this deal before the ratification process” but notably did not commit to a vote. “My department will follow the process set out in the Constitutional Reform and Governance Act 2010,” he said, which requires the government to lay the treaty in parliament for 21 days. “The house will, of course, have the opportunity to scrutinize any legislation associated with its implementation.” Trade Secretary Jonathan Reynolds told reporters that the ratification process would take “broadly” around 12 months. That gives the government’s critics plenty of time to find more they don’t like.

LONDON — The U.K. and India have wrapped up the latest round of talks in London without clinching a long-coveted trade deal. India’s top trade negotiator, Piyush Goyal, returned to the U.K. on Friday for unscheduled negotiations in an attempt to conclude the talks. The U.K. government said the two sides had held constructive discussions this week after negotiators tried to push the deal over the finish line following three years of talks. Ministers see securing a free trade agreement with India, as well as a separate bilateral investment treaty, as a key economic priority. A spokesperson for the U.K. Department for Business and Trade said on Saturday: “We have been clear we will only sign a deal that is fair, balanced and ultimately in the best interests of the British people.” “We are determined to improve access for U.K. businesses, ensure their fair treatment, cut tariffs, and make trade cheaper and easier,” the spokesperson added. Goyal returned after visiting Oslo and Brussels following a two-day negotiating sprint with U.K. Trade Secretary Jonathan Reynolds in London at the start of this week. There are “just a couple of issues left to resolve,” said a person briefed on the talks by Goyal. Nevertheless, it “appears like most of [the deal] has been resolved and it is likely there might be something announced soon,” they said. Goyal’s mid-week visits to Norway and the European Commission were focused on carving out exemptions for India’s high-emission commodities like steel and cement from new European carbon border tax regimes. India’s trade chief has also pushed for carve-outs from the U.K.’s forthcoming carbon border tax, which is due to come into effect in 2027. The U.K. and EU both argue that providing safeguards from these carbon taxes through a trade deal would breach the WTO’s Most Favored Nation rule, which requires all trade partners to be treated equally. “This government is committed to doing the right deal with India on trade and investment that delivers our Plan for Change,” said the Department for Business and Trade spokesperson.

NEUSS, Germany — On the left bank of the Rhine, the European Union’s third-largest aluminum smelter sits idle. No smoke rises from its four spindly chimneys; the giant pots, once filled to the brim with molten silvery liquid, have long cooled. They won’t fire up again.  When the Rheinwerk plant stopped smelting in 2023, citing exorbitant energy prices, it sent shockwaves through a country haunted by the threat of deindustrialization. The shutdown meant job losses and ended a 60-year tradition in Neuss, a midsized German city halfway between Cologne and the Dutch border. But behind three silent production halls, the factory now hums with round-the-clock activity. Furnaces roar, shredders rumble and electric trucks zip around the foundry. The Rheinwerk is still producing aluminum ingots the length of a minibus.  There’s just one difference: These metal blocks are made from trash — making them less energy-intensive and more sustainable than the freshly smelted stuff, known as primary aluminum. “We’re building one recycling furnace after another,” said Volker Backs, managing director of Speira, the company running the Rheinwerk. “We take the green transition seriously here.” It wasn’t an easy decision, said Backs, but a necessary one — for both profit and planet. “We were of course sorry that we couldn’t maintain primary production of aluminum here,” he added, “but we see recycling as our future.”  One of the Rheinwerk’s giant furnaces is used for re-melting aluminium waste. | Zia Weise/POLITICO The same hard choice awaits companies and governments across the continent: Prop up products and practices that are no longer competitive, or abandon them. Complicating the matter are soaring costs, fierce competition from China and a looming trade war with the United States.   Companies need to decide whether to ditch or pour money into parts of their businesses whose green transition will cost billions. And governments need to decide how — and whom — they help. Do they bet on future-oriented enterprises or retain creaky industrial sites? Europe’s strained public purses won’t subsidize it all.  On Wednesday, the European Commission will offer an initial answer with its Clean Industrial Deal. The EU executive’s plan will propose much-needed measures to slash energy prices and stimulate investment. But it will sidestep the thorniest question: Which sectors and products can and should the EU save — and which should it let die? Brussels can’t avoid this question forever. The response will determine not only what the EU’s industry and job market look like in the coming decades but also the bloc’s autonomy: Where it gets the aluminum for its wind turbines, the cement for its buildings or the steel for its weapons.  “It’s something I don’t see enough in the discourse — a transition means you need to make choices, and those choices need to be strategic and explicit,” said Domien Vangenechten, who researches European industrial policy at environmental think tank E3G. “And you cannot save everyone.”  THE CHOICES FACING EUROPE  Europe has to make those choices now.  Skyrocketing energy prices hammered the continent’s long-struggling manufacturing industry after Russia invaded Ukraine in 2022. Some companies, notably in the steel sector, say irreversible decline can only be staved off with immediate political and financial support.  Backs recalls that as electricity costs quadrupled in 2022, the power price to produce one metric ton of primary aluminum suddenly hit more than €5,000 — double the metal’s price on the global market. “You don’t have to think very long about whether it’s still worth it,” he said.  The price shock came at the worst possible time.  One of Speira’s employees painted this mural in the Rheinwerk’s sorting hall. | Zia Weise/POLITICO Unlike previous industrial transformations, the green transition has a deadline thanks to planetary physics: The faster we stop pumping carbon dioxide into the air, the less severe climate change will be. Scientists say that zeroing out global net emissions by 2050 will prevent the worst, and the EU has enshrined this target date in law.  Energy-intensive manufacturing sectors — a category including steel, cement, aluminum, chemicals and more — account for more than a fifth of the EU’s greenhouse gas emissions, and their transition will be lengthy and expensive. They’ll have to change their production processes, use clean energy, source more recycled materials and capture the remaining CO2. As modernizing a factory takes years, companies need to know now what’s worth investing in. They want certainty about the conditions they’ll face and what support they’ll receive. The Commission’s Clean Industrial Deal seeks to address many of the manufacturers’ concerns, proposing made-in-EU quotas to stimulate demand and new measures to upgrade power grids and lower prices.  At the same time, the EU executive steers well clear of picking winners and losers in the green transition.  Yet there are urgent decisions to be made about which industries the EU wants to retain, and where it’s cheaper and more effective to rely on imports. Former European Central Bank leader Mario Draghi spelled it out in his sweeping report on boosting the bloc’s competitiveness. “There are some technologies, like solar panels, where foreign producers are too far ahead and attempting to capture production in Europe will only set back decarbonization,” he said in a speech presenting the report to the European Parliament last year.  But, he added, there are other sectors “where we do not want to be fully dependent on foreign technology for strategic reasons, and so it is key to keep the know-how in Europe.” ALUMINUM’S ROLE Where on that divide primary aluminum production will land is an open question. The metal is in everything from soda cans and window frames to military aircraft and missiles. Demand is also expected to soar in the coming decades given the importance of the lightweight material for climate-friendly technologies like wind turbines and electric vehicles.  The EU has recognized its strategic role, adding aluminum to its critical raw materials list. NATO followed suit last year, warning that the alliance’s supply of the metal is at “very high risk” of disruption.  Yet manufacturing fresh aluminum requires more electricity than any other industrial production method — more than double the average German’s annual power consumption for each ton of metal. (At the Rheinwerk, a massive connection cable allowed the factory to use as much power as Neuss’ 150,000 inhabitants combined.) Once the EU’s power grids are fully decarbonized, this process could run on 100 percent green energy. Plus, once expensive fossil fuels are out of the system, power prices should go down.  Manufacturers can’t wait for that. EU companies pay two or three times as much for electricity as their Chinese and American rivals, and the 2022 price shock was the final straw for many.  Speira was only one of many smelters across Europe that curtailed operations during the energy crisis. Within two years, the continent’s primary aluminum production halved.  By contrast, Europe’s production of so-called secondary aluminum, manufactured using recycled metal, has steadily increased. Its advantages are obvious: Secondary production requires 95 percent less energy than primary production — making for a significantly lower carbon footprint. One ton of European-produced primary aluminum emits 6.7 tons of CO2 during manufacturing. That drops to as little as 0.5 tons for aluminum made entirely from remelted waste. And in theory, aluminum is infinitely recyclable.  That isn’t to say secondary aluminum producers don’t face challenges. Key EU aluminum buyers — such as carmakers — are in trouble, affecting short-term demand. The sector is also facing low-cost competition from China, which has accelerated aluminum production. Plus, U.S. President Donald Trump just announced 25 percent tariffs on aluminum, hitting EU companies’ exports.  But production costs, particularly for energy, are the top problem for European industry — and some argue the price of keeping primary production afloat just isn’t worth it.  Industry associations and trade unions, however, warn against abandoning domestic primary production.  For now, the EU cannot cover its demand with recycled aluminum alone, said Rob van Gils, president of Germany’s aluminum association. One day that might be possible, given all the metal in use. But while the average soda can ends up back at a recycling facility within a few months, the material in window frames or wind turbines won’t become scrap for decades.  Investments in recycling capacity “will pay off over time,” van Gils said. “But we still have to keep this primary process in Europe, because otherwise we will be completely dependent on imports.”  That’s bad for Europe’s self-sufficiency — and the planet: Primary aluminum produced outside of Europe tends to be far more carbon-intensive. Chinese aluminum spews around twice the emissions of EU-made metal. BRUSSELS FACES CHOICE Whether it’s worth keeping primary aluminum production in the EU is ultimately a political choice of the sort Brussels is rather bad at.  The Commission’s power to make strategic decisions about the future of industry is limited. And even where the EU executive can make decisions, it needs buy-in from a majority of national governments.   The entrance to the Rheinwerk aluminium factory. | Zia Weise/POLITICO “Trying to come up with a holistic vision is challenging,” Vangenechten said. “Trying to come up with a holistic vision and get 27 member states to implement that and work together is even trickier.”  When the Commission suggested banning sales of new combustion-engine cars after 2035 — deciding to bet on electric vehicles for the future — a massive backlash followed.  Carmakers, fuel producers and engine-manufacturing countries successfully lobbied for a loophole for cars running on synthetic fuels, giving combustion technology another lease on life — even though such fuels are expected to be scarce, expensive and inefficient.  Since the 2035 debate, Brussels has faced calls to ensure “technological neutrality” in all its policymaking and let the market alone decide what’s viable.  But industry isn’t a monolith, and the Commission faces competing demands.  Clean technology manufacturers — which Brussels also wants to support with its Clean Industrial Deal — are pressuring the EU not to walk back its ambitions, warning that zig-zagging on already-passed climate legislation risks undermining the political predictability they need.  Or take recycling: The aluminum and steel sectors are asking the EU to restrict exports of scrap metal to ensure a steady supply of recycled material. But Europe’s recycling industry — which derives significant income from exports — warns that this would damage them.  Brussels won’t be able to make everyone happy. But the sooner it makes those decisions, the smoother the transition will be.  “The last thing we want is for a bunch of old manufacturing industries to just milk out their old assets and try to get as much revenue out of them [as possible] and then just close things down,” Vangenechten said. “That way we’re just extending the problem, and in 20 years’ time there will be zero jobs.”  THE FUTURE OF ALUMINUM Back at the Rheinwerk, workforce levels are expected to return soon to 2023 numbers as the company adds more recycling capacity. The factory is unionized and workers’ representatives were involved in Speira’s plan to stop smelting.  While some European smelters are restarting primary production now that power prices have fallen to pre-crisis levels, there is no going back for Speira. The Rheinwerk is already producing as much aluminum from recycled cans as it used to smelt from scratch. Now, instead of power-intensive electrolysis, the Rheinwerk process starts with sorting through a sea of used drink cans.  In the sorting hall, Speira’s employees set up a cabinet of curiosities they find — coins, license plates, a disturbing amount of yellow Minion keychains, decommissioned military munitions — and decorated a wall with a painting of planet Earth, flanked by two cans.  “A colleague asked if he could paint that,” said Marcel Tappert, deputy head of the Rheinwerk’s recycling and casting operations. “The staff here are very much aware that they are part of the circular economy. You see what goes in, and what comes out is a new can from which you’ll drink your beer in the summer.”  After sorting, the cans are shredded, filtered for impurities, softened in huge ovens and sent for remelting. The last two stages run on fossil gas, though Speira has started mixing in oxygen to lower emissions. Eventually, Tappert said, the Rheinwerk furnaces could run on hydrogen. But that depends on sufficient investments in pipelines to transport the clean-burning gas. “If we relied on trucks, we’d have a truck coming in here every five minutes.”  Speira is prepared to achieve climate neutrality across its entire value chain by 2045, but the company can’t go it alone, Backs said. The EU and national governments have to ensure the necessary infrastructure gets built.  If decision-makers in Brussels and EU capitals don’t do their part, there won’t be any companies left to decarbonize, he warned: “Policies that protect only the climate and don’t future-proof the economy are pointless. What’s supposed to become climate-neutral if there is nothing left?” Lucia Mackenzie contributed to this story. 

President Donald Trump said Ukrainian President Volodymyr Zelenskyy is likely to travel to Washington at the end of the week to cement an economic partnership with the U.S. that could offer some security for Ukraine against another Russian invasion in a potential postwar landscape. “I hear that he’s coming on Friday,” Trump said to reporters in the Oval Office Tuesday afternoon, speaking with nonchalance after several days of pressuring Zelenskyy. “Certainly, it’s okay with me if he’d like to. He would like to sign it together with me.” “It’s a very big deal,” he added. An administration official cautioned that the situation was fluid but that a Friday visit from Zelenskyy was possible “based on the current posture,” a sign that a joint economic agreement around Ukraine’s valuable mineral deposits was at hand. Trump has spent the last week denigrating Zelenskyy as a “dictator” and blaming Ukraine for the war that Russia began. It’s been part of a public pressure campaign — against a wartime leader by the country that heretofore has been his most vital ally — aimed at getting Ukraine’s leader to agree to a proposal that would give the U.S. a huge stake in its rare earth minerals economy once the three-year war with Russia ends. Zelenskyy rejected an initial proposal from the U.S. that would have required Ukraine to provide $500 billion in future revenue to America, effectively as reparations for military and humanitarian aid already received. But as Trump has sensed, Zelenskyy has few good options after three years of fighting, with the U.S. unlikely to approve a new financial aid package and Europe incapable of providing adequate security guarantees on its own. Speaking about the agreement, which Zelenskyy has tried to water down somewhat from Trump’s initial proposal, the president Tuesday continued to frame the deal as Ukraine repaying the U.S. for past aid. “We’re saying look … we want to get that money back,” said Trump, who again overstated the total amount of U.S. aid sent to Ukraine since the war began. The U.S. has sent nearly $120 billion in aid to Ukraine since the war began, but Trump falsely claimed again that America had sent $350 billion. He also repeated the false claim that European aid to Ukraine has come in the form of a loan that was being paid back. That is not the case, but Trump’s repeating of the claim appeared to be an effort to justify his own interest in exploiting Ukraine’s economic assets. Some Trump allies who have advocated for the minerals deal, including Sen. Lindsey Graham (R-S.C.), have suggested that it will amount to a security guarantee because the U.S. will want to protect its economic investment in Ukraine. Trump said that Europe, not the U.S., would be “largely responsible” for backing Ukraine’s military and deterring future Russian attacks if and when the current war ends.