Member Article

The specter of Russian oligarchs looming over Europe's independence?

Everyone, since Napoleon, at least, knows the Russians are hard nuts to crack. Most people also know how Russian businessmen don’t hesitate to take the gloves off, when business gets tough. In a recent development of political and economic strong-arming, Russian oligarchs are trying to get in a position where they could rule the entire EU market and, through that monopoly, acquire massive influence over EU policy.

European agriculture needs fertilizers and a key ingredient is phosphate rock. Most of the world’s phosphate contains trace quantities of the natural element cadmium, except for a few small sources in northern Europe, Russia and elsewhere which for geological reasons have only low levels of cadmium. Russia is now arguing that cadmium in fertilizers is extremely dangerous and is concerned for EU citizens’ health.

As sensitive as one might be to such consideration from Russian businessmen, one may reasonably wonder why and how they came to have such concern for EU public health. In the beginning of the 2000s, the European scientific community started examining how cadmium concentrations within the soil could affect consumer’s health. Indeed, cadmium is a heavy metal and, as such, should not be absorbed in large quantities. If nickel-cadmium batteries still existed, any doctor would recommend his patients not to swallow one (not that they would recommend them to swallow a more modern Lithium-ion battery).

However, as the risks of exposure to cadmium were identified, in brazing sticks and bathtub plating for example, those applications were banned. Cadmium concentrations today are low enough to be harmless, including in the soil, as was confirmed by the 2014 report which settled the questions originally raised by a 2002 report. Professor Erik Smolders and Dr. Laetita Six reported (1): “We can, however, confirm that a decreasing trend in soil Cd and thus crop Cd can be expected.” This conclusion was exhaustively reviewed by the European Commission’s own experts in 2015 and received unanimous endorsement: cadmium levels in EU soil are falling, not rising. And yet, the EU is considering placing drastic limits onto phosphate imports which would make most of the world’s supplies banned from the EU market.

If the limit is applied, the European Commission (2) itself has assessed that EU agriculture will depend entirely upon two main sources : Russia and, on a much smaller scale Finland. . Not only would Russia have almost complete command of supply - which induces a loss of economic sovereignty - they will be in a position to suffocate EU agriculture. Russia has been known to leave Ukrainian citizens to freeze during winter by cutting off its gas supplies, as part of its political arsenal of retaliation.

Jacek Saryusz-Wolski wrote for Euractiv (3): “in the past Gazprom had resorted to an energy blackmail strategy on three occasions, both related to Russia’s decision to punish Ukraine, as in 2006, 2009 and, to a lesser degree, 2014.” Russia has tense relations with the EU, which has had tough sanctions in place on Russia since 2014, so Brussels will be almost toothless in forcing them to produce and deliver. Even if, by the best of luck, any political tension is avoided over the matter and Russia doesn’t use its new monopoly as a stick, it may well simply run out of phosphates: of the 68 billion metric tons of identified reserves in the world, only 1 is in Russia. And Russia is, as a matter of policy, diverting an increasing share of its fertiliser production to its own domestic agricultural sector in order to boost its food production and its exports – including to the EU.

On purpose or by accident, the EU’s agricultural sovereignty could be seriously jeopardized if such a regulation comes through. The EU think tank HCSS (4) wrote: “That said, the Union’s share in the global low-cadmium phosphate market (despite significant low-cadmium rock imports from Russia) is extremely low (only around 10%), so future prospects are limited”.

Phosphate would not be the only resource Russia would use to interfere within European affairs and dictate its terms. Ten of the countries which rely the most on Russian gas are all EU members, whose imports range from half to all of the gas they burn every year. The EU has filed an anti-trust campaign (5) against Russian market-tampering, monopoly and instrumentation of the energy resource as a political stick.

Russia is also working to convince EU policy makers that low cadmium limits would not grant it a monopoly because other suppliers can simply and cheaply extract the cadmium from their phosphate in order to meet the EU requirements. Many, including the European Commission, have been persuaded by this. But research into a wide range of potential ‘decadmiation’ processes has been underway for over 20 years. No process has yet proven to be technically viable on an industrial scale, nor has it been possible to quantify the resulting increase in fertilizer prices. The research continues and, it is to be hoped, may one day yield positive results. But Russia’s claims that it is already feasible are false: no commercial operation to decadmiate fertiliser exists anywhere in the world.

Given how flimsy the case against cadmium is, the move is obviously diplomatically motivated. Both the World Health Organization and the Food Administration Organization published their findings in 2010 according to which current cadmium levels were in no way problematic. The European Food Safety Agency also concluded that the risks to public health from cadmium were low, both in 2009 (6) and 2013 (7), after raising the question in 2001 (8). Furthermore, there is in fact no scientific evidence that a severe limit on cadmium levels in fertilizers would change anything in the levels in our food. A study (9) by the University of Wageningen (10) in 2017 found that multiple, complex factors govern the intake of cadmium in the diet including dietary patterns (nearly half of all EU food is either imported or seafood, so would be unaffected by fertilizer limits), food processing, soil chemistry, crop variety, and – most significantly - natural cadmium levels in the soil: cadmium in fertilizers amounts to only 0.003% annually of the cadmium naturally in the soil, so even if levels in fertilizers could be reduced to zero, it would take many years to have any impact on the soil But placing Europe’s agriculture capacity exclusively within the hands of Russian oligarch’s seems easy to guess as to the political consequences it might yield. With a new round of EU negotiations starting, Russia is scoring points with the registered support of the EU’s environmental bureau, which has recommended the Commission, Parliament and Presidency to implement the lowest possible limit on cadmium traces.

The EU has come to a major crossroad. After having implemented the basic and necessary transnational laws, will it be tempted with over-regulating, or will it let the already finely-tuned market play its role? Or will it fail to protect its members from economic and political bullying from Moscow?

Brussels versus Russian oligarchs: round 1.

1. http://ec.europa.eu/health/scientific_committees/environmental_risks/docs/scher_o_168_rd_en.pdf
2. https://ec.europa.eu/transparency/regdoc/rep/10102/2016/EN/SWD-2016-64-F1-EN-MAIN-PART-2.PDF
3. https://www.euractiv.com/section/energy/opinion/commission-opens-door-to-further-gazprom-blackmail/
4. http://www.phosphorusplatform.eu/images/download/HCSS_17_12_12_Phosphate.pdf
5. http://www.reuters.com/article/us-russia-gazprom-eu-competition-idUSKBN14G1IJ
6. http://www.efsa.europa.eu/en/efsajournal/pub/980
7. https://www.efsa.europa.eu/en/efsajournal/pub/3444
8. http://ec.europa.eu/health/scientific_committees/environmental_risks/docs/scher_o_168_rd_en.pdf
9. http://edepot.wur.nl/403611
10. https://www.wur.nl/en/Dossiers/file/From-soil-to-nutrition-micronutrients-and-heavy-metals.htm

This was posted in Bdaily's Members' News section by Victor Allen .