Uniper nationalization: why the energy company needs to be put on a climate course

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Rethinking required: Uniper boss

Photo: WOLFGANG RATTAY / REUTERS

The federal government wants to get a 99 percent stake in the troubled energy company Uniper.

So far, the Finnish company Fortum has owned the majority in the gas importer, which has experienced severe turbulence due to the lack of Russian deliveries.

For the first nine months of the 2022 financial year, Uniper reported a consolidated loss of almost 40 billion euros, around a quarter of which are realized costs for the procurement of replacement quantities for the missing gas from Russia.

The federal government's rescue measures that have become necessary as a result include, above all, the state's planned entry into the Düsseldorf-based company, which was announced on September 21.

A capital increase of 33 billion euros is to be subscribed exclusively by the federal government.

In addition, there is a ban on dividends and the limitation of remuneration for the management around the CEO

At an extraordinary general meeting next Monday, Uniper shareholders are to vote on the planned nationalization of Germany's largest gas company.

In this context, Uniper has already nominated four new members for the Supervisory Board to replace the representatives of the outgoing parent company Fortum.

Habeck: "Take a very close look at individual business areas"

The nationalization should not only stabilize Uniper, the federal government also wants to exert a strong influence on the group in the future.

The individual business areas will therefore be looked at very closely, said Federal Minister of Economics

(53) back in September.

Since the state does not initially want to break up Uniper, "but is active for profit or in indirect state administration, the corporate law norms from national or European private law apply to it," says a legal opinion commissioned by the environmental organization Greenpeace, which is available to manager magazin .

Obligation to realign the Group

In this report by the Hamburg law firm Günther, the authors

and

(50) come to the conclusion that the federal government also has a new task with the management of Uniper: "Companies 'rescued' by the state with a considerable CO2 or methane footprint can not only simply be stabilized because of the weight of the climate protection requirement, but must also be designed with regard to their climate-damaging effects in such a way that their business activities are aligned with a Paris-compatible reduction path," says the report.

The German government recently reaffirmed its commitment to the 1.5 degree target at the UN climate conference in Egypt.

In concrete terms, this means, for example, that the federal government, as the future owner of Uniper, is legally obliged to avert climate damage, for example through planned gas projects.

For example, a gas drilling project planned by Uniper and RWE together with the energy company Woodside off the west coast of Australia is to deliver climate-damaging gas from 2025 and is also to be built in a sea area that is important for whales.

Uniper alone plans to purchase two million tons of liquefied natural gas (LNG) annually from Woodside.

However , the negative ecological consequences of this project could be enormous .

Greenpeace sees Habeck as a duty here, who, as Economics and Climate Minister, must prevent a future state-owned company from continuing to invest in such deep-sea drilling that is harmful to the environment and climate.

"This project comes too late for the current energy crisis, it destroys the habitat of whales and further fuels the climate crisis," says Greenpeace ocean expert

and demands: "Uniper must withdraw from it."

Demonstrate the feasibility of decarbonization

With its powers, the federal government now also has the opportunity to demonstrate the feasibility of decarbonizing a company, according to the report.

Because private law, which is still not very climate-regulated, is currently leaving decarbonization largely to the responsibility of companies and to corrections by the courts.

Therefore, the recommendation in the legal opinion is: "The federal government can fulfill its exemplary function, which the legislator has provided for in the title of the fifth section of the Climate Protection Act, and it will also be able to set the incentives required by the Federal Constitutional Court."

By transforming Uniper and investing in renewable energies, Germany would make itself independent of autocratic states that supply gas.

"The federal government should seize the opportunity of nationalization and consistently steer Uniper's business model away from fossil energies and towards renewables," said Seidensticker.