The German Green Foundation is associated with the realization of Nord Stream 2

For years, the struggle to complete Nord Stream 2 pitted Washington against Moscow and divided Europe. Now a small German state has entered the fray with an unusual move: forming an environmental foundation to help complete the pipeline.

Mecklenburg-Western Pomerania (MV), along Germany’s northeast coast, is home to the logistics center and endpoint of the besieged project which is almost complete but has been blocked for more than a year by US sanctions.

This week, MV launched the Foundation for the protection of the climate and the environment with € 200,000 in public funds and € 20 million from the gas pipeline project, owned by the gas group Gazprom, supported by the Kremlin.

Opponents of Nord Stream 2 are puzzled as to why one of Germany’s least populous states would publicly defy strong US sanctions. German environmentalists, meanwhile, accuse the state of “whitewashing” its role in a geopolitical struggle that has nothing to do with climate change.

“A foundation claiming to promote environmental protection should not be founded by a fossil fuel project,” said Theresia Crone, an activist who staged a protest and a petition with more than 24,000 signatures against the foundation.

Nord Stream 2 declined to respond to questions sent by the Financial Times, but said the foundation “will promote Germany’s climate goals and support work to complete the Nord Stream 2 pipeline”.

The United States and most of Eastern Europe say the € 9.5 billion project would increase Europe’s dependence on Moscow. But Washington is in an awkward position with Germany, an ally that supports what it says is a purely commercial endeavor.

The foundation comes at a sensitive time for German-American relations, as President Joe Biden seeks to restore strained relations during Donald Trump’s presidency. Still, echoes of the Cold War echo in MV, which is part of the former East Germany, where Moscow remains popular enough to hold a “Russia DayAnd Washington is viewed with suspicion.

Local leaders are also touting a widely shared position in Berlin: US sanctions are supposed to force Europe to buy US liquefied natural gas.

Claudia Müller, a local MP in the Green Bundestag, who opposes both US LNG and Nord Stream 2, said the foundation was particularly questionable.

She pointed out that her laws authorizes Nord Stream 2 to propose the general manager of the commercial arm of the foundation and gives him the right to select two of the 18 members of the board. Erwin Sellering, one of the three appointed foundation heads, is a former prime minister and supporter of Nord Stream 2. Neither he nor the other presidents have environmental credentials.

“It’s pretty obvious that they [Nord Stream 2] lead this entity, ”she said. “So the question is, ‘Is it really a foundation? “”

Fossil fuel companies often fund foundations to offset environmental degradation, said Sascha Müller-Kraenner, director of the German Environmental Agency (DUH). “But to have a state government involved, the main objective being to support the construction of the pipeline itself – this is new,” he said. “I find this very problematic.”

DUH has filed two lawsuits against the foundation – one in German courts arguing that the entity should not be considered a public foundation, which benefits from looser oversight and transparency regulations, given that 99% of the funding comes from a project owned by Gazprom. He also filed a complaint with the European Commission, claiming that a public project promoting a company’s project violated state aid regulations.

Christian Pegel, MV’s energy minister, defended the project, asserting that its main objective was to protect the environment, “over which Nord Stream 2 has no influence”.

Perhaps the most controversial aspect of the foundation is that it will also engage in commercial activities related to Nord Stream 2, purchasing the necessary equipment for companies that wish to work on the pipeline but may face difficulties. US sanctions.

Mr Pegel said this would allow the project to be completed regardless of the US borders. “This foundation can buy machines and products now, before the new sanctions go into effect, and store them. Then when they are needed in a year, if sanctions were imposed on companies, they could use them, ”said Pegel.

A US official familiar with the sanctions laws expressed skepticism about the goal, arguing that any company that sells products used by Nord Stream 2 would be held liable, whether they sell directly to a sanctioned company or to a public foundation.

“This is either a conscious Russian disinformation program to collect supplies from naive companies or a truly irresponsible decision by the foundation,” said Thomas O’Donnell, energy and geopolitics analyst at the Foundation. Hertie School of Governance.

Despite the support of Nord Stream 2, Berlin has distanced itself from the foundation. Foreign Minister Heiko Maas said it was a decision of the state, “not a decision made by the federal government”.

And while Mr Biden may be reluctant to fight for a foundation while trying to fix transatlantic fences, Secretary of State Antony Blinken said during his confirmation hearing this week that the administration would use “all tools. of persuasion ”to fight the Nord Stream 2 project.

In MV, some officials argue that the foundation’s success may not matter as much as local pride in this geopolitical struggle.

“Standing up to America here is playing well,” said one politician, “whether you win or lose”.