Czech recovery plan greener with REPowerEU, but risks remain

The Czech government has approved the allocation of approximately EUR 7.17 billion in increased EU funding for the national recovery plan. The final version of the plan has undergone significant changes, notably the welcome removal of proposed funding for both the Transalpine (TAL+) oil pipeline and the STORK II fossil gas pipeline, resulting in a considerably greener plan. The exclusion of these projects is a positive step forward, but important reforms must follow.  

The original version of the recovery plan was prepared by the government and approved by the EU in 2021, with an allocation at the time of EUR 7 billion. In response to Russia’s invasion of Ukraine, the European Commission launched REPowerEU, its strategy for addressing Europe’s dependence on energy resources from Russia and other authoritarian regimes. 

Under the plan, the EU has allocated additional funds to Member States to promote energy savings, advance renewable energy sources and diversify energy supplies. The Czech government had the opportunity to secure a loan of up to EUR 14 billion, but ultimately approved an updated plan comprising EUR 5.7 billion in loans and EUR 1.4 billion in grant. 

Lack of quality reforms 

With the addition of the revised REPowerEU chapter to the Czech recovery plan, the government has committed to implementing new reforms. Several of these have the potential to significantly transform the Czech energy sector. Perhaps the most notable is the adoption of an amendment to the Energy Act, known as LEX RES II, which will enshrine community energy into legislation. The adoption of this amendment is crucial, as the lack of a legal framework has hindered the development of energy communities thus far.  

But establishing a framework is only a start. The parameters governing electricity sharing will play a vital role in shaping the long-term outlook for energy communities. However, if a well-crafted version of the amendment is not adopted, as is now currently feared, the idea of a future in which individuals, communities and municipalities generate, store and share electricity among themselves will remain an unfulfilled vision.  

Fossil-free projects 

The final version of the plan underwent significant changes compared to the original – but only at the eleventh hour. Following pressure from non-governmental organisations and due to the reluctance of the European Commission, two controversial fossil fuel projects were dropped: TAL+, which aims to increase the capacity of the Transalpine Oil Pipeline, and STORK II, a new bi-directional fossil gas pipeline connecting the Czech Republic with Poland. Both projects were intended to replace fossil fuels from Russia. The decision to remove these projects from the recovery plan is a step in the right direction. They would have deepened the Czech Republic’s dependence on fossil fuels and contradicted the EU’s climate and energy objectives. 

In Italy, the expansion of TAL+ has raised concerns about environmental and climate impacts, and a lack of public consultation has led to protests and legal action. The Czech government envisions that STORK II will be used in the future to transport hydrogen, but there is no timeframe for when this will happen. And for that matter, there is no guarantee that the hydrogen transported will be produced from renewable sources, so there is no guarantee that the pipeline will not facilitate the further generation of carbon dioxide emissions. It is also important to note that removing these projects from the recovery plan does not mean that they will suddenly stop. Indeed, the government has already announced that other sources of funding will be sought, so criticism of these projects is still valid. 

The update includes a number of highly beneficial measures. In the area of energy savings, funding will be allocated to major renovations of public buildings, the construction of new public buildings with high energy standards, and advisory services in relation to energy-saving renovations for a wide range of buildings. There is also provision for co-financing under the New Green Savings Plan, which should involve loans for households. EU funds are also earmarked for improving distribution networks and establishing an electricity data centre. 

What the update lacks, however, is financial support in the form of grants for low-income households specifically targeted at energy savings. This is an area with immense potential for reducing energy consumption. Unfortunately, these marginalised groups often lack the financial means to implement energy-saving measures. Therefore, in this scenario, it would make more sense to provide funding in the form of non-repayable grants. 

Lack of civil society involvement 

A major shortcoming of the national recovery plan update has been the limited focus on public participation. The entire process of updating the plan has been conducted with minimal involvement from civil society. While the recovery plan committee is technically an advisory body to the steering committee, which has the authority to make decisions, monitor progress and control the implementation of the plan, in practice, there has been little room for commenting, constructive feedback or in-depth discussion of proposals.  

A glaring omission of the Recovery and Resilience Facility (RRF), the EU instrument that funds recovery plans, is the lack of a specific legal requirement for civil sector involvement. Essentially, it is up to Member States to decide how to involve the civil sector in the decision-making process. However, according to the European Commission’s guidance on the RRF in the context of REPowerEU, the consultation process for the REPowerEU chapter should be adapted to reflect the changes in the respective recovery plans. In the case of the Czech Republic, where significant changes were made to the national recovery plan, this should have translated into a more robust consultation process. Unfortunately, this was not the case. 

With the substantial increase in funding, the Czech Republic now has an unprecedented opportunity to tackle the climate crisis and decarbonise the economy. Only time will tell whether the government fulfils its promises or squanders the chance to make significant progress in addressing these pressing challenges. 

Adapted from an article originally published in the Czech daily Hospodářské noviny.