Citizens’ Observatory for Green Deal Financing

The twin transition, green and digital, is being put forward within the European institutions as a central solution to combat the climate emergency. This technology-based transition – renewables, electric vehicles, green hydrogen, digitalisation – requires critical and strategic materials that are spread around the world. These materials are found in territories such as the high Andean salt flats between Bolivia, Argentina and Chile for lithium, the Katanga region in the Democratic Republic of Congo for cobalt, the Palawan archipelago province in the Philippines for nickel or Bayan Obo in China’s Inner Mongolia for rare earths, among many others.

Public funding: In Spain, for example, the Strategic Projects for Economic Recovery and Transformation (PERTE) that have received the most money to channel funds from the Recovery, Transformation and Resilience Plan through the Recovery and Resilience Facility are microelectronics and semiconductors, renewable energies, renewable hydrogen and storage, and PERTE for the development of electric and connected vehicles. All of them are highly demanding of critical raw materials.

Concerns: Some territories and specially, sacrifice zones are being impacted by extractivist dynamics.

Risks: The growing demand for critical transition minerals is causing disruption to ecosystems, territories and populations affected by extractivism that now carries the adjective ‘green’. Transition cannot focus only on technological solutions for the Global North. Just eco-social and eco-feminist transitions are needed for the entire globe.

In the desire to decarbonise the economy and production, there is one element that resonates above all else: green hydrogen. In order to develop it, the aim is to reproduce the same transport and consumption model as with fossil gas and, for this reason, the European Union, the Spanish state and countries of the Global South have developed their roadmaps to make hydrogen a reality. The European Union, for example, presented H2Med, a green hydrogen corridor to enable hydrogen transport from Spain to Portugal (H2Med-CelZa) and France (H2Med-BarMar).

Furthermore, with the idea of continuing to meet the current demand for fossil gas with hydrogen, the European Commission is looking beyond the European continent. Chile is one of the countries that has defined itself as a strategic partner to carry out the energy transition in the European Union and has a national roadmap for the development of green hydrogen. This will be used for decarbonisation of the mining sector and for export, and international investment funds and European fossil and energy companies will play a relevant role.

Public funding: Both because of the European green transition and the need to break energy dependence on Russian gas, the European Union has created public funds and mechanisms that can finance projects for hydrogen production and transport. This has meant that in recent years, energy and fossil fuel companies such as Repsol, Iberdrola, Enagás, among others, have been lobbying for the development of hydrogen, promoting old gas infrastructures to transport hydrogen.
A 4 million project to promote green hydrogen in Chile is also planned through the Global Gateway.

Concerns: In Chile, green hydrogen projects pose a threat to the way of life of the indigenous communities, in this case the Chango people who live in the coastal villages, as they are mainly engaged in fishing and seaweed gathering. Already with the installation of thermoelectric plants two decades ago, they have seen how the desalination process alters marine ecosystems and increases marine and air pollution, putting their health at risk as well.
The production of green hydrogen requires the consumption of significant amounts of water and energy.

Risks: It is not proven that hydrogen – whether green or not – can be transported over these long distances.
The promotion of large infrastructures implies the continuation of a centralised energy model with large production centres and the transport of energy to large consumption centres. The continuity of this big-big-big model (big companies making big investments) hinders the progress towards energy sovereignty and a decentralised energy model, which is more democratic and sustainable.

Across Europe, public services are being progressively dismantled in favour of large private companies. Privatisation, rather than being reversed, is being deepened by the EU’s recovery and transition plans. The Strategic Plan for Economic Recovery and Transformation (PERTE) Salud de Vanguardia, is of one of the mechanisms for channelling Next Generation funds in Spain. The Salud de Vanguardia PERTE is an example of how, through large public-private partnerships (PPPs), digitalisation and technological modernisation are being presented as the solution to all crises (including the care crisis).

Concerns: The PERTEs are not committed to guaranteeing basic rights, nor do they recognise the urgency of dignifying jobs that are essential for the reproduction of life; and meanwhile, new debt mechanisms are being created that will mean more cuts in public services.

Risks: Feminisms have long warned of the need to prioritise the reproduction of life over economics, for example by defending public services and the commons, a choice that became evident during the confinement, but was soon left behind.

In Poland, there are currently only six registered energy cooperatives. Two of these are operational. And although citizens are enthusiastic about community energy, bureaucracy and outdated energy grids result in many of these projects being put on hold. 

Our video – New Energy – showcases the pioneers who are paving the way for Polish energy communities. While some have already established energy cooperatives, others are just starting out. But in seeking financial support for their investments, they face an uphill task navigating the bureaucratic and legal obstacles that stand in their way.  

Despite these challenges, energy communities remain committed to developing a decentralised, renewable, clean and efficient energy system with citizens at its core. They provide a fantastic opportunity to transform the European energy system and make it more resilient.  

But they can’t do it all on their own. EU funds have an important part to play in unlocking the potential of these communities. But to be effective, they need to be complemented by legal changes and energy grid investments. 

Energy communities have shown just how important they can be in driving the transition to renewable energy sources. But they’re also having a real social impact by tackling issues such as energy poverty. When determining the financial support they give to energy communities, the Polish authorities should take their many benefits into account. 

For inspiration, watch Polish Green Network’s video.   

Europe’s 2022 drought demonstrated what experts have known for years – that the continent’s next crisis will be lack of water. Ill-considered water management practices, damming, irrigation, and overuse of subsurface water have damaged entire landscapes. 

Two hundred years ago, roughly a fifth of Hungary was wetlands. But over the past century, these habitats have been drained and converted into arable fields for food production. Droughts are becoming more frequent, and experts agree that irrigation is not an appropriate way to tackle water scarcity at the landscape level. 

The will and financial resources to reverse the desertification of Central Hungary and address summer droughts are available. But damming the rivers, pumping, water retention, wetland restoration, rainmaking – which solutions are truly effective?  

Public funding: As a part of Hungary’s recovery and resilience plan, water management developments are taking place in the desertifying area of the Homokhátság (Sandy Ridge) between the Danube and Tisza rivers. The plan allocates EUR 117 million for this investment, and even more is planned to come from other EU funds.  

Risks: The planned investments fail to tackle the root causes of the situation, and how some of the planned infrastructure (pumps) will be used is ambiguous. These pumps will be suitable for transferring water to wetlands as well for irrigation; but irrigation infrastructure has a lock-in effect for farmers, delays land-use change and favours big agricultural companies instead of small-scale agriculture. 

To learn more, watch MTVSZ’s video. 

Despite the availability of EUR 5.69 billion, some of the reforms planned in Bulgaria’s recovery and resilience plan have not been implemented yet, raising concerns about the effectiveness of investments. The implementation of investments precedes the implementation of reforms, which should ideally go hand in hand. 

One critical area that has been neglected is the reduction of energy poverty. The current investment programme excludes energy-poor households for several reasons. First, initial investment costs for equipment make it unaffordable for those that fall under the definition of energy poverty. Second, there is no prioritisation based on income criteria, meaning only higher income groups can benefit from the programme. Additionally, inadequate information campaigns and complex application procedures hinder the participation of those in need. 

Additionally, there is no regional distribution or consideration of specific regions with higher levels of energy poverty. The programme also overlooks the potential for prosumerism and energy communities, preventing multiple households from benefiting collectively. 

To improve the situation, it is crucial to include energy-poor households and conduct targeted information campaigns. The programme’s tranches can be expanded to include lower income groups, with a focus on simplifying the application process. Embracing prosumerism and allowing connections to the electricity grid for photovoltaic systems would align with EU policies.  

By addressing these issues and ensuring a synchronised approach between investments and reforms, Bulgaria can make significant strides in combatting energy poverty and create a sustainable future for all its citizens. 

To learn more, watch Za Zemiata’s video.  

In Estonia, the renewable energy transition has long been hindered by political inaction, largely because previous governments lacked the political will to take the necessary steps to develop the country’s massively untapped solar and wind potential. Not a single wind farm with more than three turbines was built in the past decade.  

Now the energy crisis has finally forced decision-makers to take action, with plans underway to speed up the permitting process for wind farms. But while the transition to renewables is welcome, it is equally important to prevent the damage to nature that can occur when long-needed policy reforms are drawn up in haste. Ecosystems and biodiversity must not be sacrificed in the rush towards carbon neutrality.  

Public funding: In 2022, the European Commission launched REPowerEU, its plan to end the EU’s dependence on Russian fossil fuels and accelerate the transition to renewable energy. Under this initiative, Estonia has earmarked EUR 31.8 million to streamline the permitting process for renewable energy projects. This involves revising existing laws to shorten procedures related to spatial planning, permit applications and environmental impact assessments. Additionally, a new draft bill has been proposed to fast-track wind energy developments and the process of selecting optimal areas for construction. Considering Estonia’s updated target to cover its annual consumption with 100 per cent renewable electricity by 2030, this new reform has taken on added significance. 

Risks: Amid the rapid deployment of renewable energy solutions, it is crucial to enhance measures aimed at protecting biodiversity. Under the new reform, which can no longer be rescinded, the process of selecting optimal sites for wind farms has already begun. One major concern is the proposal to offset any potential deforestation through a fee that will be used to plant trees elsewhere. Another is the possibility that decision–makers, fearing opposition from local residents, may push for wind turbines to be located in less populated, ecologically sensitive areas. 

To learn more, watch Estonian Green Movement’s video.  

Public funding

EUR 400 million from the Connecting Europe Facility

Concerns

The Melita TransGas pipeline, stretching 159 kilometres, is slated to connect Malta with Sicily. The Maltese government argues that the project is needed to end the island’s energy isolation and prepare for the transport of blends of natural gas, biomethane and hydrogen. But the project is hugely controversial.

First, there’s no further need for gas infrastructure in Europe. Second, there’s no guarantee that hydrogen will ever flow through Melita once it’s built. Third, the pipeline is linked to Electrogas, a company embroiled in a number of ongoing corruption and bribery cases. Finally, a recent environmental impact assessment found that the seabed of Sicily’s Gela harbour, a section of the planned pipeline, is heavily polluted with radioactive materials.

Risks

There is a risk that the pipeline will further lock Malta and Europe into climate-wrecking fossil fuels for many years to come. At least 35 years, according to the developers!

The pipeline is expected to transport two billion cubic metres of methane gas per year to Malta.

To learn more, watch ReCommon’s video.