Blog entry

Adriatic Metals’ ruthless mining: How can the EBRD help improve its clients’ practices when it doesn’t follow its own standards?

In 2020, nature-lovers from Kakanj started to notice tree-cutting in the mountains behind the town, together with damage to biodiversity, and heavy machinery carrying out unspecified works. Gradually it became clear that a zinc, lead and barytes mine was planned by Adriatic Metals, and that the EBRD had bought shares in the company.

Due to a complete lack of consultation with people from Kakanj, in August 2022, a group of citizens filed a complaint to the EBRD’s Independent Project Accountability Mechanism (IPAM) requesting a Compliance Review procedure to establish if there had been breaches of the EBRD’s Environmental and Social Policy.

Additionally, they contacted Bankwatch and in November 2022 we visited the area. They showed us an apparently endless road which had been newly built in the mountains to access the mine. We identified several issues of concern and contacted EBRD staff and IPAM.

An unexpected access road to the mine

During the visit, it immediately became clear that the road to the mine had been built in a different location to the one examined in the EBRD’s environmental studies. And it had been done carelessly. It was built on a pre-existing forest path, considerably widened by dug-out stone material. This also narrowed the stream bed running in parallel, which local people fear will increase flood and landslide risks.

The fact that the road was not mentioned in the environmental studies also means that the local community was not consulted about it – a potential breach of the Aarhus Convention’s requirement for meaningful consultations on projects with significant environmental impacts.

We later found out that the road has not been built instead of the originally planned one, but in addition – further increasing the environmental impact of the project.

Biodiversity impacts

The mountainous area around the mine is an important natural area, including for large carnivores such as bears and wolves. In 2013, the Kakanj authorities commissioned a study on the legal protection of the Trstionica forest, planned under the Spatial Plan and Development Strategy of the Zenica-Doboj Canton. However, formal protection never happened. By coincidence or not, the mine is being developed nearby this forest.

The EBRD’s environmental studies show that the mine and its access roads will damage so-called ‘critical habitats’, which include important habitats for endangered, critically endangered, endemic or geographically restricted species. Yet, the Bank’s Environmental and Social Policy prohibits works in such habitats unless very stringent conditions are met.

But in this case, although adjustments were made to avoid some critical habitats such as bear dens, the project environmental studies dismiss the remaining ones as not that critical after all, instead of seriously assessing whether the project should be further changed or stopped.

Already at the time of our visit it was clear that the new access road had seriously damaged one such habitat – Vrući potok. The stream was also seriously muddy, presumably from the preparatory works for the mine. There are also new findings that Adriatic Metals may have further damaged other habitats of endangered animals.

Earlier this year, activists visited a site named Red Rocks, where they allege the company is disposing of waste material from the mine, although a waste disposal permit has not yet been issued. Allegedly, traces of wolf’s fur were found 50 metres from the waste disposal location, which are now subject to laboratory analysis.

In response, the Federal Ministry for the Environment and Tourism sent environmental inspectors to the scene and in mid-July, announced that several violations had been found. The landfill was not lined, no concrete channels were built at the edges, no sedimentation tank was formed, and the landfill is not fenced. Adriatic Metals was given a deadline to comply with the inspectorate’s requirements and an additional inspection was initiated to better understand the nature of the materials being dumped.

Potential impacts on Kakanj’s water supply

Some Kakanj residents are extremely concerned about the project’s impact on the town’s water supply. It is up to the Vareš municipal utility to balance water usage between the local community and the mine and to ensure adequate environmental flow in the local water courses, and neither the Kakanj authorities nor the EBRD have much control over this. In addition, even before the first phase of the mine is operating, a second phase is planned, which has not been included in the environmental studies. So, it remains unclear whether an adequate water supply can be maintained for both the mine and Kakanj during dry periods.

Lack of public consultations in Kakanj

Local people in Kakanj have pointed out that there was a complete lack of public consultation about the mine in the town. These claims are supported by the EBRD’s environmental studies, which show consultations only in the much smaller town of Vareš. As far as Kakanj residents are concerned, besides a few representatives of local villages in neighbouring settlements, no other residents of the broader community were made aware of the project.

Why has the EBRD gone silent?

After we approached EBRD staff and IPAM in December 2022, the Bank staff replied that it was aware of the additional access road and that the environmental studies would be updated accordingly. However, updating an environmental impact assessment after the road has been built is completely pointless and against all logic of public consultation.

After we contacted the EBRD again in January, staff replied that they would be undertaking a site visit in early February which would enable a more detailed response. However, despite reminders in April and again in June, there is still no answer from the Bank.

Tone-deaf statements by international community cause local protest

On 5 June, the Bri tish Embassy organised a visit to Vareš, together with the representatives of the EBRD, and Norwegian and US Embassies, confirming their support for the Vareš project as ‘the most significant foreign investment in the country and emphasising commitment to talent, safety, community, and sustainability.’ The Norwegian embassy also joined in the praise for the company, who will apparently leave a ‘legacy of lasting prosperity and sustainable jobs to local communities, and are dedicated to talent, safety and sustainable mining.’

However, people in Kakanj do not share the same excitement about the mine development. In response to the visit, an informal citizens’ group organised a protest against the destruction caused by the mine and the ambassadors’ support for it. They also demanded the protection of the surrounding area’s water sources.

The contradictions are clear: On one hand, promises of economic blossom and opportunities derived from sustainable mining operations with no harm to nature, and on the other the reality of the company’s careless approach and degradation and damage to biodiversity. Surely, before expressing support for projects with a high risk of environmental damage, international representatives should take a more sensitive approach and find out what the affected people think.

While the international community praises the development of the project, Kakanj’s community initiative is gaining wide support from civil society throughout Bosnia and Herzegovina. People are fed up with feeling like a colony whose natural resources are being extracted at a low price for the companies and a high price for people and the environment.

Following the ambassadors’ visit, five environmental networks in the country jointly sent an open letter to the embassies, expressing disgust at their support for the company’s activities, and lack of respect for the community’s concerns.

The EBRD’s new mining strategy – more of the same?

The EBRD recently drafted a new Mining Sector Strategy (2024-2028), demonstrating the Bank’s intention to increase investments in critical raw materials. It is currently open for public consultation. The proposed strategy outlines the Bank’s commitment to engage with relevant stakeholders in the mining sector, especially civil society organisations, sector specialists, and communities, but cases like Adriatic Metals raise the question of what exactly the Bank will do differently this time.

One of the most important lessons learned from previous investments emphasised in the draft Strategy is obtaining and maintaining a social license for mines to operate. A key component is ‘comprehensive assessment of the company’s approach to stakeholder engagement throughout all stages of operations and providing support and guidance when needed.’ However, in reality, the Bank continues to reinforce the same old practices and fails to lead by example.

A good starting point would be for the EBRD to unreservedly follow its own procedures when assessing and monitoring projects and interacting with civil society. In countries like Bosnia and Herzegovina, with stunning nature but weak rule of law and poor environmental governance, it must only invest in projects with no potential for significant environmental damage and harm to local communities. And it must consider grievances from local communities affected by projects in a much more meaningful way.

Renewable energy permitting in Bosnia and Herzegovina: how to optimise the process while safeguarding the environment and public participation

Bosnia and Herzegovina (BiH) has significant potential to develop environmentally acceptable forms of renewable energy. It also has stunning landscapes and biodiversity including rivers, karst fields and forests that many western European countries can only dream of. And if it is to withstand the increasingly extreme conditions wrought by climate change, it now faces the twin challenge of rapidly increasing its renewables fleet while protecting its nature.

But although many projects are under development, BiH has only three wind farms in operation, all in the Federation of Bosnia and Herzegovina (FBiH) entity. As of the end of 2022, BiH had 102 megawatts (MW) of solar plant capacity. This is more than neighbouring countries like Montenegro and Serbia, but is still not sufficient.

The reasons for this are many, including lack of political will, legislative issues, preferential treatment of certain producers, and uncertainty about incentive schemes. But the issue of permitting caught our attention, partly because it is an increasing area of focus at the EU level, and partly because investors have claimed that around 60 various permits, consent documents and notifications are needed to build a wind farm in BiH.

The latter surprised us, as the experience with hydropower plants indicates too little environmental regulation, not too much. Plants have been permitted or built in locations where they should never have been allowed, such as protected areas or areas planned for protection, and seem to have little trouble obtaining permits, causing a widespread public outcry. We therefore asked the Aarhus Centre in Sarajevo to take a closer look at permitting procedures in BiH to see what can be improved.

Spatial planning chaos

An over-arching problem, especially in FBiH, is spatial planning. Better spatial planning, and the definition of acceleration areas for renewables, is being given increased attention in the EU as a way to build social consensus on renewables siting and avoid lengthy procedures to include projects in spatial plans at a later stage. But FBiH does not even have an spatial plan, so formally, one from the early 1980s is still valid. Consequently, the cantonal and district spatial plans that exist are a mixture of the Yugoslav one, a draft FBiH one produced in the 2000s that was never adopted, and new projects that are not aligned with the higher order plans.

Republika Srpska has a 2015-2025 spatial plan, but it fails to resolve fundamental conflicts. For example, it plans eight hydropower plants on the upper Neretva river but also plans to protect it.

Inconsistent concession rules in FBiH

In FBIH, hydropower concessions larger than 5 MW are issued by the Federal Ministry for Energy Mining and Industry, and smaller ones by cantonal authorities, while wind and solar are left to the cantonal level to regulate. The result is a patchwork of different rules and legal grey areas, with some cantons requiring concessions, some not, and some not yet having rules.

Around 29 permits and notifications needed – and in FBiH none can be obtained online

Our analysis identified around around 29 permits/consents/notifications needed to build a wind farm in FBiH, and they cannot be obtained online. We identified roughly the same number of steps in Republika Srpska, but a substantially higher number can be obtained online. In each case, the system consists of three main permits, for which all other documents and approvals are preconditions.

FBiH

Republika Srpska

Urbanistička saglasnost

(spatial consent)

Lokacijske uslove

(spatial conditions)

Odobrenje za građenje

(construction permit)

Građevinska dozvola

(construction permit)

Odobrenje za upotrebu

(operating permit)

Upotreba dozvola

(operating permit)

Even for very small-scale solar, nine different steps are needed in each entity, including a requirement to obtain the permits shown above.

How to optimise the project development process

Despite the strong need for an increase in renewable energy, approving every project in every location is not the goal. Not every kind of renewable energy is sustainable, as BiH has already learned with hydropower, and not every location is acceptable. However, it is unacceptable that needless administrative barriers, which serve no social or environmental purpose, continue to impede renewables development.

In FBiH, draft laws are currently pending adoption which would scrap the requirement to obtain the above permits for small solar plants. Given that their installation does not entail significant environmental impacts, this makes sense and is a long-overdue move. Our analysis also identified many more ways to make permitting more efficient in BiH:

FBiH needs to adopt a new spatial plan and bring local plans into line with it. Republika Srpska needs to improve its post-2025 plan by ensuring land use contradictions and conflicts are resolved during the process. In both entities, better spatial planning should replace the requirement to obtain consent from various communal services.
Republika Srpska needs to introduce an online integrated property register.
FBiH needs to ensure uniform concession requirements across different cantons.
FBiH needs to introduce online permitting and Republika Srpska needs to extend it to cover all documents.
Both entities need to rationalise the documentation needed for various permits to prevent duplication, and need to ensure that entry into renewable energy project registers happens automatically instead of project promoters being responsible. FBiH also needs to introduce a one-stop shop contact point.
FBiH should consider merging the project documentation consent with the energy permit and exempting solar and wind from the requirement to obtain a permit to carry out electrical energy activities.
Republika Srpska needs to abolish the requirement to obtain the permits mentioned above for small solar installations. FBiH needs to introduce a system of accredited installers to simplify the process for households and businesses.

To prevent a public backlash, quality – not only speed – is needed

Speed is important, but cannot be the only consideration. As the small hydropower debacle showed, a social consensus needs to be reached on the locations, types and construction methods of renewable energy installations. Ideally, these decisions should be made at an early stage during the development of sectoral strategies, spatial plans and river basin management plans to avoid problems and conflicts at a later stage.

This can only be achieved through robust implementation of the Aarhus Convention, which among others guarantees public participation in decision-making on environmental matters regarding individual projects, plans, programmes and legislation. The Convention’s provisions are partly integrated in EU legislation such as the Strategic Environmental Assessment (SEA) Directive, the Environmental Impact Assessment (EIA) Directive, the Habitats Directive, the Birds Directive and the Water Framework Directive.

Yet of these, only the EIA Directive is applied in Bosnia and Herzegovina – and not always very well — despite the SEA Directive also being obligatory for energy-related plans and programmes under the Energy Community Treaty. For this reason, we also provide several recommendations aimed at improving environmental assessments and public participation in both entitities:

Apply the SEA Directive to relevant plans and projects.
Transpose the Habitats and Birds Directives and give legal protection to Emerald sites and future Natura 2000 sites. Introduce appropriate assessments of project impacts on the Emerald network as part of the EIA procedure. Improve the quality of EIA studies to reduce the number of court challenges against approvals.
Introduce a formal process under Article 4(7) of the Water Framework Directive to assess the potential need for derogations from the goals of the entities’ water laws. Additionally, implement the existing provision stipulating that conflicts and derogations need to be analysed during development of the river basin management plan.
Both entities need to strengthen the licensing criteria and monitoring for companies accredited to carry out technical and environmental studies and hold them accountable for the quality of their work.

These may sound like additional burdens, but in fact carrying out SEAs and using river basin management plans as a basis for resolving land/water use conflicts would help to prevent issues at a later stage, while appropriate assessments and Article 4(7) assessments provide a structured process and criteria to decide whether projects can go ahead or not.

The current situation, in which BiH and its neighbours are developing renewable energy without having all these safeguards in place, is extremely problematic, and unless this is resolved, a re-run of the hydropower fiasco is likely. The EU also needs to play a role, by increasing the pressure on accession countries to apply environmental legislation and by including the relevant parts of the Habitats, Birds and Water Framework Directives into the Energy Community Treaty. But BiH must not wait for the EU, it must act now to preserve its stunning environment.

An English summary of the analysis is available here. The full original, in B/H/S language, is available on request.

Bosnia and Herzegovina’s draft NECP: The good, the bad and the ugly

There is a ‘public’ consultation about Bosnia and Herzegovina’s (BiH) draft National Energy and Climate Plan (NECP) going on until the end of July – though until this week the document was not even available online. And the coordinating ministry didn’t carry out a Strategic Environmental Assessment of the plan, despite it being mandatory under the Energy Community Treaty. With such a secretive process, my expectations about the actual plan were low.

But in fact, compared to BiH’s previous planning documents – and to Serbia’s confusing and non-committal draft NECP, also on public consultation at the moment – BiH’s draft NECP brings some important improvements.

The good – no new fossil fuel plants

Despite considerable solar and wind potential, the Federation of BiH and Republika Srpska governments have relentlessly pushed to build new coal plants such as Tuzla 7 and Ugljevik III – as well as decades-old hydropower projects in highly sensitive locations – long past their sell-by dates. These dinosaurs have heavily burdened previous energy planning and left little space for new ideas. But the draft NECP finally looks like it was written in the 21st Century: it states that there will be no new fossil fuel plants – coal or gas. This is a significant step that must be maintained in the final version of the NECP.

Emissions trading scheme by 2026

Unlike Serbia’s draft NECP, the BiH draft reflects the fact that the Carbon Border Adjustment Mechanism (CBAM) is coming, and includes the introduction of an emissions trading scheme by 2026. In reality, if BiH wants to avoid the impacts of CBAM in the electricity sector, this will have to be in place by 1 January 2026, as the country does not look likely to benefit from the mechanism’s main exemption clause based on market coupling. The deadline is close, but the first step is to plan for it. So far, so good.

The bad – illegal coal plants

The draft makes no secret of the fact that BiH’s heavily polluting coal units Tuzla 4 and Kakanj 5 will continue to operate beyond their allowed lifetime. And no information is given about pollution control investments at the other units, making it highly likely that they plan to continue operating at their current abominable pollution levels.

Our latest Comply or Close report shows that in 2022 sulphur dioxide emissions from the coal units included in BiH’s National Emissions Reduction Plan reached more than eight times as much as allowed. Dust emissions from Gacko were no less than 12 times as high as allowed. This situation simply cannot be allowed to persist until 2030. Given that this is a matter of life and death, the plants must comply with the rules or close – and it has to be clear in the NECP how this is going to happen.

The ugly: Tuzla 3 and Tuzla 4’s mysterious fate

Most of the draft is written clearly, but the authors seem to be trying to hide one thing: What is going to happen to the Tuzla 3 and Tuzla 4 coal units?

In one diagram (no. 9) Tuzla 3 looks like it already closed in 2022 and emits no more CO2 in future years. But diagrams 32 and 33 bring it back from the dead: The unit goes offline in 2022, but then resurrects in 2027 with a reduced capacity (70 MW, compared to 100 MW currently). Given that plans for a biomass conversion at Tuzla 3 already exist, this is the most likely explanation. But it’s not confirmed in the text. One of the measures includes potential coal-to-biomass conversions, but without mentioning any concrete plants.

Tuzla 4 is even less clear. According to the diagrams, it operates (illegally) till 2025, takes a break in 2026, comes back online in 2027 with the same 200 MW capacity, and then its CO2 emissions and electricity generation increase between 2028-2030. Is this a coal rehabilitation, another biomass plant, or something else? If the authors don’t know, they should say it clearly.

Even 70 MW of forest biomass capacity would be a disaster for BiH’s forests – there’s no way such a capacity could be fed from fast-growing willows and industrial offcuts. The draft also fails to recognise that forest biomass should no longer be seen as carbon neutral – if it ever could. The draft’s authors need to be upfront about what they have in mind – and if it’s coal-to-biomass, find less damaging alternatives.

Mixed signals on fossil gas

The draft’s authors seem to go back and forth on fossil gas. In some parts they repeat evidence-free claims about gas being a transition fuel and propose domestic oil and gas extraction to reduce dependence on imports, but in other parts they express a healthy scepticism with phrases like ‘If the role of gas in the energy transition is defined as important…’.

Still, what matters are the measures, and here the picture is also mixed. Since no new fossil gas power plants are planned, it is baffling why additional gas interconnectors are still promoted. Yes, Sarajevo’s heating supply is vulnerable, but building a new gas pipeline all the way from Croatia is surely not the only solution: Better ways to heat the city are also possible.

Gas is as much a fossil fuel as coal. It will need to be phased out in the next couple of decades, so there is no point in building expensive new gas infrastructure now. Once a certain fuel becomes entrenched in the energy mix, it takes decades and decades to move away from it. The NECP therefore needs to be much more decisive about reducing gas demand, not building expensive infrastructure to satisfy and expand it.

Hydropower scaled back but there’s still too much

BiH’s incumbent utilities and entity governments have for decades been pushing a plethora of large dams, including on the Drina, Neretva, Bosna, Lim, Ljuta, and Vrbas. Projects are rarely cancelled, even when they clearly will not happen. As a result, in the 2018 Framework Energy Strategy, 750 MW of new large hydropower was planned until 2035 in the ‘mildly renewable’ scenario (there was no ‘strongly renewable’ one), with 33 ‘potential projects’ in Republika Srpska alone.

Compared to that, the 195 MW planned by 2030 in the draft NECP is a significant scale-back. Although it does not say so, it obviously comprises the 160 MW Dabar plant and 35 MW Ulog which are currently under construction – and it needs to be more clear about this.

But in reality, BiH has not completed a single new greenfield hydropower plant of more than 10 megawatts MW since 2010 – only Bočac 2 on an existing dam. Against this reality, even 195 MW might be over-ambitious, especially considering how controversial the plants are.

Both are in Republika Srpska, with potentially disastrous impacts in the Federation of BiH. The Bern Convention Standing Committee has already asked for construction of the Ulog plant to be halted until a number of conditions have been fulfilled, and has asked the authorities to prevent construction in other potential candidate Emerald sites, including the ones that would be damaged by Dabar. Given this situation, it is possible that one or both of the plants will never be completed, so the draft NECP needs to examine alternative scenarios without them.

The way forward

The draft’s positive elements – particularly the halt to new fossil fuel power plants and the emissions trading scheme – need to be maintained, but biomass is the elephant in the room. The draft itself admits that more research is needed on the availability of biomass in BiH so it is extremely unwise to rely on it.

The plans to build new gas pipelines seem to be there due to inertia rather than because the NECP really depends on them, but still – alternatives need to be explored.

Further issues also need to be tackled: The authors are too optimistic about the potential for biofuels and hydrogen in transport, but don’t directly mention passenger railway transport at all. They also hint at burning waste for energy in some parts of the draft – an idea that must be quickly extinguished, especially in a country with environmental enforcement like BiH’s.

But overall, the draft is a good start. If improved as suggested, it can provide a solid basis for BiH to finally move forward with its energy transition.

The Taia hydropower plant: the latest ecocide to hit Romania

Located in the Șureanu Mountains within a protected Natura 2000 site, the hydro plant on the Taia river has been opposed by environmentalists ever since plans for the project first emerged in 2008. In May 2023, environmentalists were targeted with a strategic lawsuit against public participation (SLAPP), a tactic used to intimidate and silence environmental organisations and citizens that advocate for the protection of key ecosystems.

But before we delve into the protracted legal wranglings surrounding this project, it should be noted that the contribution of the Taia hydropower project to Romania’s energy generation is negligible. With an installed capacity of 3.78 megawatts (MW), the plant provides a mere 0.018 per cent of Romania’s annual electricity production at best, even without considering how climate change and the absence of water in the river would affect this.

Indeed, replacing the plant with around 1,700 individual 5-kilowatt (kW) photovoltaic installations would not only promote environmental protection but would also increase energy and economic resilience at the household level.

A history of regression

The saga dates back to 2008 when Italian investor SC Hidro Clear SRL was granted 400 square metres of land to build a small hydropower plant on the Taia river. Plans for the operation of the plant involved diverting water from two sources, the Valea Popii and Aușelu rivers, into a 7.5-kilometre underground pipeline.

Subsequently, Hunedoara Environmental Protection Agency (APM Hunedora) conducted a screening process to evaluate the potential environmental impact of the project. Their screening decision, issued in 2009, determined that the project did not require an environmental impact assessment or an appropriate assessment. However, this decision contradicted key EU directives, including the Water Framework Directive, which requires Member States to protect, restore and prevent the deterioration of water bodies, as well as the Environmental Impact Assessment, Birds, and Habitats Directives.

In October 2009, the municipality of Petrila signed a public-private partnership agreement with SC Hidro Clear, even though the protected area of Grădiștea Muncelului-Cioclovina, which is partially situated within the location of the plant, had been officially designated a Natura 2000 site eight months prior.

As highlighted by Călin Dejeu, a leading campaigner on the case and a member of the International Union for Conservation of Nature (IUCN), in his numerous open letters to state institutions and frequent interventions in the media, a priority habitat located upstream of the Taia gorge was illegally deforested in 2013. But it was only in 2015 that Hunedoara Environmental Protection Agency issued the environmental permit for the construction of the project. The hydropower plant was eventually built and began operating illegally until 2017 when the Hunedoara Tribunal declared the environmental permit and screening decision null and void. However, this blatant violation of the rule of law is not an isolated incident.

In 2015, the European Commission initiated legal action against Romania – in the form of an infringement procedure – for its failure to comply with EU legislation on water and biodiversity protection. The procedure specifically concerned the construction of 17 small hydropower plants, mostly on rivers in environmentally sensitive areas of the Făgăraș Mountains. Despite an exhaustive ex-post analysis of all 17 projects, legal proceedings are still ongoing.

Legal challenge upheld, but not for long

In 2016, Bankwatch Romania mounted a legal challenge against the screening decision and environmental permit. At the Hunedoara Tribunal, the court of first instance, both administrative acts were annulled. This ruling was later confirmed as final by the Alba Iulia Court of Appeal in 2018. As part of the final decision, the court also ordered the restoration of the Taia river and the affected area to its original state. However, neither of these orders have been implemented to date. Following the court’s decision, operations at the plant ceased, allowing the Taia river to flow freely once again.

However, to the amazement of all who had worked tirelessly on the case, in March 2022 the Hunedoara Environmental Protection Agency initiated a re-permitting process for the small hydropower plant, in clear violation of res judicata and in total disregard of the 2018 final court decision. In August of the same year, they unlawfully re-issued an environmental permit for the project. In response, Romanian environmental protection organisations Bankwatch Romania and Agent Green formally contested the move. Supported by a campaign led by Romanian civil society organisation Declic aimed at protecting the Natura 2000 site and the Taia river, the case was brought to court.

In May 2023, the Bucharest Tribunal had already reached a decision. During proceedings, the promoters of the Taia hydropower project, represented by one of Romania’s largest law firms, submitted thousands of pages of environmental assessments. Significantly, these assessments were conducted outside the proper legal permitting procedure for the plant and during a period when the plant had halted operations (between 2019 and 2021). Additionally, the assessments were carried out in a manner that excluded inclusive and participatory input from interested stakeholders and members of the public, contravening the principles of the Aarhus Convention and the EU’s Environmental Impact Assessment Directive.

The project promoters disingenuously claimed that the European Commission had prioritised the ex-post evaluation of the project in order to expedite its ongoing infringement procedure. In reality, however, EU practice involves assessing post-project impacts with the aim of identifying actions that need to be taken to remedy or compensate for any unforeseen impacts in the absence of an ex-ante assessment. This does not imply obtaining all the necessary permits and authorisations to restart the project.

Only a few months into the trial, in a baffling about-turn, the judge decided to reject the requests of non-governmental organisations to suspend and revoke the environmental permit, thus completely reversing the 2018 ruling. The judge also approved the promoters’ legal fees in the exact amount requested of RON 179 517 (around EUR 36 000), disregarding the indicative fee grids applicable in court.

The court’s reasoning, drafted unusually quickly within less than two weeks, cited the value of the investment as a justification for approving the defence’s legal fees. Quite apart from the excessive reimbursement, the value of the investment has no relevance to the volume of work carried out by the promoters’ legal team. This decision is significant, as it not only places environmental non-profit organisations in Romania at a significant financial disadvantage, but also limits their ability to compete and carry out their work.

Implications of the SLAPP for non-governmental organisations and the environment

This is unlikely to be the last time we see the back of this case, given that Bankwatch Romania and Agent Green are among the most active environmental organisations in Romania when it comes to defending the environment in court. But this latest twist is quite the escalation if we consider the broader context of the illiberal legislative package recently tabled by the Romanian government aimed at intimidating civil society and preventing them from asserting their rights in court, including substantial financial costs of up to EUR 10 000 for challenging administrative acts. We should also recall that at the end of 2021 non-governmental organisations were cynically scapegoated when they were summoned to appear before a parliamentary committee of inquiry into the causes of the recent substantial increases in energy prices. We can only assume, therefore, that in the case of the hydropower plant on the Taia river, environmental organisations have been dealt a SLAPP in the face.

Despite the gravity of these legal violations and the blatant disregard shown towards nature and the well-being of this generation and those to come, environmental activists, citizens and the experts who stand by them will not be intimidated. They will continue to document the plight of the Taia river, along with the protected natural areas of which it is a part, as well as the other rivers and natural sites under threat in Romania. And they will continue to bring these issues to the attention of the European Commission and all European institutions that have the power to protect them. This emerging anti-democratic and anti-European cross-party trend in Romania must be stopped.

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.

Serbia’s draft NECP: What is the actual plan?

Serbia’s draft NECP is a puzzling document, levitating between reality and delusion. Today’s economic and legal reality makes an energy-efficient, 100 per cent renewable energy sector more feasible and necessary than ever. But the draft is too defeatist about carbon neutrality and energy savings and too optimistic about hydrogen, fossil gas, biofuels and biomass.

Cherry-picking commitments

As a signatory to the Green Agenda for the Western Balkans, Serbia has pledged to adopt the EU climate law and thus reach carbon neutrality by 2050. As a signatory of the Energy Community Treaty, it has committed to greenhouse gas reduction, energy efficiency and renewable energy targets for 2030. And as a neighbour of the EU, Serbia’s electricity exports will be affected by the Carbon Border Adjustment Mechanism (CBAM) from 2026.

But the draft NECP quietly sidesteps the commitments it finds too bothersome. No carbon neutrality is planned for 2050. Emissions are forecast to drop by two thirds compared to 2025, or by 75 per cent compared to 1990, but this is not enough. Planning to fail 27 years in advance is not a good start.

The draft also unilaterally lowers Serbia’s renewable energy target for 2030 to 33.6 per cent instead of the 40.7 per cent target agreed at the Energy Community Ministerial Council in December 2022. Even by 2050, the draft only expects to have a 40-45 per cent renewable share in heating and transport, instead of 100 per cent.

CBAM? What’s that?

The draft NECP mentions CBAM only twice. And the author did not seem to understand what it entails, as they referred to using the revenues, which does not make sense as they will go to the EU budget, not the Serbian one.

It is true that Serbia is not likely to be the most affected country in the Western Balkans, but it still needs to take CBAM seriously, as its electricity exports will become much less competitive.

If Serbia wants to avoid CBAM, among other things it needs to introduce an emissions trading system for electricity by 1 January 2030 with an equivalent carbon price to the EU Emission Trading System (ETS). Here again the draft falls short, as the prices are too low. It also gives contradictory information – in one place EUR 40 per tonne of carbon dioxide in 2030 and in another, EUR 70 per tonne. Yet ETS prices have barely gone below EUR 80 per tonne this year and are expected to keep rising. The draft also plans a carbon tax, not emissions trading scheme, which could in theory secure deductions from CBAM pricing, but would be more complicated than securing a full exemption.

Smoke and mirrors

It is difficult to distinguish between the two main scenarios, because Section 3 provides 157 measures but does not distinguish which measures relate to which scenario. And to add to the confusion, some measures appear to be duplicated: several fossil gas pipelines appear under both ‘Energy Security’ and ‘Integrating Energy Markets’.

In Annex I a list of measures per scenario finally appears, confirming that some of the most carbon-intensive measures are included only in the ‘With Existing Measures’ scenario, not the ‘With Additional Measures’ one. These include spending EUR 400 million on an oil pipeline, EUR 1.3 billion to ensure adequate coal stocks, and building no fewer than seven (!) fossil gas pipelines with neighbouring countries – even Kosovo. Not even in our worst nightmares would Serbia ever build seven gas interconnectors, so this looks like an attempt to make the ‘additional measures’ scenario look better by making the ‘existing scenarios’ one worse.

Still, the lists of measures still leave considerable gaps in understanding what the actual plan is, (especially as Annex I appears to have some mistakes, such as putting carbon pricing in the ‘existing measures’ scenario). No new coal plants seem to be planned after Kostolac B3, but there is no information about the phase-out timetable for existing plants. A list of coal plants that will still be open in 2030 under the ‘additional measures’ scenario appears in Annex II, however it is not clear when these or others will finally be closed.

Likewise, a pledge is made to reduce lignite coal generation by 25 per cent compared to 2019 levels, but without providing absolute figures. By our calculations based on energy regulator reports, in 2022 Serbia already generated 7.5 per cent less electricity from lignite than in 2019, making this commitment even less ambitious than it looks.

Seduced by false solutions

To make up for some of the coal decrease and increase system flexibility, the draft plans a new 350 MW fossil gas plant in the ‘additional measures’ scenario, as well as a EUR 50 million pipeline to gasify the south of Serbia, both of which would increase its import dependence and its vulnerability to price fluctuation. After the events of the last two years, it is hard to believe that there are no better alternatives, especially given draft’s unambitious energy savings goals.

Electricity transmission and distribution grid losses are planned to decrease only very slightly – to 14 per cent – in 2030, and to take until 2050 to get down to 10 per cent. For comparison, in 2018, total losses in the EU and selected neighbouring countries ranged between 2.5 and 11 per cent. Serbia can’t afford to throw away this much electricity.

Housing renovation plans are also unambitious, which has a significant impact on electricity demand due to use of electricity for heating by some households. The planned rates are 1-1.5 per cent annually for multi-family buildings and 0.5 per cent for single-family ones, intensifying after 2030. This must be ramped up now, not after 2030.

But it’s not just fossil gas. The draft is also too optimistic about the potential of forest biomass in district heating, despite its greenhouse gas emissions, air pollution and biodiversity impacts. Given the market disruptions in 2022, which saw a temporary export ban of certain wood products being imposed, we would expect a lot more caution on increasing biomass heating.

Only secondary forest biomass – offcuts from industry – should be considered for peak load for district heating, and only as a last resort. 4th generation district heating based on solar, heat pumps and other low-temperature sources should be prioritised, or geothermal where methane and other gases are captured and water is re-injected.

The authors are also too optimistic about renewable hydrogen in heating and advanced biofuels in transport. These will probably never be available in large enough quantities at a reasonable price. The draft also plans direct electrification in heating and transport, but needs to make clear that this is the priority.

Putting its money where its mouth is?

Despite our criticisms of the overall goals and ambition of the draft NECP, it does contain many worthwhile and potentially positive measures. But for some of them, only very small financial allocations and few details are given, providing insufficient assurance that they constitute real priorities.

For example, just transition is mentioned as being part of a separate Just Transition Action Plan and only has one measure (and only in the ‘existing measures’ scenario), with an allocation of EUR 2 million. However the actions for a just transition, as well as financial allocations, need to be part of the NECP, as this is the main document relied on by the European Commission, Energy Community and international donors.

Another example is the circular economy, where Serbia needs to achieve 60 per cent recycling in 2030 compared to 3 per cent in 2021. Around EUR 230 million is allocated for this, which is a significant sum, but compared to the size of the challenge, it still seems too little. Oddly, the measures to achieve this are labelled as belonging only to the ‘existing measures’ scenario and are not replaced by any corresponding measures in the ‘additional measures’ one.

Political consensus urgently needed

After years of energy policy limbo, Serbia desperately needs to build a consensus on its climate and energy plans and the NECP is the place to do it. But in order to achieve this, the Serbian government needs to make a clear decision – does it want to participate in the EU energy market or not?

Only with clear political decisions and commitments can the document do what it needs to: clearly state its goals, distinguish clearly and accurately between different scenarios and how they will be achieved and discuss the pros and cons of different options.

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