Blog entry

Hungary urgently needs a complete overhaul of its energy planning

The energy transition in Hungary faces the risk of slowing down or even regressing, a scenario that would further increase its heavy dependence on fossil fuels. This concerning situation stems from the upcoming finalisation of the review of Hungary’s national energy and climate plan (NECP) and the amendment of its recovery and resilience plan, which involves the introduction of an additional REPowerEU chapter. Hungary’s allocation under the Recovery and Resilience Facility (RRF), along with the additional funding supplied by the chapter, serves as a key source of financing for the implementation of the NECP. Both plans, which are currently approaching their submission deadlines, will profoundly shape Hungary’s climate and energy policies, investments and financing in the medium term. Unfortunately, as of 26 June, only the NECP review has been published and made available for public consultation.

Adding to the emergency, the Hungarian government is expected to decide by the end of June whether to reopen the old coal-fired units at Mátra power plant. In light of these developments, the National Society of Conservationists – Friends of the Earth Hungary (MTVSZ in Hungarian) is calling on the government to adopt an approach that ditches fossil fuels and gives priority to measures aimed at improving household energy efficiency. Such an approach is the most cost-effective way of reducing Hungary’s dependence on fossil fuels. According to Hungary’s National Energy Strategy for 2030, with an outlook towards 2040, investments in the energy efficiency of residential buildings, including the adoption of renewable technologies, are projected to reduce annual gas consumption for heating purposes by 2 billion cubic metres (m3) by 2030. This is equivalent to one-fifth of Hungary’s total fossil gas consumption per year. Of course, during the formulation of any such approach, meaningful public consultation should be at the heart of the decision-making process.

EU funds for accelerating the energy transition

By the end of June 2023, each Member State is required to revise its NECP in accordance with the EU’s climate and energy policy goals for 2030 and 2050, as well as with the commitments outlined in the Paris Agreement. These revisions are crucial for accelerating the energy transition, especially amid the ongoing fossil energy crisis.

Furthermore, as part of the EU’s REPowerEU initiative, Member States are expected to prepare and submit their respective national REPowerEU chapters by the end of the summer in order to accelerate the energy transition and reduce dependence on Russian fossil energy sources. Hungary also intends to request loans from the RRF to supplement its financing. In total, the combined REPowerEU and RRF loan package for Hungary is expected to amount to EUR 8.8 billion.

Hungary needs a green economic transition instead of re-industrialisation

The European Union shares our concerns over the direction of Hungary’s planning, as highlighted in its Country-Specific Recommendations recently adopted by the Council of the European Union. The document emphasises the need for a regulatory framework that systematically supports a diverse range of renewable energy sources. It recommends modernisation of the electricity grid to meet renewable demand and specifies the need for improvements to the energy efficiency of buildings to reduce gas consumption. It also calls on Hungary’s government to strengthen energy cooperation with other Member States and to provide the necessary investment, skills and retraining for a successful transition to a green economy. However, it appears that the opposite is happening in the form of continued reliance on fossil fuels.

National non-governmental organisations, including MTVSZ, have been actively monitoring all planning processes connected with the NECP review and the combined REPowerEU and RRF loan plan. In a joint letter sent to relevant ministries on 12 June, and in a similar advocacy letter sent to the European Commission on 13 June, MTVSZ and Hungary’s Clean Air Action Group (CAAG) stressed the importance of focusing on energy efficiency and reducing energy demand in households instead of pursuing health-damaging mega-investments that deplete natural resources, especially when public money is involved. As a result, the government invited our organisation and other groups to consult on the plans.

There is much cause for concern given that Hungary’s economic policy is now prioritising re-industrialisation, mostly to meet the energy needs of incoming foreign investors. The planned construction of three new gas-fired combined-cycle gas turbine (CCGT) power plants with a total capacity of around 1,500 megawatts (MW) has no place in an ambitious energy transition scenario, according to a recent study by the Regional Centre for Energy Policy Research (REKK). Such actions would further increase dependence on fossil fuels and hinder a just energy transition while exacerbating the health and environmental burdens on the population.

On 23 June, the Hungarian government published a draft NECP review, which is now open to public consultation until 7 July. Based on the 45-page review, which devotes only one page to information on financing, it is still unclear whether the government intends to finance these polluting CCGT projects, at least in part, with EU and/or Hungarian state funds. There is a further lack of transparency regarding which energy projects derive from REPowerEU chapter financing and which do not. Significantly, the draft NECP review reveals that a decision has been made to commission 1,500 MW of CCGT capacity. Based on this new information, and given that a public tendering process for the CCGT plants was launched in mid-March 2023 by MVM, Hungary’s leading state-owned energy company, we can safely assume that the move is going ahead.

Adequate public consultation to help improve energy efficiency in households

The inclusion of measures and instruments aimed at gradually reducing domestic fossil energy consumption is vital for Hungary’s energy transition. The role of both the EU and domestic public funding should be duly considered in the design process of the NECP and of the REPowerEU and RRF loan plan.

To ensure the interests of the Hungarian public are adequately represented, it is crucial to expedite the publication of both draft plans and to conduct meaningful and extensive public consultation by the end of summer 2023. Such a consultation would provide valuable input from the wider public, allowing their perspectives and insights to shape and improve Hungary’s plans. By actively involving citizens in the decision-making process, the plans should be significantly refined and amended to meet the needs of Hungarian citizens.

Slovakia’s REPowerEU chapter is delivering, but focus needs to shift from big business to social organisations

Slovakia’s recovery and resilience plan was initially allocated EUR 6.3 billion, to be used starting in 2021. However, due to the growth of the country’s gross domestic product (GDP), the allocation was decreased by EUR 323 million. But the introduction of the new REPowerEU chapter has resulted in an increase of EUR 403 million, partially financed by the Brexit Adjustment Reserve.

The Slovak government engaged in internal discussions from summer 2022 to spring 2023 to determine how to adjust the recovery plan’s components in light of the original decreased allocation, significant inflation, and emerging challenges associated with phasing out Russian fuels. Unfortunately, the involvement of non-governmental organisations in the discussions occurred in the later stages after November 2022, which limited their opportunities to contribute to the improvement of the texts.

Disappointingly, the government also ignored the opportunity to secure favourable loans from the Recovery and Resilience Facility, instead prioritising the distribution of grants to large companies. As a result, not enough funds have been allocated for the renovation of social facilities, such as those for older people, crisis centres, shelters and pre-schools. Regrettably, the Slovak government has also showed zero ambition in transforming the district heating sector. But despite these setbacks, REPowerEU has helped Slovakia make strides in enhancing support for socially vulnerable households through initiatives such as the Renovate House scheme.

Building and energy support going in the right direction, but traps lie ahead

Slovakia’s recovery plan includes a generous allocation of EUR 2.7 billion for public buildings (including renovation) across various components. Unfortunately, the plan also includes support, albeit limited, for fossil gas boilers. Although this is compliant with the guidance on the application of the ‘do no significant harm’ principle, it only delays tackling the decarbonisation of heating sources.

On a positive note, Slovakia has effectively used REPowerEU to top up financing for energy poverty, specifically for energy efficiency and renewable energy projects, . This means that socially vulnerable households are not required to co-finance the costs associated with window replacements, home insulation or adopting renewable energy sources. This approach enables targeted support from EU funds, aligning with socially conscious objectives. The REPowerEU chapter will also be used to provide additional support to citizens for energy projects – such as financing for and project support for house renovation – which would greatly benefit socially vulnerable households.

Unfortunately, the Slovak government lacks a comprehensive plan for phasing out fossil fuels in the heating or district heating sectors. To address this issue, it is crucial for the Ministry of Economy to take the initiative and lead a reform of the heating sector, integrating building renovation with the modernisation of the heating sector to facilitate the transition to decarbonised low-temperature systems.

Although the first reform of the Slovak REPowerEU chapter mentions support for low-carbon hydrogen, it’s important to consider that promoting low-carbon hydrogen derived from nuclear power or even partially from fossil gas makes it economically and politically unwise. Such an approach contradicts the objectives of REPowerEU and the promotion of renewable energy sources. Slovakia is still 100 per cent dependent on uranium imports from Russia to fuel its nuclear power plants, and in 2022, it imported up to 60 per cent of its fossil gas from Russia. In addition, hydrogen from renewable sources should be used for hard-to-abate sectors only and not for heating, as it is six times less efficient than heat pumps.

Grants or loans for renewable energy?

In April 2021, the Slovak government approved a support package of EUR 232 million for renewable energy auctions. The Ministry of Economy then opened the first call for proposals between May and July 2022. Electricity prices were so high in 2022 that many companies in Slovakia financed solar installations out of their own pockets to reduce their energy costs and increase energy security.

The first component of the recovery plan provides funding for 45 to 60 per cent of the costs associated with renewable energy installations. This support may seem highly efficient, as financial assistance is granted to power plants expected to produce the highest amount of renewable electricity per euro. However, the situation is much more complex than it seems.

In March 2023, the Ministry of Economy approved grants totalling more than EUR 20 million to 58 companies. Interestingly, half of the grant recipients were capable of covering these costs from their profits in just one year (2021). The payback period for photovoltaic (PV) installations varies greatly, ranging from 7 years (during the period of high electricity prices in 2022) to 16 years (a conservative estimate for rooftop solar installations), while the lifespan of PV systems generally exceeds 20 years.

How can the government incentivise large companies to invest in photovoltaics?

Public funds should encourage profitable companies to invest a portion of their profits. Photovoltaics are a very low-hanging fruit for large companies. With favourable loans, these companies would be able to invest more effectively, leading to greater sustainability.

Moreover, the REPowerEU chapter includes the investment ‘Modernisation and digitalisation of the transmission and distribution systems’, which has an allocation of EUR 129 million until 2026. However, distribution companies (DSOs) would be able to pay this amount from their one-year profits (EUR 159 million in 2021). Slovakia is also a shareholder in all of these DSOs.

We are facing multiple crises at once, ranging from energy, war and migration to climate change. For these reasons, we cannot afford to subsidise companies whose profits amount to tens of millions of euro annually.

By comparison, ‘Investment 2: Improvement of energy performance and efficiency of state buildings (“Fast Measures”)’ has a relatively small allocation of EUR 20.42 million. The National Implementation and Coordination Authority has expanded the beneficiaries to include municipalities. But non-profit organisations, civic associations, and foundations are notable for their absence. Such a small allocation does not cover the needs of organisations active in the social field.

Social organisations need support for ‘quick action’

In March 2023, 66 social sector organisations, primarily social service providers, completed a questionnaire on the impact of the energy crisis. Twenty-six respondents estimated that they could use more than EUR 13 million in total. They expressed interest in implementing energy-saving measures and renewable energy solutions in 150 out of the 192 buildings where they provide their services, accounting for 78 per cent of the surveyed buildings. There are more than 1,300 facilities in Slovakia. The overall need for so-called ‘quick savings’ measures in this sector can be very roughly and conservatively estimated at over EUR 120 million.

The energy bills for the 66 respondents have increased by an average of 125 per cent. Out of these, 25 (41 per cent) were ineligible for compensation for the increased energy prices, and seven reported only partial opportunities for compensation. However, 29 respondents were eligible for compensation from the government. Social organisations mostly specified a preference for the installation of photovoltaics, new energy-saving LED lights and the introduction of energy management, but expressed negligible interest in biomass boilers.

Source: Friends of the Earth-CEPA, Analýzy k Plánu obnovy a odolnosti a RePowerEU, March 2023.

More detailed results of the questionnaire analysis can be found in the full publication.

Also, social non-governmental organisations and municipalities significantly helped the state during the humanitarian crisis at the beginning of Russia’s military aggression in Ukraine. Before that, they were fundamentally affected by the COVID-19 pandemic. For these reasons, the state administration should not forget to support all of the organisations that help socially vulnerable people.

Moreover, Slovakia has the lowest share of wind and solar energy in the EU, according to comprehensive data from EMBER. This is an unfortunate legacy of previous governments. Slovak ministries need to combine grants with loans to catch up with the rest of the EU.

Lastly, the projected costs for implementing the 55 per cent decarbonisation target by 2030 in Slovakia are EUR 2.7 billion, and EUR 5 billion for a 67 per cent decrease in greenhouse gases. However, decarbonisation costs will rise to more than EUR 100 billion by 2040 and by more than another EUR 100 billion by 2050 due to more complex measures. To put these figures in context, Slovakia currently has about EUR 6 billion until 2030. Therefore, the new government must understand that to achieve climate neutrality, loans are necessary and the share of grants must decrease. This is especially true for large companies.

It would be highly beneficial if the European Commission and the Slovak government took the initiative to incentivise and motivate ministries and state agencies to:

properly phase out all support for fossil gas;
re-evaluate support for low-carbon hydrogen;
commence discussions about the transformation of district heating;
gradually replace grant support with favourable loans for renewables from large companies;
prepare special grants for social organisations.

By implementing these measures, both the European Commission and the Slovak government can play a key role in promoting sustainable energy practices and using EU funds more effectively, targeting first those that have the most pressing needs.

Destruction of the Kakhovka dam: civil society calls on international community to respond to act of ecocide

Bankwatch condemns the destruction of Ukraine’s Kakhovka dam and the massive damage it is causing to human lives and the environment. In response to this criminal act, we join Ukraine’s civil society in calling on international experts, institutions that aim to protect the environment, secretariats of international environmental conventions and authorised bodies to respond to this latest act of ecocide.

Irreparable environmental damage

The explosion caused immediate downstream flooding, which heavily impacts people in southern Ukraine. Due to the scale of the disaster, there will be inevitable impacts on the water supply for millions of people and sizeable amounts of agricultural land during the coming summer months and beyond.

Major environmental threats include severe damage to ecosystems in six Emerald sites protected by the Bern Convention and the pollution of the Dnipro river’s waters with toxic chemicals, garbage, animal corpses and erosion. The dam’s destruction has also impeded the water intake necessary for cooling the Zaporizhia nuclear power plant. Greenpeace CEE has warned of the associated threat to nuclear safety.

The machinery of the Kakhovka hydropower station is in ruins, with its dam damaged. Consequently, there is uncontrolled water outflow from the Kakhovsky reservoir. We anticipate temporary impacts resulting from the flooding of the islands and territories below. However, an even greater impact will arise from the water shortage, as the Kakhovsky reservoir is the primary water source for southern Ukraine’s irrigation system. We can expect significant problems for agriculture and the local population, who rely on it for their livelihoods.

The Zaporizhska nuclear power plant will not be immediately affected since it has its own cooling reservoir, separated from the Kakhovsky reservoir by a dam. This reservoir will have sufficient water supply for several weeks. As the reactors at the power plant are believed to be shut down, the demand for water is low. However, the lack of water increases the risk of potential complications, which could lead to a nuclear fuel meltdown. The Ukrainian energy sector is already facing a challenging summer period due to the need for maintenance and delayed routine repairs after a harsh winter.

Russia must pay

Together with representatives of the environmental civil society movement in Ukraine and internationally, we call on the international community (United Nations and all state parties to the International Criminal Court) to provide assistance to Ukraine in gathering evidence, assessing all the consequences of such a crime on the environment, and taking quick measures to reduce and mitigate the consequences for the people and nature of southern Ukraine. The international environmental community (United Nations Environment Programme, Global Environment Facility, etc.) and funders should also act immediately and develop mechanisms to prevent such environmental destruction in the future. An open discussion on the feasibility of restoring the blown-up facilities must be held with the public in Ukraine, bearing in mind the already enormous projected cost of EUR 800 million and five-year timeline for restoration.

More preliminary conclusions, expected environmental consequences and key recommendations from Ukrainian civil society and authorities can be found in the following materials:

Estonia’s REPowerEU chapter: civil society excluded from decision-making on energy transition investments

Since the launch of the REPowerEU strategy, Member States have been working to amend their national recovery and resilience plans to include measures that meet the objectives of the European Union’s plan to wean Europe off Russian fossil fuels and accelerate the green transition. On 12 May 2023, the European Commission endorsed Estonia’s amended recovery plan, worth a total of EUR 953 million. Compared to the initial document, the new version of the plan supports a bolder shift towards domestic renewable energy independence. However, there has been a lack of transparency in the updating process and the voices of civil society organisations have not been heard. This is deeply regrettable. After all, if public money is to be spent in a way that truly benefits ordinary people, civil society must have a say in how it is allocated.

What do we know about Estonia’s amended recovery plan?

Although the amended recovery plan has been endorsed by the European Commission, it has still not been shared with the public. A table providing an overview of amendments to Estonia’s recovery plan was published in mid-December 2022. Surprisingly, however, in a press release issued by the Ministry of Finance on 12 May 2023, announcing the Commission’s endorsement and the final financial adjustments to the plan, the table had suddenly changed. Notably, a new investment for an offshore wind farm was added during the negotiations without any prior information being provided. Throughout this intervening period, no further documentation was made available to the public, making it impossible for civil society organisations to follow the progress and status of the negotiations. In effect, the public was left uninformed about the planned interventions and the eligibility criteria for the newly added investments.

Based on currently available information, several measures unrelated to energy issues have been removed from the initial recovery plan. These include plans for Tallinn Hospital, the controversial Rail Baltica terminal, the Turba–Rohuküla railway line and the acquisition of medical helicopters. Some of the removed measures have been replaced with new energy-related investments, including the development of offshore wind farms (EUR 66.8 million), support for companies to replace their fossil fuel heating sources (EUR 20 million) and a hydrogen-powered ship (EUR 18 million). Additionally, financial support for the reconstruction of small residential buildings has increased from EUR 8.9 million to EUR 28.9 million. The newly added REPowerEU chapter includes additional grid investments (EUR 38 million in total), support for biogas production (EUR 20.2 million) and a new reform to accelerate the deployment of renewable energy (EUR 31.8 million).

This renewable energy reform aims to remove the barriers that have hindered Estonia’s wind energy potential up to this point. It follows the Estonian government’s decision to support amendments to the existing energy sector legislation, which sets a new ambitious target of supplying 100 per cent of Estonia’s annual electricity consumption from renewable energy sources by 2030. The reform consists of several elements, such as mapping additional suitable areas for wind parks, simplifying and shortening strategic environmental impact assessment procedures, optimising permitting processes. While accelerating the deployment of renewable energy is in principle the right thing to do, environmental organisations have raised concerns about the potential of the reform to exacerbate negative impacts on biodiversity. The installation of wind parks is inevitably associated with some degree of deforestation. However, environmental civil society organisations have repeatedly emphasised the need to address the climate and biodiversity crises simultaneously. They argue that relying solely on offsetting mechanisms is not sufficient to reverse the destruction of forest ecosystems, which is why they oppose the use of forests as sites for wind parks. As part of their commitment to upholding existing EU nature legislation, these organisations will continue to monitor the design and implementation of this reform to expose any environmentally destructive practices that may occur under the guise of clean energy.

Support for community energy still absent from the amended recovery plan

Although it is fair to acknowledge the limited resources of REPowerEU and the need to make strategic decisions in a short space of time, the Estonian REPowerEU chapter has completely overlooked measures related to energy communities, which environmental civil society organisations were hoping to see added to the revised version. Due to the tight timeframe, the Estonian ministries evidently preferred to increase the volume of existing measures instead of introducing new ones. Given that the Estonian government previously included no support for energy communities across its entire Multiannual Financial Framework 2021-2027 and Recovery and Resilience Facility funding, yet another opportunity to incorporate important provisions for energy communities has been squandered.

Environmental civil society organisations have highlighted the need for state support to stimulate and encourage the emergence of energy communities, but the current political context has forced other priorities. Given the need to improve energy independence and strengthen a decentralised energy system, the allocation of public finances to promote community energy is crucial to empower citizens and send the right message to the energy market.

Lack of inclusion and meaningful participation

Although environmental civil society organisations have been proactive in regularly contacting the ministries regarding the drafting of the REPowerEU chapter since the plan was announced in late spring 2022, there has been a lack of clear communication from the government. Based on our discussions with several ministry officials, we were told that the lack of progress on public consultations was due to the absence of clear instructions from the European Commission. But it is precisely these consultations, including those with civil society organisations, that the Commission has stated should be made transparent in the development of the REPowerEU chapters. According to the amended regulation and Commission guidance, Member States are required to justify how they incorporate stakeholder input. Therefore, this situation evidently demonstrates the government’s lack of transparency and non-compliance with the basic requirement to consult with stakeholders.

A consortium led by Trinomics consultancy, contracted by the Directorate-General for Structural Reform Support (DG REFORM), has compiled a country report focusing on the necessary investments to be included in Estonia’s REPowerEU chapter. The as-yet unpublished draft report, which has been shared with us, does not include any input from environmental civil society organisations. However, in the drafting of the report, the authors did consult industry representatives and business stakeholders. This renders the Estonian ministries’ excuses for avoiding public consultation with other stakeholders questionable at best. And although the final recommendations of the report partially overlap with those independently submitted by civil society organisations, the exclusion of these organisations from the process is deeply disappointing. Environmental stakeholders should at least be given the same platform as other groups to provide informed input and raise concerns regarding the use of public finances.

Public participation needs to be enhanced

Estonia’s proactive and determined approach in becoming the first country to have its REPowerEU chapter greenlit by the European Commission is commendable. However, the participation of civil society is fundamental for safeguarding the public interest. If there is time to consult with businesses, there is time to consult with environmental partners. It all comes down to a matter of choice.

We call on the Estonian authorities to provide transparent feedback on the decisions that led to the exclusion of contributions from civil society organisations. We strongly urge the EU authorities to consider the input that was overlooked at the national level before the chapter is formally adopted by the Council. It is essential that these concerns are adequately addressed through alternative EU processes, such as the revision of Estonia’s 2030 National Energy and Climate Plan or the Modernisation Fund. The involvement of civil society organisations in the implementation of policies, in particular the reform of renewable energy sources, must be strengthened.

In the context of the overlapping crises, it is more important than ever to keep policy-making transparent and democratic. Only by keeping civil society on board will the green transition be socially just and accepted.

Seven years after joining the EBRD’s Green Cities programme, is Yerevan’s green future going up in flames?

In August 2016, Yerevan became the first city to join the EBRD Green Cities programme, signalling its commitment to environmental sustainability. To address pressing issues related to air quality, green spaces, energy, transport and waste management, the city finalised its Green City Action Plan (GCAP) in October 2017. In recent years, EcoLur, Bankwatch’s Yerevan-based partner organisation, has been monitoring progress and the persisting issues that have yet to be addressed.

The first of the Green Cities, but not the greenest

On 3 March 2023, EcoLur hosted a roundtable titled – The Right of Citizens to Live in a Clean and Healthy Environment – to present the findings of their report on the implementation of Yerevan’s Green City Action Plan. The event brought together representatives from Yerevan Municipality, the Armenian Environment Ministry, civil society organisations and experts, who discussed the progress and gaps remaining in the implementation of Yerevan’s Green City Action Plan.

Roundtable The Right of Citizens to Live in a Clean and Healthy Environment. Photo: CEE Bankwatch Network

During her opening speech, Inga Zarafyan, President of EcoLur, highlighted the positive steps taken in Yerevan’s Green City Action Plan, particularly with regards to energy efficiency. However, she acknowledged that obstacles had accumulated over the years, hindering the implementation of other crucial components such as air quality, green zones and waste management.

‘When we analyse the shortcomings, we should understand what we can do to make Yerevan a truly green city and to ensure favourable living conditions for future generations,’ she said.

Under the Green Cities programme, the EBRD has allocated funding to Yerevan for three projects:

In 2017, the EBRD provided a USD 80 million loan for the ENA – Modernisation of Distribution Network project. The total cost of the project is USD 200 million.
In 2021, the EBRD provided a USD 60 million loan to fund the second phase of the project, the ENA Investment Program. The total value of the project is USD 148 400 000, including up to USD 20 000 000 in syndicated funds.
In 2021, the EBRD allocated EUR 20 million to Yerevan Municipality for the Yerevan Bus Project. The total cost of the project is EUR 25 million.

Prior to the GCAP, in 2015 the EBRD invested EUR 8 million in the Yerevan Solid Waste project, which was also provided with a loan from the European Investment Bank (EIB) and a grant from the EU’s Neighbourhood Investment Fund. However, the EUR 27.4 million project is currently being revised and has not yet been implemented. Lastly, the EBRD, together with the EIB and the EU, invested more than EUR 55 million in three phases of the Yerevan Metro Rehabilitation project in 2010, 2012 and 2015.

Falling short on air quality, green zones and waste management goals

According to EcoLur’s findings, air pollution in Yerevan has increased due to excess levels of dust and nitrogen dioxide. ‘Yerevan has failed to reach the mid-term targets for air pollution reduction outlined in Yerevan’s Green City Action Plan,’ said Victoria Burnazyan, EcoLur’s Vice-President and author of the report.

Fire at the Nubarashen landfill. Photo: EcoLur

When it comes to waste, the situation in Yerevan is not much better. Despite the EBRD, the EIB and the EU committing a combined EUR 27 million for the modernisation of the Nubarashen landfill in 2015, the Armenian capital still lacks a sanitary landfill that meets EU standards. In addition, no waste processing plant has been constructed. As demonstrated by the recent fire, the current landfill poses a threat to the safety, health and environment of Yerevan’s residents.

Referring to the issue of greening, Burnazyan added: ‘Yerevan has lost a significant amount of its green areas. Today, we don’t have enough open space for large-scale planting.

As forest lands are being cleared for construction, the restoration of forests in the capital is becoming increasingly difficult, if not impossible.’

The World Health Organization recommends that cities provide each person with a minimum of 9 square metres of urban green space. Unfortunately, Yerevan Municipality has failed to reach the target set in the Green City Action Plan, which aimed to allocate more than 8.5 square meters of green space per person by 2022. The city centre has only 3 square metres of green zone available per resident.

Regarding transportation, Burnazyan noted that Yerevan is importing a new line of large modern buses, which will increase the city’s transport fleet by around 45 per cent. However, there is still no unified electronic ticket system in place. Compounding matters, much of the public transport system in Yerevan remains inaccessible to people with disabilities, as well as older persons and parents with strollers, despite repeated investments by the EBRD and the EIB in Yerevan’s metro system.

During the discussion, Nune Sakanyan, President of Women in Climate and Energy, emphasised the need to incorporate a gender perspective when thinking about modernising public transportation. In this instance, it is not just about providing employment opportunities for women in the transport sector. As we have seen in Tbilisi, there is also an urgent need to assess and minimise the safety risks for vulnerable groups who use public transport, including women, minorities and people with disabilities.

Yerevan’s residents must be involved in shaping the city’s future

From Bankwatch’s experience, urban development plans and strategies are usually well-designed, but problems arise during the implementation phase. For this reason, we strongly recommend that the EBRD and other funding institutions, together with their local partners, provide more opportunities for civil society to participate in the planning and monitoring of projects, particularly during the implementation stage. To that end, residents need clear, reliable, transparent and accessible information on urban development.

‘Experience has taught us that programmes are better planned and implemented when there’s a higher level of transparency and public participation,’

said Fidanka Bacheva-McGrath, Strategic Area Leader at CEE Bankwatch Network. ‘The EBRD insists that Green City Action Plans should be owned by the local authorities. But that’s not enough. Residents must also take ownership. To green our cities successfully, the public deserves to be informed and actively take part in every stage. Only through these contributions can we improve our homes, workplaces, schools, streets and public transportation systems.’

In response to our collective call for better transparency and participation, Yerevan Municipality has committed to establishing a Green Development platform by the end of 2024, which will provide complete and comprehensive information on environmental issues. Hopefully, the platform will enable citizens and stakeholders to actively engage in Yerevan’s decision-making processes and contribute to the development of effective environmental policies and programmes in the future.

Towards energy democracy: launch of new financing tracker for energy communities in the EU

A study by CE Delft has shown that half of the EU’s population has the potential to produce its own electricity by 2050 and, as a result, significantly contribute to the EU’s overall demand. But this can only be achieved if citizens are empowered to lead the transition and have access to predictable and adequate financing instruments.

Governments across the EU must take proactive steps to support energy communities, in particular by providing them with access to finance and ensuring that energy policies are designed with citizen participation in mind. The EU’s Recovery and Resilience Facility, cohesion policy funds and Modernisation Fund offer Member States a unique opportunity to do just that. These funds can be used to support citizen-led renewable energy projects, promote energy democracy and strengthen the resilience of local communities in the face of climate change.

To ensure that these public funds are used effectively, it is important to monitor their use and impact. To that end, CEE Bankwatch Network, in partnership with REScoop.eu and Climate Action Network (CAN) Europe, have launched a new Public Financing Tracker, which shows how these funds are being used to support energy communities in 19 EU Member States. Updated on an ongoing basis, the tracker is a valuable tool for citizens and civil society organisations seeking to track progress and hold governments accountable.

CEE Bankwatch Network assessed eight central and eastern European countries – Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Poland, Romania and Slovakia – to determine the level of support among these countries for using EU public funds to develop the community energy movement. It found that the level of ambition varies widely across the region, with some countries prioritising support more than others. While some countries, such as the Czech Republic and Poland, have made tangible progress in this area throughout the programming phase, others, such as Bulgaria, Estonia and Romania, are still lagging behind with no specific measures for energy communities in place. Therefore, these Member States need to increase their efforts to support the community energy movement.

Understanding and using the Public Financing Tracker

The Public Financing Tracker is similar in structure and logic to the REScoop.eu Transposition Tracker, which assesses the progress of Member States in transposing energy community definitions contained in the EU’s Clean Energy Package directives into national legislation. Featuring an interactive interface, the Public Financing Tracker assesses the progress of Member States in supporting energy communities through the EU’s Recovery and Resilience Facility, Cohesion and Modernisation Funds. The tracker is visualised as three colour-coded maps representing different types of funds. Each Member State is assigned a colour on the map based on an assessment of whether and how it is supporting energy communities through a particular fund. This assessment is determined based on the mentions of ‘energy communities’ within the funds and a further 12 criteria covering programme design, transparency and alignment with implementation.

The tracker, which is regularly updated as new data and analysis become available, can be used by national campaigners as an advocacy tool and by policy-makers as a clear communication roadmap. The development of the tracker involved extensive background research carried out by a network of national campaigners. Additionally, data collection was carried out by REScoop.eu, CEE Bankwatch Network and CAN Europe. To ensure accuracy and relevance, interviews and bilateral feedback sessions were conducted with relevant stakeholders throughout the process.

For more information, please visit the Public Financing Tracker on the webpage of REScoop.eu.

The tracker also provides an overview of the revised national recovery and resilience plans of 23 Member States. In particular, it analyses whether and to what extent the measures foreseen facilitate a greater involvement of citizens in the energy transition. The analysis focuses on three criteria: 1) transparency and inclusiveness during the drafting process, 2) potential support for fossil fuels, and 3) favourable reforms and investments towards (collective) self-consumption and energy communities. The tracker is also presented as a separate tab on the REPowerEU chapter for each national recovery and resilience plan.

For more information, please visit the Public Financing Tracker on the webpage of REScoop.eu.

Trends and policy proposals

Our accompanying policy brief provides recommendations for designing public support programmes tailored to the needs of energy communities. EU legislation on Renewable Energy Communities (RECs) requires Member States to put in place a supportive framework to encourage and facilitate the development of RECs, including mechanisms to improve access to finance.

However, countries such as Bulgaria and Romania have not yet created specific legislation or enabling frameworks for energy communities, nor are they using EU funds to support them. In other countries, such as Germany, Ireland and the Netherlands, EU funds are not being used to support energy communities because robust national financing mechanisms already exist for this purpose.

We believe that EU Member States should allocate specific EU public funds to support energy communities with clear quantitative and time-bound targets for their growth. It is also essential that public funding programmes are co-designed in collaboration with community energy stakeholders and civil society, and that they prioritise support for energy communities that meet certain social and environmental criteria, such as the inclusion of energy-poor households, the reinvestment of revenues in the local community and the promotion of gender equality.

To avoid corporate capture and to ensure the process is rigorous and trustworthy, we recommend that the European Commission develop a best practice guide for developing clear criteria. Satisfactory calls for applications, including appropriate selection criteria, are essential to maximise the social and environmental impact of energy communities and to realise their full potential. We call on managing authorities to develop appropriate selection criteria together with stakeholders. This will help to expand the community energy movement and unlock its many benefits, including its potential to create jobs, ensure energy security and reduce greenhouse gas emissions.

« Previous Page