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Less haste, more speed: The European Parliament must support renewables *and* nature

When the EU wants to do renewable energy, it can. It’s been estimated that almost 40 gigawatts of solar photovoltaics will be installed across the European Union by the end of 2022. This compares to an already record-breaking 27 gigawatts in 2021.

But there are still barriers. Hungary and Poland have spatial planning restrictions so tight that onshore wind farms are effectively outlawed, while Estonia was singled out in an early 2022 analysis as having a particular lack of staff to deal with permit-granting, leading to excessive delays. Bulgaria’s unclear incentives scheme and Romania’s frequent changes of its renewables law were also identified as issues affecting renewables development.

Reading through the European Commission’s proposed amendments to the Renewable Energy Directive under the REPowerEU package though, one gets the impression that EU environmental law is the main problem. It’s not. The Commission has panicked and succumbed to industry pressure to push through a rushed and poorly thought-out proposal that may cause more problems than it solves.

Go-to or acceleration areas

Under the Commission’s plans, each Member State is to identify ‘go-to areas’ – or ‘acceleration areas’ as some prefer to call them – where renewable energy development is considered particularly desirable. These should include e.g. built-up areas or degraded land. Projects in these areas would then be subject to lighter and faster environmental permitting processes.

As spatial planning is a clear problem in some EU Member States, it does make sense to ensure that a reasonable amount of land is allocated for much-needed renewables development, but this will not be a quick process if it is based on proper scientific research and sensitivity mapping.

The Commission’s proposal allows two years for this. This might sound a lot, but since not all countries have sufficiently mapped their biodiversity and that a strategic environmental assessment, including public consultation, needs to be carried out before adoption, adding another year seems more realistic.

Another issue is which technologies should be included in such areas. The Commission’s proposal did at least exclude biomass combustion, but not hydropower. We have serious concerns about loosening environmental requirements for any technologies (see below), but due to their very damaging impacts, forest biomass and hydropower are particularly unsuitable for exemptions in permitting processes.

Environmental safeguards under threat

According to the Commission’s proposal, projects in go-to areas would not need an environmental impact assessment (EIA). And where they may have significant impacts on Natura 2000 sites, they would not need to undergo appropriate assessments as required by the Habitats Directive, either.

This is panic-mode decision-making. The EIA Directive and Habitats Directives are already flexible enough to ensure that benign projects, including many solar projects and some wind projects, are not subject to unnecessary procedures. So the main change would be to let more damaging projects in go-to areas off the EIA hook as well.

The Parliament’s draft report does include a proposal to ensure that small hydropower plants up to 10 megawatts would have to undergo an EIA, but this is not enough. It hardly makes sense to exempt large hydropower. There seems to be an assumption that go-to areas will mostly be on brownfield sites, but if they are to ensure the countries meet their 2030 targets, they will need to go far beyond these.

Legal chaos and damage to Natura 2000 sites

The emphasis in the proposal is supposed to be on low-impact go-to areas, but the Commission is needlessly putting Natura 2000 sites and pristine rivers at risk by introducing a presumption that all renewable energy projects are of ‘overriding public interest.’

A similar, but not identical, provision is also included in the emergency regulation on renewables permitting, whose text was agreed on 24 November and which may also be formally adopted this week.

If a project is likely to have a significant impact on a Natura 2000 site, it has to undergo an appropriate assessment under the Habitats Directive. Currently, if it is confirmed that the project would ‘adversely affect the integrity of the site concerned’, it generally should not go ahead. There are exceptions, however, for projects where there is no alternative and which are of ‘overriding public interest’.

The rules are stricter in cases where the site hosts a priority natural habitat type and/or a priority species – the latter including wolves, bears, or sturgeon, for example. In such cases, generally only protecting human health or public safety can be cited as grounds to declare a project of ‘overriding public interest’.

As a result, some renewable projects can be built in Natura 2000 areas, and some cannot. This must always be assessed case by case.

Yet the Commission has proposed that renewable energy plants and related grid and storage facilities are to be ‘presumed as being in the overriding public interest and serving public health and safety’.

The appropriate assessment will still have to take place, but its conclusions will be largely pre-defined. Although in theory it will still be possible to argue that a project is in fact not of overriding public interest and/or that there are alternatives, it seems unlikely that the permitting authorities will take this on board. It is not even clear what will be achieved, as Natura 2000 areas are unlikely to offer many quick opportunities for renewables development and legal battles on individual projects will still rage on.

The situation is even more confusing because the emergency renewables permitting regulation mentioned above contains a similar — but not identical – provision. And Member States are allowed to apply it to projects whose permitting starts after the regulation comes into force, but to also those already undergoing permitting, where a final decision has not yet been taken. How this is going to play out in reality is anyone’s guess, because it appears that governments are allowed to cherry pick which projects they will apply this provision to during the 18 months that the regulation will be in force.

It may be too late to stop this provision in the emergency regulation, but the Parliament needs to at least stop it in the Directive. In the coming 18 months we expect substantial confusion stemming from the regulation. After opening this Pandora’s box, the least the Commission can now do is promptly issue some guidance on how it should be applied.

Public consultation on the project level is essential

The EIA and appropriate assessment processes also require public consultations for projects which may have a significant environmental impact, and they guarantee the public the right to challenge the relevant decisions in court. So by exempting projects in go-to areas from EIAs and taking the teeth out of the appropriate assessment, the Commission’s proposals are likely to breach the Aarhus Convention and are almost certain to be counterproductive.

Wind, hydropower and other renewable energy sources have already attracted public opposition, and there is nothing more guaranteed to annoy people than the feeling that something is being imposed on them. The process of deciding on go-to areas is supposed to include public consultation but cannot be a substitute for project-level processes.

Squeezing deadlines is not the answer – other barriers need attention

The approach taken by the Commission in its proposals has been to squeeze the deadlines in the environmental permitting process to a point where meaningful assessment and public consultation becomes impossible. The Parliament must resist this tendency and resolve other barriers – such as those mentioned above – instead.

The Commission’s REPowerEU proposals do address the spatial planning issues. And the Parliament has taken on board other issues such as increasing administrative capacity to process permitting applications. But it has so far shown few signs of understanding the importance of maintaining existing environmental safeguards.

Unless the European Parliament stands up for the principles of the European Green Deal this week by tackling the climate and biodiversity crises together, we can expect to see increased legal uncertainty for developers, more public opposition to renewables slowing down deployment, and more damage to nature.

Almaty’s Green City Action Plan: a plan for destructive creation?

The Kazakh city of Almaty joined the European Bank for Reconstruction and Development (EBRD)’s Green Cities initiative in 2019. In November 2022, Almaty became the first city in Central Asia to approve its Green City Action Plan (GCAP). Bankwatch and Green Salvation have called on the EBRD and local authorities to ensure public participation during the implementation of both the GCAP and some of the more controversial urban development projects in the city. So far, this call has fallen on deaf ears.  

This article was written by Green Salvation, Bankwatch’s partner organisation based in Almaty. 

On 4 November 2022, the supposed relocation of Almaty’s airport building, built in 1947, began. But instead of being moved 420 metres to the southeast, as stipulated by a decree from the head of the local government – the Akim of Almaty – dated 11 November 2020, the building was moved to the scrapheap. Excavators and bulldozers paid little heed to the ‘integrity and safety of the monument’ as it was cleared to make way for the construction of a new airport terminal, which proponents say the city badly needs. 

The participants and investors involved in the old airport’s demolition were the local government, the Akimat and several other stakeholders. This is despite the fact that the building is still included in the current state list of historical and cultural monuments of local importance in Almaty, a list approved by the very same Akim. 

This is not the first time the city authorities have taken such a destructive approach to creation. Locals recall the demolition of the Palace of Pioneers and the Alatau cinema, several kindergartens being destroyed, the foothills around the city built up with villas and cottages, and thousands of hectares of apple orchards being cut down. Writing down a complete list of ‘reconstruction projects’ like this would take more than a dozen pages. And then there’s the destruction cause by developers within the Ile-Alatau National Park and the Medeu Regional Nature Park. 

Behind the smokescreen of public hearings

How can these projects possibly comply with the law that ‘recognizes and guarantees’ public participation in the decision-making process, consideration of ‘public interests’ and respect for human rights? After all, many citizens publicly opposed the demolition of the old airport building; even the Akim of Almaty had made a resolution to protect it. If this can still happen, what do the dozens of agencies responsible for keeping order and ensuring the rule of law actually look out for? 

According to ‘highbrow’ scientists, experts and bureaucrats within the city, members of the public don’t understand enough to participate in these processes. One has to wonder what special knowledge is needed to understand that in a state governed by the rule of law, the law must be strictly observed. Still, the city’s experts seem to believe that public opinion can be ignored at the earliest stage of decision-making.  

It seems that their approach is to create a smokescreen of public hearings while never actually making any obligations to the opinion of the people. And from there it is a very simple algorithm: we tear it down, build it, grow it or cut it down, depending on what the investment requires. But the investment’s needs always come first. 

Only in very rare cases does the public manage to preserve natural landscapes, individual city streets, houses and trees. But this is only a drop in the sea of destructive creation that has engulfed the country. 

All of this is already known. What is new in the case described above is that the airport’s destruction was financed by the EBRD. And the bank, together with the city’s leadership, has grand plans. 

On 12 October 2022, the fourth consultation workshop with the interested parties was held in Almaty. The local government gave an advance presentation of Almaty’s GCAP. The initiative is part of the Green Cities programme implemented by the EBRD and funded by the Federal Ministry of Finance of the Republic of Austria. 

After reading the GCAP, Green Salvation has come to the following conclusions, which we have sent to the authors of the document. No response has yet been received. 

  1. The document does not clearly explain how public opinion was taken into account in its preparation. There is no quantitative and qualitative data that could confirm the public’s participation of the public and its effectiveness.
    It talks about the need to involve citizens, consumers and the public early in the processes (pp. 24, 41, 101, 109, 118, 126, 133, 134, 137, 144, 155), but there is no clear statement of how this was achieved. This once again confirms that public participation in the preparation of the plan was and apparently will continue to be reduced to formal participation in workshops and conferences during the project’s implementation. 
  1. The document lacks a detailed analysis of the legal framework for the implementation of the GCAP and specific analysis of the obstacles that may arise. These potential roadblocks could include the high degree of corruption in the country, legal chaos, limited access to information and poor work by government agencies.
  1. One gets the impression that in developing the document, its authors did not use all available sources and data. This indicates that the GCAP was poorly prepared (see appendix for specific comments).

What can we expect from the EBRD’s activities after such a tumultuous start and a long-awaited but poorly prepared action plan? The question is rhetorical, but apparently both officials and bankers are satisfied with everything they’ve done so far. 

Comments about the GCAP, Almaty 2022 

Green Salvation submitted the following comments regarding selected actions within the GCAP: 

Action 10: Transit-oriented design – application of transit-oriented design in the development of satellite cities. 

  1. The plan does not indicate whether new expansion of the city’s boundaries is anticipated.
  1. It does not address the need to move industrial facilities beyond the city limits or to move motor vehicle depots away from residential areas.

Action 16: Develop a citywide blue-green strategy and implementation plan. 

  1. The plan does not indicate when the 2030 Green Space Strategy was adopted or where the public can read it.
  1. It does not analyse the condition of the city’s green fund (it does not indicate the percentage of trees that have taken root, diseased trees and the financial costs of replanting).
  1. It is not clear what is meant by ‘withdrawal of lands due to their location in specially protected natural areas of the region’.
  1. It does not take into account that Ile-Alatau National Park is included on Kazakhstan’s preliminary list for nomination to the List of the Convention for the Protection of the World Cultural and Natural Heritage.
  1. It does not mention the creation of a structure for the unified management of the city’s green fund.

Action 18: Increase the water permeability of the city of Almaty. 

  1. The plan does not mention the need to upgrade the ‘aryk’ system of irrigation ditches, which prevents soil from absorbing moisture.
  1. It does not consider what measures need to be taken against spot and compressive development that reduces the amount of open space.

Action 19: Prevent and address landslide emergencies. 

  1. The plan does not analyse the legal causes of landslide hazards.
  1. Existing landslide hazard maps and studies have not been taken into account in the development of the plan.
  1. It does not take into account that the violation of architectural and urban planning laws is one of the most serious legal problems in Kazakhstan.

Action 21: Develop a comprehensive waste management strategy. 

  1. Local governments do not have sufficient authority to develop their own waste management strategies.

Action 22: Establish a construction and demolition waste recycling facility. 

  1. The plan does not address the issue of reducing waste production by reducing the destruction and demolition of existing facilities, including those already built during independence and illegally built facilities.
  1. It does not consider the possibility of reconstructing exploitable facilities instead of demolishing them.
  1. It does not take into account that the inexpedient ‘relocation’ (and in fact demolition) of the old airport building (which is a GCAP project) will be a source of construction and demolition waste.
  1. It fails to consider that one source of construction and demolition waste is substandard construction and outdated technology.

Action 27: Develop a water conservation plan. 

  1. The plan does not take into account that water loss occurs in large part due to the destruction of watersheds, forests and air pollution over mountain ranges.
  1. It does not take into account that water resource shortages are increasing due to spontaneous urban growth.

The EBRD must finally leave fossil fuels behind

In recent weeks, dozens of environmental groups in Romania, Estonia, Poland, Czechia, Georgia, Slovakia, Hungary and Latvia have sent letters to the European Bank for Reconstruction and Development (EBRD) representatives in their countries. In these letters, the NGOs demand the Bank stops direct finance to oil and gas and indirect support for coal, oil and gas and instead shifts its investments to help step up energy efficiency and expand sustainable renewable energy. 

The groups underlined that such investments are needed for the reduction of these countries’ dependence on fossil fuels and that they would increase energy security and reduce CO2 emissions as well. 

The EBRD is currently drafting its next Energy Sector Strategy that will determine which energy projects could be eligible for the Bank’s support. 

The letters make clear that, rather than continuing to entrench dependence on volatile, polluting fossil fuels, the EBRD could play an important role in catalysing the energy transition in its 38 countries of operation. 

In Romania, there is an urgent need to modernize and shift district heating systems from fossil fuels to renewables, and investments in industrial-scale heat pumps and the utilization of waste heat from cooling and industrial processes could really move the needle.  

EBRD money could also support the development of solar capacities in Estonia, chiefly in communities that can use municipal buildings and facilities or former industrial sites. 

There is also a great potential for investments in energy efficiency measures in Latvia in multi-apartment buildings, municipality-owned buildings, single family houses, small businesses and industry. 

SlovSEFF, Slovakia’s sustainable energy financing facility developed by the EBRD itself could use an upgrade to bring it into the 21st century, by excluding support for both fossil fuels and false solutions such as biomass or waste-to-energy projects. 

In Georgia, the EBRD’s long-standing, generous support for controversial hydropower projects needs to be replaced with promoting decentralised renewable systems that tap the country’s vast wind and solar potential while ensuring the protection of biodiversity. 

And in Poland, EBRD financing could help step up the development of energy communities and the realisation of the geothermal potential in the country. 

‘The recent energy crisis has shown us that we cannot base our energy systems on fossil fuels that increase the cost of living and lead to climate degradation,’ wrote a group of Romanian organisations. 

EBRD support to fossil fuels continued to rise 2014-2020 

The EBRD has long been boasting about its green credentials, all while channelling millions to the fossil fuels industry. Our analysis has shown that between 2006 and 2020 the EBRD forked out over EUR 9 billion in public money to the fossil energy industry. Worse still, of the four leading multilateral development banks, the EBRD was the only one that kept increasing its investments in fossil fuels during the warmest decade on record.  

In 2021 Bankwatch analysed the EBRD’s energy-related operations for 2014-2020 and found that overall, the Bank had invested more in fossil fuels than in renewables. Of the EUR 11.8 billion lent by the EBRD for energy projects during this period, fossil fuel operations made up 43 per cent, followed by renewables (excluding large hydropower plants), which made up 26 per cent. Although the EBRD’s lending in the power sector has made strong progress towards decarbonisation in the recent years, this has been undermined by its continued support for fossil fuels and for fossil-fuel dependent utilities, both in the power sector and natural resources sector. 

But there is a growing recognition that business as usual is no longer an option. In May 2021, the executive director of the International Energy Agency Fatih Birol told The Guardian that ‘if governments are serious about the climate crisis, there can be no new investments in oil, gas and coal, from now – from this year.’ 

What happened to the EBRD’s Paris alignment pledge? 

Two months later, the EBRD announced that all its operations would be in line with the Paris Agreement by end of 2022, then repeated this rhetoric ahead of this year’s UN climate summit. 

And yet, even though the impacts of a rapidly warming planet are already taking a deadly toll on communities around the globe, the EBRD is apparently getting cold feet. In a recent briefing, the Bank’s managing director Harry Boyd-Carpenter, reportedly told journalists the public financier will not divest from existing oil and gas exploration and production projects and that, because of the ongoing energy crisis, the board might not support ending financing for fossil fuels just yet. 

Except the EBRD is already lagging behind. The European Investment Bank (EIB), the world’s largest multilateral lender, was the first to cease all investments in fossil energy starting at the beginning of this year. And in a September interview the EIB’s President rightly rejected the suggestion that, due to the energy crisis, the Bank might reconsider this decision. 

Against this backdrop, Bankwatch and over 90 civil society groups are now urging the EBRD to recognize the climate emergency the world is in and divest from fossil fuels once and for all. 

In a letter sent on Monday (5 December) to the EBRD’s President and board directors, the NGOs are demanding that the Bank lives up to its climate pledges and works to exclude all fossil fuels – upstream, midstream and downstream – from its investment portfolio to facilitate the energy transition. 

According to the letter, ‘The EBRD needs to signal to its countries of operation that the clean energy transition represents the best way out of current crises: climate, energy, and cost of living,’ the letter reads. ‘Structural changes in the EBRD’s countries of operation must be accelerated. With the limited resources that the Bank has at its disposal, this cannot be achieved if it is trying to balance between scaling up the energy transition and financing dirty technologies.’  

As a development bank owned by governments, the EBRD’s financial capacity needs to facilitate, not hamper, the international community’s effort to address the biggest crisis humanity has ever faced. The urgency to break free from fossil fuels could not be clearer. The Bank’s new Energy Sector Strategy must not perpetuate countries’ dependence on coal, oil, and fossil gas but rather help them speed up the deployment of sustainable renewables and energy savings. 

REPowerEU is a chance to prioritise renovating buildings in Latvia

For Latvia, the renovation of multi-apartment buildings is a huge challenge. More than 23,000 multi-apartment buildings need to be renovated, but only 1,600 buildings have been insulated since 2009, a renovation rate of 0.5 per cent per year. Energy consumed in the residential sector accounts for up to 30 per cent of the country’s entire energy usage, which means that this sector has great potential for reducing greenhouse gas emissions and air pollution. 

The national energy and climate plan for Latvia (NECP) from 2019 aims to increase energy efficiency in at least 2,000 multi-apartment buildings by 2030 by installing non-emitting renewable energy technologies or by connecting them to district heating. The NECP will soon be revised to renew the targets, and it is clear that the target for renovated apartment buildings will be raised. The funding allocation in the Recovery and Resilience Facility (RRF) and the cohesion policy alone will not achieve this goal. Thus, the renewed targets will reinforce the fact that changes are needed in the current approach to the renovation of multi-apartment buildings.  

When the existing version of the NECP was prepared, this need was already recognised; the current NECP aims to develop and start to implement a comprehensive long-term solution for increasing the energy efficiency of the housing stock by 2030, which hasn’t yet been realised. There have been improvements made in recent renovation programmes and regulations – for example, now, it is sufficient to have a majority (51 per cent) of a building’s residents vote in favour in order to start renovations, and the costs of preparing technical documentation for renovation (up to EUR 10,000) will be eligible for funding from the state. Yet this is not enough, especially given the current energy and climate crises. 

On a positive note, The Riga Energy Agency is working on the creation of its own fund, which would combine financing from various investment funds at national and international levels to ensure that the residents of Riga have continuous access to financing for insulating their buildings. This could have a potentially significant role on the performance of the whole country, since almost 30 per cent of all multi-apartment buildings in Latvia are in Riga. However, Riga won’t be able to decarbonise its building stock without state support. 

Low-income households excluded 

To reduce the most emissions per euro invested, it makes sense to provide a minimum support intensity (grant or financial instrument) relying largely on households’ capacity to fund projects using bank loans. If the grant is kept to a minimum, provided that there are households still able to fund renovations with that level of state support, then more houses can be renovated with the same amount of money. Relying on middle-class households to participate in these schemes is also much less risky from a financial standpoint than getting involved with low-income households, which might not have secure income and might struggle to pay their energy bills on time. However, in the long term, largely excluding vulnerable households only aggravates social inequality. 

If we want to be serious about social cohesion and reducing energy poverty, programmes funded by the EU must be designed to overcome social inequality. So far, EU funds for building renovation are used quite inefficiently given that 65 per cent of the funding across the EU is absorbed by high-income households that would have renovated their buildings regardless of the existing grants. (See Quentin Jossen’s 2022 report Pre-financing mechanisms for climate renovations accessible to all Flemish homeowners for CLIMACT (not available online)). 

Short-sighted administrative cuts cause problems 

Technical assistance from state and local governments would increase the capacity of apartment building owners and managers to properly renovate their buildings. This is supported by the Ministry of Economic’s ex-ante evaluation of the availability of finance for increasing the energy efficiency of multi-apartment buildings, which came to conclusion that the state and local governments must provide technical assistance to increase the capacity of apartment building owners and building managers. A lack of resources for Altum Financial Development Institution, the administrative body managing this money, is also causing problems. The current political paradigm is to cut administrative costs as much as possible without truly considering the long-term consequences of such a policy. High-level ministry officials have informally said that the number of staff could be approximately only 10 per cent of that of similar agencies in other Member States with a comparable population size. 

This lack of capacity means that work is either not being done or is being done too slowly on measures that would speed up and make the building renovation more efficient. Latvia must include a long-term strategy and financial mechanisms that combine different sources of funding; offer long-term structure and stability for construction and material supply chain companies; and provide financial support continuously, regardless of EU planning periods and the availability of EU funds. The European Commission has also repeatedly indicated that Latvia must strengthen the capacity of this agency. 

The energy crisis has put an immense strain on our economies, so it is understandable that state authorities wish to save money on administrative capacities and design uniform support programmes for various cases. But at least in terms of building renovation, the approach should be different. It should offer various financial support schemes and conditions (intensity of non-refundable financial support, pre-financing availability, length of repayment period) for different households, depending on their income level and building type. These proposed measures are supported by studies (see Jossen) differentiating social groups by their ability or inability to fund renovation projects and apply for different loan schemes, as well as their corresponding need for support from state programmes. Furthermore, the acceleration of investments in energy efficiency is one of the most concrete and immediate measures that will help citizens address energy prices. 

A chance to prioritise and invest smartly  

The REPowerEU plan and the option for Member States to request additional funds that will add to existing recovery and resilience plans are a chance to address some of these needs. Apart from the aforementioned challenges and the simple need for a greater amount of funding, the following measures or programs could provide the necessary boost for housing renovation in Latvia: 

  • A programme for local governments to receive support for increasing their capacities. This could include measures such as educating and employing project and energy managers who would help communities or residents to successfully apply for funding and implement the renovation.  
  • A programme for cities to support the district renovation approach. The precondition of this program could be that local governments must speed up the approval process within building administrations and prioritise projects that increase energy efficiency. 
  • Introducing a ‘stick’ element by establishing penalty fees similar to a CO2 tax. This could be a long-term penalty for those who have a house of a certain type/age/technical condition and who do not decide to start renovation within a reasonable period or do not achieve specific energy efficiency results by implementing individual measures. At the same time, a specific financial support mechanism for vulnerable households needs to be in place. 
  • Implementing a standardised approach. The state should organise tenders for the insulation of multiple apartment buildings of the same type as part of one procurement, including the mass production of insulation elements, like what is being implemented in Estonia. Latvia could also develop pilot financial mechanisms for energy efficiency measures targeting energy-poor communities following the example of the Lithuanian government.  

Instead of investing in large-scale fossil gas projects in the name of energy security, the Latvian government should use REPowerEU funds to reduce energy demand and turn the EU renovation dream into a reality. This includes expanding special programmes for vulnerable households, designing programmes to help municipalities hire and train residential building project managers, implementing a standardised approach where possible and ensuring continuous funding. 

Paved with good intentions: text of EU emergency regulation on renewables permitting agreed

The EU Council yesterday agreed on the text of an emergency regulation aimed at speeding up renewables deployment during the next 18 months while updates to the Renewable Energy Directive take effect. Formal approval is expected on 13 December at the next Energy Council.

Action to speed up small-scale solar and heat pumps is more than needed. But the regulation is a prime example of the phrase ‘the road to hell is paved with good intentions’.

In its good intention to speed up renewable energy deployment, the European Commission, which published the proposal two weeks ago, has proven to be easy prey for industry lobbyists trying to dismantle EU environmental legislation by the back door.

Of overriding public interest – or just riding roughshod over EU environmental law?

The most controversial part of the regulation is Article 2, which would see all renewable energy projects presumed to be of ‘overriding public interest and serving public health and safety’. For example, if it is deemed that there are no suitable alternative solutions, a hydropower project could be built, no matter how much it damages Natura 2000 sites or degrades river water quality. 

This undermines existing EU environmental legislation which allows such harmful developments only after assessing projects on a case-by-case basis.

It is also likely to increase public opposition to the most controversial renewables projects with impacts on protected areas or pristine rivers, because it will increase the impression that the projects are being pushed through irrespective of local opinion.

But the most painful part is that it’s unlikely to make a major difference to the EU’s overall renewable energy capacity. Existing EU law is already flexible on this issue and allows many projects to be built despite having significant impacts, so just a few most damaging projects will benefit from this change.

Abuse of emergency powers

The emergency regulation has been adopted under Article 122 of the EU Treaty, which allows the EU to take emergency action, particularly to overcome energy supply difficulties. But the text goes far beyond economic measures with severe and disproportionate effects on key environmental laws. 

And some of the measures – particularly on overriding public interest – are not only of marginal importance for the overall energy supply, but they will anyway not have an impact on time to tackle the current energy crisis.

Even if a damaging renewable project – say a hydropower plant or a wind farm in an area important for birds – is declared to be of overriding public interest now, the chances of it being built in the next year or so are almost zero.

Sidelining the European Parliament

Major changes to EU environmental law should not be carried out via emergency regulations. Existing legislation should be reviewed for its effectiveness – the so-called fitness check, and any adjustments should be proposed by the Commission, accompanied by an impact assessment, and agreed on by the European Parliament and the Council. 

In fact, the last fitness check on the Habitats Directive found that it was fit for purpose, and the same goes for the Water Framework Directive. So any changes would have to be particularly well-justified. This was not the case here – as this is an emergency regulation, no impact assessment had to be carried out, and the Parliament did not have to be consulted.

To make matters more complicated, the emergency regulation includes some of the same measures currently being discussed by the European Parliament as amendments to the Renewable Energy Directive, but with different wording. Even if the Parliament later votes against such measures or votes to change them, they will anyway be in place for the next 18 months, rather undermining the Parliament’s decision-making role.

Welcome to legal chaos

The existing EU environmental laws and national laws are still in place, so the new regulation has created a parallel system for renewables that creates clashes and contradictions. This is likely to lead to more lengthy court battles, not fewer. 

Among the most absurd provisions is that the new regulation allows Member States to change the permitting rules half way through for projects already undergoing permitting: ‘Member States may also apply this Regulation to ongoing permit granting processes which have not resulted in a final decision before [starting date of application of this Regulation], provided that this shortens the permit granting process and that pre-existing third party legal rights are preserved.’  

In theory, this makes it more likely that the regulation would have a quicker impact, targeting projects which are already undergoing permitting rather than those which have not started yet. But in practice, it’s hard to imagine this leading to anything other than legal chaos. 

Remember, when it comes to overriding public interest, we are talking about only the most controversial projects which wouldn’t be able to be built without these new changes. So on one hand, project promoters will be pushing to have their projects assessed under the new rules, no matter where in the process they are. And opponents of the projects will push to ensure their rights to consultation and to legally challenge permitting decisions are preserved. It’s not hard to see who will win in this case, but this will just unleash a new round of legal challenges.

What next?

Given that the Commission and Council have likely overstretched the definition of emergency measures in this case, it remains to be seen whether the regulation will be subject to legal challenges,

But in any case, Member States have considerable flexibility in applying these new provisions, so it will be partly up to them to minimise the amount of chaos and dissatisfaction stemming from the new rules. 

And most importantly, similar provisions are currently being discussed for the longer term as amendments to the Renewable Energy Directive. So it’s crucial for the Parliament, Council and Commission to take a long, hard look at whether trashing EU environmental legislation is going to make a serious contribution to upping the EU’s renewable energy share. We can’t solve the climate crisis by destroying nature, after all.

 

Is Estonia doing enough to reach 100 per cent renewable electricity, and can it do even more with the help of REPowerEU?

Investments in renewable electricity production and storage 

The energy and climate-related investments and reforms in Estonia’s operational programme and recovery plan include a wide range of interventions. Altogether, they make up a coherent policy mix that supports the move towards 100 per cent renewable electricity and include:  

  • Incentivising renewable electricity production in industrial areas.  
  • Strengthening the electricity grid to allow for the integration of new generation capacities. 
  • Piloting renewable electricity and heat storage to balance production and consumption when the amount generated fluctuates based on the weather. 
  • The deep renovation of buildings in regions outside the larger cities. 

As the Estonian government prepares to add a new chapter to its recovery plan under REPowerEU, we in the Estonian Green Movement would like to emphasise which investments and reforms should be introduced, improved and prevented. 

Biogas can offer an alternative to fossil gas 

Fossil fuel phase-out will be necessary not only in the electricity sector, but also in the whole energy system, including in heating and transport. In light of the current gas crisis, it is especially important that Estonia uses EU funds to scale up the production of alternative gases such as biogas and renewables-based hydrogen.In order to assure sustainability, we propose the call for proposals contain criteria that would allow for biogas production only from residue and waste, not energy crops. 

Estonia’s operational programme incentivises biogas production with demand-side investments. A EUR 12 million investment is planned for  procuring  biomethane buses for public transport in larger cities and building biogas fueling stations. The buses will consume around 55 gigawatt hours per year of biomethane, and it is expected that the increase in demand will spark a corresponding rise in domestic biogas production. In the future, biogas from these production facilities can also be used for electricity and heat production in hours of peak demand instead of fossil gas.  

Hydrogen use has to be carefully prioritised 

Estonia’s recovery plan will support the uptake of renewables-based hydrogen technologies, making EUR 50 million available for pilot projects that aim to build up whole value chains. Projects must require that hydrogen be produced from electrolysis with the use of renewable electricity, financing for transmission and storage infrastructure, and specific technologies for hydrogen consumption. Although green hydrogen is not a bad solution in principle, it should be used only in sectors where reducing emissions by other means is very difficult, such as the steel and chemicals industries, aviation, long distance shipping and heavy duty road transport. We propose the call for proposals includes criteria that prioritise the production and consumption of hydrogen only in the aforementioned sectors where better alternatives for decarbonisation, such as electrification, alternative fuels, a modal shift, do not exist or are not competitive. 

If the sectors that can apply for EU funding to develop hydrogen capabilities are not limited, financial support may be used to build up hydrogen value chains in sectors that are not economically viable or environmentally optimal. An example of such a project has already emerged in Tallinn, where hydrogen will be produced from wood biomass and used as fuel for city taxis. These options are not reasonable: first, electrolysis requires a very large amount of electricity and wood biomass is a very limited resource; second, in the case of passenger cars (including taxis), direct electrification (electric vehicles) is a significantly more efficient and environmentally friendly solution than hydrogen fuel cell vehicles. 

Gas demand must be reduced 

Estonia must also avoid using EU funds to build additional permanent fossil gas infrastructure such as LNG terminals. Instead, Estonia should seek to reduce gas demand as much as possible and to invest in biogas and hydrogen production where the highest environmental standards for its use can be met (as indicated in the previous sections).  

At the moment, gas is primarily used for heating: approximately 45,000 households in Estonia are heated with gas boilers. To reduce the dependence on imported fossil gas, buildings with gas boilers should be connected to a district heating network or their boilers replaced with heat pumps as soon as possible. The Estonian Heat Pump Association has estimated that around half of these households would need financial support to purchase a heat pump. We propose to allocate additional funds for replacing gas boilers with heat pumps or  district heating. 

Energy poverty has to be addressed 

It is welcome that the Estonian recovery plan intends to implement differentiated financial support for renovation, with higher support rates in rural areas where property values and the residents’ capacity to invest are low. However, the inability to renovate may be correlated more with household income rather than the area of residence. At the same time, in the current energy crisis, low-income households who are unable to renovate are the ones who need renovation the most to lower their energy bills. We propose that Estonia differentiate reconstruction subsidies based on household income (or, in the case of apartment buildings, the average household income), whereby low-income households would receive higher subsidy rates. 

Energy communities need a nudge 

Although the EU’s new solar energy strategy foresees the creation of at least one citizen energy community in every city that has at least 10,000 inhabitants by 2025, so far the electricity production in Estonia has been heavily centralised in the hands of a few oil shale companies. No support is currently foreseen for establishing energy communities in the Estonian operational programme or recovery plan, making cooperative electricity production an untapped opportunity that could help to increase local communities’ support for renewables and improve their energy security.  

However, local communities may not have enough funds to initiate the planning of large-scale solar and especially wind farms. We believe Estonia should follow the lead of other European countries that support energy cooperatives through direct grants in the early stages. The grants could be used for conducting preliminary studies, establishing the feasibility of the projects and attracting investors from the community. 

Wind farms do not belong in forested areas 

To increase the uptake of renewables in the energy mix, the REPowerEU plan proposes to accelerate the permitting process for wind and solar farms by largely abolishing the requirement to conduct an environmental impact assessment. This would, for instance, make it easier to clearcut forests to make way for wind and solar farms.  

Although it is necessary to shorten some parts of the permitting process, it should not be done by abolishing environmental legislation and excluding the voices of affected stakeholders. Estonia should not finance the building of wind and solar farms in forested areas under REPowerEU, as the necessary clearing of forested land creates new carbon emissions, reduces carbon sequestration and damages biodiversity. Following Estonia’s Land Use, Land Use Change and Forestry (LULUCF) sector sequestration target for 2030, preference should be given to sites other than forested areas when planning wind parks. Replacement afforestation cannot outweigh decades of carbon sequestration deficit and biodiversity loss related to massively increased clearcutting. 

Suggestions for Estonia’s REPowerEU chapter 

Estonia is taking steps in the right direction, but there are still some measures that could and should be improved in Estonia’s recovery plan. REPowerEU offers an opportunity to do so, but there are loopholes that should be avoided. We suggest the Estonian government:  

  1. increase support for replacing gas boilers with heat pumps or district heating, 
  2. carefully prioritise support for green hydrogen production and consumption in sectors where better alternatives don’t exist,  
  3. differentiate renovation support based on household income,  
  4. introduce a subsidy for emerging energy cooperatives to conduct preliminary studies, and  
  5. avoid financing wind and solar farms in forested areas.