Blog entry

Bulgaria’s energy transition without Russian fossil gas and new nuclear capacity

Putin’s brutal aggression against Ukraine and the unprecedented sanctions imposed by the EU on Russia make it necessary to rethink the main directions of Bulgaria’s energy plans.

While the EU is attempting to minimise energy dependence on Russia, some Bulgarian politicians still wish to continue business as usual, serving private, oligarchic interests which reinforce corruption and increase energy dependence on Russia. This means blocking a European path that would allow for the country’s development in the direction of increasing energy efficiency, decentralisation of electricity production and easier access to renewable energy for households.

The Bulgarian government has neither the time nor any excuse to delay energy reforms. Adopting more ambitious green transition targets is a guarantee for increasing the country’s energy independence and for mitigating the consequences of new political and energy crises in the region. Such reforms will have strong support from the EU’s Recovery and Resilience Facility and Just Transition Fund.

The abandonment of the corruption-riddled project for the construction of the Belene Nuclear Power Plant (NPP), Unit 7 of the of the Kozloduy NPP and contracts with Gazprom is mandatory. Such a move has already been signalled by Bulgaria’s deputy prime minister Asen Vassilev, who recently stated that when Bulgaria’s 10-year deal with Gazprom expires at the end of 2022, Sofia will look elsewhere to meet its natural gas needs.

Nuclear and gas projects that are detrimental to the Bulgarian energy transition are still being considered viable options by some politicians. They still push for such harmful projects as the renewal of the discredited Belene NPP, which has caused losses of more than BGN 3 billion to the budget, or the construction of Gazprom’s Turkish/Balkan Stream.

Nuclear false solutions

The occupation of Chernobyl and the Zaporizhzhia Nuclear Power Plant (the largest in Europe with six 1000-MW reactors) has been used as a threat during the war, which should raise concerns in the Bulgarian government about planned increases to Bulgaria’s nuclear power capacity.

The construction of new nuclear power plants in Bulgaria should be out of the question for obvious environmental and financial reasons.

Now, on top of that, any needed Russian equipment is impossible to obtain due to the EU sanctions, which will also affect the Belene project. EU sanctions have also put a stop to plans for expanding the Kozloduy Nuclear Power Plant with a Russian reactor. The US small modular reactors recently promoted by our politicians are not an alternative: they have no license anywhere in the world and the most optimistic date for building nuclear capacity based on such reactors is around 2035.

The Bulgarian government is furthermore facing a huge unresolved problem linked to the management and storage of high-level radioactive waste and spent nuclear fuel at the Kozloduy plant, which will only worsen with the addition of another nuclear power plant.

For more on this topic, see Small modular reactors and big ambitions (in Bulgarian).

Gas pipe dreams

Europe’s vulnerability due to its dependence on fossil fuels is not a new problem. Back in early 2009, Putin demonstratively stopped gas supplies through Ukraine, which affected several EU countries, including Bulgaria. Unfortunately, no measures were taken to reduce the EU’s or Bulgaria’s dependence on Russian fossil gas.

The construction of the Turkish/Balkan Stream, a Gazprom project paid for with nearly 3 billion leva from the national budget, is completely meaningless for the Bulgarian energy transition. The war has also reminded us that it could be a serious concern for the country’s energy security, as well.

Fair and green energy transition

It is time to put an end to Bulgaria’s energy dependence on Russia, finally turning our attention to sustainable solutions for increasing the country’s energy independence, preserving nature and improving people’s quality of life.

The changed environment in Europe puts the Bulgarian government to the test of implementing real reforms for a faster fair energy transition. These are the necessary steps in this process:

Adoption of energy policies towards a green transition and a green economy.
Abandonment of energy mega projects – Belene, Kozloduy 7, combined-cycle power plants – which are blocking the development of the energy sector.
Development of an energy sector based on modern renewable energy technologies, energy efficiency and decentralisation of electricity production.
Investing in renewable energy and energy storage technologies will be a key focus in the coming years. Moreover, there will be additional funds from the Recovery and Resilience Facility, the Modernisation Fund, the Just Transition Fund and Territorial Just Transition Plans.
Planned and gradual decommissioning (phase-out) of coal plants, starting with those that have not met environmental standards for years. The Just Transition Fund should be used to make the energy transition fair for workers in the sector.
Establishing a detailed professional reorientation plan for employees affected by the energy transition, including the development of an analysis of the jobs currently held, education level and age group, based on which a clear strategy for employee opportunities after the phase-out of the coal facilities. This would significantly mitigate the negative attitudes of much of society in the region towards energy transition.

This has been adapted from the original article in Bulgarian: https://www.zazemiata.org/energien-prehod-bez-gazprom-aec/

Business with Russia: multilateral banks must rethink their approach to Russian exposure

The London-based European Bank for Reconstruction and Development (EBRD), created in April 1991 to ‘foster the transition towards open market-oriented economies and to promote private and entrepreneurial initiative’, has suspended investments in Russia since the annexation of Crimea in 2014 and in Belarus since the fraud elections in 2020.

In March, the Bank launched a formal resolution process with its Board of Governors to formally cut Russia and Belarus from its resources, which, when adopted by its Board of Governors, would allow it to stop disbursements under numerous sovereign infrastructure projects in Belarus.

In comparison, the EU-controlled European Investment Bank (EIB) suspended all such disbursements in the summer 2021, following adoption of EU sectoral sanctions.

Quite remarkably, the China-led, Beijing-based Asian Infrastructure Investment Bank (AIIB), which typically does not demonstrate concern for human rights, also suspended all activities relating to Russia and Belarus calling a spade (war) a spade. The New Development Bank (known as the ‘BRICS bank’, with founding members Brazil, Russia, India, China, and South Africa) is much less outspoken, with its two-line statement on 3 March 2022 acknowledging that it had ‘put new transactions in Russia on hold’ amid ‘unfolding uncertainties and restrictions’.

Some multilateral institutions, including the EIB, EBRD and IMF-World Bank Group have already announced resilience packages to help Ukrainian citizens, companies and institutions affected by the war. The EUR 2 billion resilience package from the EBRD also includes support for neighbouring countries affected by the humanitarian crisis, as nearly 4 million refugees have fled the war in Ukraine.

In parallel, in response to the shock of Russian aggression, over 400 companies (including Microsoft, Apple, Volvo, Rolls Royce, Toyota, etc.) are pausing, pulling out, divesting, or winding down their business in Russia and Belarus.

IKEA – which remained deaf to the calls of Belarusians activists and its own trade unions to stop purchasing timber from Belarusian dictator – felt it had to pause all export from and import to Russia and Belarus and closed its stores. British-American Tobacco, who also showed unfettered support to the Belarusian dictator and his cronies until it had to stop operations in Belarus as a result of US sanctions, first stated that it would continue its operations in Russia before making a U-turn just two days later.

Goldman Sachs, J.P. Morgan, Deutsche Bank, Crédit Agricole and Commerzbank AG made important steps in cutting ties with Russia; others like Intesa Group, Société Générale and Auchan are still pursuing a ‘business as usual’ approach towards Russia.

While Italian bank Unicredit is ‘considering exiting Russia’, Austrian Raiffeisen is taking time to assess its ‘strategic options’ in the country. Raiffeisen, with 4.2 million customers and EUR 22.9 billion in direct exposure to Russia, is actually one of the few western lenders to have increased its presence there following the annexation of Crimea eight years ago. Hungarian OTP Group also plans to stay in Russia in the long term.

Even though most of the multilateral development banks have pulled out of Russia and Belarus (see above), they are still prepared to finance commercial banking groups present there. By doing so, they indirectly support these businesses’ operations in Russia and Belarus and hence, Putin’s war and Lukashenko’s assistance and domestic repression.

Here are some illustrations:

Prior to the Russian agression in 2022, following allegations of support by Raiffeisen group (RBI) to the corrupt and terrorist regime of Lukashenko, the EBRD withheld any new financing to Raiffeisen’s local subsidiary, Priorbank. However, the London-based development bank never questioned the Raiffeisen group’s global attitude and RBI’s genuine commitment to their advertised ethical values and continued financing this group in many other countries (e.g. unfunded risk sharing with Raiffeisen Bank Romania, a EUR 100 million guarantee to Raiffeisen Bank Albania). This complacent attitude has certainly nothing to do with Raiffeisen group being the lead-sponsor of the EBRD Annual Meeting for years.
At this very moment, the EBRD is considering providing financing of EUR 48 million to Banca Intesa Belgrade. This group’s presence in Russia is ‘under strategic review’.

Multilateral development banks must not engage in double-talk – saying one thing while doing another. They must ensure that they do not support clients that choose to continue business in Russia or Belarus.

Bosnia and Herzegovina illegally extends lifetimes of deadly coal plants

Right at the end of last year, the Federation of Bosnia and Herzegovina (FBIH)’s Parliament adopted changes to the Law on Electrical Energy allowing the FBIH government to limit electricity price rises for companies if a price rise of more than 20 per cent is expected compared to the previous year. This was followed on 7 January this year by a government decision to do just that.

While undoubtedly motivated by real needs to shield certain consumers from the Europe-wide energy crisis caused by high gas prices and consequently high electricity prices this winter, the decision was taken in haste without any attempt to identify which companies would be most affected by price rises. It shields all types of companies, irrespective of their ability to pay.

The FBIH government’s decision instructs the Federal Ministry for Energy, Mining and Industry to analyse the impacts of the decision within three months of its entry into force, and if necessary to propose some adjustments. But already in early February, Elektroprivreda BIH wrote to the Federal Prime Minister saying that it wouldn’t be able to break even after this decision.

As a solution, Elektroprivreda BIH made two alternative proposals. The first was to use the electricity allocated for sale to ArcelorMittal Zenica for sale elsewhere at a higher price, and the second was to extend the lifetime of the Tuzla 4 and Kakanj 5 coal units.

These units are subject to a so-called ‘opt-out’ regime under the Energy Community Treaty, in which they are allowed to run for a maximum of 20,000 hours between 1 January 2018 and 31 December 2023. Bosnia and Herzegovina agreed to this decision, which represents a compromise for old plants that are still needed but for which it is not worth investing in additional pollution control equipment.

Bosnia and Herzegovina has known that this mechanism is available since 2013 and since 2016 it has been confirmed that these two units are on the opt-out list. This time should have been used for transitioning to new generation capacity, but the FBIH government and Elektroprivreda BIH have kept pushing the controversial Tuzla 7 project long after it should have been clear that it has no future, and have failed to invest in sufficient solar and wind capacity.

After exhausting their 20,000 hours, Tuzla 4 and Kakanj 5 are allowed to work only if they adhere to the emission limits for new plants from Annex V of the Industrial Emissions Directive. But this clearly isn’t going to be the case here, as no pollution control investments are planned. Coal power plants in Bosnia and Herzegovina already pollute almost ten times as much as allowed, so these lifetime extensions will only add to the pollution.

Instead of adjusting the hastily-made decisions limiting electricity price rises for companies, first the House of Representatives on 9 March and then the House of Peoples on 24 March accepted the government’s proposals, irrespective of the law and people’s health, despite being warned by civil society organisations and the Energy Community Secretariat that the move was illegal.

The move to extend the coal units’ lifetime is seen by some as a victory for FBIH’s miners, who justifiably fear for their employment. But in reality, the decision is yet another short-term sticking plaster to get the government through to this October’s elections. It is not even clear how long Tuzla 4 and Kakanj 5 can technically operate for, given that they are both more than fifty years old.

Meanwhile, decisions that would really help to orient Bosnia and Herzegovina’s energy sector and enable a planned and participatory just transition for mining communities are inexcusably delayed. Despite work having started on the country’s Integrated Energy and Climate Plan several years ago, no draft is yet publicly available, while a new draft FBIH Law on Renewable Energy has been inexplicably languishing in a government drawer since 2019. A temporary solution to connect Tuzla’s district heating to the existing unit 6 instead of unit 4 has also been delayed. These simply must move forward if Bosnia and Herzegovina is to avoid a major energy crisis in the next few years.

The river Bosna – a neglected gem of Bosnia and Herzegovina

The River Bosna in September 2021, photo: Dobrica Mitrović

The Bosna is the largest river that is completely within Bosnia and Herzegovina. From its source in the outskirts of Sarajevo, it flows north for 271 kilometres to its mouth in the river Sava. Surprisingly, it is also one of the few large Balkan rivers with no hydropower plants or major dams, despite some plans being around for decades.

After concerns were raised by environmental organisations and protests from local people, on 28 January 2022 Germany’s KfW bank confirmed it was dropping financing plans for the 13 MW Janjići hydropower plant near Zenica. But Bosnian power utility Elektroprivreda BiH is still trying to push forward this project as well as the larger Vranduk plant downstream.

Shortly after the news about Janjići, people from Kakanj – a few kilometres upstream – strongly opposed a new plant called Bilješevo and the municipal council refused to give consent for the plant until a public consultation has been carried out.

Due to the threats from hydropower construction and a lack of updated knowledge about the biodiversity of the Bosna, CEE Bankwatch Network and the local NGO Eko Forum Zenica organised a survey of the aquatic animals that inhabit the river. Our study found proof that the globally threatened Danube salmon, also known as huchen (Hucho hucho) and the recently described Sava bleak (Alburnus sava) inhabit the river. With at least 17 species of fish protected by the Bern Convention and the EU Habitats Directive still found in the river, it is crucial to include Bosna in the Emerald Network, the pan-European ecological network.

The survey among fishermen in Zenica

30 face-to-face interviews were carried out in December 2021 with local fishermen from around Zenica who regularly fish on the river Bosna. They shared their knowledge on all the fish and other animals they knew from the river, the best fishing areas, the quantities of fish that could be caught in a day, and the threats and changes to the river. After the interviews they also shared photos of fish caught recently in the river.

“We have been fishermen for generations and we have taught many people to love fish. Zenica has many fishermen”, explains a fisherman from the Kanal district of Zenica.

A total of 34 fish species were described by the local fishermen, most of them of fishing importance, but also many rare species whose habitats need to be protected in Europe (see Table 1 below). The exact scientific names were verified afterwards by ichthyologists whom Bankwatch contacted and they gave their opinion that a few other species probably occur in the river, elevating the total number to above 40.

All the fishermen described how, during the 1990s war in Bosnia and Herzegovina, much of the industry along the river was destroyed, which led to the self-purification of the river and the quick recovery of aquatic life. In recent years, the water quality has deteriorated due to industry and construction of roads, but still a lot of fish survive.

“The river Bosna has always been rich in fish. The improvement of water quality during the war led to a large migration of fish from the Sava, so that’s when there was the most fish, and they’ve largely remained today”, says another fisherman from Nova Zenica.

Fifteen of the fishermen affirmed that the Danube salmon was still found in the river, although some commented that it was on the brink of extinction. Nevertheless, the photos we received of two large individuals caught in the winter 2020-2021 in the river Bosna show that the Danube salmon still inhabits the river.

Other protected fish known by the fishermen include the asp (Aspius aspius), Danube barbel (Barbus balcanicus), Vladykov’s lamprey (Eudontomyzon vladykovi), Balkan loach (Cobitis elongata) and even the Sava bleak (Alburnus sava) which was described as a new species for the first time in 2017.

Danube salmon caught in the river Bosna - winter 202021 2

Danube salmon caught in the river Bosna – winter 2020/21, photos from local fisherman courtesy of Eko Forum Zenica

Sava bleak caught in the river Bosna, July 2021, photo from local fisherman courtesy of Eko Forum Zenica

Most of the fishermen confirmed the presence in the river of otter and crayfish, but interestingly, thirteen fishermen also knew of the presence of the Eurasian beaver (Castor fiber), another species protected by national and European legislation. It seems that the species has recolonised the Bosna recently as the beaver population in the country is growing. A beaver family was found already in 2009 on the river Lašva, a left tributary of the Bosna.

Sixteen of the fishermen said that in recent years they’ve been able to catch more than five kilograms of fish on the best days; nine said that they could catch between two and five kg and only five said that they could catch between one and two kg. The reported quantities before 2010 were slightly higher, with 20 fishermen reporting more than five kg on the best days. “The river Bosna is still rich in fish, but the law limits the catch to eight specimens”, says another local fisherman.

A large individual of European grayling caught in the river Bosna, photo from local fisherman courtesy of Eko Forum Zenica

Most of the fishermen reported problems with waste, pollution, construction and illegal fishing in the river, but still believe that the Bosna and its fish are hugely important for local people. What all of them fear is the construction of hydropower plants. “If they build a hydropower plant in Janjići, all the fish upstream from Zenica will disappear,” says a fisherman from Raspotočje.

How can we explain the extraordinary importance of Bosna for the protection of fish?

Popularly known as being very polluted from industry and wastewater, few people can imagine the incredible aquatic life the river Bosna now supports. There are several reasons for this:

The river’s self-purification capacity. It is still almost natural, with no major construction in the riverbed. Its diverse natural habitats, like the spectacular rapids near Janjići and the riparian forests along its whole length, help the river clean itself. Investigations show that the self-purification of streams from nitrates and phosphates is more effective in natural stretches than in regulated stretches.
The destruction of much of the industry along the river during the 1990s war. Although the city of Zenica suffers from serious industrial pollution, it seems that the pollution levels are still not like those in the Yugoslav times.
The size of the river Bosna. The large volumes of water the river carries still allows most of the fish species to survive. The average annual outflow in the lower stretch of the Bosna is 142 m³/sec and pollution can be diluted in a lot of water. According to the Environmental Impact Assessment report of the Janjici plant, the affected river stretch is in good ecological status based on macroinvertebrate indices.
The lack of dams and other barriers in the river. There is no major barrier stopping fish migration from the Danube, through the Sava and Bosna rivers all the way to Sarajevo. This allows many species to move from one stretch to another depending on the conditions and their ecological needs.

Time to throw away old assumptions

Old assumptions that the “river is already in heavy use, as a result of which its ecological condition is already being impacted” need to be forgotten. Our survey confirmed that river Bosna is a highly valuable river.

Because of the quantity and quality of fish and other rare animals, in 2015 scientists working on the creation of the Natura 2000 network in Bosnia and Herzegovina proposed it for protection as the Rijeka Bosna Natura 2000 site. With stricter control of pollution and implementation of restoration activities, the river Bosna would further improve its status and become even more attractive for local people and for international fishing tourism. But in order to achieve that, the authorities will need to drop all plans to build hydropower projects here.

Table 1. Fish species reported from the river Bosna by local fishermen:

This publication was produced in collaboration with EuroNatur and RiverWatch in the frame of the Save the Blue Heart of Europe campaign, with financial support from MAVA Foundation.

Is there room for informal waste pickers in Serbia’s new waste management system?

The European Bank for Reconstruction and Development (EBRD) and French Development Agency (ADF) co-financed upgrade of Serbia’s waste management system is poised to collide with the country’s informal waste collectors. As Serbia prepares its new solid waste management system and begins to close municipal dumpsites across the country, these informal and formal waste pickers face the loss of their livelihoods. The human rights violations which occurred as a result of the Belgrade’s Vinča project should not be repeated.

Waste pickers – the unsung heroes of recycling

Recycling has historically been a low priority for public companies in Serbia, as evidenced by the Serbian Environmental Protection Agency’s most recent report on waste management between 2011 and 2020. It found that 80 per cent of the 2.9 million tons of municipal waste in 2020 ended up in unsanitary landfills, including garbage dumps and illegal landfills.

Waste collectors are thus key stakeholders in recycling in Southeastern Europe. The bulk of informal waste collectors are self-employed individuals that collect recyclables from the street, homes, businesses, or waste dumps and sell them to scrap dealers or municipal waste companies. A GIZ study estimated that Roma men and women account for up to 80 per cent of Serbia’s overall recycling effort, which means that they recycle between 10 to 30 per cent of the total garbage created. Their labour has immediate positive environmental, economic, and social impacts on cities and towns.

Despite all this, Roma waste collectors are discriminated against and criminalised as a result of laws prohibiting street picking in Serbia’s cities and towns. At the same time, once the landfills close, they are also pushed out of formal and informal picking of recyclables.

The upgrade of the solid waste management system needs to take into account the contribution of Roma collectors if it is to achieve the recycling target of 35 percent by 2030. Otherwise, the narrow focus on limiting landfilling will likely result in the displacement of primarily Roma people who often live in informal settlements on and near the landfills.

Perils of the EBRD co-financed modernisation of waste management

The Serbia Solid Waste Programme is a multi-site EUR 150 million project planned to be co-financed fifty-fifty by the EBRD and ADF. It will fund the closure of municipal dumpsites and develop seven regional waste management centres serving more than 29 municipalities, as well as a multi-regional primary sorting system. In total, 15 municipal dumpsites are planned to be closed, as waste is redirected to seven new regional waste management centres.

Before the project is implemented, the EBRD requires environmental and social assessments, including baseline studies and socioeconomic surveys to help determine a plan for any necessary resettlement and livelihood restoration for people affected by the project.

Yet the studies presented so far for the project’s impacts might not do the affected communities justice. For example, Bankwatch found that several of the local municipal dumpsite had already been closed, putting into question the integrity of any present or upcoming baseline studies on the formal and informal waste pickers working there and the potential for their loss of livelihood or preparation of restoration strategies.

In November 2021, Bankwatch commissioned an independent analysis of the environmental and social impact assessment for the Kalenić sub-project by international, Serbian and local Roma experts. They found that the timelines for action lack consistency and transparency. The reviewers noticed that several controlled dumpsites had stopped operating already, or functioned as informal transfer stations as of December 2021, which is not consistent with the timeline in the project documentation. It is unclear what has happened to informal recyclers who once worked on landfills that have since been unofficially closed. They were involved in extracting, cleaning, transporting and marketing recyclables which were not captured in any other way.

What’s more, the analysis shows that the affected waste pickers are often not informed about the projects in a timely and transparent manner. The reviewers could not confirm that the Roma coordinators working in the 11 municipalities of the Kalenić sub-project had received any updates on the project as of December 2021.

Some collectors and their families had been previously informed that something would happen to their livelihoods between 2019 and 2020, but they were not informed that the project had been delayed. These families continue to believe that their livelihoods were unaffected and that the entire project was cancelled.

Even the project’s requirement of a 30-day notice to affected communities seems extremely short. Affected waste pickers should be informed about landfill closures and livelihood restoration initiatives as early as possible in the process, as their livelihoods – and, in some cases, their housing – depend on access to landfills.

It is equally important that the impact assessments capture the varied potential social consequences of these projects for women and entire households engaged in recycling. Oftentimes, men extract waste from the streets or dumpsites, while women, children and the elderly process it before it is sold. Hence, opportunities to improve the life of impacted households, such as ensuring better access to education or health services, should meet their different needs. However, these questions are not given due consideration in the Kalenić project documents.

Finally, Bankwatch stresses its concerns in light of previous experience in Serbia with an EBRD-financed waste management project that resulted in the eviction of Roma families who worked and lived on the Vinča landfill. The new Serbian National Solid Waste Programme should address concerns similar to those that the displaced Roma families from Vinča faced in 2018, such as affordable housing, access to education, and income generation.

We call on the EBRD to ensure that the rights and livelihoods of the most vulnerable and marginalised affected people will be protected before the project goes any further.

EU Taxonomy proposal welcomed by CEE governments, spells trouble for energy transition

Last year, the EU approved its first set of rules defining sustainable investments – part of what is commonly known as the EU taxonomy – meant to support the EU’s effort to become carbon neutral by 2050. Even this set of rules was controversial due to its weak rules in areas like bioenergy and forestry.

But worse was to come, as the European Commission, under pressure from EU Member States, sidelined the findings of its own expert group and in early February released its proposal for a second set of criteria – this time on fossil gas and nuclear power.

Instead of accelerating the demise of these damaging energy sources, the Commission has instead undermined the credibility of its own taxonomy by proposing to allow them to be labeled as ‘transitional’ sources and therefore implicitly accepting them as sustainable.

EU governments and the European Parliament have until early June to study the proposal before deciding whether to adopt or reject it. But decision makers in central and eastern Europe have already applauded the Commission’s proposal to greenwash gas and nuclear, effectively confirming concerns that this policy could open the door to energy projects that would hamper the energy transition already underway in these countries.

Hungary

“It is a big victory for the V4 countries,” said Attila Steiner, Hungary’s State Secretary for Circular Economy Development, Energy and Climate Policy at the Ministry of Innovation and Technology. In an interview with Magyar Nemzet he argued that nuclear energy is not only “key for Hungary” but essential for the entire EU’s climate neutrality quest.

The Hungarian government remains keen to build the Paks 2 nuclear power plant, although there are currently delays with permitting, planning and financing – supposedly from Russia – for the project.

In Hungary and beyond, nuclear power has been subject to a strong PR push in the last few years but still suffers from several fundamental issues, including the facts that no country has truly solved the issue of long-term nuclear waste disposal, that uranium has to be imported and that uranium mining is a highly dangerous business. Nuclear safety issues remain hotly debated, and even if these can be resolved, this still leaves nuclear’s enormously high costs and very long project development time. The IPCC has made it clear that we have now only around a decade to halt dangerous climate change, and any nuclear plant whose planning begins now will be built too late to make a difference.

At the same time, Hungary has long enjoyed cheap Russian gas that’s imported and stored in the country, then distributed throughout Europe, and there are plans for a new cross-border gas interconnector. “The EU’s recognition of the contribution of natural gas to sustainability is also a priority for our region: it is a fast solution that is much cleaner than coal,” Steiner said about the Taxonomy proposal.

This echoes a claim frequently made in favour of gas – that it is at least ‘better than coal’. At the point of combustion, this may be true, but the fact remains that methane leaks during extraction and transportation can render gas even more climate-damaging than coal under certain circumstances. And all the evidence points towards methane emissions having been drastically underestimated until now, making it imperative to stop building new gas infrastructure.

Bulgaria

Like Hungary, the Bulgarian parliament has supported the inclusion of fossil gas and nuclear power in the EU’s sustainable investment taxonomy. With multiple large scale, expensive gas projects relying on EU financing as well as plans to expand the country’s nuclear power capacities, the parliament is more than happy to see these energy sources classified as ‘green’.

Even as deals with alternative gas supplies are falling through as a result of alleged contract breaches, the Prime Minister, Deputy Prime Minister and Energy Minister are keen to see Bulgaria’s gas projects receive so-called green financing to lessen the country’s reliance on Russian gas imports.

On nuclear power, the government is divided on whether to enlarge the Kozloduy power plant or to build additional plants, but there is overarching support for increasing the share of nuclear in Bulgaria’s energy mix. An EU Taxonomy that allows for the expansion of nuclear power with public money essentially keeps both options on the table.

Poland

The inclusion of fossil gas and nuclear power in the Commission’s proposal also appears to meet the expectations of the Polish government which plans to boost the development of these energy sources in the coming years.

But Polish energy companies have their own reservations. For one, the requirement that new gas-fired power plants do not exceed the capacity of the coal plants they are meant to replace is considered a significant challenge.

Wojciech Dąbrowski, head of state-owned energy giant PGE also opined, that the requirement for a coal exit date in the national energy and climate plan for energy installations to be considered sustainable is a serious problem. He argued that a decision on Poland’s coal exit date is “beyond the scope of corporate decisions that can be made by boards of [energy] companies”.

Czechia

In Czechia, the Commission’s Taxonomy proposal has been much better received by both the government and the industry than the text’s earlier draft, if only because the final version included some of the amendments the Czech government had earlier asked for.

Environment minister Anna Hubáčková stated that she is “glad that the European Commission had listened to our requests in large part. What is important and positive at the moment is that both nuclear energy and natural gas are considered by the taxonomy to be sustainable activities and investments necessary for a sustainable energy system.”

The Czech Heating Association welcomed the cancellation of the proposed timeline for blending of decarbonised gases but remained unsatisfied with the requirement to replace fossil gas in new power and heating plants with hydrogen or biomehane by the end of 2035. The Association wrote this requirement is “too ambitious given the expected lack of technological readiness and sufficient availability of low-emission and renewable gases in this time horizon.”

Romania

The inclusion of fossil gas in the EU taxonomy is likely to spur the wrong kind of investments. In Romania, this could breathe new life into gas drilling in the Black Sea and catalyse the construction of multiple new gas-fired power plants in the coming years, including a 475MW plant at Turceni and a 850MW plant at Ișalnița that Romanian energy company Oltenia Energy Complex has been planning. Just these two projects are expected to cost over EUR 800 million.

“Romania needs to use natural gas as a transition fuel, in order to ensure our energy security, energy minister Virgil Popescu said on the day the Commission released the Taxonomy proposal. He also argued that “decarbonation without nuclear is not possible.”

Later in February Romanian Prime Minister Nicolae Ciucă also claimed nuclear energy has a role to play in the country’s energy transition. Specifically, he expressed support for the operationalization of two nuclear energy units in the Cernavoda power plant and the refurbishment of another, as well as for the acceleration of building small modular nuclear reactors, following a contract Romania had signed with U.S. firm NuScale.

In reality, however, Romania’s energy transition has already been stagnant for at least five years, and prioritising fossil gas over renewable energy would necessarily impede the decarbonisation process.

In the end, no-one except the gas and nuclear industries win from including these sources in the taxonomy. CEE decision-makers might favour them for now but any further investments in these sectors will come at a prohibitively high price, in financial, environmental, path dependency and geopolitical terms.

It is now up to the EU’s more progressive Member States and the European Parliament to reject the Commission’s counterproductive proposal and ensure the taxonomy’s credibility is not eroded even further.

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