Blog entry

New EU subsidies rules too lax to rule out support for damaging energy projects

On 21 December 2021, the European Commission announced that it had endorsed the new Guidelines on State Aid for Climate, Environmental Protection and Energy 2022 (CEEAG) which enter force in January 2022. They replace the EEAG, which entered force in 2014.

There are some welcome new provisions, e.g. a new category of aid to protect or restore biodiversity. But overall, it is disappointing to see how many weaknesses remain, especially on checking compliance with EU environmental law and on fossil gas.

All available avenues will have to be used to ensure that the Guidelines are applied as strictly as possible. Until now this has been extremely difficult, since the Commission, according to the EU rules, is not required to inform the public when it receives a notification on planned state aid measures, is not obliged to act on complaints by NGOs, and does not allow NGOs to challenge its state aid decisions. But new opportunities are slowly becoming available, as we explain below.

Fossil gas favouritism

The main weakness of the new CEEAG is its unjustified support for fossil gas. The Commission has invented a new category of ‘most polluting fossil fuels’, differentiating between gas and other fossil fuels. Coal, oil etc. are rightly considered to be unworthy of aid, but gas is treated more favourably, being seen as a transition fuel. Such a division is not defined anywhere in EU legislation, nor is it scientifically justified. The IEA has made it abundantly clear that we cannot build more fossil fuel infrastructure.

The CEEAG allows direct or indirect support for fossil gas via a plethora of activities: cogeneration and district heating/cooling, carbon capture and storage (CCS) and carbon capture and usage (CCU), production of ‘low-carbon’ hydrogen (see below), gas infrastructure, gas electricity generation support via capacity mechanisms, gas-powered transport (including ‘low-carbon’ hydrogen) and gas household boilers replacing coal or oil-fired ones.

There are caveats for some of the more direct support for gas:

… Member States should explain how they will ensure that such investment contributes to achieving the Union’s 2030 climate target and 2050 climate neutrality target. In particular, the Member States must explain how a lock-in of this gas-fired energy generation will be avoided. For example, this may include binding commitments by the beneficiary to implement decarbonisation technologies such as CCS/CCU or replace natural gas with renewable or low-carbon gas or to close the plant on a timeline consistent with the Union’s climate targets.

But it remains to be seen whether such conditions are workable in practice. Is the Commission really going to check on state aid after several years to make sure the Member State really fitted CCS/CCU and that it really works? Or that it has converted the plant to run on renewable gas? Given the ever-present capacity squeeze at the Commission, it seems highly unlikely.

For gas infrastructure, one of the qualifying criteria is that the infrastructure is ‘ready for the use of hydrogen’. This sounds wearily familiar. More than a decade ago, ‘CCS-ready’ was a familiar work-around for building new coal plants like Slovenia’s Šoštanj 6, despite their well-known climate impacts. Nowadays everyone is trying to figure out how to close the plants while minimising losses. And if new gas infrastructure is built, it’s going to be the same picture there in a few years.

After the public consultation on the draft CEEAG text, a new provision crept in that allows, until the end of 2023, support for the replacement of coal power plants by gas ones in the EU’s poorest Member States. The coal plant in question must close before 2026, the Member State must not have a capacity mechanism in place, and the replacement capacity must be part of a credible and ambitious decarbonisation strategy, including the prevention of stranded assets in view of the 2030 and 2050 targets. It is unclear how the latter provisions will be assessed.

Hydrogen fantasies

Hydrogen produced using renewable energy is likely to play a role in hard to decarbonise sectors, but will almost certainly be too expensive and scarce to be used for e.g. power generation, space heating and most types of land transport.

But the CEEAG largely ignores this and promotes hydrogen without any limitations on its use. It also fails to ensure that only renewable hydrogen is supported, and supports what it calls ‘low-carbon’ hydrogen, without even defining what this is. This opens the door to state aid for hydrogen made with gas, nuclear and who knows what else.

Insufficient safeguards against non–compliance with EU law

Rapidly increasing the share of renewable energy is an imperative, but not all renewable energy is equal. Hydropower and forest biomass do particular harm to biodiversity (not to mention the carbon emissions of biomass burning), but in the wrong place, at the wrong scale, or with the wrong design, any type of renewable energy can be harmful. At minimum, this means EU law has to be adhered to, though it also has to be improved e.g. to stop incentivising the use of primary forest biomass.

It seems obvious that any project – whether receiving state aid or not – has to comply with EU environmental law and other legislation. But in reality this is often not the case. In 2016 the Commission approved adjustments to Romania’s renewables state aid scheme, including for hydropower, even though an infringement procedure was open for the country’s failure to apply EU water legislation when permitting small hydropower plants. In its decision, the Commission warned that plants supported by the scheme must comply with EU law, but it remains unclear what will happen if they are not.

In any case, infringement cases are just the tip of the iceberg. Hydropower plants like Dabrova Dolina or Ilovac in Croatia have violated environmental law, but painfully slow enforcement procedures on the national level are still ongoing. Similarly, the VEZ Svoghe hydropower cascade in Bulgaria is part of a pre-infringement procedure called an EU Pilot, but not yet a full infringement.

And it’s not just the ‘usual suspects’ which support renewables projects conflicting with EU law. An investigation was recently opened in Austria’s Styria region, where in recent years every single major project passed the environmental impact assessment process – unlike in other Austrian regions – and corruption is suspected. The projects under examination include three wind farms and the controversial Koralm pumped storage plant.

The CEEAG states that ‘the aid measure, the conditions attached to it, the procedures for adopting it and the supported activity do not contravene Union environmental law’, but doesn’t provide information on how the Commission will check this. Nor does it explain how the Commission will address the issue when the project or scheme is later found out to be in contravention of environmental law, as national court cases and Commission infringement procedures that follow can take 5 to 10 years and there is still no guarantee that state aid will be recovered at the end of the process.

The new CEEAG also doesn’t offer anything new in terms of NGOs being able to challenge state aid decisions at the EU level on environmental law grounds, though the Commission has elsewhere committed to examine this issue by the end of 2022 and to make a proposal – if appropriate – by the end of 2023. It does open some potential opportunities on the national level though, as we will see below.

Renewable energy communities

Positively, renewable energy communities can be exempted from participating in tenders for state aid for renewables projects up to 6 MW, or up to 18 MW for wind. This was not the case with the previous EEAG, which set the threshold at 1 MW for all renewable energy projects. Due to the specific nature of renewable energy communities, they can hardly compete against other commercial projects in tenders, so it is logical that they should be subject to special provisions.

Other small-scale renewables – problematic loopholes?

In addition, projects promoted by SMEs have also been granted an exception from participating in tenders for projects up to 6 MW. Wind projects by small and micro-enterprises can be exempt up to 18 MW.

This will certainly have its advantages, but may also prove problematic based on the experience in southeast Europe, particularly with small hydropower but also with other non-transparent renewables support. Given that the Commission’s definition of an SME is any company which employs fewer than 250 persons and which has an annual turnover not exceeding EUR 50 million, and/or an annual balance sheet total not exceeding EUR 43 million, this threatens to exempt a high proportion of projects from tenders, thus raising the spectre of favouritism of certain companies as well as over-compensation by premiums being set too high. It might also tempt companies to ‘salami-slice’ their projects in order to avoid being subject to tender procedures.

Those small-scale projects not owned by SMEs or renewable energy communities have a 1 MW threshold for exemption from tenders for electricity generation projects, storage, heat generation and gas production (e.g. hydrogen), the same as the EEAG threshold for renewables tenders.

Stricter thresholds for feed-in tariffs

As with the EEAG, in the CEEAG, support for renewable electricity generation will mainly be allowed only in the form of feed-in premiums rather than feed-in tariffs.

Feed-in tariffs enabled the rapid expansion of renewable energy but also drove the expansion of damaging small hydropower plants in countries like Italy, Bulgaria, and beyond the EU in the Western Balkans. They also became very expensive after some time, leading to abrupt changes of policy in countries like Spain, Portugal and Bulgaria. This led to an EU-wide emphasis on carrying out tenders to set premiums at as low a level as possible. These are then paid as an incentive on top of the price of electricity sold on the market, rather than a state-appointed entity buying off all the electricity produced at administratively set incentive prices.

However, the EEAG recognised that premiums are impractical for very small projects and allowed renewable power projects under 500 kW to continue being granted feed-in tariffs. The CEEAG further tightens this limit so that only plants below 400kW may be granted feed-in tariffs and for plants commissioned from 1 January 2026, this will be further decreased to 200 kW.

This is somewhat positive, however hydropower and biomass should not be exempted at all. Small hydropower does significant damage to rivers, but makes a negligible contribution to energy supply. And it is not justified to stimulate the use of primary forest biomass – particularly in electricity-only facilities – due to its climate and biodiversity impacts.

Public consultations and the first signs of access to justice

One of the main novelties of the CEEAG is the introduction of 6-week public consultations by Member States from 1 July 2023 for decarbonisation measures such as renewable energy, synthetic fuels, CCS/CCU and security of supply measures such as capacity mechanisms.

Public consultations are mandatory for all schemes in these sectors worth more than EUR 150 million per year, and for smaller schemes, 4-week consultations must be held only if the aid is not subject to a competitive tender or if the aid supports investments in fossil gas. It is unclear why we need to wait so long for the introduction of such consultations, but they are a logical step towards improving the effectiveness and efficiency of subsidies schemes.

Similarly, although the Commission’s unwillingness to open its state aid decisions up to scrutiny by environmental NGOs continues to be a barrier to ensuring coherence between state aid and EU environmental legislation, the CEEAG does at least provide a reminder that ‘Finally, individuals and organisations should be given the opportunity to challenge the aid or measures implementing the aid before national courts where they can adduce evidence that the Union environmental laws are not complied with’.

Much more work will be needed to make this a reality, but the stakes are high. We clearly cannot rely on the Commission to stand up to industry and Member State lobbies, so we will have to make this happen ourselves by using all available legal means.

To avoid failures of recovery planning, cohesion funding must offer transparent public engagement

At over two trillion euros, the long term EU budget and the NextGenerationEU recovery package comprise the single largest stimulus in the history of Europe and include laudable aims to transform a post-pandemic continent into a greener, more resilient and prosperous society for the next generation of Europeans.

But how are Member States planning to spend this massive chunk of money, and will they deliver on the required minimum of 37 per cent spending for climate action while committing to ‘do no significant harm’ with the rest of the investments?

The problem is that very little information is known about how this money will flow, and without better public engagement, this glaring lack of details threatens to derail the Green Deal.

Earlier in the year alarm bells rang about this lack of transparency as states began to plan spending from the EUR 723 Recovery and Resilience Facility. A survey of 20 EU countries found that the national recovery plans had not been properly consulted and next to no information was made available to the public.

The consequence is that, as details emerge about the types of recovery investments planned, EU countries seem set on continuing with business-as-usual projects and programmes that do not address the massive changes to economies and society the European Green Deal was designed to address.

Now the same concerns appear as the programming begins for the budget’s second largest slice, the EUR 372 Cohesion Policy. A month before the spending plans are supposed to be submitted for approval by the Commission, stakeholders across the bloc have often been kept in the dark about the latest plans and how their opinions are being accounted for.

This is problematic because the EU is obliged by law to the ‘partnership principle’ for consulting stakeholders about Cohesion spending, which provides a counterweight to the Member States’ claims and assertions about how money will be spent.

Moreover, such huge financial injections into EU economies can come with well-documented risks of embezzlement, corruption and corporate capture of public money if not properly safeguarded. Money that is borrowed today will be repaid by future generations, so involving citizens in the spending will increase scrutiny over the funds and reduce the risks of financial mismanagement.To avoid the pitfalls that come with spending in secrecy, the Commission must take corrective action against Member States that fail to remain open about their intentions.

Local and regional authorities and civil society groups alike complain about a lack of access to the necessary planning documents, as Member States move ahead with the negotiations behind closed doors.

Yet, the solution to ensure public participation and consultation exists in the form of ‘monitoring committees’, which should be composed of equal parts national and regional authorities, social and economic partners, business, academia and civil society.

These committees are designed to play the safeguard role and provide transparency and integrity checks on the billions of euros that are spent to keep the EU on track towards implementing the European Green Deal objectives. Unfortunately experience thus far shows that these committees are being fast-tracked, sidelined or ignored completely.

The EU should also disclose what investments Member States are bringing to the table. In order for proper scrutiny and oversight, details documenting reforms and proposals need to be public, but as it stands, it is unknown whether information will be out in the open.

If the Commission stands firm behind principles of the European Green Deal, it must do more to counterbalance the strong political incentive to agree on the plans as soon as possible and to support any investment that might stimulate the economy.

There can be no trade-off between the speed and quality of the recovery. Hundreds of billions of euros are at stake for the clean energy transition. How we use these massive amounts of public funding will decide if the Commission can meet the aims of the European Green Deal. The outcomes will determine the legacy of this generation and show whether we were indeed intent on steering a green and resilient recovery.

The article originally appeared in EU Observer.

The dark side of EBRD’s Green Cities

On 10 December, the European Bank for Reconstruction and Development (EBRD) announced through local media that its client Almatylectrotrans has committed to move this illegal bus depot by the end of 2022. This means another year of diesel fumes for the people in Kairat. It also means that the EBRD will knowingly finance a client that violates national law and the EBRD’s Environmental and Social Policy.

Green Salvation, a Bankwatch partner in Almaty, Kazakhstan, tells the story. This blog post has been adapted from an article published in Russian here.

On 23 November, residents of Almaty’s Kairat district and Ecological Society Green Salvation appealed to the management of the EBRD. They informed the Bank about a violation of Kairat residents’ rights to a clean and healthy environment by the Bank’s client, Almaty’s electric public transport company.

According to the information posted on the EBRD’s website, the Bank plans to provide a loan of EUR 58.9 million for the Almaty Electric Public Transport project with the municipal public transport company Almatylectrotrans, an enterprise 100 per cent owned by the city. The company owns four bus and one trolleybus depots. One of these bus depots is located in Kairat.

The Bank considers the Electric Public Transport of Almaty project a ‘trigger project’ within the framework of the Green Cities programme. The development of Almaty’s Green City Action Plan (GCAP) will be included in the financing agreements for the project.

The essence of the problem

In mid-2019, a bus depot was organised in the Kairat district on the land of the Semirechye market, which is located next to residential buildings.

More than 100 buses leave the depot daily on city routes. The drivers’ workday starts at 5.30. The buses run on diesel fuel. When drivers start their engines to warm them up, a cloud of exhaust and fumes covers the apartment buildings, and there are loud noises. The workday ends at 23.00. Buses return to the park, and residents get another batch of noise and exhaust.

The Kairat bus depot was established in breach of the Sanitary and epidemiological requirements for the establishment of a sanitary protection zone of production facilities, approved by order number 237 of the Minister of National Economy (20 March 2015). The regulation states that:

facilities for servicing automobiles, such as trucks or urban transport buses, are class III hazardous facilities;
such facilities must have a sanitary protection zone of at least 300 metres (Appendix 1, paragraph 48, subparagraph 4).

The sanitary protection zone around the vehicle fleet in Kairat has not been established. A few metres separate residential buildings from noisy, polluting buses. For several years, local residents have been trying to relocate the fleet, but without success.

In order to determine whether the location of the car park was legal, at the end of 2019, Green Salvation sent inquiries at the request of the residents to relevant departments in the City of Almaty (also known as the City Akimat), such as the departments of Green Economy, Urban Planning Control, Land Relations, and Urban Mobility, as well as to the Department of Quality Control and Safety of Goods and Services, the Department of Ecology and the Specialised Environmental Prosecutor’s Office of Almaty.

From the responses received, it became clear that the decision on the location of the vehicle fleet was made without the appropriate approval from the authorised bodies. This is a violation of environmental, sanitary and land legislation.

The Department of Ecology for the city of Almaty replied that the project for assessing the environmental impact of the bus fleet was not submitted for consideration by state environmental experts.

On 23 December 2019, the Green Economy Department reported that Almatyelectrotrans did not send the Department the draft strategic environmental assessment documents for approval.

On 30 December 2019, Almatylectrotrans announced that it owns the land plot on which the bus depot is located. The designated purpose of the land plot is ‘for the construction and operation of a multifunctional logistics centre’.

Thus, placing a car park on this land on the basis of a lease agreement without changing the designated purpose of the land plot is a violation of Articles 4, 49-1 and 65 of the Land Code.

The Department of Quality Control and Safety of Goods and Services of the Turksib district (where Kairat is located) carried out an unscheduled inspection of the site. During the inspection, they found that the sanitary protection zone was not observed (the depot should be at least 300 metres from the nearest residential building); no justification for the existing sanitary protection zone was presented. Experts also carried out air intakes and noise measurements. Based on the violations identified, on 27 February 2020, they drew up a protocol on an administrative offense and issued an order to the park management to eliminate the violations.

On 11 March 2020, the Urban Mobility Department reported that in March the City Akimat signed a new agreement on the lease of a land plot in Kairat for the temporary location of the bus fleet. After the construction of a new park in the Alatau region is completed, the buses will be moved there.

However, in the fall of 2021, the situation worsened. As the weather has gotten colder, the amount of time needed to heat the buses has increased, and so too the hours of the day in which residents are disturbed. Residents continue to suffer greatly from noise pollution and exhaust fumes that penetrate into the interior of the living quarters. Vibrations are felt in some homes. The nearby residents’ physical and psychological health is deteriorating.

Contacting the EBRD

On 11 November, Green Salvation sent a request to the EBRD for the following information:

Was the Almaty Public Electric Transport project approved by the board of directors? If yes, when?
Was there a public hearing on the project, including consultations? If so, detailed information of the course of the consultation should be disclosed.
The Ecological Society asked for project documents including social and environmental information.

On 23 November, the Bank announced that the approval of the project is scheduled for the first quarter of 2022. The Non-Technical Summary and Stakeholder Engagement Plan will be updated prior to project approval and will be open for review.

The Bank’s 2019 Environmental and Social Policy states:

2.3 The EBRD does not knowingly finance projects that contradict national laws, countries’ obligations under relevant international treaties, conventions and agreements, the scope of which is determined during the preliminary project appraisal;

2.4. The EBRD is committed to respecting human rights in EBRD-financed projects. The EBRD will require clients to respect human rights in their business activities, avoid infringing on the human rights of others and address the adverse human rights risks and implications of clients’ business.

The Bank’s 2019 Information Access Policy states:

1.2 Accountability.

The EBRD respects the right of people to make comments and suggestions on the Bank’s operations and activities, and to request and receive information about operations and activities that may affect themselves or their communities. The EBRD seeks comments and suggestions from a wide variety of sources, hears comments and suggestions from stakeholders and engages in dialogue.

On 23 November, residents of Kairat and Green Salvation, guided by these provisions from the EBRD’s policy, appealed to the Bank’s management with the following requests:

to postpone the agreement on project support with the municipality of Almaty and Almatylectrotrans;
to postpone the provision of a loan in connection with the client’s violation of the right of residents to a healthy and prosperous environment.

The vehicle fleet must be relocated to another location that fully complies with the requirements for placing an object that is in the hazard class III. Only after the transfer of the vehicle fleet can a contract be signed and a loan granted. The appeal was signed by 27 people.

We believe that the EBRD must reaffirm its commitment to the principles of respecting the right to an environment conducive to health and well-being. We hope that the Bank will consider the appeal of the public and take effective measures to restore the violated rights of residents. This will contribute to strengthening the credibility of the Bank and the successful development and implementation of the Green City Action Plan for Almaty.

In Bulgaria, marking an air pollution tragedy with another one in the making

London and Sofia don’t share much in common.

But when it comes to air pollution, the two now share December 9, when in 1952 the deadliest air pollution event in Europe occurred. Over three days the Great Smog of London resulted in 12 000 deaths, as the reckless burning of coal and wood suffocated the capital.

Nearly seventy years later, activists at Za Zemiata marked the occasion by projecting a series of slogans on Sofia’s thermal power plant, in hopes of avoiding a catastrophe in the making like the one in London.

Every year as winter sets in, critical levels of air pollution stifle the Bulgarian capital and offer a reality check about how poorly things could get if the municipality moves forward with plans for an incinerator.

In spite of repeated warnings about the project’s devastating impacts on health and the environment, the European Commission and the European Investment Bank continue to support the project.

See more images from the action below.

European rivers on RED alert: the VEZ Svoghe case, Bulgaria

More than half of European rivers are on red alert – failing to reach good health as required until 2015 by the Water Framework Directive. Yet in parallel, the Renewable Energy Directive (RED) has enabled numerous harmful hydropower projects to be counted as renewable energy and in many cases to benefit from renewable energy incentives as well – even when they have breached EU law.

If the ongoing revision of the Directive doesn’t improve the requirements for water and biodiversity protection, the goals of the EU 2030 Biodiversity Strategy to stop deterioration of all protected habitats and species and restore 25,000 km of free-flowing rivers by 2030 will be unattainable.

The VEZ Svoghe project on the Iskar River just north of Sofia, has already led to serious environmental and social impacts, which show the need to explicitly link the RED with requirements for compliance with EU environmental law. With five out of nine originally planned hydropower plants built, fish migration has been obstructed and part of the Vrachanski Balkan Nature Park has been flooded.

EU officials have pointed out numerous times that there should be no trade-offs between reaching the climate goals and protecting biodiversity. However, many hydropower plants put into operation since the RED was first adopted in 2009 show a different picture. Although some lessons have been learned in the last decade, the environmental harms remain and need to be remedied. No space for new harm should be allowed by the RED that is currently under revision.

As Bankwatch partner groups from Bulgaria have been informing the EC for years, the VEZ Svoghe cascade was approved, built and now operates with serious infringements of national law, as well as the EU Habitats and Water Framework Directives. Yet it still counts towards Bulgaria’s renewable energy targets and has received renewable energy incentives. In reality there is nothing to prevent such plants receiving such subsidies, as the RED has no provisions to ensure that legal breaches result in a halt to incentives.

Violation of national law

The Svoghe cascade was planned and partially constructed within the Vrachanski Balkan Nature Park in an unprecedented violation of Article 33 of Bulgaria’s Protected Areas Act which stipulates:

“In nature parks it is forbidden to carry out: (…) activities and construction that are not allowed by the decree declaring the park, the park management plan and the development and technical plans and projects”.

In the park declaration decree from 2003, hydropower construction is not allowed, nor in the first management plan approved after the EIA decision, nor in any other park document. Nevertheless, according to the project EIA, the total area of the installations that fall within the boundaries of Vrachanski Balkan National Park is 11.085 hectares (…), and includes parts of the Lakatnik, Svrazhen, Opletnya, Levishte and Gabrovnitsa plants.

The EIA was opposed by the Regional Environmental Inspectorate, but approved by the national Ministry of Environment and Waters. The Lakatnik, Svrazhen and Opletnya plants, financed by the EBRD and put in operation between 2008 and 2013, have already destroyed more than 6 hectares of the park.

Moreover, all the dams are built in the river bed, which is state property, without any concession agreement or other rights to build on state land. The Balkanka Association has alleged that such constructions are illegal according to several national laws and in another region, this has led to the first dam removal in Bulgaria. In November 2021 the Sofia regional prosecutor’s office refused to take action on the legality of the construction permits of the Svrazhen plant, and Balkanka is appealing the decision.

2021_11_30_Opletnya HPP — Opletnya HPP, photo: Balkanka Association

Violations of the EU Habitats Directive

In September 2008, during low water, the Lakatnik hydropower plant discharged a large amount of silt deposited behind the dam. At least 18 km downstream all aquatic organisms and fish died, a fact reported by the Regional Environmental Inspectorates of Sofia and Vratsa. VEZ Svoghe was only fined after the incident but didn’t remedy the damage done.

Even after this incident, the impacts of the cascade on the Natura 2000 network were not evaluated in the permitting procedures for the other plants. In 2010, the Regional Environmental Inspectorate concluded for the three plants of the second phase of the cascade, that an Appropriate Assessment (AA) is not necessary as there would not be significant negative impacts. This is in breach of the Habitats Directive since they would clearly damage several sites.

All the plants except Tserovo and Prokopanik are located within Natura 2000 sites (three Habitats Directive and two Birds Directive sites) and all nine plants have impacts on another three sites downstream on the Iskar River.

Plant	Phase	Within Natura 2000 site
Lakatnik	1	BG0000166 Vrachanski Balkan, BG0002053 Vrachanski Balkan
Svrazhen	1	BG0000166 Vrachanski Balkan, BG0001042 Iskarski prolom – Rzhana, BG0002053 Vrachanski Balkan
Prokopanik	2	–
Tserovo	2	–
Opletnya	2	BG0000166 Vrachanski Balkan, BG0001042 Iskarski prolom – Rzhana, BG0002053 Vrachanski Balkan
Bov – Yug	3	BG0001040 Zapadna Stara planina i Predbalkan, BG0002005 Ponor
Bov – Sever	3	BG0001040 Zapadna Stara planina i Predbalkan, BG0002005 Ponor
Levishte	3	BG0000166 Vrachanski Balkan, BG0001042 Iskarski prolom – Rzhana
Gabrovnitsa	3	BG0000166 Vrachanski Balkan

Violations of the EU Water Framework Directive

Heavily polluted in the last century by industry and wastewater, the water status and biodiversity of Iskar started recovering after the fall of the Iron Curtain. But shortly after Bulgaria joined the EU, more than ten new hydropower plants were built downstream from Sofia, including five from the VEZ Svoghe project. The status of the river deteriorated significantly, converting long river stretches into heavily modified water bodies.

The River Basin Management Plan was approved in 2009 with the main objective to achieve, maintain and improve the ecological status of rivers by 2015 in accordance with the Water Framework Directive (WFD). For this objective the Plan sets out programs for prevention and reduction of anthropogenic pressures and impacts on water resources.

Among them are two which prohibit the construction of new hydropower in the protected areas under the Water Act. All Natura 2000 sites in the Iskar Gorge are classified as such and for each of them a special ban on hydropower is also envisaged in the Plan. A general prohibition on new hydropower in Natura 2000 is also separately foreseen in the Environmental Assessment of the RBMP which is also legally binding for the administration. Obviously the cascade does not comply with any of these bans.

Currently the VEZ Svoghe case is part of an EU pre-infringement procedure against Bulgaria and other countries – called an EU Pilot – for lack of implementation of the Water Framework Directive.

Joined-up policy needed to safeguard biodiversity

The updated Renewable Energy Directive needs built-in biodiversity protection. In a situation of biodiversity crisis it makes no sense to allow incentives for hydropower projects – or any other renewable projects, for that matter – which have only been allowed to go ahead with violations or exceptions provided for in the Water Framework Directive and the Habitats Directive. Incentives must be used sparingly, and only for those projects which truly deserve it.

The Svoghe hydropower cascade is an ongoing serious environmental crime that needs to be solved and unless the new RED includes effective safeguards against such projects, we will continue to see them further eroding the EU’s already ailing biodiversity.

This publication was produced in collaboration with EuroNatur in the framework of the joint research and advocacy work on hydropower finance and subsidies.

Heated households based on heat pump technology claim it is a smart, clean and comfortable investment

In recent years, governments in the Western Balkans, with the help of international financial institutions, have started offering citizens financial support in a bid to step up the deployment of cleaner household heating solutions and energy efficiency measures.

Many programmes have focussed on promoting pellet-based heating systems, or solar thermal technologies, alongside energy efficiency solutions. But not enough attention has been given to heating pumps, despite them being one of the most promising, low-carbon and energy efficient technologies.

One reason for that is simply that heat pumps can be expensive. Installing a heat pump in a 2–3-bedroom home would mean spending anywhere between EUR 8000 and EUR 15,000, depending on the heat source and the building’s existing infrastructure. Solar thermal systems, for comparison, would cost half as much for the same size house. Yet, an investment combining heat pumps and solar panel heating systems could be returned in four-five years, and it comes with a dramatic reduction of greenhouse gas emissions.

Another reason heat pumps might not be as popular as they should be is simply because many don’t understand this technology. Many home owners simply refuse to believe that heat pumps are capable of bringing heat from outdoor air or water even when the air temperature is below zero. But this is no science fiction.

Installing a heat pump in your home comes with real economic, environmental and social benefits. Homeowners in the city of Tuzla in Bosnia and Herzegovina, who used a subsidy scheme that covers half of the purchase and installation costs of fitting homes with heat pumps, now say it was absolutely worth the investment.

“I would like to call on all people who consider warming their homes with heat pumps to do it because it is in their interest,” says Izet Husic. “Life quality is much better both in winter and summer since heat pump can bring heating or cooling, so you are solving with one solution both problems of heating and cooling for economically acceptable costs.”

These people said heating their homes with heat pumps has brought comfort and safety and even made their heating bills three times lower, compared to households using coal or electricity, and twice lower than those using pellets.

In fact, the price of biomass can be particularly volatile. Local non-industrial pellet markets have already proven unstable as they are depending on subsidy schemes that come and go. As a result, the quality of pellets can also vary widely, in turn expediting the wear of domestic furnaces and increasing maintenance costs.

Heating with coal, certainly if it’s of low quality, also requires a serious effort. Think about transporting it from the mine or market, cleaning the chimney, frequently painting your house, cleaning the dust. All of these can be a serious burden, especially for the elderly. Heat pumps, however, are much easier to maintain than other forms of heating systems.

Decarbonising individual and collective heating and cooling systems relies on diversified renewable energy sources and the introduction of smart and efficient grids and buildings. For this to happen governments should make these technologies accessible and affordable, either by increasing subsidies or other financial means. This will also vital if countries are to meet their renewables and emissions targets.

The International Energy Agency projects that by 2045, heat pumps will be responsible for nearly half of the global heating. In Vienna, for example, a third of the residential buildings are already heated with heat pumps based on the ‘water to water’ technology. In the UK, the authorities are drawing up plans to fund the installation of heat pumps in 90,000 homes across the country.

The beginning winter is a reminder that governments in the Western Balkans should also ensure that more households can keep warm with clean, efficient and low carbon heating systems.

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