Blog entry

‘Needle under a blanket’ at Belgrade waste project

Where I come from they say that it’s not wise to hide a needle under a blanket. The better the needle is hidden, the higher the chance that someone gets hurt.

The EBRD’s Independent Project Accountability Mechanism (IPAM) informed Bankwatch before Christmas that it found the bank to be in full compliance with its policy regarding the Belgrade Solid Waste public-private partnership (PPP) project. The four page analysis of compliance reads like a superficial attempt by IPAM to cover up the problems with the project at a time when a second complaint has already been submitted to IPAM. Indeed a “needle under a blanket.”

The complaints concern a EUR 70 million loan provided in 2019 by the EBRD to ‘Beo Cista Energija d.o.o Beograd’ for the remediation of the Serbian capital’s old Vinca landfill and the construction of a solid waste incinerator. The International Finance Corporation and the Austrian Development Bank are also financing the project. The EIB was also considering funding before confirming it had pulled out in October 2019, citing the project’s incompatibility with EU waste prevention and recycling targets.

New grievances arise as the first complaint is closed

A month after the first complaint on the project was closed, on January 18, 2021, a second complaint by waste pickers was registered by IPAM. The second complaint was submitted in November, so in fact the mechanism was in discussions with Belgrade human rights lawyers representing several waste pickers at the same time that the compliance review was being closed.

Two years earlier, in December 2018, the families of the waste pickers were evicted from the project site and lost access to Belgrade’s Vinca landfill, their main source of livelihood. During its investigation of the first complaint, experts at the mechanism met a family of waste pickers in Belgrade in December 2019. The family showed these experts the eviction order by the City of Belgrade and reported the inadequate social housing to which they were resettled.

Their new housing was not affordable, they said, especially after their contracts with the Belgrade waste company were terminated and their livelihood from picking recyclables on the Vinca landfill was lost. The rent, electricity and heating bills of the dilapidated apartment were too high, much higher than their insecure income. Moreover, picking of recyclables from the streets of Belgrade has been prohibited, and thus their livelihood criminalised, as the new solid waste PPP project was being set up.

At the time, the accountability mechanism’s experts advised the Roma family to submit a separate complaint and use the mechanism’s problem-solving function. This did not prevent the compliance review from concluding that the EBRD has properly done its job with regards to resettlement and livelihood restoration, although IPAM’s report is not very persuasive:

“Finally the ESAP [Environmental and Social Plan] contains provisions related to the effective implementation of the RAP [Resettlement Action Plan] and appointment of an independent consultant to conduct periodic evaluation of the resettlement process and the effectiveness of the implemented measures to successfully restore the livelihoods of waste pickers.”

Problems persist

Two years after the eviction, IPAM’s compliance report provides no information whatsoever on the monitoring results from the actual implementation of the Resettlement Action Plan and no assurance that the rights of the most vulnerable group of project affected people were respected.

As the new complaint and A11’s letter to the EBRD board detail, there is sufficient evidence that the shelter and the livelihoods of Vinca waste pickers have not been restored. It informs the board that the resettlement was “more akin to forced eviction than any form of sustainable and legally sanctioned process of relocation”.

The A11 letter makes clear that additional action is needed from the EBRD’s client and the City of Belgrade to bring the project into compliance with the EBRD’s policy requirements to “restore or, where possible, improve the livelihoods and standards of living of displaced persons to pre-displacement levels” and to “improve living conditions among physically displaced persons through the provision of adequate housing, including security of tenure at resettlement sites”.

IPAM’s compliance report has not served to adequately warn the bank of these ongoing issues. It remains to be seen if the mechanism can deliver effective remedy to redress the violation of the rights of project affected people through problem solving.

Lost in transition

One potential reason for the sub-standard compliance review on the Belgrade Solid Waste PPP is the on-going reform of the EBRD’s accountability mechanism. In 2020 the EBRD’s former Project Complaint Mechanism (PCM) transitioned to an Independent Project Accountability Mechanism (IPAM). The IPAM appointed a new Managing Director with a direct reporting line to the board of the bank. The structure of the mechanism was changed to provide greater control by IPAM over the handling of complaints, in order to ensure consistent quality, predictability of the process and equal treatment of complainants.

One problem with the PCM was the different approaches of external experts to evidence and to following the terms of reference defined by the mechanism. One could not know what to expect from the external experts, and this lack of predictability was even more annoying to EBRD management than to complainants, as a survey of PCM stakeholders found. The independence of the mechanism was underpinned by the independence of the external experts, so the PCM had little control in ensuring quality and consistency.

As the PCM transitioned to IPAM, the problem persisted. A comparison of two compliance reviews from 2020, those of the Belgrade Solid Waste PPP and the Nenskra hydropower project, shows huge differences in IPAM’s approach to considering good practice in policy implementation. For example, the Nenskra review found non-compliance in the lack of proper assessment of project alternatives. The Belgrade Solid Waste review noted the allegation, but claimed compliance without providing any explanation why.

Most importantly, the two reviews also show very different views regarding good practice in disclosure of information and stakeholder engagement, which underpin the proper implementation of safeguards and the project’s mitigation hierarchy.

Understandably, it takes time for an institution like the EBRD to set up a fully functioning and well resourced IPAM. Building a strong mechanism, which is trusted by stakeholders and project affected people, will not happen overnight.

Meanwhile, controversy around the Belgrade Solid Waste PPP is far from over. We can only hope that the compliance review “needle under a blanket” will not haunt the IPAM and become an obstacle for the restoration of the rights to shelter and livelihoods of Belgrade’s Roma recyclers.

Serbia’s renewable energy law must prioritise both environmental and financial sustainability

Serbia’s Ministry of Energy and Mining has recently held a public consultation on the main points of its planned new Law on Renewable Energy.

Among other things, this law aims to bring Serbia’s renewables incentives scheme into line with the EU’s Energy and Environment State Aid Guidelines. The EBRD has already been assisting Serbia to move away from feed-in tariffs towards auctions for wind and solar incentives, but in order to become a reality, the country needs to change its legislation.

Moving away from feed-in tariffs is a much needed move from both the environmental and financial point of view, as Serbia’s existing support scheme is becoming increasingly expensive. The Ministry recently announced a five-fold increase in the fee paid by consumers to incentivise renewable energy in Serbia.

According to data from the Regulatory Authority, AERS, in 2019 the part of Elektroprivreda Srbije which distributes incentives collected only EUR 59 million while it paid out EUR 106.7 million. In addition, new wind farms started work in 2019 and 2020, so it is clear that the costs of the scheme are increasing and the income from consumers has not kept up.

Bill increases are highly controversial in a context where people are struggling to meet daily costs, but particularly because part of the money is used to incentivise small hydropower plants which have caused widespread protests across Serbia.

Despite the fact that there were more than 100 small hydropower plants operating in Serbia in 2019, according to AERS, they only generated around 0.7 per cent of the country’s electricity. Their construction destroys swathes of forests for access roads, increasing erosion, and their operation causes countless mountain streams to run dry.

In fact, Serbia’s current Law on Energy is also the only in the Western Balkan region which allows feed-in tariffs for hydropower plants up to 30 MW. In reality, no plants over 10 MW have been built while the Law has been in force, and most of the controversy has been aimed at small plants. However larger plants, eg. those planned at Brodarevo, are also controversial, and subsidising these would bring even higher consumer costs and more protests.

The Vinča waste incinerator in Belgrade has also been given preliminary approval to receive operating subsidies under Serbia’s current Law on Energy – a decision which is being challenged at the Energy Community as it would incentivise burning all waste, including the non-renewable fraction.

These controversial uses of consumers’ money threaten to undermine public support for energy transition as a whole and make it imperative that Serbia, like any other country, brings its renewables support costs down to a minimum and only supports those technologies which can significantly contribute to energy generation and which are the most environmentally acceptable.

No more aid for mature technologies

As technologies mature and their costs fall, they should no longer receive incentives. This is what has started to happen with solar and wind, which started off expensive but whose prices have been falling rapidly. Larger projects may now be able to function on a market basis.

Therefore, the scarce resources available need to be directed at those technologies which still need a boost but whose prices may still fall – mainly solar and wind farms not sited in environmentally sensitive locations. Mature and environmentally destructive technologies such as hydropower and waste-to-energy must not be subsidised any more.

Under the EU Energy and Environment State Aid Guidelines, feed-in tariffs would still be allowed for hydropower under 500 kW or lower. Given the controversy about small hydropower plants, including those under 500 kW, one option would be to decrease this threshold to below 100 kW. However, given their minimal contribution to energy generation capacity, and the negative experience so far with enforcing environmental legislation at such dispersed plants, we advocate for a halt to hydropower incentives altogether.

Particular attention and support needs to be given to incentivising prosumers and energy cooperatives. These can make a significant contribution to generating electricity close to where it is consumed – thus minimising losses – and in increasing public support for energy transition.

Need to ensure environmental compliance

The EU’s Energy and Environment State Aid Guidelines state that all projects receiving incentives must be in line with EU environmental law.

Serbia’s new Law on Renewable Energy needs to explicitly incorporate this requirement. Auction criteria should exclude plants in protected or otherwise environmentally sensitive areas, and the auctions should only be held after the plants have received all relevant permits, in order to ensure a high realisation rate.

The Law needs to make clear who will check compliance with environmental legislation, at what stage in the procedure, how, and clearly laying out how incentives for non-compliant plants will be halted and recovered.

One concern we have is the proposal to delegate approval of incentives for small plants (below 500 kW or whatever threshold is decided on) to local authorities. This might be acceptable for rooftop solar or other uncontroversial energy sources, but not for hydropower, where even small plants can cause damage, and local authorities have not demonstrated the capacity or knowledge to properly assess their impacts.

Review of existing contracts needed

The new law will also regulate existing power purchase contracts. Given the high level of controversy about small hydropower plants, all the existing contracts need to be reviewed to double-check whether the plants have been permitted and built in line with Serbian legislation. For those which are not, the power purchase contracts need to be annulled. This is an essential step to build public confidence in the incentives system.

A need for genuine consultation

Although the idea to hold an early public consultation was very welcome, the extremely short time period allowed for comments – from 31.12.2020 to 12.01.2021, with Orthodox Christmas right in the middle – prevented many stakeholders from taking part and gave an unfortunate impression of the Ministry not being entirely sincere in its invitation for comments.

We hope that further consultations on the Law will allow much more time and be much better advertised, and we also advocate for more public participation during the process of awarding incentives, in order to allow any concerns to be raised at an early stage. For example, an action plan for 2-3 years needs to be drawn up, which should be publicly available and publicly consulted, and draft decisions to award incentives should also be published before they are signed.

With these measures, Serbia can develop an incentives system which keeps down costs and finally gains the trust of the public, while driving forward a sustainable energy transition.

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

EU state aid rules must finally end environmentally harmful subsidies for energy projects

Irrespective of its mundane title, the Guidelines on State Aid for Environmental Protection and Energy 2014-2020 brought significant changes to the way that public money supports the EU’s energy sector, particularly renewable energy.

The Guidelines, which lay out the rules on how the European Commission assesses Member States’ planned subsidies for the energy and environment sectors, ensured a switch from feed-in tariffs to premiums awarded via a competitive bidding procedure, thus helping to greatly reduce the cost of renewable energy incentives.

But much has changed since 2014, and although the European Commission extended the validity of the Guidelines until the end of 2021, they are now quite out of date.

The Guidelines brought positive changes that limited incentives to build additional small hydropower plants in EU countries, but they have not proven successful in halting state aid for existing hydropower projects which breach EU environmental law, nor for preventing aid for the Sofia incinerator, fossil gas Projects of Common Interest, or capacity mechanisms that enable back-door fossil fuel subsidies.

Last week saw the end of a public consultation on plans for the new Guidelines, to which Bankwatch contributed with a range of ideas on how to end environmentally harmful subsidies.

No subsidies without environmental compliance – how to make this a reality?

Even within the existing rules, much more could be done to ensure environmental compliance and policy coherence. The Guidelines already state that Member States must ensure compliance with EU environmental legislation, carry out an environmental impact assessment when it is required by EU law and ensure all relevant permits.

They also specifically point out that hydropower plants must comply with the Water Framework Directive and waste projects with the waste hierarchy laid out in the Waste Framework Directive.

The European Court of Justice confirmed in September 2020 that aid to an activity that breaches EU environmental law cannot be found compatible with the internal market.

But in reality, the Commission needs to take more care in assessing environmental compliance. It is unclear how the Commission currently checks this, but from its decisions on renewable energy support schemes, it appears that it asks the Member State to confirm that it will ensure compliance, rather than looking at the country’s actual compliance record.

In reality, support schemes – some of which awarded aid before the current Guidelines entered into force – have approved subsidies for projects that later turned out to be non-compliant. For example, the Commission in 2015 opened a case against Romania for failure to apply the environmental acquis to small hydropower plants. The 2019 Commission letter of formal notice to Croatia on inadequate application of the Habitats Directive in the case of wind farms and the experience with the Kaliakra wind farm in Bulgaria show that environmental breaches also apply to other subsidised renewable energy projects.

But apart from the general principle that non-compliant projects are not allowed to receive aid, there is no clear mechanism in the Guidelines to systematically halt or prevent state aid for illegally permitted projects.

So, the new rules need to make more explicit how both the Commission and Member States need to check compliance when approving aid, and what happens when a project is found to be non-compliant only later.

It is surely easier to prevent aid being granted than to recover it later, so a precautionary approach needs to be taken, especially in countries where environmental breaches are known to be a problem.

Just as Article 3 of the Renewable Energy Directive prohibits Member States from granting subsidies for energy from the incineration of waste if the State has not complied with the separate collection obligations laid down in the Waste Framework Directive, the Guidelines also need to clearly stipulate that no incentives for hydropower – even for very small plants – may be provided in countries which have not achieved the goals of the Water Framework Directive.

Likewise, to make sure that energy projects developed in breach of the Environmental Impact Assessment, Birds or Habitats Directives, do not receive incentives, the Guidelines need to clearly state that any energy/environment projects or sectors subject to infringement procedures, investigations or court cases may not receive incentive payments until the issue is resolved.

Not only legal, but desirable – the need for better policy coherence

There is – unfortunately – a difference between being illegal and being environmentally damaging, and too often the Commission has accepted planned subsidies which may or may not be legal, but which certainly do not represent the best use of public money. Gas infrastructure and highly-efficient cogeneration are just two examples where the Guidelines fail to prevent state aid for projects which contradict the EU’s decarbonisation and circular economy agendas.

Gas and fossil hydrogen

For years, under the TEN-E Regulation, the EU has used public money to support new gas infrastructure such as pipelines and LNG terminals, while at the same time promoting decarbonisation.

The TEN-E Regulation is currently under revision and the Guidelines will need revising in line with the new version. We expect that this will lead to an end to direct support for new fossil gas infrastructure. However, concerns remain about hydrogen.

Renewable hydrogen may play a role in sectors which are difficult to decarbonise, but caution is needed. Hydrogen needs large amounts of energy to produce, and even if generated by renewable energy, can put pressure on ecosystems.

There is also a serious danger of boosting fossil gas hydrogen by overestimating the future availability of renewable hydrogen. Shaping policies and infrastructure around renewable hydrogen that may or may not materialise is likely to result in extending and expanding the use of fossil hydrogen instead. Currently, less than 0.1 percent of hydrogen capacity is for ‘green hydrogen’, and the availability of renewable hydrogen in the future has yet to be proven.

Therefore, direct or indirect support for hydrogen must be limited to strictly renewable hydrogen, to be used only for hard-to-decarbonise sectors, and must exclude any support that relies on fossil fuels and unproven technologies such as carbon capture and storage.

Cogeneration, fossil fuels and waste incineration

In 2019, the Commission decided to allow subsidies for the Sofia waste incinerator, despite Bulgaria’s appalling record on recycling. This makes it highly likely that recyclable materials will be burnt.

This decision is the result of the fact that the current Guidelines allow operating aid for highly efficient cogeneration plants as defined in Annex II of the Energy Efficiency Directive. In practice, this has proven to be a loophole allowing subsidies for fossil fuels, as well as incineration of waste that is not biodegradable and would therefore not qualify for renewable energy operating aid, as in the Sofia case.

It is no longer acceptable to provide state aid for fossil fuels in any form, efficient or not, nor for other unsustainable energy forms such as waste incineration. The Commission needs to review the definition of cogeneration which can receive aid under the Guidelines and stop linking it to the current definition from the Energy Efficiency Directive.

It should also, at a minimum, update the Guidelines to prevent any subsidies for waste incineration in countries that have not met their separate waste collection targets, in line with Article 3 of the Renewable Energy Directive.

But it should also be taken into account that the Commission’s 2017 Communication on the role of waste-to energy in the circular economy advises Member States to phase out public support for energy from incineration, because quantities of mixed waste as a feedstock for waste-to-energy processes are expected to fall as a result of separate collection obligations and increasingly ambitious EU recycling targets.

So, it is questionable whether any new aid should be allowed for waste incineration at all.

Public participation and access to justice as means to better decisions

One of the most interesting parts of the Commission’s consultation questionnaire included a proposal to initiate public consultations on proposed aid schemes.

Considering that state aid decisions have until now been one of the most difficult areas of EU decision-making for the public to influence, this would be highly welcome as a step forward to increase state aid transparency and effectiveness.

State aid has traditionally been seen as something mainly affecting market competitors of beneficiary companies, so the general public and non-governmental organisations (NGOs) have had little involvement. It is often hard to find out when the Commission initially examines cases, as they are announced only when a decision is made to open an investigation. So, it is hard to provide timely input, and neither the general public nor NGOs are allowed to challenge the Commission’s state aid decisions.

The Aarhus Convention stipulates the need to involve the public in environmental decision-making, so it is only logical that state aid schemes with a potential impact on the environment – positive or negative – be consulted.

Similarly, the public needs to be able to challenge the Commission’s decisions to approve state aid, which is one of the issues being raised in another current EU policy process, the review of the Aarhus Regulation, which is still ongoing.

The European Commission has made strong commitments in its Green Deal to ensure that the environment is at the top of its agenda and that European citizens have a voice in this process. State aid policy can only make a difference when implemented together with ambitious legislation in all fields. But it is clear that the use of public funds will strongly influence the Green Deal’s outcomes, and that there is no time to lose.

The new Guidelines on State Aid for Environmental Protection and Energy must do more to not only ensure that the projects supported by state aid are compliant with EU environmental legislation, but that they also represent the very best use of public money. State aid must look beyond what is legal, to what is clearly desirable.

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

Runners raise the alarm about air pollution from coal power during inaugural Lung Run

The countries in the Balkans are among the worst in Europe when it comes to air pollution. The annual average concentrations of pollutants in the air are several times higher than those recommended by the World Health Organisation. Because of this, thousands of lives are lost in these countries every year due to polluted air, and thousands more develop chronic respiratory and cardiovascular diseases.

Why the Lung Run?

Bankwatch has been engaged in air pollution monitoring work since 2016. Through independent air quality monitoring, we make the “invisible” visible and draw attention to the connection between the burning of coal in power plants and the health impacts on locals from the resulting pollution.

Exposure to air pollution depends on various reasons. Outdoor sports can be one of the reasons, as they disproportionately expose people to air pollution, for the simple reason that lungs are gasping for more air and more of the pollutants are inhaled.

In an effort to bring more attention to the health impacts of air pollution, we organised a trail race in which runners, a group that spends lots of time outdoors, took on the task of making the pollution visible. The Lung Run was designed in a way that gave runners a small taste of what living in the shadow of a coal facility means. They monitored pollution levels on the course, measuring personal exposure to draw attention to the need for continuous air quality monitoring near coal power plants.

The municipality of Novaci in North Macedonia seemed like the perfect location for the first edition of The Lung Run. It is home to one of the worst polluting coal-fired power plants in Europe, REK Bitola, which is accompanied by two open-pit lignite mines and an ash disposal site. At the same time, the municipality is blessed with rich agricultural land and breathtaking landscapes in the hills surrounding the plains.

The area has also become somewhat of a hotspot for outdoor sports. Neighbouring municipalities host a number of events every year, including trail races, cycling events, climbing and paragliding competitions. But all of these take place within a 40-kilometre radius of the towering chimneys of the power plant that constantly blanket the area with pollutants.

lung-run-blog — Runners in Novaci are fitted with personal pollution sensors

Going virtual

Like most things in 2020, the Lung Run did not go according to the original plan. Because of restrictions on gatherings in N. Macedonia put in place during the week of the race, the event in Novaci had to be cancelled. Instead, all participants were asked to do their runs on a location of their choosing in a virtual event.

69 runners from 14 countries joined in this inaugural edition. Twelve runners travel to Novaci and ran part of the originally-planned course while using personal pollution sensors. In near perfect weather conditions, these twelve runners completed 20 kilometres in the hills above the power plant and the coal mines.

While they enjoyed the set route, they also pointed out that the smell of burning coal was overwhelming at times and that it was terrifying to see how the open-pit mines dominate the landscape. In the end, runners concluded that this was an eye opening experience and every single participant asked to participate in future events.

Runners that couldn’t be in Novaci but participated anyway were happy they had the chance to support the cause. Felix, a computer scientist from Berlin first heard about the idea from a friend and decided to run five kilometres along the Spree. Felix wanted to support the locals in their fight for cleaner air because air pollution does not respect borders. The decentralised race was great because ‘everyone could take part, even if they did not live in N. Macedonia.’ Felix said he was surprised to ‘learn how much pollution I was breathing-in while running only this small distance.’

While she was closer to the actual race, Slavica could not make it to Novaci and instead ran in the nation’s capital. For her, the virtual race was about showing solidarity with the communities in Novaci and an affirmation that ‘breathing clean and fresh air is everyone’s right.’ Though the weather didn’t cooperate for her run – it poured the whole day – Slavica’s spirits were not dampened: “Alone we can do so little, together we can do so much.”

All these runners became part of our growing community on the sports platform Strava and will continue to be advocates for cleaner air. We are hopeful that this will become a wide movement of outdoor athletes and enthusiasts. Everyone is welcome to join the club of people that are dedicated to fighting air pollution through sports.

Time to end the damaging cycle of land, surface and groundwater pollution in Tuzla

First, there is a fear of the unknown. People have seen their environment changing: their homes and lands have been slowly encircled by huge lakes filled with coal ash and slag. Their crops started drying up and their water has become undrinkable. ‘Is this safe? Could all of this affect our health?’ wonder the locals, while local environmental authorities reassure them that the pollution is within the legal limits.

Then, along comes a report, like the one released today by the Center for Ecology and Energy, which proves that the land and water are indeed contaminated with toxic substances such as cadmium, lead, nickel and chromium, and another fear creeps in: will those responsible take appropriate measures to stop this pollution and prevent it from damaging lives further?

From March to August this year, an analysis of water and soil samples was carried out near the slag and ash disposal sites in Tuzla, Bosnia and Herzegovina (BiH) – Plane, Divkovići I, Divkovići II, Drežnik and Jezero I – as well as wastewater samples from the active ash disposal site Jezero II and samples from six water wells. In total, twenty-three water samples and two soil samples were analysed. This was the first drinking water analysis to be carried out since the ash and slag – byproducts of burning coal – started being dumped in this area of western Tuzla approximately fifty years ago.

The heavy metal content in the byproducts of coal burning largely depends on the concentration of these chemical elements in the coal of origin, mined at Dubrave and Banovići. The report shows that the arsenic and cadmium content in the Dubrave lignite is almost twice as high as the upper limit of the global average concentration, and the nickel content in the Banovići’s lignite is almost 6 times the limit.

Toxic wastewater and land polluted with heavy metals

The results showed that the wastewater at the active Jezero II ash landfill is alkaline toxic water containing amounts of cadmium, lead, nickel and chromium that exceed the prescribed limit values. This type of wastewater should not be discharged into surface water without treatment or come into contact with underground water.

Out of the six water wells tested during the analysed period, the water from only two of them can be considered completely safe to drink according to BiH standards.

The soil on the closed waste disposal sites of Plane and Drežnik, which is currently used for agriculture, contains concentrations of nickel between 6 and 12 times above the prescribed limits, and concentrations of chromium and cadmium between 1.6 and 4 times higher. These heavy metals, even in small quantities, tend to bioaccumulate over time, eventually leading to chronic, degenerative changes on important organs: the liver, bones, spleen, brain, etc.

Remediation measures are not rocket science, they just need proper implementation

So far, the only remediation measure taken to prevent the harmful effects of pollution on the surroundings has been to cover the surface of the waste disposal site with a thin layer of soil. However, this is inadequate, since it does not prevent the dangerous impacts of heavy metals found in the waste. This is particularly true because the site has been informally repurposed for agriculture, and crops are now grown on top of it.

As a result, the report recommends that agriculture for human and animal consumption must be stopped and full remediation and recultivation measures implemented in accordance with the Federation of Bosnia and Herzegovina’s legislation. Those who have been driven to farm at such a polluted site need to be assisted to find alternative land.

One of the most urgent steps recommended in today’s report is the adoption of a regulation that would prescribe compulsory measures to prevent further negative impacts of slag and ash disposal sites on the environment.

In order to prevent or reduce contamination of underground water – mineral lining needs to be installed on the bottom and the sides of the ash and slag disposal site.

There are numerous wells and drinking water springs in the vicinity of both the active and closed ash disposal sites, so an underground water quality monitoring system must be set up by the operator. This would help spur a timely reaction in case the spring or underground water quality worsens.

Tuzla 7 new unit is not part of the solution

Whatever the promoters of the new unit at the Tuzla coal power plant and its main financier, the China Eximbank, would like the local community to believe, increased coal capacity would not stop the real problem. Ash and slag will continue to be released as long as a coal-fired power plant operates here. The idea that its lifetime would span over several more decades and produce more toxic byproducts is simply inconceivable.

Just last week, the environmental group Re:Common released a video that includes moving testimonies of local people living near the ash waste dump, as well as of the author of the report. It also shows how financial institutions, such as Italy’s Intesa Sanpaolo Bank, alongside a subsidiary of Slovenia’s NLB Banka (partly owned by the EBRD) and Russia’s Sberbank worked hand in hand to back the Tuzla 7 project with loans of their own, totalling EUR 74 million.

What is most needed is a full remediation of the soil, water and air pollution and a complete turnaround from energy sector development which harms already vulnerable people. A shift towards sustainable renewables and energy efficiency is long overdue and highly expected.

EC must heed Ombudsman’s warning on gas gaffe beyond the EU

Just a month after the European Ombudsman criticized the European Commission for approving a list of gas infrastructure projects without assessing their greenhouse gas emissions, the EC must not make the same mistake this week with the EU’s southern and eastern neighbours.

The inclusion of gas pipeline projects and LNG terminals on these lists has long attracted criticism for its collision with the EU’s decarbonisation commitments, as well as for the central role played by an industry body – the European Network of Transmission System Operators for Gas (ENTSOG) – in the process.

But the EU is not the only one with a list of priority projects – the Western Balkans, Ukraine, Moldova and Georgia have a similar list, selected every two years under the auspices of the Energy Community Treaty.

This Thursday (17 December), at the Energy Community’s annual Ministerial Council meeting, Ministers are expected to adopt three electricity transmission projects, twelve gas projects, and two oil projects as Projects of Energy Community Interest (PECIs) and Projects of Mutual Interest (PMIs) between the EU and Energy Community. Except, the methodology behind the climate footprint of these energy projects has already been called into question.

The stakes are high. Some of the Energy Community countries like Ukraine have a long-established gas dependency, but others like Montenegro and Kosovo are not connected to international gas networks. Others are only partly connected, like Albania, North Macedonia and Bosnia and Herzegovina.

So investing in gas is a massive undertaking for these countries. It will demand scarce human and financial resources that could have been better used to leapfrog to decarbonisation by tapping their energy efficiency, solar and wind potential.

Greenlighting these gas projects would undermine any efforts to decarbonise the EU neighbours’ energy sectors by 2050, and would incur a real risk of these very projects becoming stranded assets.

What is more, it would be very similar to what the European Ombudsman criticised the Commission for just a month ago.

On 19 November, in response to a complaint by Food and Water Action Europe on the 4th PCI list, the European Ombudsman published findings that the sustainability assessment of the gas projects had been what it diplomatically called “suboptimal”.

In 2019, ENTSOG was asked to include a sustainability assessment in its cost-benefit analysis as part of the PCI gas project proposal process. Unsurprisingly for a gas industry body, it proposed a biased methodology which could find only climate benefits from the projects, not emissions increases. This was because it assumed that the gas would only replace other fossil fuels like coal, and not renewable energy.

In the 4th PCIs list case, the Commission spotted the issue, and did not utilise the methodology concerned. Instead, it went ahead with the PCI selection process without any sustainability assessment at all.

The European Ombudsman found it “regrettable that the Commission did not attempt at an earlier stage to improve the available data and the analytical methodologies applied, so that a ranking of candidate gas PCIs based on their sustainability would have been possible.”

Given the EC’s plans to apply a new sustainability assessment for the 5th PCI list in 2021, the European Ombudsman did not suggest specific corrective action.

But what she did not appear to know was that the Commission is about to propose the PECI and PMI lists to the Energy Community Ministerial Council for approval, and that their sustainability assessment was very similar to the ENTSOG one rejected by the EC in 2019.

The assessment assumed that all the new gas entering the mix would replace coal rather than renewables – a dubious assumption given the high level of hydropower use in some of the countries, including Montenegro and Albania.

It also assumed that there is no overall energy demand growth in the countries, so the gas could not represent new emissions compared to current ones. In other words, the only possible answer from the assessment was that gas would bring emissions reductions.

But what the EC spotted in 2019 for the EU, it did not spot in 2020 for the Energy Community.

The Commission must do everything in its power not to let the Energy Community countries fall into the same carbon trap that the EU is now struggling to pull itself out of.

Bankwatch has recently raised the issue with DG Energy. We requested that the approval of the new priority project list be postponed until the new TEN-E Regulation has been approved, or to propose a list with only electricity projects on. But DG Energy responded that this would be worse because the current gas list would remain valid.

Yet, a new list approved on the basis of a misleading assessment and a TEN-E Regulation that is being reviewed will have no credibility. So, delaying it by a few months would give the next list a much more solid foundation – as the saying goes: less haste, more speed.

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