Blog entry

Czechia ‘unambitious’ climate laggard according to Commission assessment

The European Commission’s analysis of the Czech national energy and climate plan (NECP) supports the critique of local civil society and renewable energy associations, who call the plan’s provisions “unambitious” and the contribution to the joint decarbonisation efforts of the EU “modest”.

But with the EU’s 2030 emissions reduction target currently being updated to at least 55 per cent, the already unambitious Czech NECP will be in dire need of revision.

Main shortcomings of the Czech NECP

The Commissions has identified the most notable shortcomings of the Czech NECP as insufficient ambition for the development of renewable energy – especially solar and wind – in the next decade, as well as insufficient plans for improving the country’s energy efficiency.

While the Commission has recommended that the Czech Republic increases its share of renewable energy in final consumption to at least 23 per cent by 2030, the Czech NECP only counts with a 22 per cent share by that time. This seemingly small difference of one percentage point would actually mean an almost four times faster increase of renewables capacity. According to the Czech Chamber of Renewable Energy, this is far below Czechia’s renewable energy potential, which could be at least twice as high.

This criticism is supported by a recent study that confirms Czechia plans the absolute slowest deployment of renewables in the EU. If the current government’s plan goes ahead, there will be fewer renewable energy sources built during the next decade than were built in the previous one. In 2030, Czechia will have the lowest share of renewable energy of all Member States, and the majority of this share will come from biomass, which is less sustainable than solar and wind.

Another study shows, however, that the country’s renewable energy potential is not as low as its politicians often suggest. According to Ember’s modelling, Czechia could achieve up to 10GW of solar and 4GW of wind by 2030, effectively replacing all of its existing coal capacity. In this way, the Czech NECP seems rather unreasonable, as it does not count with any coal phase out date nor does it set out a framework that could lead to the replacement of uneconomic coal with the cheapest source of energy, renewables.

Insufficient link of recovery funding and climate goals

By relying heavily on biomass to cover its renewable targets, the Czech NECP effectively pushes solar and wind out of the country’s energy mix and thus its eligibility for public financing.

This is exacerbated by Czechia’s plans for the Recovery and Resilience Fund, which would provide the majority of funding to large companies in the electricity and heating sectors at the expense of small and medium sized enterprises, often providers of sustainable, renewable energy solutions. Similarly, there is insufficient support planned for municipalities, which could be pioneers of community energy development in Czechia.

The NECP also does not set a date for a phase out of fossil fuel subsidies, meaning that if the recovery funding is spent in line with the existing NECP, there is a risk that EU money goes into harmful projects that will end up increasing Czechia’s emissions. There are considerable doubts that the draft National Recovery Plan complies with the 37 per cent climate investment criterion.

As it stands, the NECP is a hindrance to more ambitious climate policy, as it does not provide any guidance for energy efficiency improvements and substantial renewable energy deployment. Once the EU and its Member States agree on increased 2030 targets, the Czech NECP will need a thorough revision to address its shortcomings. The Recovery and Resilience Fund should be seen as an opportunity to get a head start for the necessary decarbonisation of Czechia’s energy systems, yet in its current form it also falls short of this task.

Romanian parliament prepares to reject EU Biodiversity strategy for 2030

Members of Romania’s Chamber of Deputies, its lower parliamentary house, intended to vote on 17 November on a draft decision to reject the European Union’s Biodiversity Strategy for 2030.

Parliamentarians said that by increasing the by-laws, strategies and action plans dedicated to nature protection and the restoration of habitats and species, attention will be diverted from carrying out concrete actions in a timely manner on local levels, such as preventing illegal deforestation and ensuring appropriate protection of forest areas. They also argue that the plans and documents for the implementation of EU policies on environmental and biodiversity protection are very dense and complex, having an unjustifiably large number of pages, which makes them difficult for citizens or interested businesses to understand. Also, parliamentarians claimed to see no connection between the current poor biodiversity protection and the insufficient legal safeguarding measures in place.

Those in favor of rejecting the Biodiversity Strategy claim that their decision will provide for an increase in the involvement of stakeholders in the management of protected areas. This is despite the fact that such a system was in place until two years ago, when the Parliament made the controversial move to retake custody of natural protected areas and remove the NGOs as administrators. Prior to that, the state had outsourced the administration of these areas to custodians and administrators, which allowed NGOs to get involved.

This isn’t the only time Parliament has been involved in controversial amendments to environmental protection legislation. In 2016, the regime of the protected natural areas was modified so that it could allow for the construction of natural gas pipelines in fully-protected areas and in the buffer zones around these special perimeters. These provisions were designed to speed up the implementation of the BRUA pipeline, which intersects seven Natura 2000 sites and comes near other five natural protected areas. Eventually, the provisions were extended to all projects of national importance in the field of natural gas.

Given the Parliament’s complicated past with the already fragile environmental protection legislation, it is no wonder that, once again, the benefits of protecting biodiversity and the environment are overlooked and rejected.

If this decision is adopted, not only would Romania be putting its biodiversity at risk, but it would also lose much needed investments in nature protection, like the EUR 20 billion per year of private funding and the post-2020 EU budget.

The draft decision will be further discussed by the specialized committees of the Chamber of Deputies and a decision will be made by the end of the year.

As Romania’s last new coal project is cancelled, a larger gas threat looms

In an interview with Euronews last week, Romania’s Minister of Economy, Energy and the Business Environment finally confirmed that no new coal unit will be built in the country. Only one such power plant was in the pipeline – the 600 MW Rovinari project, first proposed in 2012 with Chinese partners who would also be the majority shareholders. The unit was supposed to be run together with the state-owned Oltenia Energy Complex (OEC), which currently operates four power plants and 10 lignite mines.

While the project was considered implicitly cancelled because it was removed without fanfare from the National Energy Strategy in September, the Minister’s announcement makes this cancellation definitive. It also reflects the acknowledgement of an increasing number of stakeholders in Romania, including government officials and energy authorities, that coal is incompatible with climate goals and with the implementation of the Green Deal, as they seek to take advantage of generous European funding opportunities.

The warning signs were clear

The new unit’s economics were doomed from the start, as a Bankwatch analysis from 2019 showed. Even under the most favourable assumptions for the project, which have already been proven false – such as a low cost of pollution (originally estimated at a price of EUR 21 per ETS allowance, but which is today over EUR 27) – it would still have a negative cash flow throughout its first 15 years of operation. Furthermore, the unit’s revenue would cover the costs of lignite, limestone and pollution, but would leave little margin for fixed costs (salaries, operation and maintenance), depreciation and interest expenses.

Oltenia in a hole – will it stop digging?

The Minister’s announcement is expected to become official next month, when Oltenia Energy Complex’s board will approve the company’s position on the opportunity of the project to build a new 600 MW unit at Rovinari, taking into account all recent aspects of the internal and European energy markets, as well as the intention and the actual capacity to implement it. OEC has bigger concerns, as it can no longer cover its operating costs: it borrowed over EUR 100 million last year, and this year it received European Commission-approved state aid worth EUR 251 million.

Even as the company comes to terms with the fact that coal is unsustainable, it still hasn’t realised that fossil gas is not part of the solution. OEC is unable to return this year’s loan, and because of this, European state aid rules require it to prepare a restructuring plan. While this plan isn’t public, a summary was presented by the company, showing plans to build fossil gas units totalling 1.3 GW on the site of the Turceni and Ișalnița power plants. OEC also intends to build eight photovoltaic parks totalling 700 MW; however, switching the core of its business to gas shows that it still fails to understand how to make its business truly sustainable.

Lessons for the Western Balkans

The demise of the new unit at Rovinari sends a strong message to Serbia and Bosnia and Herzegovina – now the only countries in southeast Europe which are planning new coal plants.

Like Serbia and Bosnia and Herzegovina, Romania assumed it could benefit from Chinese financing to build a new coal unit, but it didn’t take into account today’s economic realities, which render coal largely uncompetitive. The Rovinari plan was based on flawed maths and the company failed to take into account a rise in CO₂ prices. Despite the fact that Oltenia still benefits from some free emission trading scheme allowances, the company is in deep economic trouble. It has ended up dependent on emergency rescue and restructuring aid, even without building the new unit.

The story of Kostolac B3 in Serbia and Tuzla 7 in Bosnia and Herzegovina might well turn out similarly, with dire consequences for the state-owned companies promoting them. Kostolac B3’s feasibility study omitted CO₂ prices, arguing – without any legal basis at all – that if introduced, they would be paid by the government. Tuzla 7’s feasibility study was similarly deluded, expecting CO₂ prices to be introduced only in 2034, and only at a rate of EUR 7.10.

Yet it’s clear these countries cannot continue to trade electricity with the EU without playing by the same rules as EU operators. This is why the EU is currently planning to introduce a carbon border tax and the Energy Community is examining options for the introduction of the ETS in the region.

The Rovinari project shows exactly what happens to new coal power plant plans when countries have to play by EU rules. They fail. Serbia and Bosnia and Herzegovina need to learn this lesson before it’s too late.

‘Smog globe’ shows reality of polluted winters in Belgrade now

Last month, a series of artistic interventions I set up to illustrate the problem of air pollution in Belgrade got people finally discussing how coal affects their health, even when they don’t live next door to the power plants.

I grew up in Obrenovac. Obrenovac is a town in Serbia about 30 kilometres away from the capital, Belgrade. It is home to two coal-fired power plants, Nikola Tesla A and B, which for years have polluted the town’s air and created serious health problems for our community.

We were always aware of the impact of air pollution, ash and soot were visible on the snow every winter, and they were present on our terrace almost every day.

Instead of warning us about yellow snow, our parents used to tell us ‘Don’t play with that black snow’.

Air pollution was also harmful for our health. My mother’s asthma, which had affected her since childhood, only got worse once she and my father moved to Obrenovac in their early 20s. My friends and I were enrolled in swimming lessons from a very early age to help us maintain our lung capacity. But this was not enough to prevent me from developing respiratory problems, as well.

Once, when I had a cough for an extended period, our doctor advised us to go to Sokobanja, a famous retreat for patients with respiratory problems which offers natural vapour inhalation therapies. When the doctor at Sokobanja learned that my mother and I came from Obrenovac, he prescribed us inhalations a few times a day more than for other patients. He also recommended that we visit Sokobanja for a week or two twice a year, which we did for many years.

No escape from pollution

Finally, when I was in high school, we moved to Belgrade. We chose the southern part of the city, because there are some forests there and the air is usually cleaner than in the other parts of the city. But we realized that although there were no big industries within the city limits, the air pollution from power plants and other industries in nearby towns, like Pančevo, and even Obrenovac, greatly impact Belgrade as well.

The residents of Obrenovac blamed the poor environmental conditions during the 1990s on widespread corruption. There were always rumours that the filters in the plants were never changed and that money for these operations ended up elsewhere. So in the transition period of the early 2000s, people were quite optimistic that things would change.

In the last two decades, however, environmental issues have become more widely discussed in the news, and sources of information about the pollution in our country have become widespread. We now realise that not much has been done since the 1990s – we still breathe extremely polluted air all the time.

Art as an advocacy tool

In 2012, I decided to teach an art workshop about the environment for children in Obrenovac. I visited kindergartens there and I spoke with them about the environment – how we pollute and protect it, and how they feel about it in their own community. Many of their drawings showed power plants as big polluters, or sometimes flowers coming out of plants presenting their wish for the future.

I painted their drawings on large wooden boards, which we placed next to a new canal and running trail that led to a forest. It was a reminder that children are quite aware of pollution and that because of them, we are obligated to do something about it.

Two years later, in 2014, there was huge environmental catastrophe – floods damaged the entire city, and, of course, our artistic wooden billboards. Murals I painted in Obrenovac were also destroyed by the floods.

I was especially sad about the mural I painted on the wall of centre for people with developmental disabilities. While I was painting it, many people approached and asked what the building was for. It was sad that large number of residents didn’t know about this place, but my mural had made it more visible to society.

This encouraged me to think more about what I could do as an artist for other important issues in our society. I discovered that my obligation as an artist is to create socially engaged street art available to everyone. After several projects in Serbia, I also participated in a climate change street art project in Berlin, a street art festival in Bucharest to enhance the local community, and in southern Sicily where we painted murals to show solidarity with refugees.

In order to increase awareness about the current environmental situation, I wanted to create an artistic and educational art piece in Belgrade. When the COVID-19 pandemic hit, I started thinking about the air pollution that had affected my family and my community’s health. The air pollution in our region directly impacts our lung capacity, which is so important for surviving the virus. I couldn’t help but wonder, if we had better air, would this help us fight the pandemic?

At the same time, air pollution has threatened our health for years, and will continue to do so long after the risk of COVID-19 goes away. Even before the pandemic started, some people in Serbia wore masks outdoors on days with extremely high air pollution. Social media was full of advice on which mask to buy, and some people started buying air filtering machines for their homes.

#AirPollution on the Sava quay

When Bankwatch approached me to ask if I would be interested in creating an art installation to raise awareness about air pollution, the topic felt perfect for the Sava quay in New Belgrade. This quay is very long, and many people take walks there on weekends with their family and friends. I thought it would be a perfect place to illustrate the distance a person is from coal-fired power plants from the beginning to the end of the strolling route. I wanted my installation to be eye-catching, functional and reversible.

First, I tied coloured fabric over concrete benches right next to the Sava River. I chose four colours to indicate different levels of pollution at different distances from the major coal-fired plants near Belgrade, Nikola Tesla A and B and Kolubara A.

I wanted to make people reflect on the fact that there is no safe distance from these polluters, and that just because coal fired plants are not in their neighbourhood does not mean that they have good quality air. I saw a lot of passers-by stop to read what was written, and many of them nodded worryingly.

I also created a ‘smog globe’, which was a temporary installation on the same quay. Instead of snow, as you might expect to find in a snow globe, this one has ash and soot; instead of a fir tree or a snowman, I painted a power plant. This installation was made out of painted circular panels that people could stand between and take photos, creating the effect of being trapped inside a ‘smog globe’.

Passers-by were really interested in the globe and in the informational banner I made. Some people told me they were aware of the issue but felt powerless to change anything; others asked whether the coal-fired plants were really that close to the quay. Older people talked about how it is now my generation’s turn to improve the environment. Others wanted me to tell their kids, who were interested in my installation, more about the topic. I was glad that people were willing to talk with me and that they recognized the importance of the issue.

Even though I wanted people to be concerned about the health of their families, I wanted to make a fun installation that people would remember. Everyone who saw the exhibition will recall my smog globe when they see snow globes in the winter, which is when the air pollution will be at its highest due to the heating season.

As a child, my first association with snow was the black ash that fell in Obrenovac. The idyllic snow holiday moments had a different meaning for me, so I created this installation to share my experience and to show people how far from ideal our winters in future will be if Serbia does not stop using coal and lignite.

I also created a ‘smog globe’ Facebook frame so that the topic of air pollution can continue to develop on social media. You can add the frame to your profile picture and raise awareness about pollution here (EN, SR, MK)!

Nada Krstajić graduated from the Faculty of Applied Arts in Belgrade in the wall painting department. She received professional training in art conservation and aid for cultural heritage in times of emergency. She has taught many art workshops for children, and is also a mural painter and graphic designer.

European Commission’s assessment of Romania’s final national energy and climate plan

The assessment is centred on the analysis of Member States’ final national energy and climate plans (NECPs) and the plans’ contributions to the post-pandemic economic recovery.

Romania submitted its final plan in April 2020. According to the Commission’s evaluation, it still lacks ambition, and it should allocate more financing to projects that contribute to the green transition.

2030 energy and climate targets

Based on the Commission’s recommendations, the policies and measures drafted for the achievement of the decarbonisation objective need more clarity. The report also notes that Romania failed to notify the Commission of its national long-term strategy (LTS), a document outlying how the country intends to reach the goal of carbon neutrality by 2050, as required under the NECP Governance Regulation.

Although Romania increased its renewable energy target from 27.9% in the draft NECP to 30.7% in the final version, this is still below the 34% renewable share established at the European level. Thus, the country maintains a conservative approach despite its considerable potential in the renewable energy sector, such as for offshore wind.

Romania can also improve on energy efficiency. The NECP envisages primary energy consumption at a level of 32.3 Mtep in 2030, which will generate energy savings of 45.1% compared to the PRIMES 2007 baseline scenario. The target for final energy consumption will decrease to 25.7 Mtep in 2030, but this is unambitious considering the average final consumption for the period 2016-2018, which registered a level of 22.9 Mtep. These targets are far too low to contribute to the overall European energy efficiency target of 32.5%. The planned measures and policies need to be supplemented with alternative measures and defined much more clearly. For example, the plan should prioritise the use of EU funds for the positive investments foreseen in the NECP

On energy security, Romania foresees an increase in installed capacities based on solar, wind and hydropower, but it also plans to negate the positive benefits of these renewable sources by putting gas at the center of its energy system. Romania’s NECP plans to develop the national gas transport system and facilitate investments in the Black Sea’s natural gas perimeters. Although several coal-fired power units are envisaged for replacement with gas-fired ones, a coal phase-out plan is still absent, and measures to phase out fossil fuel subsidies are still missing.

Regarding just transition, the report recommended that Romania conduct a social impact analysis that is currently missing from the final NECP. This is important in order to anticipate the number of jobs that will be affected by the green transition in the main coal mining regions.

Post-pandemic economic recovery and resilience

The Commission’s assessment also includes suggestions on how Romania can make the most of the new financial instruments dedicated to the post COVID-19 economic recovery in its recovery and resilience plan.

The pandemic recovery funds should be used for green energy investments and reforms to make up for the NECP’s shortcomings. As such, the national recovery and resilience plans should contain:

Measures to stimulate renewable energy generation, the renovation of buildings and increasing the energy efficiency of district heating networks;
Measures to improve transport infrastructure and sustainable mobility;
Measures to support the gradual introduction of green taxation and green budgeting.

Romania’s first version of its recovery and resilience plan is still under elaboration. However, time is of the essence if Romania wants to make use of the recovery funds, which will be available once the Recovery and Resilience Facility’s regulation comes into force and Romania’s recovery plan is approved. There is no information available regarding the plan’s development, nor for any public consultation procedure on the plan.

According to the national framework regulating the elaboration of the plan, among the projects eligible for financing are also those for the development of natural gas distribution systems. Investment projects in renewable energy sources are not included.

Romania needs to tap into the opportunities provided by the Recovery and Resilience Facility in order to accelerate its green transition while also contributing to economic recovery. In order to do so, it must give up unsustainable investments in fossil fuels and effectively commit to a just and clean energy transition.

Victory in Parliament: a green agenda placed at the heart of Europe’s recovery

A key step has been made for ensuring a green and sustainable recovery in Europe. On Tuesday, 13 October, the Environment (ENVI) committee presented their final opinion on the Recovery and Resilience Facility (RRF) – the largest part of the overall ‘Next Generation EU’ recovery package. MEPs voted to apply the EU Taxonomy regulation to any gas investments financed by the RRF, ensuring almost all gas investments are excluded from the scope of the Fund.

This represents a big step forward for placing the environment and climate at the centre of Europe’s recovery, sending a clear message to the Economic and Monetary Affairs Committee (ECON) and the Budget Committee (BUDG), the two lead committees on the file, to follow suit.

The RRF will be the largest part of the EU recovery package, providing an enormous EUR 671 billion of the total EUR 750 billion in funds to EU Member States for reforms and investments in green and digital priorities. It will therefore prove decisive in allowing for a green and fair recovery which moves away from the fossil fuel dependent status quo towards a cleaner, more sustainable future.

This vote is a big step forward for achieving just that. As well as choosing not to finance activities that undermine the Union’s climate and environment objectives, the Committee also took an unprecedented move to back the use of the EU Taxonomy criteria for ensuring that only sustainable activities will be financed. Applying this Taxonomy to the RRF will almost entirely prevent further investments in fossil fuels, including natural gas. The Committee also voted for at least 37% of the RRF to be directed to financing climate actions and 10% towards biodiversity, something that would have been inconceivable until only recently.

Bankwatch has long supported applying stricter criteria for accessing EU funds and ending the disastrous financing of fossil fuels. Through first hand experience, our member groups have revealed how all too easily Member States in central and eastern Europe (CEE) are able to use EU public funds and investments to directly finance projects that are harmful to the environment and climate.

Yet we have strong reasons to believe that CEE countries intend to use the recovery funding to further deepen their dependence on fossil fuels and undermine the objectives of the European Green Deal. We are particularly concerned over the region’s plans to spend substantial amounts of the Facility on supporting gas infrastructure. Some governments have also publicly announced their intention to increase development of roads and dams financed under the RRF. This is despite road transport being responsible for the increase in total GHG emissions, and the proven devastating impacts of dams on biodiversity.

We thoroughly commend the ambitious decision presented by the ENVI Committee, but there is still a long road ahead before these amendments become officially adopted into the RRF legislation. This ENVI vote was only an opinion on the RRF: the Committee was asked to provide input to the lead Committees (ECON and BUDG), who are ultimately responsible for this file and will have the final say on presenting it before the plenary vote in November. However, as lead, they have no obligation to adopt the same amendments and opinion as ENVI and can even decide to completely disregard it. Only last month, the Committee for Regional Development voted against the full exclusion of fossil fuels within the EUR 17.5 billion Just Transition Fund.

The overwhelming support by ENVI MEPs, however, clearly demonstrates the strong and growing level of climate ambition in Parliament. The message is clear; end financing of fossil fuels and start financing a clean, green recovery. The onus will now be on the ECON and BUDG committees to act on this and deliver the green recovery that is so clearly desired.

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