Blog entry

EIB keeps denying Southern Gas Corridor climate impact

In November 2019, the EIB made important progress by deciding to phase out lending to fossil fuels projects and it is currently developing a roadmap to align its financial flows with the Paris Agreement.

However, despite this progress, the bank keeps on denying that its two massive loans, totalling EUR 2.4 billion, for the controversial Southern Gas Corridor, will only worsen the climate crisis. This therefore calls into question the bank’s ability to objectively assess the climate impacts of its future investments that will have to be Paris-aligned.

The two loans were extended for the construction of the Trans Adriatic Pipeline (TAP) and the Trans Anatolian Gas Pipeline (TANAP), which together with the extended South Caucasus Pipeline are intended to bring Azerbaijani gas all the way to Italy.

Civil society groups have repeatedly warned the world cannot afford more public money sunk into massive fossil fuel projects such as the Southern Gas Corridor, and in February 2019, Bankwatch, Counter Balance, Friends of the Earth Europe and Re:Common filed a complaint with the EIB’s Complaints Mechanism.

The complaint argued that the EIB substantially underestimated the greenhouse gas emissions associated with the project.

It exposed the incomplete and incoherent nature of the bank’s assessment, including the use of outdated science and a failure to address significant greenhouse gas emissions. In particular, the EIB underestimated the global warming effect of methane, a greenhouse gas up to 86 times more powerful than carbon dioxide (CO2).

Environmental and social impact assessments (ESIA) for both pipeline projects also systematically underestimated inevitable releases of this extremely potent greenhouse gas and excluded key parts of the project, such as the gas extraction and the pipelines carrying it through Azerbaijan and Georgia.

In a report issued several days ago in response, the Complaints Mechanism simply dismissed these concerns, saying it did not find anything wrong in the EIB’s carbon footprint assessment. In fact, instead of addressing the arguments in the complaint, the report provided no additional justifications beyond what the EIB had contended earlier.

For one, the bank’s own carbon footprint assessment hadn’t considered the project over its full lifetime, but instead based its analysis only on the first stage of the project, in which it will transport 10 billion cubic meters of gas annually. However, it is clear that the pipelines are ready to transport at least twice as much gas, in line with the political objective stated by the EU for the Southern Gas Corridor to transport more and more gas from Azerbaijan and other countries in the Caspian region in the future. The EU list of projects of common interest (the so-called 1st PCI List) has also expressed clearly that 10 billion cubic meters annually is a minimum amount of gas that will be imported to the EU thanks to this project. Even the EIB itself doesn’t seem to have any doubts about the project’s capacity: “the infrastructure created could transport larger volumes of gas in the future – at a lower cost than during the initial phase – which would increase the economic benefits of the projects.”

Then, the EIB argued that the project will be entirely climate neutral by making the highly questionable assumption that all the imported gas will be used to replace more polluting sources of energy. In Turkey, gas from TANAP is expected to replace coal for power generation but no evidence was provided to substantiate this claim, such as coal-based power plants closure plans. In fact, this assumption has little to do with reality. The 2019 OECD report noted that Turkey’s stated objective was to reduce its reliance on energy imports by exploiting its domestic coal resources. According to this report, Turkey is the country with the largest coal power plant development programme in the OECD and new plants are being constructed in line with the national target to increase electricity generation from domestic coal.

Similar ungrounded assumptions have been made for the gas to be imported to the EU. According to the EIB, it is supposed to replace Russian gas from the Nord Stream 2 (NS2) pipeline or from Ukraine. In reality, NS2 is well under construction and the Ukrainian gas system remains entirely dependent on Russian counterparts’ decisions whether to use it or not.

The EIB’s assumptions that the gas from the Southern Gas Corridor will entirely replace other sources of gas are highly hypothetical. In reality, this gas could also procrastinate energy efficiency measures or the expansion of renewable energy sources which will have to compete with this subsidised gas. In the end, the bank was unable to provide any indication which EU gas imports will be replaced by the Southern Gas Corridor.

Although the EIB internal standards require that all operations comply with the United Nations Framework Convention on Climate Change, in reality the bank did not conduct any due-diligence regarding the impact of this gas project on the obligations of transit countries under the Convention.

The majority of direct emissions taking place along the pipeline route will take place outside the EU, namely in Azerbaijan, Georgia, Turkey and Albania and will feature on the emissions balance sheet of these countries. Emissions from TAP and TANAP in Greece and Turkey, for example, will be reported in their National Inventory Submissions and will be subject to emission cuts as committed by those states. These countries will however not be able to claim that TAP or TANAP related emissions were compensated by emissions reductions taking place somewhere else, as the EIB had suggested, either in Ukraine or Russia.

In the case of Albania, the impacts of TAP will be particularly significant. When TAP will reach its designed capacity of 20 bcm in 2023, its emissions are expected to account for 7% of the annual total emissions of the country and will even double the emissions of the Albanian energy sector. Again, our concerns regarding the EIB’s dismissal of potential mitigation and compensation measures or offsets for Albania have effectively been brushed-off by the EIB-CM.

The Complaint Mechanism’s disappointing report suggests that the EIB has not learned from its mistakes. Despite the clearly harmful consequences of the Southern Gas Corridor, the EIB keeps on disowning the project’s contribution to the climate crisis.

Not least, the Complaints Mechanism’s response to the civil society complaint comes around the same time as the bank has reportedly approved another tranche, worth USD 270 million, of its loan to the TANAP project.

The EIB’s approach is particularly worrying as it shows that the bank’s recent climate commitments risk being watered down by the continuous underestimation of the climate impact of the projects that it supports. It raises serious questions regarding the bank’s ability to assess the full extent of emissions of its projects, including its new energy projects such as hydrogen, and their compliance with the Paris Agreement. As this emblematic case demonstrates, the EIB’s commitment to the United Nations Framework Convention on Climate Change remains a mere declaration.

Informing women is the first step to empowering them

Knowledge is power. Informing women and men about the opportunities and risks of development projects should be the first step to empowering them to protect their rights. However, getting gender impact information from the European Bank for Reconstruction and Development (EBRD) has proven a challenge.

The EBRD prides itself on being the entity with the largest share of approved funding from the Green Climate Fund (GCF), with a total of USD 831 million – nearly 15 per cent of the GCF’s total portfolio. One of the EBRD’s flagship climate investment initiatives, the Green Cities Framework, secured support from the GCF in October 2018. The Framework prioritises sustainable, green investment, improving the resilience of vital urban infrastructure in countries from Tunisia to Mongolia. By May 2020, the GCF had made two disbursements under this framework, totaling USD 17 613 636. It appears that no Annual Performance Report has been produced yet for 2019, however.

According to the EBRD and GCF’s Gender Action Plan for the Green Cities Framework, the EBRD has committed to conduct Gender Impact Assessments on the country, sectoral (for the municipal environmental infrastructure sector), and project levels.

Since January 2020, Bankwatch has been requesting the disclosure of EBRD Gender Impact Assessments. Bankwatch member groups in EBRD Green Cities like Tbilisi and Skopje have closely followed the developments of the Green City Action Plans (GCAPs) and projects financed under the Framework, also requesting gender impact information.

After six months of repeated requests, calls and appeals, the EBRD has not disclosed a single Gender Impact Assessment. Well, with an estimated lifespan of 23 years of the GCF-funded Green Cities Framework, the EBRD has still another 21 years to get its act together. We are not holding our breath though, as many of our cities are already very advanced in the preparation of GCAPs and are starting transformative climate investment projects – without adequate assessment of gender risks and clear plans for mitigation and prevention of gender-based violence.

Tbilisi case study

The Tbilisi Metro project is the first operation expected to be co-financed by the EBRD and GCF under the Green Cities Framework. A sovereign loan of up to EUR 75 million to Georgia will be on-lent to the city of Tbilisi for the benefit of the Tbilisi Transport Company (TTC), which operates buses, the metro system and cable cars in Tbilisi. The GCF states that the project is kicking off an initiative to support low-carbon, climate-resilient urban development in the city. The project follows a number of previous EBRD investments in the public transportation system of Tbilisi and the development of the Tbilisi Green Cities Action Plan.

Green Alternative, Bankwatch’s member group in Georgia, analysed the EBRD supported GCAP for Tbilisi and the subsequent Green Cities Framework projects, hoping to shed light onto how gender has been addressed. On the positive side, the EBRD has made efforts to establish equal employment opportunities for men and women. As a proof of that, the Non-Technical Summary of the Tbilisi Metro Project and Tbilisi Bus Extension states that TTC has developed an Equal Opportunity Strategy. The Bank has helped TTC to set up training courses specifically for women drivers. Twenty-five women have already participated in the program, some of whom are already working as drivers.

Tbilisi is one of many cities where women report high levels of sexual harassment on public transport. Source: Addressing Gender-Based Violence and Harassment, Emerging Good Practice for the Private Sector publication Disclaimer: The material in this work is copyrighted. The EBRD, CDC and IFC encourage dissemination of their work and readers may reproduce and distribute these materials for educational and non-commercial purposes, provided that appropriate attribution is given and this disclaimer is included.

However, a major concern raised in the briefing is the lack of opportunities for public participation, including for women, in the research and design of new modes and routes for public transport. This problem and wider concerns about governance standards in Green Cities planning and project investment were highlighted by a Bankwatch briefing on the EIB and EBRD’s investments in the Balkans and EU Neighbourhood, published in June.

Another matter of concern is that the projects, as well as city planners, have not been addressing the unique risks for women using public transport, such as the need to safeguard women against the sexual assaults that occur there. The Asian Development Bank (ADB), another important investor in Tbilisi’s transport system, raised the issue of gender based violence risks in its 2015 study. It reported that up to 45 per cent of interviewed women said that they had experienced sexual harassment or felt harassed or uncomfortable on public transport in the previous six months. In addition, 62 per cent of respondents considered sexual harassment in public transport and its environs a matter of concern.

Although a new bill was introduced in 2019 to make sexual harassment a punishable offence, numerous supplementary activities still need to be implemented by city planners and international financial institutions. While the Tbilisi Metro and Bus Extension Non-Technical Summary mentions TTC’s Equal Opportunity Strategy, there is no suggestion that an assessment of risks for gender based violence was done by the EBRD, its client or consultants.

In addition to its findings on gender, Green Alternative’s analysis raises the issue of the vast number of initiatives and parallel planning processes ongoing in the city. It notes that ‘the GCAP has both failed to launch an integrated approach to urban development in Tbilisi and to become integrated into the city’s urban planning more broadly.’ As a result, it appears that the Tbilisi GCAP has turned into an urban mobility improvement plan, rather than the comprehensive plan for Tbilisi’s integrated future green development.

The EBRD’s Gender Strategy needs to catch up with the GCF’s

One promising development has been the newly updated EBRD methodology for the development of the Green Cities Action Plans. The updated methodology places greater focus on governance and on gender mainstreaming. Moreover, EBRD-commissioned consultant teams hired to help cities develop Green City Action Plans need to have gender specialists. New Terms of Reference for consultants’ assignments reflects the need to analyse gender opportunities and risks, and to plan public consultations that provide space for women, gender organisations and vulnerable groups.

The EBRD, together with its sister institution, the International Finance Corporation (IFC) of the World Bank, recently published a good practice guide on Addressing Gender Based Violence and Harassment for the private sector. Although many of the EBRD’s clients and partners in the Green Cities initiative are public institutions, local municipalities and public services companies, there are a lot of tips in this guide that are relevant for our Green Cities. The guide includes a special focus on public transport, which is also relevant.

The question is, when can we expect to see all these good practices and effective prevention of gender based violence in our cities? When will the EBRD include gender risk assessment in its analysis for Green Cities plans and projects?

The Bank has focused its Gender Strategy on economic inclusion and has successfully demonstrated in the last decade that gender equal ity works. However, so far the Bank has shied away from committing to integrate gender protection alongside this promotion. It has artificially separated safeguards from its Gender Strategy, so unsurprisingly, there is a lot less to show for the effective implementation of its gender safeguards than for its economic inclusion work.

The EBRD’s Gender Strategy is at odds with the much superior and more comprehensive gender policy framework of the GCF. The GCF’s Original Gender Policy and Action Plan adopted in 2015 created a policy framework for assessing and addressing ‘risks for women and men associated with adaptation and mitigation activities financed by the Fund’. The Updated Gender Policy and Action Plan adopted in 2019 similarly seeks to promote climate investments that minimise social and gender-related risks. Gender assessments at the project level are required by both the 2015 and 2019 GCF policies.

The EBRD is well capable of implementing GCF standards, although the evidence that they have done so is still to be seen. Furthermore, the EBRD is well capable of developing its own robust policy framework. The Bank prides itself on having some of the highest safeguards policies among MDBs. The 2019 Environmental and Social Policy is a testament to the Bank’s commitment to sustainability and the protection of human rights.

Effective implementation of gender safeguards needs a strong commitment streamlined across a comprehensive policy framework. The new EBRD Gender Strategy, expected to be approved by the end of this year, needs to dovetail with the EBRD’s existing safeguards and to be harmonised with the policies of partner financiers like the GCF.

If the Strategy is to be effective, it must guarantee the right for all to be informed about its operations, and it must require the inclusion of the very people most at risk in decision-making, regardless of gender. With the support of the GCF, the EBRD can already begin to implement these as part of its Green Cities plans and projects.

Controversial plans for Estonian shale oil pre-refinery cancelled

Eesti Energia, Estonia’s national energy company, has announced the cancellation of a planned shale oil pre-refinery, a joint venture with the private company VKG. The decision came after a feasibility study deemed the project non-attractive. The study found that the project would generate unexpectedly low additional financial value in the process of refining Estonia’s sub-standard shale oil. The plant was supposed to produce 1.6 million tons of shale oil per year and increase Estonia’s total use of fossil gas by around 50 per cent.

The feasibility study’s analysis makes its conclusions based on the requirements of the new EU Sulphur Directive, which limits the amount of sulphur that is allowed to be in shipping oil to 0.5 per cent. Estonian shale oil, which is primarily used in the maritime industry, contains between 0.6 and 0.7 per cent sulfur.

Instead of building a pre-refinery, Eesti Energia and VKG’s new plan is to use ‘alternative methods’ to improve the quality of the current shale oil output. However, their exact plan is hidden from the public. Thus, we can only speculate as to whether their new approach utilizes some legislative loophole or whether the dirty oil will simply be exported to refineries abroad.

The total cost of the investment was estimated at around EUR 650 million, including EUR 200 million from the government. Now that it has been cancelled, there is an opportunity for these resources to be allocated elsewhere: they could be used, for example, to solve the pressing issue of local renewable energy related to conflict with defence radars and the prohibitive cost of offshore wind park connection cables, or to support the just transition of the oil shale region in Northeastern Estonia.

While the scrapping of the pre-refinery is good news for people and the planet, public uproar against a new planned shale oil plant by the same national energy company is still ongoing. Public figures have signed petitions to stop the plans, citizens collected over 1,000 signatures to push the issue to the parliament, NGOs submitted an inquiry to the European Commission, and local climate youth activists filed a legal complaint to annul the plant’s building permit. The plant’s investors should pay attention to the voices of the public and the case of the pre-refinery and cancel these plans as well. And ultimately, any meaningful just transition must start with setting a phase-out date for fossil fuels.

Priority energy infrastructure projects for the EU’s neighbours still anchored in fossil fuels

At the end of April, Bankwatch published its comments to the list of Projects of Energy Community Interest (PECIs), and Projects of Mutual Interest (PMIs), as part of a consultation process organised by the Energy Community Secretariat. We highlighted then that over three quarters of the projects presented were fossil fuels with costs estimated at EUR 8.5 billion. Greenlighting these projects would undermine any efforts to decarbonise the EU neighbouring countries’ energy sectors by 2050, and would also pose a real risk of becoming stranded assets.

After the evaluation, five gas projects and two electricity interconnectors have been dropped from the list. Still, the list of projects passing evaluation is dominated by fossil fuels projects – 12 gas and 2 oil projects ones, out of a total of 17.

The non-binding list of PMIs, energy projects that involve EU member states, is now expecting the European Commission’s recommendation. The PECIs list is expected to be approved by the Energy Community’s governing body, the Ministerial Council, at its 27 November meeting, upon the European Commission’s proposal.

Mega projects, mega investment risks. Best avoided.

Two of the projects that have not passed evaluation are White Stream gas pipeline and the Black Sea undersea electricity cable, both connecting Georgia to Romania. The former consisted of new cross-Black Sea infrastructure which would transport gas from Turkmenistan, via the second string of the Trans-Caspian (TCP) and expanded South-Caspian (SCP) pipelines in Georgia, to Romania and further to other EU Member States.

There is very little information available regarding the Black Sea undersea cable from Georgia to Romania, but we can make an educated guess and say that most likely the soaring investment costs outweigh the benefits.

The rest of the projects that haven’t passed evaluation are less megalomaniac, and refer to gas interconnectors between Romania and Serbia; Ukraine, Moldova and Romania, and electricity interconnectors between Serbia and Romania, and Croatia and Bosnia and Herzegovina.

Other harmful projects which did get the green light

There are, however, many other projects that did pass the evaluation, even if they’re not aligned with the EU’s long term decarbonisation goal.

The Albania-Kosovo interconnector, compressor station and internal gas pipeline, for one, is the exact opposite of decarbonisation. So far, gas has made up a relatively small percentage of Kosovo’s energy mix, and this project could make the country more dependent on this fossil fuel. Importing more electricity from Albania, where hydropower is the main source, could help cut Kosovo’s energy related emissions. In addition, Kosovo has very high potential for reducing energy losses, and high potential for renewable energy sources. Investing public resources in gasification at this point would crowd out investments in other urgent priorities such as reducing distribution losses, insulating housing, heat pumps etc. and must be avoided.

Proposed gas pipelines. In orange are PECIs, in blue are PMIs.

Similarly, the Ionian-Adriatic Pipeline would facilitate gasification of Montenegro and Albania, which have until now not used significant amounts of gas. Both countries are in a strong position for leapfrogging towards decarbonisation because of small populations, high potential for reducing energy losses, high potential for renewables, and high shares of electricity generation from existing hydropower plants, which can balance intermittent renewables. The pipeline project’s own feasibility study concludes that it is questionably feasible and shows that it is in partial competition with the LNG terminal at Krk in Croatia, which is already under construction.

All three Energy Community countries involved in these two projects – Albania, Montenegro and Kosovo – seemed to be going in the right direction – Albania with no fossil fuels in their electricity mix, Montenegro having dropped plans to build a new coal unit at Pljevlja and Kosovo needing to make a leap of faith and not resurrect the Kosovo eRe coal project, but rather seek sustainable alternatives and cut current losses.

All this at a time when the European Green Deal highlights the importance of smart infrastructure in the transition to climate neutral economies. To get there, there will also be a need to review the regulatory framework for EU energy infrastructure, including the TEN-E Regulation¹, that’s intended to facilitate a common energy network linking regions and Member States through modern and efficient infrastructure. This Regulation has also been transposed into the Energy Community acquis.

What next?

The European Commission should hold off making a proposal to the Ministerial Council of the Energy Community to approve the list of projects until the revised TEN-E Regulation is adopted on both the EU and the Energy Community levels. The Regulation guides Projects of Common Interest (PCIs) in the EU and PECIs and PMIs in the Energy Community countries.

The context for the public consultation on the TEN-E Regulation that ended a few weeks ago makes it very clear why this revision is needed: “Europe needs modern, clean, secure, future-proof and smart energy infrastructure to deliver the Green Deal. The revision of the guidelines for trans-European energy infrastructure aims to ensure EU energy infrastructure policy is consistent and aligned with the climate neutrality objective of the Green Deal. Our infrastructure framework needs to be revised to reflect new policy developments such as the accelerated take-up of renewable energy sources and ‘smart sector integration’, which links energy sectors to help them reduce carbon emissions.”

And there’s an important lesson for considering future energy projects for priority status. There are numerous voices, including from within the industry sector, that agree we need a shift in mindset on the PCI status. A new approach and definition to PCIs could genuinely help prioritize new forms of infrastructure projects that take into account the current needs and future trends in the European energy sector: digitalisation, consumer participation, decentralisation, system-market interactions, and that integrate innovative solutions. The curtain is closing on the age of mega pipelines.

On the EU level the PCIs list was approved already, but not before prompting the EU Ombudsman to look into whether the European Commission has committed maladministration in failing to ensure an adequate climate impact assessment for fossil fuel projects already listed as PCIs So it is not too late for the Energy Community to avoid new, costly infrastructure that effectively hampers the continent’s decarbonisation goal .

These projects should be evaluated based on their lifecycle greenhouse gas emissions, not merely as replacement capacity for more polluting fuels. This is of particular importance as estimates of exactly how much natural gas contributes to climate change are continuously being revised upwards and depend on the Global Warming Potential assigned to methane as well as on assumptions about the extent of fugitive emissions during gas extraction and transportation.

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

¹The TEN-E Regulation, which is the basis for the PECI projects as well, is part of the Connecting Europe Facility package of proposals, and sets out the conditions for identifying projects of common interest (PCIs) that will be eligible for EU funding under the Connecting Europe Facility and other instruments.

In the air tonight: visualising SO2 emissions from coal power plants in the western Balkans

At the end of June, a new Bankwatch report showed that sulphur dioxide (SO₂) emissions from coal power plants in the Western Balkans, which are included in National Emissions Reduction Plans,¹ breached the combined national ceilings by 6 times, for the second year in a row.

However, the extent of the pollution is in fact even higher, as not all the existing plants in the five countries² are covered by these plans. Eight units are allowed to continue operating with no pollution control until the end of 2023 as long as they limit their operating hours.

Continuous measurements and reporting of emissions only became mandatory as of January 2018, when the Large combustion Plants Directive entered into force in the Energy Community countries, but these levels of pollution have been around for decades, putting public health at risk and causing environmental havoc.

Grasping what a 600% breach of allowed SO₂ emissions means is not an easy job, but our data visualisation does just that. In addition to choking the communities where coal power plants are located, SO₂ pollution from the Western Balkans often reaches as far as Russia and the Black Sea Coast to the east and Germany to the West!

Governments of the Western Balkan countries have known since the signing of the Energy Community Treaty in 2005 that they need to take measures to limit the pollution from their coal combustion plants. And while SO₂ pollution in the European Union has been kept under wraps for ten years now, thanks to the very same policy and strict enforcement, in the Western Balkans only baby steps have been made towards compliance. Even those are not yet delivering results.

SO₂ reduction investments in the Western Balkans – a domino of failures

Serbia – Kostolac B and TENT A de-SOx – plenty of headlines, no results

Serbia’s energy utility secured financing for a complete overhaul of Kostolac B1 and B2 in December 2011. A USD 293 million loan was taken by the Government of Serbia on behalf of the energy company from China Exim Bank to, among others, equip the two units with de-SOx and bring the plant’s emissions in line with the legal obligations of the LCPD.

The works were declared completed in 2017, but the plants’ emissions in 2019 were still at 79 113 tonnes, ten times above the legal annual ceiling of 7957.03 tonnes. There is no information available to the public about what is going on – is it a construction mistake, an operation flaw, a mix of both?

At the Nikola Tesla A power plant a loan for a desulphurisation project was signed in 2011, but the announcement of the start of works only came in 2019 and according to the financing agency, Japan’s Export Credit Agency, the rehabilitation should only be finalised by 2022.

Ugljevik, Bosnia and Herzegovina – 11 years of waiting in vain

Financed by a loan from the Japan International Cooperation Agency (JICA) signed back in 2009, works on the de-SOx equipment started only in 2017 and test operation began in December 2019. We hoped that in 2020, SO₂emissions would finally be significantly lower.

However in February 2020 it was revealed that there was a technical problem. The plant’s dust filters, overhauled three years ago by the Czech company Termochem, were not working properly, and their proper functioning is a precondition for desulphurisation. The EUR 83 million desulphurisation investment has been put in jeopardy.

Pljevlja, Montenegro – judgement clouded by nepotism?

The 40 year old plant is expected to undergo a full overhaul in 2021, bringing its emissions in line with the EU’s best available techniques. In November 2019 a consortium comprising China’s Dongfang and Montenegro’s BB Solar, Bemax and Permonte was chosen.

The choice raised eyebrows within Montenegro, especially for the significantly lower price compared to the other bids, but also as some of Dongfang’s staff were suspected by the Chinese government of accepting bribes from suppliers; BB Solar is half-owned by the President of Montenegro’s son, and Bemax is another well-connected company that often wins government contracts. One cannot help wonder if this project will have the same fate as Kostolac B and Ugljevik.

North Macedonia: all investments in pollution control on hold

Fitting a desulphurisation unit at the country’s largest coal plant, Bitola, is still stuck in the feasibility study phase, and according to the latest draft IPPC permit for the power plant, it is planned to be put into operation in December 2026. However, the National Energy Strategy adopted earlier this year, foresees a coal exit in 2025 in two out of three scenarios. This is probably why the Government isn’t keen on investing in SO₂ only to shut the plant in a couple of years, so the logical move would be reducing operating hours to get the emissions down.

Meanwhile, in just one year, SO₂ emissions from North Macedonia’s coal power plants have doubled. Total emissions in 2019 were 108,032 tonnes – twice as high as in 2018, when they were 53,855 tonnes.

In a reaction to Bankwatch’s report, the North Macedonian energy company does not dispute the volume of SO₂ emissions in 2019 per se – which was nearly 7 times higher than the national ceiling – but is more fixated on the “wrong” use of the word “doubling”.

The company’s response explains that the 2018 emissions were measured at longer intervals compared to 2019, which makes the margin for error in the calculations higher. According to them, this, in combination with the 20 per cent increase in operating hours should account for the higher volume of emissions. This makes one wonder how different the reported emissions will be after installing continuous measurements at the stacks– as required by the LCPD.

Kosovo: No plans for desulphurisation

The ancient Kosova A plant has been planned for closure for years, but successive governments tried to delay this until the planned Kosova e Re plant was built. With this plan now cancelled, however, it is time to stop procrastinating and make a definitive plan for Kosova A.

Given Kosovo’s near-complete dependence on coal, however, Kosova B will have to stay online for several more years. There is so far no clear plan to invest in bringing down SO₂ levels at the plant, as all eyes are on an ongoing investment to reduce the plant’s eye-watering dust emissions.

How bad is SO₂ for the environment and human health?

Sulphur dioxide is classified as very toxic for humans when inhaled. It can cause severe irritation of the nose and throat. High concentrations can cause a life-threatening accumulation of fluid in the lungs (pulmonary oedema). Symptoms may include coughing, shortness of breath, difficult breathing and tightness in the chest. Even a single exposure to a high concentration can cause a long-lasting condition like asthma.

SO₂ is also responsible for the formation of acid rain. This impacts our environment by changing soil composition and damaging crops and by inducing changes in the chemistry of rivers and lakes, often in remote locations, which are linked to declines in the health of aquatic organisms.

What to do?

Such daunting data on emissions as well as such flagrant displays of neglect from all countries about proper spending of public money and compliance with laws calls for decisive and immediate action. Those responsible for failed projects, mis-reported emissions and disregard for the rule of law must be held accountable, for sure. But the pollution also needs to be cut, immediately.

In some cases this will mean installing desulphurisation equipment, but Kostolac B and Ugljevik have shown that this is not a risk-free option. It bears considerable costs, both for installation and operation, and in some cases it will be more viable to close the plants.

Until then, we rely on communities on the ground to report how these projects are moving forward, and on governments to finally enforce the law and and bring the operating hours down in order to decrease the exposure to such life threatening levels of SO₂.

We also count on the Energy Community and European Commission to enforce large combustion plants legislation and penalise current and any further breaches, both directly and indirectly. Non-compliant plants should not be able to continue exporting electricity to the EU without paying their external costs, and EU funding support for the countries’ energy sectors must be made conditional on compliance with the Energy Community legislation.

¹A flexible implementation mechanism under the Large Combustion Plants Directive in the Energy Community whereby emissions can gradually be reduced by totalling their combined emissions and ensuring they are lower than the decreasing ceilings mandatory set for 2018, 2023, 2026 and 2027.
²Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia. Albania has no coal power plants.

The visualisation is based on atmospheric modelling with the European Monitoring and Evaluation Programme Meteorological Synthesizing Centre – West (EMEP MSC-W) computer model, which is also used by the European Environment Agency for European Commission assessments of health impacts from air pollution in Europe.
Simulations and data visualization by Rosa Gierens and Lauri Myllyvirta.

Bosnia-Herzegovina: Illegal lignite mine expansion at Gacko must be halted

The town of Gacko is dominated by its lignite power plant and open-cast mine, which sprawls messily for kilometres across the landscape. But even further expansion is now planned, by opening up the so-called Central Field, which would bring the mine even closer to the town.

Lignite is well-known for the air pollution belching from power plants – indeed a Bankwatch report launched earlier this week showed that Gacko – run by Elektroprivreda Republike Srpske (ERS) – is one of the Western Balkans’ worst offenders when it comes to dust pollution. But what many people are not aware of is that open-cast lignite mining adds to this, with dust, noise, vibrations and water pollution.

An environmental impact assessment process for the opening of the Central Field is ongoing, with a public hearing held this week, which should be assessing whether the impacts of the planned expansion are acceptable, and if so, how to keep them to a minimum.

There’s just one catch: Works on the Central Field have already been ongoing for quite a while.

The environmental impact assessment study itself admits that several kilometres of the River Mušnica have already been rerouted, and satellite images show that considerable parts of the mine have already started excavations.

Pulling the central bar to the right shows the situation as it was in 2014, with the planned Central Field in the centre of the picture, with a red border, and the River Mušnica flowing through it. Pulling the bar to the left shows the situation in 2018, with a long stretch of the River Mušnica redirected and excavations having taken place across at least one third of the Central Field.

This completely defeats the point of an environmental impact assessment and the works undertaken so far on the Central Field appear to be completely illegal, considering that no permits have been issued.

There is now no way to understand the baseline situation before the expansion in order to carry out an assessment of the likely impacts on the environment, nor is any public consultation meaningful when significant damage has been done already.

The works need to be stopped immediately, and ERS and its subsidiary RiTE Gacko deserve a hefty fine. They also need to restore the environment to its prior state, as far as possible. Treating environmental assessments as a formality is a problem across the Western Balkans, but doing one after works have begun really takes the biscuit.

For more information, see the Center for Environment’s website: https://czzs.org/the-mine-and-thermal-powerplant-gacko-are-digging-for-coal-without-a-valid-permit/?lang=en

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