Blog entry

The wind of change is still far from Galabovo

With regularly emerging scandals like the forced resettlement of the Beli Bryag village due to the coal mine expansion, or the burning of waste as a substitute for coal without the necessary environmental permits, the air pollution produced by Maritsa’s dozens of coal facilities is sometimes overlooked. But Galabovo, a town that is part of the Complex, cannot miss it: winds bring its residents only clouds of dust.

Galabovo is a small town in the heart of Bulgaria’s coal region. It is located less than 10 kilometres from the biggest lignite mining operation in the country, Maritsa East, and it is home to two coal-fired power plants. The newer one is the 670 MW plant, AES Galabovo, that started operation in 2011. Right next to it is the dinosaur Maritsa East 1, also known as Brikel, that started operation in 1962. Brikel produces both electricity, with an installed capacity of 360 MW (supposedly only 180 MW are currently in use), and district heating, with an installed capacity of 170 MW, for the town. Both plants are less than 2 kilometres north-east from the outskirts of Galabovo. In addition, the town borders an ash disposal site to the north, which is less than 500 meters from the nearest houses.

Brikel, together with the power plants Bobov Dol and Pernik, is part of the major waste burning scandal currently ongoing in Bulgaria., In 2019, a court ruling found that these plants were using waste as a substitute fuel without the necessary environmental permits.

With all these capacities around the town, even when best techniques and practices are applied, it is inevitable that the air quality will be affected.

However, the official air quality monitoring station in Galabovo monitors only sulphur dioxide and nitrogen dioxide concentrations and does not monitor coarse (PM10) and fine (PM2.5) dust particles at all.

Bulgaria was already reprimanded in 2017 by the EU Court of Justice over its failure to implement the Directive on Ambient Air Quality (AQD), but it seems that the ruling of the Court, which did nоt involve any fines, has not yet had the much needed dissuasive effect.

We installed our environmental dust monitor in the northern part of Galabovo, about one kilometer from the ash disposal site and two kilometers from the power plants. The location was chosen for its ability to provide some indication of the major sources of dust pollution, in addition to the levels of pollution themselves.

We monitored dust concentrations for 26 days in late Autumn 2019, between 14 November and 9 December, and then compared the results to the AQD and World Health Organisation (WHO) guidelines. According to the collected data, the 50 µg/m³ daily limit from the AQD for PM10 was exceeded on 5 days out of the short 26 day monitoring period (Chart 1). The number of allowed exceedances by the AQD is 35 days in one calendar year, which, given our findings, is very likely to be breached during the winter season.

Chart 1. 24-hour average PM10 values (blue line) compared to the allowed limit value (red line)

For the more health-damaging PM2.5, the WHO daily limit of 25 µg/m³ was exceeded on 11 days (Chart 2). This is already several times more than the three annual exceedances that the WHO recommends for proper health protection of the population.

Chart 2. 24-hour average PM2.5 values (blue line) compared to the WHO recommended value (yellow line)

When wind direction and wind speed data are included in the analysis of the high pollution peaks, it becomes visible that high levels of dust pollution originate from the direction of the ash disposal site and from the direction of the power plants. The windroses (Charts 3-6), created using the data on wind direction and wind speed together with the PM10 values, show lines that extend from the monitoring location in the direction of where the wind is blowing. The length of the lines is determined by the changes of the PM10 concentration in the ambient air. The longer the lines, the higher the amount of PM10 originating from that particular direction.

Charts 3 and 4 clearly point to the power plants, which are located between the 70o and 90o marks on the windrose, as seen from our monitoring location.

Charts 3 and 4. Windroses of the contribution to dust pollution from the power plants

Charts 5 and 6, on the other hand, show the contribution of the nearby ash disposal site, spread between the 310o and 10o marks on the windrose, to the dust pollution in Galabovo. The situation shown in Chart 5 is especially worrisome, because it shows a huge cloud of dust picked up from the entire surface of the ash disposal descending upon the town.

Charts 5 and 6. Windroses of the contribution to dust pollution from the ash disposal site

As dust pollution from coal utilities is inevitable, it is unclear why the Bulgarian government is not monitoring PM10 and PM2.5 in Galabovo. There is a very clear requirement from the AQD that prescribes monitoring of all major pollutants near big industrial complexes such as the ones in Galabovo, so this is something that the government should fix immediately.

But even without measurements of the dust concentrations, it is recommended that ash disposal sites are encircled by a protective tree belt (see Waste Treatment BREF, p. 412) to reduce the spread of fine dust particles rich in heavy metals to the surrounding areas. According to our measurements, the area between the ash disposal site and the town must be recultivated as soon as possible in order to reduce the population’s exposure to dust particles.

At the same time, the Brikel power plant should be considered for shut down soon. It has already worked long beyond its advised economic lifetime of 40 years. Resources needed to reconstruct the power plant in line with environmental standards should be reallocated for solutions that will provide clean electricity and heating from renewable energy sources to Galabovo.

A herd of white elephants is approaching the EU’s neighbours

Today marks the last day of a public consultation on priority energy infrastructure projects under the Energy Community Treaty. Yet, 20 of the 26 projects put forward by the Western Balkans, Moldova, Ukraine and Georgia rely on fossil fuels – a clear no-no if the countries plan to align with the EU’s decarbonisation goals.

18 of the proposed Projects of Energy Community Interest (PECIs)¹ and Projects of Mutual Interest (PMIs) consist of gas infrastructure and 2 are oil projects – some rehabilitation of old pipelines but mostly construction of new ones, expected to be commissioned in the next 3-5 years. The remainder are electricity transmission lines.

If the EU and its neighbours are on their way to decarbonisation by 2050, why are they still planning so many fossil fuel projects?

As last year the European Investment Bank (EIB) – the EU’s financing arm and the world’s biggest lender – announced it will bar funding for gas and oil at the end of 2021, sending a signal to all other international financial institutions, the list of potential PECIs bears a striking resemblance to someone committing to go on a healthy diet, but spending the last month before that eating junk food.

Of course, the comparison is only fair to some extent, as a person’s diet choices only affect their own health, whereas a regional increase in gas and oil infrastructure affects all of us, who suffer the consequences of climate change while also bearing the costs of these projects, paid for with public money.

Already in 2016 Oil Change International calculated that no more fossil fuel infrastructure can be built if we are to meet the goals of the Paris Agreement. The potential carbon emissions from the oil, gas, and coal in the world’s operating fields and mines would already take us beyond 2°C of warming, and even excluding coal, the reserves in currently operating oil and gas fields would take us beyond 1.5°C.

Yet, the PECIs list includes projects which, if realised, would contribute to gasification of countries like Montenegro or Kosovo, that currently have very low use of gas in their energy mixes and are not connected to international pipelines. Additional investment in gas infrastructure, even when it is only for diversification of supply sources, is more likely to serve as a distraction from investments in renewable energy, energy savings and solutions such as heat pumps than to support them. According to the 2019 Carbon Budget, the global increase of greenhouse gas emissions is currently driven by gas and oil projects, so connecting completely new countries to gas pipelines at this stage is very much the same as allowing them to build new coal-fired power plants.

New gas projects are the wrong direction

Two of the five questions in the public consultation questionnaire refer to the projects’ contribution to decarbonisation of the energy sector by 2050 and to better integration of renewable energy in the market. In Bankwatch’s submission, we argue that the projects represent the exact opposite of those.

Estimates of exactly how much 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. One estimate cited in the EBRD’s Energy Strategy is that in the best case, gas combustion saves a maximum of 30% of greenhouse gas emissions compared to coal, hardly an advantage worth investing hundreds of millions of EUR for.

Regarding household heating, gas is likely to partly displace existing wood use, whereas using wood more efficiently and complementing it with solar thermal and heat pumps would better promote the efficient use of renewable energy.

For electricity, intermittent renewable energy is not likely to be better integrated by the use of gas. Most of the Western Balkan countries have high shares of existing hydropower that can be used for balancing intermittent renewables, and gas is likely to be uncompetitive for power generation in the coming decades.

In the Western Balkans, there is a significant difference from EU countries with regard to gas: it is not a question of when to phase out an existing source of energy, but of making massive new investments in the opposite direction of where we want to be. The EU must not encourage this in any way.

EU decarbonisation policy needs to be coherent – and that means no new gas

In recent years, EU member states’ proposed Projects of Common Interest (the process which the Energy Community has adapted) have also been riddled with critique over being way too reliant on gas infrastructure. A study by industry consultants Artelys warns that there is a risk of €29 billion being wasted on 32 mostly “unnecessary” gas projects.

The EU Ombudsman is looking into whether the European Commission has committed maladministration in failing to ensure an adequate climate impact assessment for the PCI fossil fuel project lists chosen so far. Therefore, our ask to the Energy Community is to ensure that a thorough GHG emissions assessment is carried out for any gas projects being seriously considered as PECIs or PMIs.

Europe’s attention now should be clearly focused on how the economic recovery will be designed. This is crucial in determining the long-term pathways for emissions and whether the Paris Agreement’s 1.5˚C limit can be achieved. A recent analysis by Climate Analytics points to strong economic and climate change advantages if governments adopt green stimulus packages in response to the COVID-19 pandemic.

The countries of the Energy Community Treaty need to realise this on time, before they lock themselves into a carbon and debt trap.

¹ Regulation (EU) 347/2013, as adapted for the Energy Community in 2015, establishes rules for identifying projects of Energy Community significance, called Projects of Energy Community Interest (PECIs) and Projects of Mutual Interest (PMIs). These projects will benefit from 1. streamlined permitting procedures within Contracting Parties – in case the Competent Authorities are put in place, 2. where applicable, from cross-border cost allocation.

From the Caucasus to Russia: Why this road?

This article was first published on Bankwatch, official publication of NGO forum on ADB.

Starting in Armenia, the southestern-most of the Caucasus countries, the corridor crosses Georgia and continues to Russia.

This new massive construction will go through a precious valley of Georgia and it poses considerable threats to the livelihoods, biodiversity and cultural heritage of the pristine valley of Khada. It raises questions about the economic and political validity of the initiative. The Asian Development Bank is among the project’s supporters.

The ADB is the largest funder. Of the total USD 558.6 million-project, more than half, USD 415 million, comes from the ADB to the Georgian government. The government invests USD 83.6 million, and the European Bank for Reconstruction and Development (EBRD) has approved a loan of USD 60 million to co-finance construction of a nine kilometer tunnel.

Although its impact was almost unstudied and the promoters had failed to properly inform and communicate with the locals, international banks still allocated funds for this road.

The public protest against Kvesheti-Kobi intensifies and local communities are no longer alone in this fight.

Who will benefit?

According to the Roads Department of Georgia, the 23-kilometer Kvesheti-Kobi highway aims at better connecting Georgia and the South Caucasus to Russia and its neighbors with shorter and more convenient roads. An official statement from the Roads Department of Georgia, “the tunnel [of the road] provides for safer and reliable conditions during the winter for those using the road.” Promoters also argue that the road will cut distance. Compared to the existing section that connects the same geographic areas, the new one will be only 12 kilometres shorter. Also, the north-south corridor’s traffic time will be reduced by only 40 minutes.

Benefits of this road are debatable. No cost-benefit analysis has been done, both in terms of land transport development as well as its impact on the country’s fiscal parameters.

The current project does not promise a clear economic return, as the budget is unprecedentedly high for a 23-kilometer road that threatens to bulldoze the unique valley.

What will be lost?

The Khada Valley is rare because it brings together an untouched landscape and a large number of cultural monuments in one place. The valley boasts unexplored archaeological treasures that confirm traces of life from the Eneolithic period, rare biodiversity species on the UN red list, and villages built at 1800 meters above sea leve, where old traditions of mountainous people are reserved.

All of this will be replaced by five tunnels and six bridges. One of the tunnels will be nine kilometres long: a rare length in construction, as mentioned by the Road department of Georgia. The bridges total two kilometres and include 426 metre and 166 metre arches.

The project owners suggest that one of the results will be a tourist centre in the valley. It is unknown if the visitors center will promote tourism in the gorge once the bridges and tunnels are in place and thus will have lost its value and identity.

In addition, part of the new road will be constructed by “23rd China Railway Bureau Group”. This company was banned from participating in tenders for nine months by the World Bank for fraud in June 2019. The company was announced as the winner after the World Bank’s ban.

Against the road

The Kvesheti-Kobi road threats livelihoods. Locals of Khada are asking for the highway to avoid the valley. They have collected signatures, held protests and submitted letters to the ADB and EBRD, asking for help. In August 2019, a few days after Khadians had sent a letter to the ADB, the bank announced the loan approval.

Khadians said they will not give their lands for anything. They do not want to lose their ancestral areas and are concerned that noise and air pollution will increase. The impact threatens healthy village crops and tourism opportunities. Expected forced economic resettlement poses risks to incomes. And last but not least, the project is dangerous: geologists warn that the tunnel could pass areas with risk for volcanic activity.

In the struggle to protect the areas, some of the locals have said they have been refused by state agencies to register their traditional properties around the road area. Meanwhile, the project does not include a socio-economic baseline assessment on how it affects the population in terms of land acquisition or restrictions on land use. It does not identify social impacts, needs and rights of affected communities.

What happens to the 60 towers?

The Khada valley is also known as ‘the place of 60 towers’ that include special historic methods of construction and are unique in Georgia.

Churches, fortresses, towers, old cemeteries and other memorials are only a portion of the monuments in the Khada Valley.

The road project documentation suggests it will pass the cultural sites at 50 to 100 meters, which means they are very likely to be ruined. Even in the Environmental Impact Assessment drawn up by the government, it is stated that “it will have a significant effect” on the monuments. Sufficient mitigation measures are absent in the project documentation.

Experts and archeologists worry that the large scale construction will bring irreconcilable damage to the monuments, especially in light of the fact that the government began the project without detailed research.

Nature at risk

Khada Valley is a biodiversity hotspot in the Greater Caucasus. As the greenfield project crosses the Kazbegi national park and a number of Emerald sites, gthe Kvesheti-Kobi road will heavily impact its landscape and biodiversity.

As pollution increases and habitats change, the project will influence the reduction of species listed in the Red Book and will encourage the spread of invasive species in the valley. The road will affect bird watching areas that offer one of the unique possibilities for bird lovers in Georgia. The area is a host to more than 30 000 migratory species per year.

Kazbegi Park is the home for at least six species found on Georgia’s red list. Most of those species were not even mentioned in the project documentation and environmental risk management plan for them is not present.

Then, why this road?

While locals and NGOs fight to protect human rights, save the valley and question the economic validity of the project, journalists have also raised questions about Kvesheti-Kobi: national security risks. Security experts note that larger, resistant to military transport roads directly cut to Russia – a country with which Georgia has ongoing military disputes.

The Kvesheti-Kobi road inspires a lot of questions, and they are not only political. When the project does not prove its economic benefits, causes human right violations, promises dangers, cooperates with a company that was banned for fraud and does not present an in-depth social-environmental studies and analysis, why do the international banks go against their own policies and support it.

For more information visit the project page.

Change for good: why we need fair, just supply chains

In an opinion piece for the Financial Times, the EBRD’s Chief Economist Beata Javorcik outlined the extraordinary shock to the global supply chains caused by the current pandemic, one that is ‘likely to spark nothing less than a rethink of how the world does business’. Indeed, Javorcik is right to call for a closer look at the sustainability of global supply chains, but it should be done from both ends of the chain.

Uncertainty and crisis have always been the natural state of the global supply chain, especially in the industries most removed from consumers – raw materials and manufacturing.

To make a profit, these industries rely on competitive advantages and cost efficiency derived from tightly controlled human labor, working on deadlines set to the second (the just-in-time system of manufacturing and logistics). They frequently operate without backup stocks of raw materials and finished products.

Under this paradigm, global supply chains have been known to cause a whole variety of impacts such as environmental destruction, violations of workers’ or communities’ rights, harmful labour patterns or deepening poverty in the peripheral regions at the beginning of the global supply chain.

These shocks primarily affect some of the most isolated but necessary links in today’s global supply chains. Small and medium mines – the first block in the global information and communication technology (ICT) supply chain – are usually situated on the peripheries of the globe, beyond scrutiny. In connection with its aggressive exploitation of natural resources, mineral mining can severely affect the environment and the rights of people living in the vicinity of the mines.

As a Swedwatch report shows the unsustainable extraction of copper, a mineral frequently used in ICT products, has caused environmental degradation and adverse impacts on local communities in Zambia, the second largest copper producer in Africa. The pollution of water in mining areas has impacted their health, destroyed farmlands and reduced crop yields.

In Armenia, where the Amulsar gold mine is being developed with the support of the EBRD, locals who make their livelihoods tending apricot orchards, collecting wild plants, breeding animals and farming fish have been protesting for almost two years against the lack of meaningful public engagement in decisions about the mine. Their safety and security in exercising their rights to information and freedom of opinions has been repeatedly threatened.

After sites of extraction come smelters, the next block in the chain, which are often situated in places with low legal standards and a lack of scrutiny of working conditions. This is the case of the copper smelter in Namibia, where highly toxic substances, like arsenic trioxide, are being kept in unsafe conditions at a smelter in Tsumeb and affecting the health of workers and local communities.

Another vulnerable part of the supply chain is manufacturing. Some societies that make their livelihoods from the production of a whole range of goods have become subject to abusive labour conditions, such as the workers in the Turkish metal sector.

Unfortunately, corporate businesses, governments and development finance, which are now so shocked by the fragility of supply chains, have not been doing enough over the years to see the reality of what has been happening at the foundations of global supply chains.

The lack of transparency in supply chains enabled the dismantling and violation of workers’ rights. Dodgy deals between big business and governments exclude tax payers and societies from decision-making processes. As pressure to extract diminishing natural resources grows, so too do instances of attacks and threats against human and environmental rights defenders.

The most developed countries in the world are surprised that well-engineered, global supply chains have led to critical shortages of basic products, such as medicine and protective masks or gowns, desperately needed in the current situation. But how can the current setup be considered well-functioning if it fails during abnormal spikes in demand?

The role of public finance in such a scenario should be to work in the public interest and not focus primarily on furthering private interest. The assumption that promoting the private sector is in all of the public’s interest is in part responsible for what led to the current crisis of the global supply chains.

Today’s shock is affecting ‘the rich end’ of the supply chain, and while it has already started to shake, the question is what will be the result of it. Diversification of the full range of suppliers is surely not enough. The crisis should be an opportunity to fix not just the proximity of supply chains but also to end their obscurity and bring resilience into labour relations and stakeholder engagement.

Public finance institutions, such as the EBRD, should explore more space to examine and address these structural issues. For example, why not give some new meaning to the EBRD’s transition indicators like Resilience, Competitiveness, Green Economy or Inclusion?

The 2008 economic crisis caused the overhaul of the previous transition methodology at the EBRD. So why not strengthen it again? Instead of plugging the gaps, alternatives can be introduced: starting from ending extractivism and unsustainable logistic chains, through just transition and strengthening local economies, to public finance institutions using a human rights-based approach to development.

The Commission must stay strong on EU sustainable investment criteria as they become law

The European Commission is currently consulting the public on its plans to set up legally binding criteria for the so-called “EU sustainable investment taxonomy” on climate mitigation and adaptation. The taxonomy is a welcome move by the EU to prevent greenwashing in investments by setting a widely-agreed standard for defining which investments can be regarded as sustainable.

This could be a very welcome instrument for increasing coherence between investments by the European Investment Bank and European Bank for Reconstruction and Development, among others. For years the EBRD and EIB have been increasing support for climate action but their selection criteria have not always been strict enough to ensure that the projects supported are really sustainable. Notable examples include hydropower projects like those financed by the EIB on the river Tamega in Portugal and the Nenskra hydropower plant in Georgia, approved by both the EIB and EBRD but not yet signed. Even burning fossil fuels and waste have been considered to be climate action, with the EIB-financed gas-and-waste incinerator in Sofia, Bulgaria, and the EBRD-financed gas heat and power plant in Zagreb, Croatia, and Belgrade waste incinerator in Serbia, all cases in point.

So far discussions on rules for EU funds under the next EU budget have taken place separately from the taxonomy debate, but it makes sense to apply these rules to EU funding as well, to make sure all forms of EU financing are applying consistent standards.

The criteria to be used by the Commission have been set by a Technical Expert Group, whose work has been subject to two rounds of public consultations. In March the Group published its final report, in which it has been quite successful in ensuring that that the criteria embody sufficient environmental integrity to be widely accepted.

Activities excluded from the taxonomy for now, due to their impacts, include nuclear power, waste incineration and unabated gas power and heat generation, while other controversial areas like hydropower are subject to tight criteria, which if properly applied will ensure that only a select few projects will qualify.

The challenge now is to maintain the delicate consensus as the legislative process proceeds. Further lobbying will no doubt take place to amend the criteria, during the development of the European Commission’s Delegated Act and later on. However, we strongly caution against reconsidering activities that the Technical Expert Group has excluded.

The Group rightly excluded waste incineration with energy recovery from the climate mitigation/adaptation taxonomy, but recommended “bringing this … for further … consideration to the Platform on Sustainable Finance…” Its report cited a potential argument in favour of including incineration: “WtE has a role to play even in an increasingly circular economy as not all residual waste can be reused or recycled”. However, an incinerator built now will run for at least 25 years, and needs a steady quantity and types of waste in order to operate. This locks in incineration for decades to come, and undermines the development of waste prevention, composting and recycling.

We cannot accept that there will always be residual waste needing to be disposed of, as EU policy needs to make sure that such materials are replaced with those which can be re-used and recycled.

Incineration’s climate impact must also be critically examined. Its CO2 intensity depends on waste composition and whether it generates only electricity or also heat, but much of the combustible waste consists of fossil-derived plastics and other non-renewable material, which produce climate-relevant emissions. Numerous studies have shown that waste incineration with energy recovery results in poorer climate outcomes than prevention and recycling, and for some materials it offers little advantage relative even to landfilling.

Similarly, on nuclear power, “the TEG recommends that more extensive technical work is undertaken on the DNSH aspects of nuclear energy in future…” As the long-term management of high-level nuclear waste is unresolved, among other concerns, reconsidering nuclear’s inclusion in the taxonomy would not be purposeful, as nuclear energy clearly does not fulfil the “do no significant harm” criterion used by the Technical Expert Group to ensure that in resolving climate issues, its sustainable investments do not cause other major environmental and social problems.

The Technical Expert Group has also been ambiguous about gas with carbon capture and storage. It proposes a declining threshold starting at 100 gCO2eq/kWh for electricity and heating/cooling generation. Unabated gas-fired power generation is rightly excluded from the list of eligible activities, but while stating clearly the need to avoid investment in fossil-fuelled power generation in order to reach the Paris Agreement objectives, the annex to the Group’s final report also states that “gas fired power with carbon capture and sequestration may qualify” as a clean investment.

However, gas installations not only emit greenhouse gases during combustion but also via upstream activities: gas transportation and processing emits methane, whose global warming potential is far higher than that of CO2. The EC itself acknowledges in its long-term strategy that “due to the higher global warming potential of methane, as little as 3% leakage along the natural gas supply chain can cancel out the greenhouse gas emission benefits of natural gas vs. coal in power generation”. The IPCC in 2014 identified the minimum carbon intensity of gas power generation with CCS as 94 gCO2eq/kWh, so it is very unlikely to fall within the declining threshold.

As the EC moves forward, it must avoid being tempted to tweak the criteria, no matter how strongly pushed. Including activities like those above would erode the relative consensus achieved so far around the criteria, and if stakeholders lose trust in the taxonomy’s sustainability, the whole aim of the process – to form a united definition of sustainable investments that will be widely recognised – will be lost.

Wither the money: Czechia must make better use of EU funding to meet EU climate goals

A new report finds that only 9.7 per cent of the current EU Regional Development and Cohesion Funds has been used for investments in clean energy, including energy efficiency or renewable energy projects. Ironically, the report also shows that the states that often are the loudest when asking for more money to support their decarbonisation efforts – such as Poland – are the ones spending the least on advancing cleaner energy.

The most prevalent problems were the low absorption capacity of the Member States i.e. the lack of capacity of economic actors to design and deliver “green” projects, as well as the high administrative burdens posed by national managing authorities, which discouraged and disqualified many from applying for funding.

Of the overall allocations for climate and energy-related areas, the largest share was dedicated to energy efficiency (64 per cent), followed by renewable energy (18 per cent), electricity infrastructure (7 per cent), research and innovation (7 per cent) and gas infrastructure (4 per cent). While energy efficiency has rightly received the largest share of funding, the majority of investments under this strand have gone into public infrastructure, leaving little for the residential building sector. Investing more into insulation of residential buildings would not only help reduce emissions, but also help cut energy poverty.

Furthermore, of the money allocated for renewable energy, the majority of funded projects were in support of biomass development at the expense of solar, wind and other renewables. This is a worrying trend, as the availability of sustainable biomass is limited across the EU and its increased usage could be damaging to the environment and the climate.

These issues appear mostly in central and eastern Europe, which lags behind in the transition to a clean economy and where EU funds account for the major share of public investments. A case in point is Czechia, where past experiences with corruption have led to stringent administrative conditions being placed on who receives EU money, resulting in many small and medium enterprises and smaller municipalities being left out and larger entities benefitting. Combined with low capacities to absorb the funds, much of the transformational potential of EU funding has been squandered.

Learning from past mistakes and enabling more EU money to be spent on low-carbon projects would bring double benefits, both for economies and climate efforts. Without aligning the financial flows in individual states with the EU decarbonisation policies, the EU as a whole will not have a chance of reaching its climate neutrality goal by 2050.

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