Blog entry

Landmark moment for Berlin’s heating transition: BTB bids farewell to coal

BTB – part of the E.ON group and one of Berlin’s three district heating operators – provides heat to 80,000 households, businesses, and public buildings, generating 682 gigawatt-hours (GWh) of heat and 22 GWh of electricity annually. Encouragingly, despite their ability to grow by 10 MW every year, BTB is now reducing emissions, thanks in part to its long-term strategy to become fully decarbonised by 2045.

With the end of coal at Schöneweide, BTB is embracing a more diverse and sustainable set of heat sources. One particularly exciting development is the integration of a heat pump that draws thermal energy from the nearby River Spree.

Beyond that, BTB is actively exploring innovations such as heat storage, grid optimisation, and advanced heat forecasting tools to ensure resilience and efficiency of its new system. In addition, the company would like to harness and integrate heat from wastewater treatment and data centres to harness the unused heat produced from their respective processes.

The district heating system of Berlin is one of the largest in Europe and is very similar to heat networks in central and eastern Europe. Like its counterparts in central and eastern Europe, it was a result of socialist planning during the post-war reconstruction period and was traditionally based on coal. Connected to over one million homes, its path to decarbonisation will be technically and economically challenging.

Public funding as a catalyst for change

Thankfully, financial support from the German state is making much of this transformation possible. Since September 2022, the government has launched the Bundesförderung für effiziente Wärmenetze (BEW) programme which is a financial source for district heating companies to decarbonise their systems, via renewables and heat recovery. This programme is worth EUR 3 billion until 2030, making it one of the largest district heating decarbonisation financial schemes of its kind in Europe, and can also be an example for countries in central and eastern Europe looking to develop district heating decarbonisation financing schemes.

But progress is far from frictionless. Like many other district heating providers, BTB faces a systemic issue: the lack of coordinated, city-level planning. For instance, infrastructure like wastewater treatment facilities – often a goldmine for heat recovery – are rarely designed with district heating in mind. Without integrated, cross-sector planning, valuable opportunities for sustainable heat generation are being lost.

Another, more delicate challenge is Germany’s cultural resistance to digitalisation – an issue that’s often overlooked in public discourse. Tools like smart metering and digital energy management are essential for a decarbonised heat network. Yet, due to strict data protection norms and public scepticism around digital tools, implementing these technologies at scale remains a significant hurdle.

The heat transition isn’t just an engineering challenge – it’s a social one, too. If we want to decarbonise effectively, we need the public on board. That means making these conversations accessible—not just for engineers and plant operators, but for everyday citizens as well. Bridging the gap between technical innovation and public understanding is the key to decarbonisation success.

Beyond technology

BTB’s move away from coal is a powerful symbol of what’s possible when policy, innovation, and ambition align. It also offers key lessons for municipalities across Europe, especially in central and eastern Europe.

But Berlin’s experience also highlights the complex terrain ahead – from digital transformation and infrastructure integration to public engagement. The heat transition isn’t just about replacing boilers and pipes – it’s about reimagining how cities generate, distribute, and value heat.

To succeed, the transition must be a shared effort across sectors and city agencies – but also one that includes the people who will ultimately live with its outcomes. Berlin’s farewell to coal is just one chapter, but a hopeful one, in the broader story of Europe’s heat transition.

Latvia’s cohesion policy at a crossroads: Balancing security priorities and green investments

Even before the European Commission announced in April 2025 that it would be seeking to propose a regulation amending EU cohesion policy funds under its mid-term review, the Latvian government had been reviewing its national spending plans for several months with the aim of identifying opportunities to redirect cohesion policy funds towards bolstering its national defence and security infrastructure.

Latvia’s new policy direction is understood to involve reallocating flexibility amounts and potentially cutting previously planned investments. And while funds will formally remain within the main thematic priorities, including those dedicated to climate and green investments, they may also be used for dual-use purposes such as supporting renewable energy projects that also enhance energy independence and security.

Though many amendments under the mid-term review are necessary and justified, some changes threaten to weaken climate and environmental policies. For instance, certain shifts appear unrelated to security, raising questions about their true benefits.

With final decisions still pending, the Commission and the Latvian government must carefully assess the country’s long-term needs and the consequences of all proposed changes before proceeding with the mid-term review reallocations.

Diverting funds from transport decarbonisation

One of the most concerning proposals, which affects the Just Transition Fund, would see a reduction in funding for decarbonising the transport sector, undermining Latvia’s climate and energy targets. Specifically, EUR 14.7 million initially allocated for zero-emission electric buses is set to be redirected to industrial park development.

This would be a considerable setback given the transport sector’s escalating emissions and significant investment gap. Apparently, the rationale for the decision is limited municipal interest due to doubts over the sustainability of electrified transport in rural areas with poor road conditions.

However, instead of ditching the measure completely, the authorities should engage with municipalities to understand the obstacles and amend the programme rules while maintaining the overarching goal of zero-emission public transport.

If no viable solution can be found, support should be redirected to other target groups within Latvia’s just transition regions, such as entrepreneurs tasked with promoting zero-emission mobility. In any event, the most important thing is to maintain investment in transport decarbonisation in alignment with the funding allocated under Latvia’s national energy and climate plan.

There is also the risk that industrial park investments may raise overall emissions. While these parks are expected to promote a climate-neutral economy, municipalities cannot guarantee that the facilities will offer greener alternatives to existing high-emission products and services. Currently, there is no rigorous selection or monitoring mechanism in place that would ensure only climate-positive companies benefit.

Additionally, significant funding originally designated for railway electrification is now expected to be diverted to Rail Baltica – the large-scale railway infrastructure project connecting the Baltic states and Poland. But while the project is much needed in terms of both sustainable mobility and regional defence, its ballooning costs and funding issues should not jeopardise crucial domestic railroad upgrades aimed at promoting public and zero-emission transport.

Circular economy investments dropped

Risks associated with the mid-term review are also evident in the likely elimination of funding for circular economy initiatives involving small and medium-sized enterprises, including projects aimed at improving product design, repair, and reuse.

EUR 1 million previously earmarked for this purpose is now set to be channelled into energy infrastructure that strengthens Latvia’s energy security, such as mobile transformer substations, emergency generators, and improved grid capacity for industrial parks.

Unfortunately, delays in developing regulations for the circular economy measure have made it an easy target for reallocation. Its focus on smaller, innovative projects, which typically require more administrative resources than large-scale ventures, may have also played a part.

One possible solution could be to amend existing waste management programmes under Latvia’s cohesion policy funds, reallocating some resources to small and medium-sized enterprises pursuing waste prevention initiatives.

Promising renovation programme needs more funding

The Latvian government recently launched a national multi-apartment renovation programme supported by EUR 173 million in cohesion policy funding. However, the available funds as of now have already been fully reserved. This is partly due to relaxed rules allowing project applications to be submitted before all technical documentation has been finalised, which could lead to some projects failing to reach the contracting stage.

Nevertheless, the huge interest in the scheme is encouraging. For years, the pace of building renovations in Latvia has lagged due to low public interest fuelled by financial fears and scepticism. Fortunately, the high demand now suggests a shift in public sentiment.

This latest programme introduces several progressive elements: up to 70 per cent support for prefabricated wood-panel renovations; up to 50 per cent support for cluster renovations involving three or more neighbouring buildings; up to 45 per cent for renovations involving the installation of ventilated façades; and targeted support for individual energy efficiency measures in the Latgale region – one of Latvia’s just transition regions.

Given this early success, additional funding should be allocated to maintain momentum. Continuity between support schemes is crucial, both for sustaining public interest and for preserving the capacity of the construction sector.

Striking a balance

Final decisions on the mid-term review amendments have yet to be made. But while the geopolitical crisis understandably requires funding priorities to be reassessed, this should not come at the expense of Latvia’s long-term sustainability goals.

Public resources are limited and precious. Their use must be based on thorough and transparent assessments of needs and impacts to ensure that short-term security concerns, however pressing, do not derail the environmental transformation already underway.

Black wool over the EBRD’s eyes

In July 2023, the EBRD approved a EUR 100 million loan to North Macedonia’s publicly-owned energy utility AD ESM. It was intended to provide ‘vital liquidity support to continue to endorse ESM’s decarbonisation strategy’ after the energy crisis and to keep the country on track with its coal phase-out commitments.

We were immediately worried that the company would abuse this financial support, at the very least by using savings in its own funds for further investments in coal infrastructure. However, the EBRD claimed in the project’s Board Report that this loan was not just ring-fenced from investments in coal, it was also conditioned on ESM’s commitment to decommission all coal-fired power plants by 2027 and to stop any coal mining operations or further coal exploration.

What the loan was not ring-fenced from is the country’s and company’s extensive track record of not complying with their commitments. ESM is continuing to pursue plans for new coal exploration and mining.

Four days after the loan was approved, on 25 July 2023, the company notified the Ministry of Environment of its intent to open a new open-cast lignite mine near the village of Zivojno. In December 2023, less than six months later, the company published a public procurement notice for project documentation for road infrastructure to transport coal from the planned Zivojno coal mine to the Bitola power plant. Just three months later, in March 2024, ESM signed a contract with a company to produce a feasibility study on a concession for the exploitation of coal at the Gusterica deposit near Oslomej, a power plant that — based on the commitment cited in the Board Report — was already supposed to be closed by the end of 2023.

We flagged to the EBRD that the company was not complying with its commitments, and after several months of back-and-forth communication, we received a response that:

ESM responded, clarifying that the Procurement process for the Zivojno mine was cancelled and such study was not performed. They further explained that the Study for Gusterica was not capital investment in new coal assets, but preliminary analysis made by the old local management of the TPP Oslomej. ESM’s new management, appointed in August 2024, confirmed that ESM or the Government do not plan any investment in new coal mines, as evidenced by ESM’s Investments plan and the Government’s single project pipeline list. Finally, ESM provided assurance that ESM is fully committed to the green energy transition.

We received this response on 21 March 2025. Just one day beforehand, on 20 March, the Ministry of Environment published an Environmental Impact Assessment (EIA) for the Zivojno mine. Public consultations were then announced and a public hearing held on 12 May 2025.

The study explains that the mine will have a surface area of seven km2, and the deposit of around 23.6 million tonnes of lignite will be extracted over a period of ten or more years. The extraction will begin three years after the project is approved since it will take more than two years for the surface soil layers to be removed. Such a project not only delays the 2027 coal phase-out – it completely disregards it and enables further coal use beyond 2040.

Legend:

Dark purple area – coordinates from the Zivojno concession agreement

Light purple area – coordinates from the Zivojno EIA study

Teal area – coordinates of a recently opened privately owned coal mine — Zabrdo

Top left corner – existing Brod-Gneotino coal mine in North Macedonia

Bottom right corner – existing coal mines in Greece

When asked about this during the public hearing, the experts working on the EIA claimed that the mine is only intended to bridge the gap until the coal-fired power plant becomes unnecessary for the country’s energy system, while allowing the company to avoid expensive lignite imports from Greece. But this is not a small project that has just appeared as a temporary solution to a new problem — it has been brewing for years, if not decades. There has been more than enough time to think of and implement alternatives since the first setting of a coal phase-out date in 2019, but ESM has never demonstrated real commitment to this goal. Somehow, three different governments and successive ESM management teams have managed to pull the wool over everyone’s eyes, claiming that the country is heading towards a quick and planned coal phase-out. The EBRD is not the only one who has been fooled.

Under the pretence that it is advanced in its decarbonisation efforts, North Macedonia has received technical assistance to prepare a Just Transition Roadmap. It was also one of the few chosen to be part of the Climate Investment Fund’s Accelerating Coal Transition programme and prepare an investment plan for the just transition. ESM has received millions of euros of technical assistance and loans for renewables projects that are yet to see the light of day. In addition, it received in excess of EUR 369 million from the national government during the energy crisis to ‘bridge the financial gap’ created by the need to import expensive coal and heavy oil. The EBRD’s EUR 100 million loan was just the cherry on top.

After all this, the only major ESM project that is going forward is a new open-cast lignite mine. The company is constantly using someone else’s money to produce high ambition plans that are not implemented, and that has freed up enough of its capital for investments in projects that are not aligned with either the country’s strategic priorities or EBRD policies.

This must stop – ESM needs to put its own money where its mouth is. The EBRD and other international financiers need to stop enabling ESM’s coal addiction. As long as they continue to pour money into a declarative decarbonisation and green energy transition that has no political will behind it, the company – and the government – will never transform into a responsible and accountable partner. The EBRD must insist that ESM cancels the Zivojno coal mine plans or immediately repays the entire loan. In future, it also needs to more closely scrutinise its clients’ performance and look at their deeds, not only their words.

Encouraging local input: Łódzkie voivodeship takes a more inclusive approach to just transition planning

An often thankless task

In Poland, many activists carry out their work after hours on top of their daily salaried jobs, and it’s not uncommon for small local grants to serve as the only source of funding for organising events and activities. A major issue, however, is that these funds rarely provide remuneration for the people driving efforts behind the scenes.

The unfortunate reality is that the vast majority of these activists – who continually strive to make positive societal changes and improve the welfare of their communities out of concern for the common good – don’t earn a penny.

That’s why it’s so important for regions supported by the EU’s Just Transition Fund to specifically allocate funds that support the development of community organisations.

Łódź and Silesia show the way

Fortunately, there’s now a growing recognition of how crucial it is to genuinely involve the public in shaping regional development. This is especially evident in regions like Silesia and Łódzkie voivodeship. For instance, the regional government in Łódzkie voivodeship has taken inspiration from a progressive measure adopted in Silesia that places social inclusion at the heart of its shift towards a more sustainable economy. And now the Łódz administration is preparing to roll out a similar programme of its own.

Simply creating space for this kind of initiative is already a meaningful step forward.

In an encouraging move, officials in Łódz have already started reaching out to potential participants well ahead of the programme’s anticipated launch in October 2025. In March, they presented their initial ideas during a conference in Bełchatów, the centre of just transition process in Łódzkie voivodeship, focused on empowering local communities in post-mining regions as they transition to a green economy.

Community and collaboration

The programme will mainly support small, local organisations in Łódz’s post-coal regions eligible for funding from the Just Transition Fund, with a particular focus on groups that work on a non-profit basis. The range of activities that can receive funding is broad, with priority naturally given to projects linked to the energy transition, ecology and social inclusion.

The programme will also promote initiatives aimed at building a strong sense of local identity, particularly those focused on regional history and heritage. The types of activities encouraged include workshops, conferences, study visits, information campaigns, counselling services, and a wide range of cultural education projects.

A key feature of the programme is its emphasis on partnerships between various stakeholders, including non-governmental organisations, local authorities and small businesses. However, one issue that’s provoked much debate is the programme’s requirement for a 5 per cent ‘own contribution’, which is likely to prove problematic for non-governmental organisations that generate no income.

In response, the Łódź municipality – the managing authority for the distribution of EU funds in the region – has proposed establishing a dedicated fund to cover the contribution, which would provide applicants with direct financial support for their chosen projects.

Bridging the urban–rural divide

While Polish cities tend to be home to more traditional non-governmental organisations, in rural areas of the country, it’s often groups like rural housewives’ associations that play a central role in social life. To reflect these differences, efforts have been made to expand the range of eligible applicants to include all types of grassroots organisations, as well as their potential partners, such as local media outlets.

Indeed, there has been strong opposition to the idea of allowing large-scale national non-governmental organisations to participate in the programme, since smaller local groups typically lack the experience and resources to compete with larger organisations in writing applications and raising funds, putting them at a disadvantage from the very start.

Cause for hope?

From the perspective of the members of the monitoring committees tasked with overseeing the fair distribution of EU funds, this move to recognise the diversity of the non-profit space is an unusual but welcome development.

Typically, these committees are given a set of predefined criteria with limited scope to change anything other than minor details. Additionally, the managing authorities often come under pressure to quickly allocate funds, which means they tend to resist any input that might slow things down.

In Łódź, however, something refreshingly different has happened. The regional government has opened up the basic outline of the programme for public consultation long before any concrete decisions have been made. And there’s also an understanding that the finer details will still be worked out and reviewed in collaboration with local organisations.

The final shape of the programme is still to be ironed out, and the initial ideas may not be perfect – but they offer real promise. More importantly, the consultation process led by the officials in Łódź stands out as a model of good practice worth celebrating. At a time when meaningful public involvement in EU funding decisions is still too rare in Poland, this approach needs to be recognised and replicated.

Karaganda, Kazakhstan: Why are public concerns about a risky wastewater project being ignored?

Project capacity under scrutiny

The Karaganda wastewater treatment plant modernisation project – a EUR 100 million initiative backed by the Kazakh government – is set to be approved by the EBRD’s Board of Directors on 7 May 2025. The project involves the construction of a new wastewater treatment plant, the modernisation of the existing sewage pumping station, and the installation of sludge treatment facilities. However, the planned capacity of the plant has become a focal point of criticism.

The project’s environmental impact assessment specifies a maximum daily treatment capacity of 130,000 cubic metres, which local activists claim is insufficient. For context, the city’s existing sewage treatment plant has a daily capacity of 232,000 cubic metres. Municipal water utility Karagandy Su, the EBRD client on the project, claims that the actual daily wastewater throughput ranges from 70,000 to 160,000 cubic metres depending on the season, peaking at 190,000 cubic metres during the spring flooding period.

According to the city’s 2007 master plan, the daily wastewater inflow in 2005 was 202,360 cubic metres at a time when the city’s population stood at 446,000. Today, the population stands at 525,300 and, based on the 2025 strategic environmental assessment report for the soon-to-be revised master plan until 2040, is projected to reach 570,000 by 2030 and 650,000 by 2040. Much of this growth, driven by extensive residential development, is expected to occur in the southeastern parts of the city – the same districts the new facility is expected to serve.

Locals also warn that the capacity estimates fail to account for significant water losses caused by severe degradation of the sewerage system, which requires extensive rehabilitation. In 2023 alone, Karagandy Su reported 19,580 clogs in the sewerage network, with 84 per cent of the system in a state of deterioration. Residents routinely report sewage leaks both within and outside the city.

Emergency services attend a collapsed sewer in Karaganda in 2024 (photo: Pavel Podvigin).

Violations of public hearings laws

Citizens first voiced their concerns in January 2024 during public hearings on the project’s environmental impact assessment. According to project monitors, fewer than 10 of the 72 questions submitted by the public were marked as ‘withdrawn’ in the official hearings protocol, with more than half of the questions designated as unresolved or given an ambiguous response.

This, according to the Centre for the Introduction of New Environmentally Safe Technologies (CINEST), a local public organisation monitoring the project, is a direct violation of Kazakhstan’s legislation on conducting public hearings. This law states that in cases where comments and proposals submitted by interested state bodies or the public are marked as ‘not withdrawn’ in the public hearings protocol, the project proposer must revise the draft report accordingly.

Despite having flagged these violations with the Committee for Environmental Regulation and Control and other departments within the Ministry of Environment and Natural Resources, local monitors have yet to receive a clear response as to why their legitimate concerns have not been addressed.

Nor has the project been revised in line with public input. In accordance with legal requirements, all clarifications requested by residents should be reflected in the environmental impact assessment. As things stand, given concerns about the reliability of the data provided in the existing assessment, the proposed capacity may not be sufficient to meet the city’s current and future needs, potentially posing severe environmental risks.

High-risk project design

As the EBRD board prepares to approve the project, Karaganda is bracing itself for its annual spring flooding season. Residents remain concerned about the risks posed by poorly managed rain and flood waters, especially during peak periods, which could directly affect the new wastewater treatment plant. Currently, the city has no functioning stormwater drainage system in place, which means that all storm and rainwater either flows directly into sewage wet wells or funnels into local water reservoirs.

CINEST representatives communicated their concerns during a joint meeting between Bankwatch and the EBRD’s project team in October 2024. They were informed that stormwater management fell outside the scope of the project and was not the responsibility of the project implementer, but rather of the city administration, which would need to secure funding to resolve the issue separately.

In December 2024, the EBRD published its public consultation report on the project. It recommended that excess floodwater be managed through the use of emergency basins but provided no details on their proposed capacity. The report also noted amendments to the environmental impact assessment, including information on the city’s plans to develop a separate, closed stormwater drainage system.

However, activists point out that the master plan, published some two decades ago, also contains plans for a stormwater drainage system that never came to fruition, with little progress beyond occasional emergency repairs of burst pipes and leaks. Repeated requests by activists for access to the amended environmental impact assessment and the project feasibility studies – funded through a EUR 1 million technical cooperation grant from the EBRD – have gone unanswered.

Pressure mounts on the EBRD

The EBRD project team maintains that the current design offers the best available technical solution for handling Karaganda’s stated wastewater volumes and points to the city’s plans to upgrade the remaining outdated infrastructure. However, monitors have found no concrete evidence of coordinated local schemes to modernise associated infrastructure critical to the project’s success.

With Karaganda’s population on the rise, existing treatment capacity will soon prove insufficient, requiring either a substantial upgrade or the construction of a second facility. Yet without a comprehensive municipal plan to integrate long-term wastewater treatment requirements, repair existing dilapidated sewerage channels, and establish a functioning stormwater drainage system, the new treatment plant is likely to become a wasted investment.

More alarmingly, the continued disregard for public concerns in the decision-making process undermines community trust in development funding, particularly for high-risk projects such as this. Activists insist the design must be amended to include greater treatment capacity or, at the very least, condition a coherent city plan for modernising stormwater infrastructure and complementary treatment facilities. Failure to do so risks hazardous overflows, with potentially grave environmental consequences for Karaganda residents.

Pedalling forward in Daugavpils: Towards a cyclist-friendly city

Daugavpils City Municipality, in collaboration with Latvian environmental organisation Green Liberty and Riga Technical University, presented their recent study examining the state of cycling in the city. It outlines the infrastructure challenges facing the city, identifies areas where improvements are needed, and proposes actions for promoting cycling among the residents of Latvia’s second-largest city.

Expert insights and recommendations

Riga Technical University researcher Antra Viļuma emphasised the many benefits of urban cycling: improved public health, less air pollution, a more liveable urban environment, and a reduced climate footprint. As well as showcasing positive examples from other cities, Viļuma shared the results of surveys conducted among Daugavpils residents along with the findings of an on-site urban assessment.

She called for a gradual but consistent approach to developing cycling infrastructure, recommending that cycle paths be incorporated wherever possible as part of regular street construction works. While fragmented, this strategy, she argues, represents the most practical way forward in the absence of funding for large-scale, high-cost projects.

She also highlighted the need for the municipality to establish a dedicated cycling coordinator, which would signal a commitment to increasing capacity and ensuring cycling-related initiatives are advanced as Daugavpils works towards becoming a more cyclist-friendly city.

Tools for better decision-making

Rūdolfs Golubovs, chairman of the City for People association, illustrated how other cities have upgraded their cycling infrastructure through relatively modest investments. He underscored the importance of volunteer involvement, and shared a number of useful methods for effectively conducting bicycle traffic counts to support more effective infrastructure development.

One notable tool is the Strava app, which offers insights on cyclists’ habits by aggregating user data on routes and their intensity. This zero-cost platform could serve as an invaluable data resource for planners, helping them analyse traffic flows and identify priority areas for development. Golubovs also presented visual examples of how simple improvements in infrastructure or traffic planning could be rolled out in specific locations in Daugavpils.

Local initiative shows the way forward

Viktorija Kozlovska, representing local cycling enthusiasts from Sniegpulkstenīte tourism club, introduced the club’s contribution to the promotion of cycling culture in Daugavpils. She stressed the importance of information and education, calling on the municipality to place more focus on public involvement. The efforts of the club’s members exemplify the vital role that local residents can play in improving their city and local neighbourhoods.

Featuring engaging and constructive discussions on the general principles of cycling infrastructure planning and offering concrete solutions for locations throughout Daugavpils, the event was organised as part of the LIFE-funded project ‘RePower the Regions: Ambitious and inclusive clean energy plans for repowering the just transition regions’.

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