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Slovakia’s climate duplicity

Most Slovaks would be surprised to find out their public funds finance a fossil fuels industry in Cuba. The national export-credit agency (ECA) Eximbanka SR channels as much as 60 per cent of its entire financing into the island country, notably into the two oil power plants: Mariel and Felton. Both are rife with serious environmental and human rights problems.

The environmental and social study revealed that the projected emissions of sulphur dioxide on the  the “modernised” sixth block of the Felton power plant will be 40 times of what is permitted in the EU, and 50 times of what is recommended by the World Health Organisation. The levels of small dust particles, which are particularly harmful for health, are also expected to go above the levels permitted in Europe. 

The human rights situation of local inhabitants also leaves much to be desired – any disagreement  with the officially supported project (or simply an attempt to find out about health impacts), can be dangerous. Transparency or environmental consultations with affected communities are practically non-existent. 

On top of it all, these foreign investments make little economic sense. In an economically volatile country such as Cuba, the risks of default are too high. Eximbanka SR itself admits that the risk is “quite significant”. 

In the face of the climate emergency, we cannot afford burning fossil fuels – not at home, not abroad.  In the interconnected world where pollution and climate change know no border, this two-tongued approach to the environment is not just morally wrong, but also ineffective.

 

More on this (in Slovak): 

The secret life of export credit agencies

What are ECAs?

ECAs are a kind of investment insurance agency that absorbs the risks of doing business abroad. Using state-backed export loans, guarantees and insurance, ECAs protect domestic exporters from a payment default caused by economic or political changes in the project country. This payment failure can then be turned into bilateral national debt of the project country to the export country.

By some estimates, ECAs provide an average of USD 200 billion every year, a large portion of which is invested in politically-volatile countries that often score low on environment protection, human rights, and transparency metrics.  

The problem with ECAs

Unlike development banks that are obliged to follow their own environmental and social standards no matter the project country, ECAs have until recently operated without restrain, and the present set of standards for these bodies – the OECD’s ‘Common Approaches’ – covers less than a tenth of all ECAs transactions.

Left to their own devices, ECAs can engage in any dubious project with environmental, social, political or other risks that would have never been financed otherwise. Many such projects – massive hydropower dams, highly-emitting power plants, questionable nuclear facilities – would have been better off unrealised. 

Moving forward

ECAs do not have a development mandate per se and do not provide ‘aid’, but as public institutions with powerful finance muscle, they have a responsibility to be more transparent, accountable to the public, and in line with the social and environmental standards that other financial institutions follow.

Governments around the globe and European leaders should oversee such large financial streams, which hides in the grey zone of trade policy and uses its obscure status to engage in projects that are rightfully deemed too risky and potentially harmful by others to ever support.

For these reasons, our informal group of NGOs aims to improve transparency and reporting requirements of the (ECAs) in central and eastern Europe. Project is managed by the Centre for Transport and Energy in the Czech Republic, and the members CEE Bankwatch Network in Hungary, Poland, Slovakia and Croatia.

With more transparent and accountable ECAs, as well as other development finance schemes, public financial flows can better contribute to the UN Sustainable Development Goals and the Financing for Development process.

This content was produced with the financial support of the European Union. Its contents are the sole responsibility of Citizens for Financial Justice and Both Ends and do not necessarily reflect the views of the European Union.

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The Skopje Green City Action Plan – developing a city for citizens or for decision makers?

Skopje is one of 29 cities that is preparing Green City Action Plans (GCAP) to help address its most pressing climate change and local environmental challenges. The plan is prepared with the support of the European Bank for Reconstruction and Development (EBRD) and donor funds, including financing from the Green Climate Fund (GCF). The EBRD-GCF agreement includes nine countries eligible to receive support – Albania, Armenia, Georgia, Jordan, Moldova, Mongolia, North Macedonia, Serbia and Tunisia.

While in theory the “EBRD Green Cities strives to build a better and more sustainable future for cities and their residents”, the practice so far shows that participation of civil society organisations (CSOs) and the public in the development of the Skopje Green City Action Plan is not welcome. The presentations and workshops are invitation-only and the CSOs that have really made a positive difference in greening Skopje during the last several years are not yet involved despite formally declaring interest to be engaged as stakeholders in the technical assessment and planning process.

In recent years Skopje is mostly famous for being the most polluted capital in Europe and one of the cities with the lowest quality of life. The citizens’ unrest and opposition for many of the planned and ongoing projects is growing because they do not reflect their current needs and issues. Thus, an urgent shift in the city’s development is necessary, together with a stronger enforcement of legislation and most importantly wide and meaningful public participation.

The Skopje GCAP presents a long-term green city vision (10-15 years) based on a previously identified baseline data and strategic priorities in the following six sectors: transport, energy, building, industry, water, solid waste, and land-use. The development of the GCAP is a process spreading over 12 months and the final GCAP should reflect the inputs of all stakeholders, including CSOs and a wider public.

There have been many plans and programmes made by the city officials to accommodate the needs of the businesses and construction companies – from urban plans decimating green areas to non-inclusive traffic plans impeding the mobility of many citizens, including pedestrians, elderly and disabled persons, and parents.

The last thing that this city needs is another action plan that does not reflect the issues that people are facing every day. 

That is why after we found out that the GCAP is under development during the EBRD Annual Meeting in early April 2019, we instantly requested from the EBRD to ensure wider public participation. We prepared a shortlist of CSOs that are the most relevant at this stage and we were promised that they would be invited to the workshop where the baseline data and the priority issues would be presented and concluded. But this never happened. Green organisations were not invited to the workshop. Instead, after the event, the City of Skopje sent out an email requesting a written input, but it did not include local CSOs that work on urban mobility, air pollution, waste management, urban planning, etc. 

So now again, the priorities are mostly defined by the input from authorities and municipality owned companies that can barely provide that baseline data – the very same stakeholders whose work is heavily influenced by political decisions and who are in big part responsible for many of the problems the residents are having, such as a barely functional waste management system, over-urbanisation at the expense of green spaces, non-existent waste water treatment and inefficient public transportation, to name a few.

“External experts and citizens representatives will confirm or dispute the relevance of identified green city challenges,” – EBRD Green Cities Programme Methodology.

In a last effort to include timely participation of citizens, we requested that the deadline for comments on the Technical Assessment Report is prolonged. Every single project and action that will come out of the GCAP will influence the lives of hundreds of thousands of people in one way or another and every single one of them is derived from the baseline data and the prioritisation. So how does one develop an action plan that will bring a better future for the residents, if the residents are not asked what future they want for themselves?

Looking ahead, we sincerely hope for a truly transparent and participatory process for the GCAP for Skopje. In a society that has been plagued by corruption and incompetence for decades, the spirit of cooperation from the EBRD policies and the Aarhus convention is most welcome in any future plans and developments.

For the third year in a row, the European Commission asks Romania to stop big polluters

This is the third consecutive year when the Commission asks Romania to act. Last year it noticed again a lack of action, when the Govora and Mintia power plants emissions exceeded several times the legal limits for sulphur dioxide and dust.

The Industrial Emission Directive regulates emissions of dust and greenhouse gases like nitrous oxide, but also sulphur dioxide, which causes acid rains. These substances not only contribute to the acceleration of climate change, but threaten human health, causing thousands of new illnesses in Europe every year. To fight these problems, ten European states – among them the United Kingdom, Italy or Slovakia – will close their coal industry before 2030, and another 8 EU member states are already coal free.

Since national authorities did not answer requests to find a solution to these problems, Bankwatch Romania has been notifying the European Commission since 2016 about the coal power plants which are functioning without an environment permit, and about the fact that their emissions are above the legal limit.

The Industrial Emission Directive is not correctly transposed in Romania because the fines operators receive for breaking the law are not proportional and dissuasive. They are worth not more than a few hours of sold electricity. Furthermore, as the Romanian Ministry for Environment confirmed in a recent press release, the power plants challenge the fines in court and then units are operated unbothered while the lawsuit takes place – in some cases spanning several years.

Meanwhile, the Turceni, Rovinari and Paroșeni power plants received environment permits, but the situation at Mintia and Govora remains unchanged: their emissions are still well above the legal limit and threaten the health of the nearby population in Deva and Râmnicu Vâlcea and well beyond. Everybody else in the country is affected, as these substances are carried by wind for hundreds of kilometres.

The European Commission has been aware of this situation for several years, but chose to send another letter to Romania, and not a reasoned opinion, which is the second procedural step in the infringement procedure, before notifying the Court of Justice of the European Union.

For more than three years, the country did not take any steps towards implementing the “polluter pays” principle. However, it already feels the effects of climate change: more floods, longer periods of drought, record temperatures. It would certainly be less expensive for Romania to modernise or close these units.

[1] https://ec.europa.eu/commission/presscorner/detail/en/inf_19_4251

Third time’s a charm? New attempts to sell off unprofitable Czech coal plant in Turkey

The Czech Minister of Industry and Trade announced that there is apparently a bidder who had not managed to submit an offer on time during the previous round. With a new deadline set for 21 August, the bidders can make new offers for purchase.

The offered price is CZK 4.4 billion (EUR 170 million), which amounts to just about a third of the initial investment made by Czech export credit agencies (ECAs). 

The Czech Prime Minister, together with the Industry Minister, plans to visit Turkey in the first half of September to discuss the sale further.

Read more (in Czech)

Belgrade incinerator: Serbia to be a dumping ground for outdated technology?

On 28 June the Serbian Ministry of Environment published two environmental assessments: for the planned municipal waste incinerator and landfill gas plant at Vinča, just outside Belgrade, and for a new waste landfill next to the existing one at the same site.

Nothing unusual about that, except that the EBRD had already published an environmental assessment on its website last November which encompassed all these project elements in one. Ne Da(vi)mo Beograd and Bankwatch submitted 92 pages of comments to the bank in December, and in May received a response with the project promoter’s answers.

Expecting our comments to have been addressed in the new version of the studies, we were surprised to find that they repeat many of the same deficiencies that we pointed out in our comments submitted in December.

The main issue is that no-one has yet come up with any numbers to prove that the incinerator will be compatible with waste prevention and separate collection schemes. These will not only be obligatory for Serbia in the next few years as it advances towards EU membership, but also highly beneficial in terms of protecting public health and saving energy and resources.

It still looks to us like the incinerator will crowd out resources for prevention and recycling and will depend on a large increase in Belgrade’s waste generation which, if it implements EU circular economy policies, may never arise.

But one important thing has changed since our last round of comments in December. On 17 June new pollution control standards called the Waste Incineration Best Available Techniques (BAT) Conclusions were approved in the EU. The Conclusions will immediately be binding for plants permitted after they are published in the EU Official Journal in the coming months.

No-one can say they did not see this coming. The need to develop new BAT Conclusions was stated already in the 2010 Industrial Emissions Directive and drafts of the new rules have been available for two years already. Yet so far, the project promoter and the EBRD have failed to ensure that the project complies with the new rules.

If the Vinča plant goes ahead, it will receive its integrated permit well after the publication of the new standards. While Serbian legislation is unclear on the extent to which these are binding, the EBRD’s Environmental and Social Policy is not. Its requirements on industrial pollution state that: “Certain projects that, due to their nature and scale, would be subject to the EU Industrial Emissions Directive will be required to meet EU Best Available Techniques (BAT) and related emission and discharge standards, regardless of location.”

Irrespective of the rules, failure to apply the latest standards raises the question of why the public in Belgrade is not deserving of the same level of environmental protection as EU citizens. Any government that cares about its citizens cannot permit the construction of a new incinerator that does not afford maximum protection for public health.