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Blog entry

Prisoners of coal

Stanari power plant is owned by EFT Rudnik i Termoelektrana Stanari d.o.o., a subsidiary of the UK-headquartered EFT Investments SE. The power station is located near the Stanari coal mine, which is located approximately 70 kilometres east of Banja Luka in Republika Srpska. It is the first privately-owned power plant in the Western Balkan region. Originally the project was planned and permitted to be 420 MW, using supercritical technology, but was later changed to 300 MW and lower efficiency subcritical technology. No updated EIA was carried out based on the new plans.

The presence of the plant and mine is easily seen and felt in the village – they dominate the landscape, there is dust on the cars and the rivers are running brown and red from the overburden of the excavation. The company is also heavily involved in matters that are usually strictly municipal responsibility.

As one of the locals, who requested anonymity, describes it: „In this area, we are mostly dealing with heavy dust and noise coming from the nearby coal mine. Sometimes, especially when it’s windy, you can feel it in the air and see the dust on cars and other objects. At the moment there is only one water tank truck that is circling around the mine, but during the hot and dry summers we have this is far from enough. Also the biggest issue here in Stanari is the relationship between the coal mine and the local authorities – if a local wants to build anything near the mine, the municipality first needs to ask EFT for its expert opinion and future excavation plans before issuing a building permit. Also, when it comes to water supply, we cannot drill for new water wells without their (EFT’s) permission because of their concession for water exploration and usage for the area. Everything, just about everything here is done because and for the purpose of the mine and power plant.“

When we visited the mine mid-summer, even this water tank truck was nowhere to be seen and the trucks moving in and out of the mine, transporting soil and coal, were creating clouds of dust, impacting the health of workers and residents alike.

We monitored the dust pollution in Stanari between 4 July and 1 August 2019. The chosen location was at a similar distance from the power plant and from the mine in order to try and evaluate how they are impacting air quality separately. 

As can be seen from the graphs below, and as was expected for the summer period, there were not many breaches of the PM10 and PM2.5 limit values – the national (and EU) 24-hour limit for PM10 was exceeded twice and so was the WHO recommended 24-hour limit for PM2.5 – but short-term dust pollution peaks were alarming.


Analysis of the results reveals that the ash disposal site, the lignite mine and the conveyor belts, spread out north of the location of where the dust monitor was installed, are an enormous source of particulate matter pollution.

Every time the wind was blowing from the side of the mine, the monitor recorded high peaks of pollution regularly going over 300 micrograms/m3 – with the highest one on the morning of 17 July reaching 828 micrograms/m3. 

On the following graphs these peaks together with the polar-diagrams showing the source of the pollution can be seen. 

Historically, a lot more focus has been put on the long-term impacts of air pollution on public health and that is why legislation is also aligned to prevent long-term exposure. However, research into the impacts of short-term exposure is no less worrying. According to many studies, even a short-term increase of dust concentration in the ambient air of 10 micrograms/m3 can increase cardio-pulmonary mortality. With high and regular pollution peak events, this can become a serious public health problem for the population of Stanari, even without taking into account the chemical composition of the dust.

While there are no requirements regarding the short-term emission values in the national or EU legislation, having sources of pollution that can contribute significant amounts of dust in a very short timespan can be especially deadly during the winter months when air quality is aggravated by other sources and when pollution is trapped in the valley due to temperature inversion. 

At the same time, the Air Quality Directive requires continuous monitoring in the nearest residential area near industrial sources for the purpose of health protection, which Stanari does not have. This way sources of air pollution can be properly identified and mitigation measures can be taken for all of them because only by reducing emissions from all sources, can pollution levels be kept within legal limits. 

Since we have now shown that the mine is a major source of particulate matter, urgent measures, in the form of an automated sprinkler system and a properly-placed protective tree belt, should be taken as soon as possible. Continuous air quality monitoring with real-time publicly available information must be installed in Stanari to monitor the effectiveness of the measures taken and to provide input for their future improvement, as well as to alert residents when pollution peaks occur so they can protect themselves.

Uncertain future for Slovakia’s development funds

Despite the mounting concerns about blended finance, Slovakia’s export-credit agency (ECA) Eximbanka SR is about to join the club. The national parliament will vote on the new legislation in September, to take effect the following month. 

Experience shows, blended finance works best in middle income countries for “physical infrastructure” projects, and not so well – in truly vulnerable communities that urgently need development aid in the areas of health, education, and social justice.

Moreover, the involvement of the private sector in disbursement of development aid may add to developing countries’ debt vulnerability.

Delivering effective development aid through blended financing requires a particular development expertise, experience, and commitment, which is not at all Eximbanka SR’s focus.

Its primary role has always been to simply support Slovak businesses abroad without burdening public coffers, and some of its projects (e.g. crude oil financing in Cuba) are not just unaligned with the sustainable development mandate, but are in direct opposition to it.

In its new role, Eximbanka SR will be tasked with the implementation of blended finance mechanisms of the EU designed for development assistance and cooperation (External Investment plan, EIP, and European fund for sustainable development, EFSD), despite its sheer lack of experience of working with the primary target – vulnerable communities in low income countries.

It remains unclear how Eximbanka SR will be delivering on the development objectives while its own portfolio contains some heavy polluters in politically volatile countries with proliferating human rights abuses. If Slovakia is serious about its commitment to the Sustainable Development Goals (SDGs) and the Paris agreement, it should think twice before burdening an unrelated institution – Eximbanka SR – with the mission it has never signed up for.

More on the issues of blended finance: https://www.counter-balance.org/wp-content/uploads/2019/07/NGO-submission-to-High-Level-Group_July2019_final.pdf

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): 

  • https://dennikn.sk/1512005/co-sa-stane-ak-nam-kuba-buduci-rok-prestane-platit/
  • https://dennikn.sk/1383341/za-postojom-k-venezuele-moze-byt-aj-biznis-v-bratislave-o-nom-rokoval-vplyvny-politik-z-kuby/?utm_source=follow_authors&utm_medium=email&utm_campaign=mnt-email.author.article.new-15.02.2019-21&utm_content=24332
  • http://www.teraz.sk/slovensko/clovek-v-ohrozeni-slovenska-pomoc-na/251073-clanok.html?mostViewedArticlesInSectionTab=0

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.

Image result for eu flag    Image result for both ends logo

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

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