Blog entry

The dirty secret in Sofia’s backyard – the coal dust that only comes at night

Anyone who has ever driven from Bulgaria’s capital city, Sofia towards the country’s southwest has passed through the town of Pernik, just twenty kilometres away. At first glance, it is in no way different than any other ghost town in eastern Europe, a relic of the former socialist industrial thrive – a metallurgical complex at the entrance on the left, a coal rail to the right, a cement factory, abandoned warehouses. Finally, as you get nearer to the residential part, a smoking chimney of a lignite power plant appears, the last kick of a soon-to-die industry, which seems like it wants to take everyone down with it.

In 2013, the European Environment Agency’s report on air pollution found that four of Europe’s five cities with the most consistently high levels of particulate matter (dust so small it enters deep into our lungs and stays there) were Bulgarian. Our small town of Pernik topped the list as the dirtiest one, with too high concentrations of particulates in the air around half of the year. EU law only allows for 35 days of pollution above the regulated limit.

Nothing seems to have improved since 2013, in spite of the European Commission’s repeated warnings to the Bulgarian Government to act on air pollution. It all culminated with the European Court of Justice’s ruling against Bulgaria in April this year. The ruling confirmed Bulgaria’s law infringement by failing to stay within the allowed limits of coarse particulate matter (PM10) and for failing to take action to keep the exceedance period as short as possible.

Bankwatch’s own, independent dust measurements have concluded the same thing as well. During 19 days of monitoring PM10 and PM2.5 emissions in Pernik the EU limit on PM 10 was exceeded on 13 days, or 68 per cent of the time. As mentioned above, over the course of one year, the PM 10 limit may be exceeded no more than 35 times. The EU limit on PM 2.5 was exceeded on 10 of the 19 days of monitoring.

Daily average of particulate matter levels for PM 10 and PM 2.5 in Pernik, Bulgaria and EU limits for both pollutants. The graph shows how both PM 2.5 and PM 10 levels exceed the legally allowed limit: PM 2.5 on 10 out of 19 days of monitoring (53%), PM 10 on 13 days out of 19 (68%). — During more than half of the observed days, EU pollution limits were breached in Pernik, Bulgaria.

Night and day

We also found big discrepancies between the levels recorded during day time and night time, which may point to the dust filters of the nearby power plant not functioning properly or at all. The trend over the observed period shows an increase in PM10 levels every day after 7PM, lasting until 8AM the following morning, the highest peak being recorded on April 12, at 3AM, with 409 micrograms per cubic metre, eight times above the allowed limit.

Particulate matter levels for PM 10 and PM 2.5 in Pernik, Bulgaria at different times of day and EU limits for PM10 and PM2.5. The graph shows high peaks for PM 10. The highest value for PM 10 was recorded on April 12, at 3AM, with 409 micrograms per cubic meter. PM 2.5 levels spike on a number of occasions and are on average above the EU annual limit more often than not. — The pollution peaks during night time are clearly visible in the graph.

For our independent monitoring device this was quite a brutal conclusion. The high concentration of particles caused the device’s filter to be clogged much sooner than anticipated. The filter could no longer accept any more dust. The monitoring period had to be cut almost by half from a planned full month. With a machine it’s easy, you pull the plug and send it for a clean-up. But I can’t stop wondering about the locals’ health condition and how their respiratory systems handle these levels of pollution.

A cursed coal town

Nowhere in the town is it cleaner – there’s the power plant in one part, the coal transporting rail in the other, and right in the middle of it a now abandoned lignite open-pit, which used to fuel the power plant. No reclamation works have been carried out in this mine, the heap soil was left on site without any protection measures, making it very easy for the wind to carry the dust away.

A satellite image of Pernik. The lignite mining pits are almost as big as the town itself. — The mining pits are almost as big as the town of Pernik itself.

Until recently, this was an official mine under the concession of Recoal AD, a Belgian majority shareholder company. In 2005, the Bulgarian state signed a 10 year concession agreement with Recoal for the lignite field within the town of Pernik. In 2015, the agreement was not renewed, Recoal arguing that the costs of the facility were too high. They left without the compulsory land rehabilitation.

What makes the whole situation most frustrating is that with the ECJ’s decision to sanction Bulgaria for its failure to improve the air pollution, it is Bulgarian taxpayers who will bear the costs of the fine. This is the paradox of air pollution: the sources are quite easy to identify – a lignite power plant, a mine, an industrial facility, traffic etc. – and measures easily applicable on local level. Yet, in case of inaction a much larger segment of the population is affected, be it because emissions travel beyond city borders, be it because when eventually there’s a fine to pay, every citizen has to chip in.

Anti-coal campaigners may motivate themselves with a heart-felt ‘coal is dying’ when we witness the industry’s mounting struggles. But learning about towns like Pernik and how people are indeed dying from coal pollution is a humbling reminder of the work that’s still ahead of us.

Serbian mining company ignores desperate calls for compensation while Kolubara mine is reaching family houses

Every night in the last few months, Dragan Živanović has woken up to the sound of cracking tiles in his kitchen and bathroom. Neighbours Nebojša and Snežana Mitrović, take turns in walking to the bedsides of their five children to calm them down, as they too wake up crying in the middle of the night, scared by the howling sound of excavators near their house.

The village of Vreoci, Serbia, is home to the Kolubara mine, the country’s largest lignite open-pit, one of the biggest in Europe and financed by the European Bank for Reconstruction and Development. It used to be home to Dragan, Nebojša and Snežana and tens of other families. To them it is now a living hell.

In November 2007, the Serbian Government, EPS – the state-owned energy utility, and the local council of Vreoci agreed on the “Program basis for resettlement of the village Vreoci” according to which the entire village would be resettled by the end of 2015. Not only has this not happened, but the mining works have continued at a rapid pace, closing in on the locals’ houses and causing vibrations, noise and utter fear.

In February this year, in an emergency action, the mining inspection demanded one part of the village to be resettled by mid-April. The justification for this demand is not publicly available, but the locals suspect it was most probably a deep crack in the lignite layer underneath the village.

Everyone impacted expected their households to be promptly evaluated and expropriation money disbursed in order for them to find new homes and relocate as soon as possible. However, it took until April 9 when the expert came to the village to estimate the properties. The expert, however, did not visit all affected people, and even more worryingly, at the time of writing still no inventory of property has been produced.

Two weeks after the deadline given by the Mining Inspection and five families haven’t even received a paper listing their possessions, let alone receiving any compensation.

In 2015 the EBRD provided a EUR 200 million restructuring loan to the state-owned utility EPS that had among its conditions that a resettlement framework is to be developed, followed by specific resettlement action plans to be agreed on with affected communities. However, although the EBRD has been notified by EPS that the resettlement framework has been published, the document is nowhere to be found, and it has not been consulted with the communities or Serbian civil society organisations that follow the case.

Contacted by two locals in Vreoci in a desperate attempt to improve their unbearable situation and to speed up the fair resettlement process, the Bank is backing its client’s solution to offer temporary housing to the families living now closest to the mining front. However, once out of their homes and out of the excavators’ way, those people will be in a ‘grey zone’ and in a vulnerable and disadvantaged position to accept a final solution that may not be to their satisfaction. The locals have requested suspension of mining works in dangerous proximity to Vreoci until a final compensation is agreed and the families can relocate safely.

The EBRD annual meeting is taking place next week. The situation of Vreoci and several other villages in the Kolubara mining basin in Serbia, in connection with the restructuring loan that EPS has received, is definitely a hot potato for the meetings.

Looking at the ongoing detrimental impacts of EPS operations on local communities and the violation of the legal framework of Serbia one should ask what does restructuring mean in the EBRD’s and EPS’s view and at what cost can it be accepted?

Who really benefits from Georgia’s Nenskra hydropower plant?

Today the Asian Development Bank started its annual meeting and one of the projects that we will be discussing with the bank’s management and Board of Directors is a loan for the 280 megawatt Nenskra hydropower plant in the Svaneti region of Georgia. The ADB is planning to provide a loan of USD 176.70 million and a Political Risk Guarantee over USD 100.00 million for Nenskra, with a total cost of the project of USD 930 million. The project is under appraisal for co-financing by the Asian Infrastructure Investment Bank, the European Investment Bank and the European Bank for Reconstruction and Development.

All of these funders are state owned institutions.

The project promoter is JSC Nenskra Hydro – which is jointly owned by K-water, a Korean government agency (80% shares) and Georgian state owned Partnership Fund (20% shares).

Both of them are state owned institution.

And yet the project falls into the ADB’s category of private sector development.

The project’s contract is confidential, therefore issues like guaranteed power purchase terms, rate of tariffs, roles in distribution, payments of taxes, obligations of each party, etc. are unknown to the public. The government claims that the company requested the confidentiality of the contract as it carries out negotiations with development banks to receive funding.

Wait a moment, a company owned by two states (through their agencies) have difficulties with disclosing information because of negotiations with publicly owned international financial institution (in most of which Georgia is a shareholder)?

But this is not all – one of the documents disclosed by ADB stated that that the Power Purchase Agreement with the JSC Nenskra Hydro uses a “Take or Pay Model” of 1.196 GWh which equals the average annual production of the project. Furthermore, the Government of Georgia will be responsible for the construction of high voltage transmission lines and related infrastructure to transmit the electricity generated by Nenskra. All of this means that the project will have preferential treatment over other electricity producers in Georgia, including the government owned Enguri dam or private companies that currently operate in Georgia.

I am sure that there is some private interest in the project, but it still needs to be dug out. So far it is clear, that it is not the interest of local people – Svans – that for centuries live in the valleys impacted by the project, and who are losing their land and livelihoods. They will have to deal will all local project impacts.

Doing the same thing and expecting different results: Mongolia plans to curb air pollution with more coal

A new law on air pollution recently adopted by the Mongolian government is in part the result of massive demonstrations that swept the streets of Ulaanbaatar during the winter months, when pollution in the capital is at its worst. Mobilised under the umbrella movement ‘Moms and dads against smog’, the protestors signed petitions calling on the government to come with an urgent plan for tacking the overwhelming situation in the city, where emissions from the coal burned in the surrounding ger districts and three combined heat and power plants reached some of the highest levels in the world this past winter.

The new policy will soon be followed by a yearly action plan for reducing emissions, but the protestors and civil society groups working for cleaner air in the country should remain cautious. That’s because the government’s plan involves even more reliance on coal – hauled in from the massive Tavan Tolgoi mine in the south and then cleaned in as yet constructed processing plants before being burned in the ger districts that are now responsible for 60 per cent of total emissions in the capital. So the plan does not appear to tackle the underlining problem in Mongolia, which is its dependency on coal.

A new Bankwatch report presented this week in Ulaanbaatar argues that the energy plans of the Mongolian government – which have the backing of international financial institutions – are disconnected from the urgent need to improve the efficiency of an ageing energy system and at the same time address the massive potential of solar and wind energy in the country. The report shows how the 12 gigawatts of planned installed capacity by 2030 would exceed even the governments’ own projections for electricity demand. This is in part because it represents an unrealistic twelvefold increase in the current installed capacity of coal.

The report surveys a number of Mongolia’s coal power projects in the pipeline, including the 600 MW Tavan Tolgoi power plant in the South Gobi region, which would benefit mostly just three mines close to the Tavan Tolgoi deposit, including the EBRD and IFC-financed Oyu Tolgoi mine. In the capital, plans for a new combined heat and power plant supported by the Asian Development Bank and with potential involvement by the EBRD, would only add to emissions while not tackling the problem of burning coal in the ger districts, as these are not connected to the public utilities.

To better understand what is at stake with the governments’ plans for the continued use of coal, more than 40 members of civil society groups from the country gathered on 1 May at the Water Conservation Centre in Ulaanbaatar to discuss the risks of coal-based energy and the involvement of financial institutions in pushing for coal-based energy projects in the country.

Mongolia is at a crossroad, and the movement started by civil society this past winter is a sign for international financiers like the EBRD and the ADB to rethink their energy strategies for Mongolia and prioritise energy efficiency and renewable energy solutions for the the ger districts, rural areas and the people of Mongolia.

National and local levels play secondary role in Green Climate Fund, European Investment Bank project illustrates

Established as part of the UN Framework Convention on Climate Change ‘to address the needs of developing countries in overcoming the negative impact of climate change’, the Green Climate Fund (GCF) approved its first round of projects of 2017 earlier this month. At the beginning of April, 8 new projects worth USD 755 million were approved, bringing the total number of projects under the fund to 45 and a value of USD 2.2 billion.

Typically recipient countries access the fund directly or, increasingly, via an international entity like international financial institutions. The reason for this is that the requirements for the smallest funding category are the same as for bigger projects. This bureaucratic hurdle creates competitive disadvantages for national or subnational entities that want to directly access the fund.

Civil society observers monitoring the activities of the GCF have warned about the lack of such small-scale projects. Big projects hide more risks and the potential for negative impacts by lower levels of transparency and the impossibility to track the variety of funds, contracts, projects and activities.

One recently approved project is GEEREF NeXt, administered by the European Investment Bank. GEEREF NeXt represents exactly the type of project that the GCF should not focus on. It is a fund that will further distribute USD 765 million to other national funds. Instead of tackling specific climate issues, GEEREF NeXt will provide investments into a variety of subprojects in various funds to implement energy efficiency and renewable energy projects. It is unclear what these specific subprojects will be and what communities GEEREF NeXt will target.

Before the April GCF board meeting, the management of GEEREF NeXt discussed its proposal with civil society representatives, with the main topics covering the transparency of subprojects, the absence of criteria for hydropower and biomass energy sources, a commitment to paying taxes and the development of a gender strategy.

Some improvements to the project resulted from the discussions. Fund managers responsible for specific subprojects are obliged to report on how it meets particular standards, and a significant redesign of a Gender Strategy, Assessment and Action plan was made. Another positive is the new “Stakeholder Engagement Framework,” which might ensure that projects will be in compliance with the needs of local communities and other stakeholders.

At the same time, outstanding issues remain, the most significant being that the GEEREF team did not include criteria for biomass energy projects about what constitutes a ‘renewable’ source. In addition, there is a potential that the categorisation of hydropower projects could lead to financing environmentally-destructive ones. Finally, more ambitious targets for achieving gender equality, such as a specific rate of supported women-led SMEs, are needed.

It is a step in the right direction that project managers involved civil society in the project’s design, in order to embrace a diversity of opinions and to avoid the negative impacts posed by potential projects and to ensure that their goals are met. Moreover, the implementation of projects by national or subnational actors has a number of advantages: it enables increased country ownership of the funding and better equality and transparency. Finances are also more effectively allocated with no transaction costs and are better targeted to local institutions and harmonised with national priorities.

For further reading

IIED (2017): Delivering real change: getting international climate finance to the local level (pdf)

Both ENDS (2016): A CSO guide for engagement and local access

Why no Trans-Adriatic Pipeline (NO TAP), here or elsewhere

This article first appeared on the Re:Common website.

It was the end of February and the scene is Baku, the capital of Azerbaijan. During an official meeting, the Italian government was severely criticised for the considerable delays in the construction of the Trans Adriatic Pipeline (TAP), part of the Southern Gas Corridor.

With his tail between his legs, the Italian Minister for Economic Development, Carlo Calenda, declared that Italy would soon move forward with the pipeline construction. Calenda’s words sounded as a clear attempt to patch things up and reassure the banks – who are still to decide whether to grant the loans required by the Consortium- as well as the Azeri government and other international partners such as the European Commission.

Rather than seize this opportunity and prevent a project which will be a black hole for Italian and European public finances, the government chose to send hundreds of police to Melendugno, in the countryside of Salento, to defend the uprooting of olive groves to make way for the pipeline. This was despite lacking all the necessary permits to carry out such works.

While the inhabitants of Melendugno and Salento physically opposed the passage of vehicles in the field the mayors wearing tricolor sashes negotiated the suspension of the works with the police and the local government representative. Even the Governor of the Puglia region – Michele Emiliano – publicly denounced in a post on Facebook the removal of the first 211 olive trees (out of the 1900 to be “moved” in total) as illegal, and his statement rapidly spread in the news.

After three days of interventions, the mayors’ negotiations succeeded and the local government representative asked the company to suspend their operations. He also called the Italian central government to further verify the operations‘ compliance with the required permits, questioned by the inhabitants and the local authorities. As a consequence, the operations were temporarily stopped, but the central government’s consultation resulted in a renewed go-ahead for the company, who then resumed the removal of the trees.

But the protestors have not given up: just the night before the operations were supposed to start back, they put up stone barricades to block the access to the work site, making the continuation of the uprooting impossible. At the same time, as the situation echoed in the national and international news, more and more people expressed their solidarity with the protest, which now sees a solid front of around 500 supporters overseeing the construction site.

The works have not advanced since then, and are now officially interrupted again, due to a suspension of the permit by the Italian Ministry of Environment. The renewed temporary suspension was decided by court, following an appeal by the Puglia regional government which will be discussed in a hearing on April 19.

We stand in support of the No TAP Committee and the population of Melendugno and Salento against this unnecessary project. We believe it will do great, permanent damage to the areas where these communities live, as well as to the Italian and European citizens who are called on to fund this project.

Already in 2014, several months prior to the approval of the environmental impact assessment of the pipeline, we made clear the reasons of our opposition to the TAP project, which you can read here. Today, three years from 2014, and after more than four years of public campaigning and initiatives to expose the many negative aspects of this project and the deep gaps that are apparent in its economic and financial sustainability, we believe it is right to reiterate our NO to this mega project.

To those ten reasons stated previously as to why we stand against it, we can today add that:

TAP is not strategic

Oxford University has questioned the extent of the gas reserves in Azerbaijan. One of the members of its energy research team was interviewed during the Italian investigative tv program “Report” (RAI3 channel), which recently shed light on some of the dodgy deals concealed behind the Southern Gas Corridor project. The Oxford study can be consulted here.

Furthermore, the European Commission has justified the “strategic importance” of the pipeline by claiming the Southern Gas Corridor is an”alternative to Russian gas”. But in the past few years, relations between some governments which are part of the Southern Gas Corridor and Russia have changed.

Turkey has already signed an agreement with Gazprom to build the Turkish Stream. This will carry Russian gas to then be sold in Istanbul and to the European market including through the Trans-Anatolian Natural Gas Pipeline (TANAP) which is part of the Southern Gas Corridor. Greece has also signed an agreement with Gazprom for another pipeline that would connect to the TAP. The head of TAP in Italy, Michele Elia, has confirmed reports that his company is interested in selling gas, without being concerned about the actual source. This is not in the interests ofthe private citizen who actually pays for the construction of the pipeline.

TAP supports authoritarian governments

Azerbaijan and Turkey are two countries that in recent years have seen an escalation of repression by the State towards journalists, activists, intellectuals, and lawyers working in the defence of human rights. These countries are experiencing a profound crisis in their democratic structure, where hundreds if not thousands of political opponents have been arrested and where the ruling elites change the laws in their favour to weather the bad times, in violation of democratic principles.

Martial law is still in place in Turkey, while in Azerbaijan the latest reforms promoted by President Ilham Aliyev will allow him to be re-elected potentially forever, his son to become President despite his young age, while his wife has recently been appointed as vice President.

In this scenario, how can we believe that there may be independent oversight as to the construction of the project, or how the lands are acquired? How will European public funds for the project be managed, knowing that we are speaking here of billions of dollars?

It is undemocratic

From 2014 we have studied and compared our findings with activists, experts, and journalists from the different countries involved. We have visited over two-thirds of all the 870 kilometers of pipelines, and we have talked to the people whose lives will be impacted by the work – not only in Italy, but also in Greece and Albania.

We found that beyond the propaganda about “strategic importance” and how various executives point to define the pipeline as “a project of national priority” as well as of European interest, the reality is that families along the route have been imposed upon by this “pipe”, with little consideration of the direct harm it will cause them as a consequence.

Entire communities will see their economy distorted by not only the construction but also the future cohabitation with industrial personnel and equipment, which will be highly invasive. The project also potentially bears high industrial risks (including explosions) according to the standards established by the Seveso legislation, an EU law to guarantee safety for sites containing large quantities of dangerous substances, Many claim that in the TAP’s case this law has been bypassed, and even today this remains a controversial point. Different administrative appeals on the issue have been presented in Italy and Greece.

It is opaque and non-transparent

We do not feel at all reassured as to the real interests behind this project of 45 billion euros. We have made several requests for access to documents to the public institutions involved, organised public meetings at which the European Commission did not want to participate, asked specific questions to the TAP Consortium from which we haven’t had replies, sent letters to the European Investment Bank from which emerged the lack of due diligence around the project. For example, has anyone actually seen the TAP Consortium 2016 budget for the project? Has anyone read the agreement signed by the Italian Government with the TAP Consortium?Perhaps the Minister Calenda should seek to make this agreement public, so that today everyone could make their own assessment of the situation.

There is no gas – we do not need the pipeline

The European Commission has been knee deep in negotiations with Turkmenistan in persuading the government to sell its gas to European markets through the Southern corridor.

The talks, which began in 2011, foundered and Turkmenistan has begun construction of another pipeline that faces East, the TAPI. Without the gas from Turkmenistan, what exactly is the Southern Corridor? Selling Russian gas maybe? But do we still need this gas in Europe, following the collapse of gas consumption since 2009? We do not think so, and we believe that true independence from Russia will not be built on fossil fuels, including gas. The construction of the European gas market has nothing to do with our energy security and the future we want to build.

We believe that the European Commission should thank the resistance to TAP in Italy and the invaluable work of the experts and of persons and organisations that in recent years have spent time in achieving clarity on this project, which has consequently been found to be useless as well as harmful.

It makes no sense to build the TAP, not in Melendugno, nor anywhere else.

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