• Skip to primary navigation
  • Skip to main content
  • Skip to footer

Bankwatch

  • About us
    • Our vision
    • Who we are
    • 30 years of Bankwatch
    • Donors & finances
    • Get involved
  • What we do
    • Campaign areas
      • Beyond fossil fuels
      • Rights, democracy and development
      • Finance and biodiversity
      • Funding the energy transformation
      • Cities for People
    • Institutions we monitor
      • European Bank for Reconstruction and Development
      • European Investment Bank
      • Asian Infrastructure Investment Bank
      • Asian Development Bank (ADB)
      • EU funds
    • Our projects
    • Success stories
  • Publications
  • News
    • Blog posts
    • Press releases
    • Stories
    • Podcast
    • Us in the media
    • Videos
  • Donate

Home > Archives for Blog entry

Blog entry

Happy birthday, Khadija!


In one of 40 events across Europe, a graffiti has been inaugurated in Warsaw today, to celebrate the 40th birthday of Azeri journalist Khadija Ismayilova on May 27, who has been incarcerated for more than 500 days after a politically motivated trial in her home country. The actions across Europe are meant to highlight the dire situation of human rights in Azerbaijan and to criticise the European Union’s cosy relationship with the country’s dictatorship.

Khadija became famous by exposing corruption among the Azerbaijani ruling elite and human rights violations in Azerbaijan. Most recently her work was confirmed in the Panama Papers, a leak of confidential papers incriminating dozens of political figures, including Azerbaijan’s ruling family.


The birthday graffiti in Warsaw invites people to take a selfie with Khadija and send it to the Azeri embassy. (See a map of where the graffiti is located >>)

After being arrested under ridiculous charges, Khadija was sentenced in September 2015 to 7.5 years in prison. She has received numerous awards, including the Barbara Goldsmith Freedom to Write Award by PEN, Anna Politkovskaya Award and the UNESCO’s prestigious Guillermo Cano Press Freedom Prize in May this year.

Cosying with a dictatorship

In a bid to import gas from Azerbaijan to Europe, EU leaders and finance institutions are warming up to the Aliyev regime.

Find out more

But the story of Khadija is not an isolated case. Azerbaijan is the worst regime in Europe. Since the Aliyev family took over power in 1993 no free and transparent elections have taken place and independent media have experienced enormous pressure. More than 80 political prisoners are held in the country. Reporters Without Borders rank Azerbaijan 163 out of 180 countries in their press freedom index.

Azerbaijan’s regime heavily relies on money obtained from oil and gas exports to consolidate its power, while trying to hide the truth about human rights violations and corruption in Azerbaijan. For exposing this, Khadija Ismaylova was imprisoned.

In a bid to import Azeri gas to Europe, leading EU politicians overlook the relationship between the dictatorship’s power and hydrocarbon exports. The Southern Gas Corridor, a series of mega-pipelines meant to bring gas from the Caspian region to Europe, is being promoted by all means, even though a study has shown (pdf) that, considering the EU’s own data on gas demand, the gas is not even needed.

But the outlook for Azeri gas hasn’t put the conscience of ordinary Europeans to sleep who celebrate Khadija’s birthday today with the message: “We will not turn a blind eye to human rights abuses in Azerbaijan, the worst European dictatorship. Happy birthday Khadija – bütün yaxşı Khadija!”

You can send your own message of support by using the hashtag #FreeKhadija or sending an email to the Azeri embassy in your country (find a list of them here).

Images

More photos from the action can be found on Polish Green Network’s flickr account.

#FreeKhadija

 

Time for Europe to stop supporting Ukraine’s risky nuclear power sector


This article first appeared on Energy Post.

Three decades after the Chernobyl catastrophe and five years after the Fukushima disaster, Europe appears to be slowly coming to terms with the risk of keeping nuclear power as part of its energy mix. In Ukraine, however, the government is eager to maintain, even enhance, its reliance on nuclear energy as if neither Chernobyl nor Fukushima ever happened.

In fact, generous financial support from the EU now effectively enables prolonging the operation of Ukraine’s Soviet-era nuclear reactors well beyond their original expiry date.

The country’s ageing nuclear fleet has had a disturbing track record of mishaps and failures over the past few years. Yet, Ukrainian authorities only make minimum efforts to ensure due process when extending these nuclear units’ lifetimes, overlooking the risk to people in Ukraine and across Europe.

Since 2010 Ukraine has already approved lifetime extensions for four of its 15 nuclear units. Two more could be greenlighted later this year. (A decision was originally planned for this month, but this has been postponed due to the financial crisis of Energoatom, Ukraine’s national nuclear energy generating company.) Yet, time and again what followed cast serious doubts over the reliability of these power plants and the decision-making processes behind their continued operation.

Expiry dates

Here’s how this atomic debacle unfolded so far. In December 2010 the Ukrainian authorities approved the first lifetime extension. Unit 1 in the Rivne power plant, working since three decades, was allowed to continue operations for 20 more years. Barely a month later an accident happened, and the reactor’s output had to be reduced by half.

Unit 2 in the Rivne power plant was also granted a 20 years lifetime extension. Activists and civil society organisations criticised the decision-making process allowing these nuclear reactors’ expiry dates to be rewritten. In March 2013, the Espoo Convention‘s Implementation Committee ruled the decision indeed was in breach of the treaty, since Ukraine did not carry out assessments of the impacts the project can have on people and the environment in neighbouring countries.

But this did not deter the Ukrainian government. In December 2013 it approved another lifetime extension, this time for unit 1 in the South Ukraine power station. Energoatom, Ukraine’s national energy operator, conducted technical checks of the nuclear reactor prior to the decision, but these might not have been thorough enough. An independent expert assessment released in March 2015 criticised the re-licensing process that led to the approval of the lifetime extension, and warned that the reactor is suffering critical vulnerabilities.

South Ukraine‘s unit 2 was suspended in May 2015 when it reached its original expiry date. But this was only temporary, to allow necessary safety improvements. Seven months later, in December 2015, Ukraine’s nuclear regulator decided the reactor can be brought back online and continue working for ten more years, even though 11 safety measures of the highest priority had not been implemented.

Reckless adventure

Ukraine’s neighbours are also concerned. Romania, Slovakia, Hungary and Austria have sent multiple questions for clarification and requests for participation in trans-boundary consultations. But Kiev, in response, denied its obligation to conduct any.

One might think that this experience, or perhaps civil society’s repeated warnings, would make decision makers reconsider this reckless adventure. But not the Ukrainian government.

The 30 years’ old reactor in unit 1 of the Zaporizhia nuclear power plant has reached the end of its design lifespan just before last Christmas and was taken off the grid. Unit 2 in the same power plant, Europe’s largest, was also switched off once it exceeded its original lifetime in February.

The Ukrainian nuclear regulator will be deciding on lifetime extensions for both units this year. But a series of incidents in late 2014 were Zaporizhia’s latest signs of instability. Blackouts in large parts of Ukraine in November have been aggravated by an emergency shutdown of unit 3 of Zaporizhia following an accident, Prime Minister Arseny Yatsenyuk revealed only several days later. The following month unit 6 in the same power station was briefly taken off the grid after one more incident.

These might sound like minor hiccups, but they should be seen as warning signs of these reactors’ precarious state. In fact, Energoatom is currently in dire financial straits and it is unclear whether the implementation of all necessary safety upgrades in the Zaporizhia nuclear units will be completed any time soon.

Frontlines

Even people working in the Zaporizhia power plant, located just 250 kilometers from the frontlines of the ongoing conflict in eastern Ukraine, are worried. In April last year the chief specialist on the ground told a Bankwatch team that nuclear power plants were simply not designed to withstand an armed conflict.

Yet, Ukraine’s addiction to nuclear energy would not have been possible without the EU’s support. The European Bank for Reconstruction and Development (EBRD) and Euratom have each contributed €300 million to a so-called safety upgrades programme, which effectively enables these lifetime extensions.

Acknowledging the risks involved, Germany, Switzerland and Italy have already decided to end their nuclear energy programmes without waiting for an accident, small or large, to happen. But taxpayer money from the very same countries is still being used to fuel the Ukrainian government’s nuclear energy fixation.

We reached out to the European Commission’s Directorate General for Economic and Financial Affairs which oversees half of the EU’s financial support to the safety revamp of Ukraine’s nuclear power plants. They argued there is no connection between the safety upgrade programme’s timeline and that of the lifetime extensions project.

Sustainable solution

Ahead of the decision on prolonging the operations of the two nuclear units in the Zaporizhia power plant, the EBRD and the European Commission should reflect on the experience from previous reactors which have been granted lifetime extensions. It is high time for the EU to acknowledge its responsibility and suspend its support until Kiev starts taking into account the safety of both Ukrainians and Europeans beyond its borders.

Ultimately, patching up these ailing nuclear reactors is no sustainable solution. The experience so far shows that the Ukrainian government’s stubborn attempts to keep its nuclear fleet on EU-funded life support are futile at best, and outright dangerous at worst.

If Europe truly wants to stand with Ukraine, both should recognise the urgency in exploring a better, safer energy path. In 2014 nuclear made up less than 30 percent of total installed capacity, and even now, when the share of nuclear power is over 50 percent due to a drop in overall demand and a shrinking share of coal in the energy mix, reactors are not working to full capacity. Materialising the country’s vast wind and solar potential and investing in energy efficiency, particularly to cut losses in distribution grids, could effectively make Ukraine’s outdated nuclear energy array completely redundant.

The alternative might be history repeating itself.

No security for Europe from the Southern Gas Corridor


Proponents of the Southern Gas Corridor, a system of pipelines meant to bring gas from the Caspian region to Europe, have one more reason to celebrate at tomorrow’s ground-breaking ceremony of the Trans-Adriatic Pipeline (TAP), the Corridor’s end piece, in Greece after the European Bank for Reconstruction and Development (EBRD) announced that it considers a record loan of EUR 1.5 billion for the project, increasing the possible public funding for the Southern Gas Corridor to at least EUR 7 billion.

The Southern Gas Corridor has been promoted by the European Commission as a key infrastructure project to secure the European Union’s energy supply and reduce its dependence on particular gas suppliers, most notably Russia.

With a planned volume of initially 10 billion cubic meters (10 bcm) annually and up to a fanciful 80-100 bcm in the future, the pipeline system indeed opens up a new supply route. But with an ownership structure heavily influenced by Azerbaijan, it may end up not increasing Europe’s energy security but becoming a costly and useless infrastructure that might even put a tool for political leverage in the hands of the authoritarian Aliyev regime.

Unprecedented public finance support

The four puzzle pieces of the Southern Gas Corridor (SGC) – the Shah Deniz stage 2 gas field in Azerbaijan, the South Caucasus Pipeline extension (Azerbaijan-Georgia), the Trans-Anatolian Pipeline through Turkey (TANAP) and the Trans-Adriatic Pipeline (TAP) through Greece-Albania-Italy – are not only prioritised in the EU’s foreign and energy policies, but also slated for extensive EU public finance support and favourable legal and tax rules.

The European Investment Bank (EIB) is considering loans worth EUR 1 billion for TANAP and another mind-boggling EUR 2 billion for TAP, which would be the biggest single investment by the EIB. In addition to the announced EUR 1.5 billion for TAP, the EBRD is involved in a range of loans (in cooperation with other lenders) over almost USD 1.2 billion for Shah Deniz (here and here) and is also rumoured to consider support for TANAP. The World Bank is expected to decide in July over a USD 1 billion loan for TANAP.

In addition to public loans, TAP was also granted a favourable 25 years tax deal for the Greek section which, as a state aid measure, has been recently approved by the European Commission.

Read more

Background, campaign news, publications on the Southern Gas Corridor.

See our campaign page

Azerbaijan’s strong grip on the infrastructure

With such massive taxpayer-backed support, Europeans should expect (and are made to believe) that the Southern Gas Corridor will provide Europe with secure control over a large portion of its gas needs. Yet none of it is the case.

So far, only gas from Azerbaijan’s Shah Deniz gas field is slated to come to Europe through the Southern Gas Corridor. To add gas from other countries in the Caspian Region and beyond requires more pipelines and further negotiations with potential suppliers (Turkmenistan and Iraq have been mentioned among others). Even the energy agreement between the European Union, Azerbaijan and Turkmenistan is currently stuck.

But while the Southern Gas Corridor’s initial 10 bcm from Azerbaijan can only cover 2-3% of Europe’s gas import needs, Azerbaijan will also have strong influence on the Southern Gas Corridor via its state energy company SOCAR.

In 2013, TAP has been granted an exemption from third party access – an EU rule to avoid monopolies and improve competition which requires energy infrastructure to be accessible for other suppliers to access the infrastructure. For 25 years, the owner of the TAP pipeline – the TAP AG, of which SOCAR owns 20% – will have exclusive rights to use the initial capacity of 10 bcm of the pipeline. In practice this means that the only gas delivered to Europe through TAP until roughly 2045 will come from Azerbaijan, unless the pipeline capacity will be increased before then, which so far is still written in the stars.

According to the EIB’s project summary, also TANAP has been granted special or exclusive rights while operating in a non-liberalised market. Both TANAP and TAP are considered public sector projects, subject to EU procurement procedures. Yet, not a single public EU entity will be able to control the infrastructure and its availability to other gas suppliers.

In addition to owning 20% of shares in the private Swiss based consortium TAP-AG (the rest belongs to BP (20%), the Italian Snam S.p.A. (20%), Belgian Fluxys (19%), Spanish Enagás (16%) and Swiss Axpo (5%), SOCAR also has a majority share of 58% in TANAP (the rest is owned by Turkey’s national energy company BOTAS (30%) and British Petroleum (12%)).

At the same time, SOCAR is still set to purchase a 49% share of the Greek national gas transmission and distribution operator DESFA, who will be responsible for the day-to-day operation of the Greek TAP section, ensuring the reliability of gas transmission and maintenance. (The size of the share had been reduced from the initial 66% for which SOCAR won a tender in 2013 after the European Commission intervened, demanding 17% to be sold to European operators.)

Risks for Europe

If Azerbaijan’s regime decides to shut off supply or if political upheaval results in disruptions, the risks for Europe’s energy supply will be very limited. But without the gas from Azerbaijan, one of the most expensive pipelines ever will simply be useless.

In fact, even a look at the EU’s own gas demand data shows (pdf) that Europe will not need the gas and that building a pipeline of such proportions is a waste of money.

Which begs the question why supplying a maximum of 2-3% of the EU’s import needs with Azeri gas, through infrastructure under strong Azeri influence, becomes one of the EU’s biggest flagship projects ever?

Bosnia and Herzegovina signs deal for Tuzla 7 coal plant construction – but its economics are shrouded in mystery


Bosnia and Herzegovina and its neighbours are among the few European countries still planning to build new coal plants. Most EU countries are not only not building new ones, but are looking to phase out the ones they already have. Just recently, Belgium and Scotland closed their last coal-fired power plants and others including the UK, Austria and Portugal aim to phase out coal within the next ten years.

Such moves are certainly influenced by climate considerations, but let’s face it, economics plays a crucial role. I doubt we’d be witnessing such a fast decline of the coal industry if burning coal was highly profitable.

Yet here in southeast Europe, the myth that “coal is cheap” is proving hard to shift. The latest manifestation of regional governments’ refusal to believe that times have changed is today’s signing of an annex to the contract between Elektroprivreda Bosne i Herzegovine (EPBiH) and China’s Gezhouba Group for the latter to construct a new 450 MW lignite unit at the Tuzla power plant.

The original contract was signed in August 2014 between EPBiH and China Gezhouba Group for EUR 785.7 million, but it was later admitted that the project was not economically feasible in this form. This ought to have been clear before the contract was signed, not only afterwards. In July 2014 Bankwatch and our partner Ekotim warned that the EPBiH’s own figures showed that if the cost of construction rose by EUR 50 million – hardly a rare occurrence in large infrastructure projects – it would be tipped into economic unfeasibility, and an analysis by economist Vladimir Cvijanović published later in the year showed (pdf) that the price of coal from the nearby mines on which the project was relying was unrealistically low.

Coal in the Balkans

Find out more

Today’s annex is reported to bring the cost down to EUR 722 million, which is of course better than EUR 785.7 million, but important questions remain unanswered:

  • What technical compromises have been made in order to bring down the cost?
  • What future electricity prices are being assumed?
  • What coal price is being assumed? In the original calculations presented to the Federation of BiH Parliament, it was stated that:
  • “the price of coal should not rise above the current level which is already now above the price foreseen in the investment documentation for unit 7 (4.75 KM/GJ) […] In the event that it does, the competiveness of the current generation and feasibility of the realisation of the new units will be threatened.”

    Yet in 2014 the sales price for coal for power plants (pdf) was 4.90 KM/GJ. Moreover the sales price is nowhere near to reflecting the production costs in the Federation of BiH’s mines, which in 2014 – the latest year for which information is available – amounted to 6.58 KM. None of these prices include the investments that would need to be made into the mines to continue production for the new unit.

  • Have future costs of CO2 emissions been included in the calculations and if so, at what price?
  • Is the plant feasible if the planned 350 Banovići lignite plant, less than 30 km away, is also built?

Toolkit on Balkan coal finance


Visit the website

Bosnia and Herzegovina has apparently managed to persuade China to provide a loan in EUR rather than USD in order to mitigate exchange rate risks – the Bosnian Mark is pegged to the Euro – but negotiations are still ongoing about whether the period for paying off the loan can be extended to 15 years instead of 10.

The Federation of BiH government plans to provide a guarantee for the loan, but it is not clear under what conditions, which as well as concerns about debt, also raises issues of compliance with its state aid obligations under the Energy Community Treaty.

The latest changes to the project have taken place well away from the public eye so it is impossible to analyse them in more detail and come to clear conclusions about the project’s feasibility. This in itself raises a red flag, and if the Federation of BiH government wants to convince anyone that this project is going to be a success, it will need to be much more ready for open debate about it. Of course this should have happened before the signing, not afterwards, but it is still far from certain that the plant will be built: Tuzla 7 does not yet have an updated environmental permit, let alone a construction permit, and no financing contract has been signed.

Without these conditions fulfilled, the project’s future is just as uncertain as it has been for the last two years.

For European public finance, where will all roads lead from Paris?

Signing the Paris Agreement is an important step in Europe’s contribution to the global effort to tackle the climate crisis.

But funding this commitment necessarily passes through the public coffers. To kick-start the much-needed energy transition– by swiftly cutting emissions to reach the global carbon neutrality the Paris Agreement prescribes for the second half of this century –a change of paradigm in public investments in energy infrastructure is needed.

But current trends in European public finance – namely the energy investments of the European Investment Bank, (EIB) the European Bank for Reconstruction and Development (EBRD) and the European Regional Development and Cohesion Funds – demonstrate a worrisome tendency towards business as usual.

As the EU’s house bank, the EIB does certainly financing renewable energy projects, but this support is overshadowed by its investments in fossil fuels. From 2013 to 2015, the EIB’s lending for renewables decreased from almost EUR 3 billion to less than EUR 2 billion. At the same time, investments in fossil fuel projects reached stable level of over EUR 2 billion annually. The EIB is also expected to extend Europe’s largest ever loan – EUR 2 billion – for the dubious Trans Adriatic Pipeline, one part the immense import infrastructure known as the Southern Gas Corridor. The bank is also considering another billion euros for the Trans Anatolian Pipeline, another piece of that import puzzle.

The EIB has repeatedly voiced its commitment to tackling climate change, but the actions of the world’s largest public lender must better match its rhetoric. In its revised climate strategy adopted last September, the bank set aside just a quarter of its EU portfolio for ‘climate lending’. This portion includes loans for renewable energy, energy efficiency, sustainable transport, afforestation and adaptation to climate change.

In some EU countries the share of EIB investments in climate-related projects is considerably larger than in others. A Bankwatch analysis shows that between 2013 and 2015, the EU’s richer members received the lion’s share of this climate finance, averaging 39 per cent of all EIB loans. At the same time, in 18 other EU countries, climate action finance registered an average of 18 per cent of total EIB loans.

Energy efficiency is one area where EIB investments can make a difference. Energy intensity varies widely across the EU. But according to our analysis, five EU countries received EIB loans for energy efficiency amounting to two to four times the EU average of 3.6 per cent of the total loans. At the same time, in five of the ten most energy intensive EU economies, EIB lending for energy efficiency was below the EU average. If the EIB focuses on boosting energy efficiency especially in these five countries (Estonia, Bulgaria, Slovakia, Poland and Netherlands) it could make a substantial contribution to lessening these countries’ dependency on fossil fuels.

The EIB is not the only financial tool at the EU’s disposal that can help bloc cut its emissions. Central and eastern European Member States are dependent on European Structural and Investment Funds, yet are reluctant to make any strong climate commitments. Instead of using EU funds for catalysing a transition to a decarbonised, renewables-based and resource-saving economy that respects the planet’s boundaries, their investment approach mostly maintains the fossil fuels-based, energy-intensive economy that threatens the long-term sustainability of European societies. Bankwatch research reveals that for CEE countries, only 7 per cent of the EUR 178 billion in EU funds will be invested into renewables, energy efficiency and smart grids, and that the integration of climate considerations into all plans and projects – as required under EU law – remains superficial.

At the same time, road infrastructure receives the highest share of EU funds for the transport sector at more than 50 per cent, whereas sustainable transport modes beyond railways are marginalised. These nine CEE countries will spend only EUR 30.5 billion on climate action, which is little more than 17 per cent of their total EU funds allocations.

In addition, the EBRD has also come up short on its climate rhetoric. While the bank is well aware of the economic risk of continued investments in fossil fuels – recently it even explicitly warned governments of oil, gas and coal exposure – it has so far failed to change course. The EBRD has been disturbingly generous with support for fossil fuel projects. This trend is particularly evident in hydrocarbon rich countries like Azerbaijan, where EBRD loans for gas and oil only serve to perpetuate fossil fuel dependency – on which the current authoritarian regime has built its power – and blocks the energy, economic and political transformation the country desperately needs.

In the EU’s southern and eastern neighbouring regions, energy lending from both the EIB and the EBRD has been overwhelmingly dominated by fossil fuels. A recent Bankwatch study found that during the period 2007-2014, hydrocarbon projects in the European Neighbourhood have received three times more support than sustainable energy ones. The EIB alone supported fossil fuel projects to the tune of EUR 3.2 billion, and extended merely a fourth of this amount, EUR 780 million, to energy efficiency and renewable energy projects.

So while the Paris Agreement signals the twilight of the fossil fuel era, EU public money seems unable to let go of the types of projects at the root of the climate crisis. The signing of the Paris Agreement should be the cue for the reform of Europe’s public financial institutions. EU governments, who are shareholders in the EIB and EBRD, must ensure that financing for sustainable energy is not simply a green veneer to mask the banks’ unsustainable hydrocarbon portfolios.

Europe’s Keystone XL: Planned gas pipeline is reckless


This article was first published on Climate Home.

The recently adopted Paris Agreement has given unprecedented momentum to the long term effort to tackle the climate crisis, and the EU prides itself on being one of its architects.

Yet Europe’s – and humanity’s – fossil fuel obsession looks far from over as the EU is nowadays advancing what can be considered as the European version of the Keystone XL pipeline.

Stretching across 3,500 kilometres from Azerbaijan’s Caspian coast to southern Italy, the Southern Gas Corridor is planned as a chain of mega-pipelines designed to feed Europe’s energy appetite with extra 10 billion cubic meters of gas every year, an amount that could later be doubled.

The European Investment Bank (EIB) is considering a €2 billion loan, the largest in Europe’s history, for the Trans Adriatic Pipeline, the western section of the Southern Gas Corridor. It is also looking into supporting the central section, the Trans Anatolian Pipeline with a loan worth €1 billion. But the justifications for such an enormous undertaking are questionable at best.

Does Europe even need more gas? Data shows quite the opposite. European gas demand has been dropping since about a decade, and gas imports are actually likely to shrink over the next 35 years, as the European Commission itself forecasts.

In fact, as the EU’s Court of Auditors has recently pointed out (pdf), even these forecasts have been inflated due to the Commission’s incapability for generating projections of EU gas demand.

According to the EU’s Energy Roadmap 2050, the longer term goal of a decarbonised Europe would instead be achieved through a shift to renewable energy sources, which would also help reduce the continent’s dependence on energy imports.

Not only does European gas demand keeps falling, the EU already has surplus of gas import infrastructure. The Court of Auditors specifically noted that EU policy commitments, especially those related to climate change, are lacking a comprehensive assessment of the infrastructure needed.

Therefore, a massive project such as the Southern Gas Corridor is only likely to turn into a liability.

Read more


Background, updates, publications on the Southern Gas Corridor.

See our campaign page

Proponents of the project argue for its necessity as a substitute for Russian gas imports. But it is no other than Russian energy giant Lukoil, as part of a larger consortium, that is controlling the tap of the Shah Deniz gas field, the source of the Southern Gas Corridor, and mostly thanks to a recent €500 million loan from another public lender, the European Bank for Reconstruction and Development. A bank official is also reported to have recently said the bank is considering finance for sections of the Southern Gas Corridor.

The answer for Europe’s energy security woes is not with fossil fuel imports, especially not from authoritarian regimes such as Azerbaijan.

Rather, to truly boost energy security, EU public investments should go to home grown wind and solar power, high energy efficiency potential and an actual decrease in energy consumption along with better integration of EU internal energy market and infrastructure.

Last month, EU leaders discussed Europe’s contribution to the global effort to tackle the climate crisis in light of the Paris Agreement. The international accord requires nations to progressively ratchet up their climate goals.

With the Southern Gas Corridor project already being constructed, the EU – whose climate action and energy commissioner claims to have led the so-called High Ambition Coalition in Paris – risks not even meeting its current goals, and pushing Europe even farther from its decarbonisation objective.

It is difficult to see how such long term hydrocarbons project can be in line with the international community’s commitment to achieve net zero global emissions after 2050, as also agreed in Paris.

In fact, the Southern Gas Corridor would be a triple whammy.

Firstly, increasing gas supply for the sake of increasing gas supply is only likely to trample the EU’s energy efficiency goals.

Secondly, perpetuating the dominance of hydrocarbons in Europe’s energy mix could mean blocking the much needed expansion of renewable energy sources such as wind and solar.

Lastly, channelling EU funds, including from international financial institutions, to this project would significantly curtail the EU’s ability to achieve energy sovereignty in a cost-effective and sustainable way.

Ultimately, going ahead with this reckless energy adventure necessarily means rejecting science. As the climate crisis unfolds, more and more studies, including analyses by the International Energy Agency (pdf), demonstrate the need to leave most of the recoverable fossil fuel reserves in the ground if we are to have any chance of averting the worst impacts of climate change.

In order for the Southern Gas Corridor not to become a stranded asset – an immense waste of taxpayer money – the EU would have to scale down its climate and energy targets when it actually needs to increase them.

And with a huge corporate lobby apparently having already managed to bend EU policy in favour of gas, it really is up to the European public to push back.

« Previous Page
Next Page »

Footer

CEE Bankwatch Network gratefully acknowledges EU funding support.

The content of this website is the sole responsibility of CEE Bankwatch Network and can under no circumstances be regarded as reflecting the position of the European Union.

Unless otherwise noted, the content on this website is licensed under a Creative Commons BY-SA 4.0 License

Your personal data collected on the website is governed by the present Privacy Policy.

Get in touch with us

  • Bluesky
  • Email
  • Facebook
  • Instagram
  • LinkedIn
  • RSS
  • YouTube