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Ahead of Dubrovnik 3SI Summit, 47 civil society organisations warn against Western Balkan gas addiction

In a joint statement, the groups warn that far from merely replacing Russian gas, the plans would massively increase the region’s gas consumption and its dependence on imported fossil fuels. 

For several years, the United States has been pushing projects like the Greece to North Macedonia interconnector, liquid gas (LNG) terminals in Montenegro and Albania, and the southern gas interconnection between Croatia and Bosnia and Herzegovina.

At this week’s Three Seas Initiative Summit in Dubrovnik, an inter-governmental agreement is planned on the latter, while a planned US-Montenegro agreement has already met with strong resistance from civil society and people living near the planned LNG terminal in Bar.

Compared to the EU, the Western Balkan countries have low or no gas dependence. Despite a reduction in consumption, in 2024, gas comprised over 20% of available energy in the EU. But in the Western Balkans, the most gas-dependent countries were Serbia (14%) and North Macedonia (12%). In Bosnia and Herzegovina gas makes up less than 3% of energy, with Albania, Montenegro and Kosovo not connected to international gas infrastructure.

But instead of seeing this as an advantage to capitalise on, most Western Balkan governments are actively planning gas pipelines, power plants and LNG terminals that could collectively triple their 2023 gas consumption. These would, according to the joint statement, either entrap the countries in costly import dependence, or end up as stranded assets. 

Pippa Gallop, CEE Bankwatch Network: ‘In the midst of yet another fossil fuel crisis, it’s unbelievable that governments are still planning new gas pipelines and power plants. They would cost billions, even before the costs of gas are included, and would likely end up as stranded assets, or be heavily subsidised by taxpayers. Planning and construction could easily take a decade in most cases – too late to replace Russian gas – and the region does not have money or time to waste on such expensive mistakes.’

The groups are calling on the region’s governments to focus on appropriately-sited solar and wind generation – supported by existing hydropower and strong grid connections – for electricity generation, and heat pumps, geothermal, and ambient or leftover heat for heating and cooling. They also call for more action on energy efficiency and electrification of the heat and transport sectors.

Contacts:

Pippa Gallop, Southeast Europe energy policy officer, CEE Bankwatch Network

pippa.gallop@bankwatch.org

Gligor Radečić, Gas campaign leader, CEE Bankwatch Network

gligor.radecic@bankwatch.org

Notes for editors:

The joint statement, which includes links to the sources of information, is available at link.

For further information on the Western Balkan countries’ gas plans as of September 2025, see here.

Changing the dealer, but keeping the addiction

Environmental organizations today condemned the new joint statement between US and 12 central and eastern European countries promoting increased imports of U.S. liquefied fossil gas (LNG) to Europe, warning that it repeats the very mistakes that triggered Europe’s energy crisis. 

Eliot Garnier-Karcenti from Food and Water Action Europe: ‘Framing fossil gas expansion as ‘energy security’ ignores a simple reality: dependence on imported gas, whether from Russia or the United States, exposes Europe to volatile global prices, geopolitical shocks, and long-term infrastructure lock-in.’  

Before Russia’s full-scale invasion of Ukraine in February 2022, the EU was 44% dependent on Russia for its gas supplies. Four years later, the United States is well on track to become Europe’s largest gas supplier, overtaking Norway. 

Diana Maciaga from Polish Green Network: ‘Diversification of fossil fuels is not diversification of energy. ‘Replacing one dealer with another does not solve the structural problem. It prolongs it. 

It is also politically risky. Building long-term European infrastructure around U.S. LNG assumes a stable partner for decades, an assumption the U.S. regime’s authoritarian turn has repeatedly challenged in the last year.’ 

Denis Žiško from the Aarhus Center in Bosnia and Herzegovina added: ‘The current administration in the United States has been very direct about dismantling the EU legal order in multiple areas, from supporting far right politicians, dismantling civil society, weaking EU environmental safeguards and attacking digital regulations.’ 

Gligor Radečić from CEE Bankwatch Network: ‘The statement’s commitment to mobilizing export credit agencies and multilateral financial institutions for gas infrastructure is particularly alarming. Public money should be building renewables, grids, storage and efficiency in the EU and neighbouring countries — technologies that cannot be weaponized or manipulated, which lower bills for both households and industry.’ 

Contacts 

Gligor Radečić, CEE Bankwatch Network, gligor.radecic@bankwatch.org,  

Eliot Garnier-Karcenti, Food & Water Action Europe, egarnierkarcenti@fweurope.org  

Denis Žiško, Aarhus Center in Bosnia and Herzegovina, denis.z@bih.net.ba  

Diana Maciaga, Polish Green Network, diana.maciaga@bankwatch.org  

EU climate fund commits over half a billion to fossil gas expansion

The largest share of the EUR 1.8 billion approved was allocated to much-needed investments in electricity grids, renewable energy, batteries, and the decarbonisation of transport. Yet, some funding has once again been directed towards fossil fuel projects, namely, combined heat and power (CHP) gas plants in Bulgaria and Czechia. Although limited in this round, these projects are expected to receive more than EUR 630 million from the Fund in the coming years.  

The Modernisation Fund, a flagship EU climate finance instrument, is designed to convert carbon market revenues into investments for the energy transition in 13 lower-income member states. However, by the end of 2024, the fund had already channelled over EUR 4 billion into unsustainable energy – of which more than half went to gas pipelines and gas-fired power plants, according to a Bankwatch report released in May. 

In Bulgaria, EU decarbonisation money is supposed to enable a full or partial conversion of CHP plants from coal to fossil gas by 2030. These investments are labelled ‘hydrogen ready’. For this purpose, the Bulgarian authorities have now received EUR 15 million via the Modernisation Fund and are expected to receive an additional EUR 65 million. 

In Czechia, support from the Modernisation Fund is meant to help build the Trmice gas plant project. With an initial investment of EUR 5 million, out of nearly EUR 183 million in total that will be requested from the Fund, this plant will have a capacity of 100 megawatts (MW) in heating and up to 150 MW of electricity. 

An additional EUR 5 million in fresh EU climate cash is destined for another new gas power station in place of the EME-1 lignite-fired plant. This large-scale project includes 300 MW in heating capacity and 500 MW in electric capacity, as well as a hot water accumulator and energy storage. The total investment via the Modernisation Fund is expected to reach more than EUR 360 million. 

Bankwatch and other civil society groups have been calling on national authorities and the Modernisation Fund’s governing bodies to end support for dirty energy. Several gas pipelines and waste incineration projects proposed by national authorities for financing from the Fund ahead of this disbursement round were not approved. 

Nevertheless, and despite international momentum for phasing out fossil fuels buildout, national authorities in six Member States are still seeking over EUR 3 billion in EU climate money for anything from waste incinerators to fossil gas pipelines to small nuclear reactors, a recent Bankwatch analysis has shown. 

Gligor Radečić, gas campaign lead with CEE Bankwatch Network: 

‘Once again, climate money is being used to create new emissions and lock the EU deeper into fossil fuel import dependency. Czechia has already shown how not to use the Modernisation Fund funding to decarbonise heating and industry, and is doing it again. Now Bulgaria is following suit, betting on so-called hydrogen-ready gas plants that will never realistically run on renewable hydrogen. It’s evident that for a transformation of our energy system we can’t rely solely on the Member States’ ambition without changes to the Fund’s eligibility rules.’ 

To learn more about the Modernisation Fund’s misguided investments see here: https://bankwatch.org/modernisation-fund 

For more information, please contact: 

Gligor Radečić
Gas campaign lead, CEE Bankwatch Network
gligor.radecic@bankwatch.org 

Latest EU hydrogen push prolongs gas industry hold over Europe’s energy transition – new report

The report, Hallucinating Hydrogen: Why the PCI/PMI Process Must Be Overhauled, is available here: https://bankwatch.org/publication/hallucinating-hydrogen-why-the-pci-pmi-process-must-be-overhauled 

The PCI/PMI list, some of whose electricity projects are truly high-priority, includes over a hundred hydrogen projects, with twice as many hydrogen pipelines as in the previous list. Alarmingly, 42 out of the 59 pipeline projects will most likely ship fossil gas-based hydrogen, according to the new analysis. 

Any transboundary energy infrastructure granted the lucrative status of ‘Project of Common Interest’ or ‘Project of Mutual Interest’ is eligible for EU subsidies via the Connecting Europe Facility and benefits from faster permitting. 

Yet, while the Commission boasts that PCI/PMI projects will catalyse decarbonisation, today’s report reveals that many of them will make no meaningful contribution to cutting emissions, and their necessity is little more than speculation. 

This is no coincidence. The vast majority of hydrogen projects on the list were originally proposed by the fossil fuel industry, and specifically members of ENTSOG, a gas transmission operators’ lobby group. 

In fact, as the report authors stress, the rules governing the PCI process – namely, the TEN-E Regulation – give ENTSOG a major role in the process from the early stages such as network development planning, to crafting the methodology for cost-benefit analyses and developing demand and supply scenarios. 

EU bodies – including the Agency for Cooperation of Energy Regulators and the European Advisory Board on Climate Change – and civil society have long been warning that the PCI exercise does not serve its purpose. 

Bankwatch and Food & Water Action Europe are therefore calling on Members of the European Parliament and the Council to reject the PCI/PMI list to prevent Europe being chained to fossil gas for decades to come. 

Gligor Radečić, Gas campaign leader at CEE Bankwatch Network: “While it is expected that some projects are promoted by transmission system operators, since they are often the only actors with the necessary know-how and capacity, it makes little sense that the very same companies – represented by ENTSOG – are also the ones responsible for assessing those projects.”  

Eliot Garnier-Karcenti, Senior Energy Advisor at Food & Water Action Europe: “Not voting against the PCI/PMI list would promote a carbon-intensive European Union dependent on fossil-based hydrogen. All European stakeholders are awaiting a review of the hydrogen strategy and the Trans-European Energy Networks (TEN-E) regulation. It makes no sense to support a list that will become obsolete within a few months.” 

The report’s warning is particularly timely given the new Grids Package released today by the Commission. As part of the legislative package, the proposed changes to the TEN-E Regulation could determine the future role of ENTSOG – and later also the European Network of Network Operators for Hydrogen (ENNOH) – in deciding on Europe’s transboundary energy infrastructure.  

However, the TEN-E regulation proposal, which was leaked to several media outlets last week, has so far failed to eliminate this conflict of interest in the PCI/PMI process. Aside from proposing that the Commission now develops the central scenario, all the other roles remain with ENNOH. Decision makers need to ensure that the revision of the TEN-E Regulation not only democratises the PCI/PMI process but also that it prioritises electrification to truly step up the energy transition. 

For additional information, please contact: 

Eliot Garnier-Karcenti
Senior Energy Advisor, Food & Water Action Europe
egarnierkarcenti@fweurope.org
+33 6 34 31 56 20
LinkedIn: https://linkedin.com/in/eltgk 

Gligor Radečić
Gas Campaign Leader, CEE Bankwatch Network
gligor.radecic@bankwatch.org 

Another needless threat to the ecosystems we all depend on: The Commission’s panicky, chaotic deregulation drive has to stop

It includes a Communication; a draft Directive on acceleration of permit-granting procedures for renewable energy, batteries and grid infrastructure,[1] and a draft Regulation on guidelines for trans-European energy infrastructure (TEN-E), also weakening environmental permitting.[2]

The decision to re-open the Renewable Energy Directive is surprising as it was changed in 2023, and already eroded environmental safeguards. The final transposition deadline was in May this year, yet by July only Denmark had fully transposed it. The Commission started infringement procedures against the other 26 Member States. Although the 2023 Directive is problematic, the rationale for re-opening it half way through transposition is unclear. Even industry has called for more stability: Solar Power Europe has asked the Commission to prioritise implementation of existing EU rules rather than pursuing deregulation.

Among the most controversial provisions in the Commission’s new proposals are:

  • A new paragraph that tries to prevent no-go zones for renewables but in fact undermines the whole concept of protected natural areas. Member States are to ‘endeavour not to designate large areas where the installation of renewable energy plants and their related infrastructure is legally or de facto restricted due to environmental reasons (…)’.[3]  But the whole point of protected areas is to restrict certain types of activities: why would hydropower plants be allowed in National Parks or wind parks in old-growth forests? Among others, this contradicts the principle that Member States may introduce stricter environmental protection measures than EU law requires.[4]
  • An existing assumption [5] that renewables and grids are of overriding public interest for when carrying out assessments under the Habitats, Birds and Water Framework Directives is set to be widened. This provision is already highly problematic as a declaration of overriding public interest is needed for only a few of the most damaging projects with significant impacts on protected natural areas. The new proposal would stop Member States being able to restrict the application of this provision in certain parts of their territory and would widen the assumption of overriding public interest to enable land expropriation and other areas of law, except cultural heritage.
  • If satisfactory alternative solutions exist, projects with severe impacts on protected natural areas are – appropriately – currently not allowed to proceed. But the new proposals would restrict the examination of alternatives to the same energy technology as the proposed project. This makes no sense, as it would mean a high-impact technology like hydropower or biomass would not have to be compared to a lower-impact one like solar.
  • The draft TEN-E allows many cross-border electricity transmission projects and storage facilities to be exempted from environmental impact assessments (EIAs) and appropriate assessments under the Habitats Directive if they are part of National Development Plans that have been subject to Strategic Environmental Assessments (SEAs). Similar provisions are already in place for renewable projects but SEAs are less detailed than EIAs and are unlikely to be an adequate substitute. Among others, this deprives the public of a major consultation opportunity during project development. While new obligations to designate and finance an independent facilitator to promote dialogue between the project developer and the general public may be a useful complement, they cannot replace structured and science-based processes like the EIA and appropriate assessments.

Quotes

Pippa Gallop, Southeast Europe energy policy officer, CEE Bankwatch Network: 

‘Sustainable renewables and grids are crucial, but re-opening the Renewable Energy Directive is not. The ink has barely dried on the 2023 changes, so revising them already is a tacit admission that they were poorly done. But rather than undoing the damage, the Grids Package digs an even deeper hole into the EU’s well-balanced environmental safeguards. The European Parliament and Council must finally say no and put a stop to this manic deregulation drive.’

Gligor Radečić, Gas campaign leader, CEE Bankwatch Network: 

‘Certain proposed amendments to the TEN-E Regulation concerning the acceleration of permitting raise serious concerns: they lack scientific grounding, conflict with EU environmental law as interpreted by the Court of Justice of the EU, and could prove legally problematic, as in the case of tacit approval mechanisms.’

Contacts

Pippa Gallop
Southeast Europe energy policy officer
CEE Bankwatch Network
pippa.gallop@bankwatch.org

Gligor Radečić
Gas campaign leader
CEE Bankwatch Network
gligor.radecic@bankwatch.org 

[1]  This would amend: 

  • the Renewable Energy Directive ((EU) 2018/2001); 
  • the Electricity Market Directive ((EU) 2019/944); 
  • the Directive on gas markets and hydrogen ((EU) 2024/1788) and 
  • the Energy Performance in Buildings Directive ((EU) 2024/1275).

[2] This would amend:

  • Regulation (EU) 2019/942, establishing a European Union Agency for the Cooperation of Energy Regulators;  
  • the Electricity Market Regulation (EU) 2019/943; 
  • the gas markets and hydrogen Regulation (EU) 2024/1789 
  • and would repeal the current Regulation on guidelines for trans-European energy infrastructure ((EU) 2022/869) on guidelines for trans-European energy infrastructure.

[3]  ‘(…), unless they can demonstrate that those types of plants and their related infrastructure would result in irreversible damage in the area which cannot be mitigated or compensated for during the environmental assessment pursuant to Directive 2011/92/EU and, where relevant, the appropriate assessment pursuant to Article 6(3) of Directive 92/43/EEC’.

[4] Article 193 of the Treaty on the Functioning of the EU.

[5] ‘rebuttable presumption’ i.e. it is presumed, but can be disproved during the assessment process. However, the burden of proof is on the public to prove likely harm instead of on the project promoter to prove a lack of harm.

EU Reform and Growth Facility not yet speeding up energy transition in Western Balkans – new report

The financing instrument is part of the European Commission’s Growth Plan for the Western Balkans, intended – among others – to accelerate the enlargement process. To access the funds, the Western Balkan countries prepared Reform Agendas – action plans covering six policy areas, including energy and green transition. The process was plagued with issues from the very beginning – the preparation of the Reform Agendas was rushed, there were no public consultations, and the resulting documents lacked ambition and focus. 

Bankwatch’s analysis finds that around one third of the 100 energy-related reforms in the Agendas are overdue obligations under the Energy Community Treaty that the countries should have implemented years ago. Now they could be awarded EUR 275 million for completing them. 

The report questions the decision to reward the countries for their late reforms, but finds that even this is not having the desired effect. 

With the complicated political situation in Serbia and Kosovo impeding progress in the energy sector, and Bosnia and Herzegovina only recently having completed its Reform Agenda, only Albania, Montenegro and North Macedonia are completing any reforms. Even they have completed only nine reforms, with a prospect of completing four or five more until the end of December 2025. This means that regionwide, less than 20 per cent of the 50 energy reforms due have been completed.  

As the overall deadline for implementing the measures is August 2027, each delay reduces the likelihood of the countries being able to access the full sums available. 

Davor Pehchevski, Balkan energy coordinator at Bankwatch – ‘These reforms will speed up the decarbonisation of the Western Balkan economies, mitigate the impacts of the Carbon Border Adjustment Mechanism, and provide benefits such as clean air, increased comfort and decentralised electricity generation for their citizens. However, the governments are obviously struggling to implement what is required of them. Whether it is lack of will or lack of capacity, the whole instrument is at risk of failing.’ 

Pippa Gallop, Southeast Europe energy policy officer at Bankwatch – ‘With such a tight timeline, the Commission needs to decide swiftly how to get the process on track. But our findings also raise fundamental questions, as the Commission’s proposal for the next EU budget relies almost entirely on similar funding instruments in the region. As the EU institutions decide on the budget in the coming months, they need to probe whether this makes sense. In any case, governments must not be rewarded for overdue legal obligations.’ 

Contacts 

Davor Pehchevski, Balkan Energy Coordinator, CEE Bankwatch Network 

davor.pehchevski@bankwatch.org, Tel: +389 71 264 087 

Pippa Gallop, Southeast Europe Energy policy officer, CEE Bankwatch Network  

pippa.gallop@bankwatch.org, Tel: +385 99 755 9787 

Notes for editors 

  1. The report is available here.