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Western Balkan coal pollution still massive, illegal and deadly – new report

The entry into force of new legal standards on 1 January 2018 should have brought reductions in deadly air pollution. But the report – Comply or Close – shows that in 2021, dust emissions from coal plants included in the National Emissions Reduction Plans (NERPs) of Bosnia and Herzegovina, Kosovo, North Macedonia and Serbia increased compared to previous years, while sulphur dioxide emissions only decreased slightly.

The Ugljevik coal plant in Bosnia and Herzegovina again emitted the most sulphur dioxide in the region in 2021 – 86 774 tonnes – despite having desulphurisation equipment installed at a cost of EUR 85 million. (1) Its emissions were similar to 2019, so even two years after testing began, the desulphurisation equipment clearly did not work.

The highest dust polluter in 2021 was Gacko in Bosnia and Herzegovina, whose emissions more than tripled to 4 960 tonnes in 2021 – more than 16 times as much as allowed by the country’s NERP. The reasons for this massive increase are unclear.

The Pljevlja coal plant in Montenegro also breached the Energy Community Treaty in 2021 by operating for more than 20 000 hours from 1 January 2018 without undertaking pollution control investments. (2)

The year ended with a region-wide energy crisis with coal supply problems and coal plants in Serbia, North Macedonia and Kosovo collapsing one after another. Coupled with poor hydrological conditions and high electricity import prices, this diverted attention from tackling pollution and in early 2022 provided a pretext for the Federation of Bosnia and Herzegovina to approve an illegal lifetime extension for the Tuzla 4 and Kakanj 5 units and for North Macedonia to start up an ancient oil-fired plant again after being in reserve for years. (3)

Ioana Ciuta of CEE Bankwatch Network – ‘Western Balkan governments are reacting to the energy crisis by opening new coal mines (4) and delaying power plant closures, but with such antiquated plants, the end of coal is closer than they think. A plan B is urgently needed – cutting energy wastage, opening markets and ramping up development of sustainable forms of renewable energy – but governments must take measures to cut pollution and save lives in the meantime.’

Pippa Gallop of CEE Bankwatch Network – ‘In 2021 the Energy Community Secretariat opened dispute settlement cases against Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia but this has not been sufficient to spur them into action. The European Commission must redouble efforts to introduce deterrent penalties into the Energy Community Treaty if it wants Western Balkan governments to take EU law and human health seriously.’

The report findings, as well as additional context, can be found at https://www.complyorclose.org

Contacts

Pippa Gallop
Southeast Europe Energy Advisor, CEE Bankwatch Network
pippa.gallop@bankwatch.org
+385 (0)99 755 9787
Twitter: @pippagallop 

Ioana Ciuta
Energy coordinator for the Western Balkans, CEE Bankwatch Network
ioana.ciuta@bankwatch.org
+40724020281
Twitter: @unaltuser 

Davor Pehchevski
Balkan Air Pollution Campaign Coordinator, CEE Bankwatch Network
davor.pehchevski@bankwatch.org
+38971264087
Twitter: @dpehche

Notes for editors

(1) For more information about the Ugljevik coal plant, see here.

(2) For more information about the Pljevlja coal plant, see here.

(3) A statement by the Energy Community on Tuzla 4 and Kakanj 5  is available here.

(4) For example, North Macedonia has recently announced the opening of two new coal mines – Zivojno and Gusterica and Montenegro plans to open open-cast mines at Glisnica and Mataruge.

Civil Society From Across the Asian Region Urge the ADB to Stop Financing False Climate and Energy Solutions

Today, the NGO Forum on ADB is hosting an online press conference featuring representatives from groups based in Southeast and Central Asia and the Caucasus to speak about the need for the ADB to support decentralized, appropriately scaled, distributed variable renewable energy, and to pull back from sinking limited funds into risky resource intensive energy ventures that are neither clean nor just. In Manila, an in-person convergence will be coordinated by the Power 4 People (P4P) Coalition on the morning of June 17th, bringing together local and regional organizations united in the call issued to the ADB to stop financing false solutions. Details of the event location and timing will be disclosed separately. 

“We recognize this year at ACEF, though the ADB has made an effort to focus on support for ‘green’ energy technologies, it has been dominated by private sector proponents and by discussions about technologies that are neither ‘clean’ nor economically, socially or environmentally sound. As civil society organizations mobilizing and organizing for a rights based, lasting, inclusive, just transition, we are adamant that power must be wrested in the public domain, ensuring meeting people’s’ rights to water, land, territory and other resources are not only prioritized, but set as non-negotiable,” explained Tanya Lee Roberts-Davis, Energy Campaigns and Policy Strategist with the NGO Forum on ADB. 

“Net-zero should not be misconceived as real-zero. Short-sighted technocratic fixes such as carbon capture schemes are not a substitute for simply making the rapid and needed shift to invest in forward looking clean energy sources. Meanwhile, we are concerned the highly touted Energy Transition Mechanism risks creating a situation whereby the public may be forced to accept a heavy toll on their health, the environment and climate,  while coal companies will have the greenlight to continue to turn a profit over the course of several years during which the ADB and other donors sponsor the project’s retirement,” she continued. 

As asserted by Yobel Putra, of the Global Alliance for Incinerator Alternatives-Asia Pacific: “ACEF 2022 is not getting better as it adds more false solutions to the list. For years, ADB has insisted that waste-to-energy incineration is a renewable energy source and a low-carbon solution. However, the world knows that plastic is on track to become a bigger climate problem than coal. Burning municipal solid waste — especially when it contains plastics — is dirtier than coal-fired power plant in every aspects. In addition to the highly toxic emission and ash, WTE incineration is amongst the dirtiest energy sources on the grid both in the U.S. and the E.U.. Substituting one form of dirty fossil fuel with another and claiming it as renewable is greenwashing. Worse, ADB’s suggestion to couple its climate harming projects with carbon capture technology is a huge distraction. Our time is running out, ADB should stop becoming a climate criminal before it is too late.”

Andrey Ralev from CEE Bankwatch added: “The biodiversity and climate crisis can and must be addressed together. We fully support the upscaling of investments in renewable energy, but this should not be at the cost of biodiversity loss. The lack of strategic planning and cumulative impact assessment means that many hydro, wind and solar projects in the ADB pipeline are wrongly placed. The Zarafshan wind power project, for example, could lead to the extinction of the globally endangered saker falcon and Egyptian vulture.” 

In the Philippines and Southeast Asia, the recent Financing a Fossil Future report from the Manila based think-tank Center for Energy, Ecology, and Development (CEED) found that ADB is among notable public financiers helping bankroll the fossil gas industry in the region since the Paris Agreement was signed in 2015. Alarmingly, 84% of total financing for midstream gas projects mapped in the report were found to have been linked to public financial institutions. As Avril de Torres from CEED asserted: “It took 12 years for ADB to recognize that financing coal goes against the development it claims it wants to achieve for the Asia-Pacific region. By keeping the door open for fossil gas, however, ADB is sustaining its dirty energy legacy, merely switching from one fuel to another in dooming the region to climate catastrophe.” 

“ADB is also forcing grave economic burdens on our people – spiking gas prices as exacerbated by the Russia-Ukraine war are a warning sign against massive fossil gas expansion, if we wish to veer away from vulnerability to volatile fuel costs. If it hopes to become a genuine climate and development bank, we see no other path for ADB to take than working with Asia-Pacific peoples to advance renewables,” she concluded

 

Press Contacts: 

Tanya Lee Roberts-Davis, Energy Policy and Campaigns Strategist, NGO Forum on the ADB| Email: tanya@forum-adb.org   

Dennis T. Paule, Communication and Support Liaison Officer, NGO Forum on ADB | Email: dennis@forum-adb.org 

Aryanne, Center for Energy, Ecology and Development | Email: info@ceedphilippines.com

EU bank hands out billions to companies complicit in burning fossil fuels

The report, Flattering to deceive: A reality check for the ‘EU Climate Bank’, shows how the bank handed out at least €7.4 billion in financing to some of Europe’s fossil energy giants in 2020-21 – including €2 billion in loans to companies still burning coal. Even though EIB President Werner Hoyer declared “gas is over” last year, the gas industry made the most of the bank’s one-year transition period away from fossil fuel investments to secure €657 million in financing for gas infrastructure.

The EIB mainly financed renewable and other non-fossil projects, including those by oil and gas giants like ENI, Total Energies or ENGIE. However, none of these companies have a solid plan for honouring the Paris climate accord. Many are also ignoring warnings from the International Energy Agency and the IPCC to stop extracting fossil fuels or building related infrastructure. Big energy multinationals made billions in record profits last year while energy prices are surging, with the EIB’s financing helping these energy companies to boost their profits even more.

Frank Vanaerschot, Director at Counter Balance, said:

“It is crucial that the bank makes financing companies dependent on having a solid plan to phase out fossil fuels fast enough to be in line with the Paris agreement.”

“The EIB has to become a real ‘Climate Bank’. That means doing much more than just excluding fossil fuel projects. We need the EIB to be on the side of the people in Europe struggling to pay skyrocketing bills – not the energy companies making huge profits from them.”

“Locking us into decades of more fossil fuels simply isn’t compatible with living on a healthy planet, not to mention a gigantic waste of public money. The EIB should only finance projects with partners who are entirely focused on renewables, energy efficiency measures and public well being.”

The EIB’s support for fossil gas and hydrogen is concerning as the bank is due to review its approach to energy investments later this year. Given that its current energy policy contains many loopholes allowing fossil fuel investments to continue, there is a risk that the EIB could decide to support gas more overtly.

The report also reveals that almost 20 cents of every euro invested in transport by the EIB went to carbon-intensive and polluting transportation methods. Of the €21.2 billion invested in the sector, almost €3 billion was used to finance highly polluting expressways and highways. Airport infrastructure (€520 million) and expansions of sea ports (€339 million) are also environmentally problematic. The EIB is due to overhaul its transport policy in the coming months – a great opportunity for the bank to stamp out this destructive lending.

Anna Roggenbuck, EIB Policy Officer at CEE Bankwatch Network, said:

“Our report also showed that the EIB reported a record climate financing at the level of 40% of its overall lending, however we also noted that the bank changed its methodology for calculating this spending therefore it cannot be simply compared with previous results. Energy efficiency loans steadily grew from €3.6 billion in 2014 to €4.7 billion in 2021 while renewable energy sources have also been growing since 2015, although the EIB reached similar lending volumes in the past. In the context of the REPowerEU, the pace of the growth will have to accelerate with the energy savings and clean energy put at the core of climate action and energy sovereignty. 

 

For more information, please contact:

Anna Roggenbuck
Policy Officer
CEE Bankwatch Network
+48 509970424
annar@bankwatch.org

Paul Creeney
Media and Communications Officer
Counter Balance
+32 465 946 509
paul.creeney@counter-balance.org

Notes to editors

  • In November 2020, the EIB adopted a Climate Roadmap with the aim of aligning all of its operations with the goals of the Paris Agreement, and transforming itself into the ‘EU Climate Bank’. The previous year, the EIB adopted an energy policy in which it committed to phase out fossil fuels by the end of 2021.
  • The Flattering to deceive: A reality check for the ‘EU Climate Bank’ report analysed the EIB’s operations in 2020 and 2021, focusing on the energy and transport sectors – the largest sectors for direct EIB loans. Nevertheless, there are sectors of EIB activities that we could not explore in great depth, such as its support to carbon-heavy industrial sectors or the climate impacts of other operations like health, agriculture and research and innovation.
  • Counter Balance’s briefing, ‘EIB & Transport: Making EU Public Finance transform mobility across Europe and beyond’ exposes how the EIB’s current approach to transport needs to undergo radical change if it is to help the EU decarbonise its transport sector and achieve the objectives of the Green Deal.

Environmental groups challenge EU support for 30 fossil gas projects

  • Four environmental groups are starting legal action against the EU’s gas infrastructure priority list.
  • The organisations deem the inclusion of 30 proposed gas projects on the list unlawful and say the EU Commission breached its own climate and energy laws when approving the list.
  • The cost of all the gas projects amounts to €13 billion. Their collective CO2 and methane output have not been calculated by the Commission or project owners but can be expected to be sky-high.

Every other year, the EU Commission draws up a list of priority energy infrastructure projects deemed beneficial to the whole bloc. Infrastructure on the “Projects of Common Interest” list gain fast-tracked permits and eligibility for EU funds.

Billions of euros are bound to be wasted on 30 major pieces of gas infrastructure like the EastMed pipeline – a €7 billion, 1,900km gas pipeline that will connect Eastern Mediterranean offshore gas fields from Israel and Cyprus to Italy via Greece.

The groups have been able to commence legal action through a request for internal review – a mechanism now open for use by NGOs and the public after a major reform of EU access to justice laws last year.

The four organisations request the EU Commission to review the decision that approved the PCI list and gave 30 proposed gas projects priority status. If the Commission refuses to amend its decision, the organisations will be able to ask the Court of Justice of the EU to rule.

ClientEarth lawyer Guillermo Ramo said: “This list amounts to a VIP pass for fossil gas in Europe, when we should be talking about its phase-out. The Commission did not consider the impact of methane emissions derived from gas infrastructure projects – in spite of evidence that these are substantial. That’s unlawful as it directly clashes with the EU’s own climate laws and its legal obligations under the Paris Agreement.”

Methane is the main component of fossil gas, with a global warming potential over 85 times higher than that of CO2 over 20 years. Yet, its impact when planning gas infrastructure is not taken into account. 

The environmental organisations argue the EU’s decision to support gas infrastructure puts the EU’s climate and energy goals under threat. Experts have clearly said no new gas or other fossil fuel developments should be built if we are to limit warming within 1.5C. The list also comes as Europe faces a gas price crisis, caused in part by over-reliance on price-volatile gas.

Despite this, the EU Commission’s REPowerEU strategy plans to unleash another €10 billion in new fossil gas infrastructure.

Some studies point out that the EU can end imports of all Russian fossil gas by 2025 – two years earlier than the European Commission’s current target of 2027 – without building new gas infrastructure or delaying the phase-out of coal.

Natasa Ioannou, climate campaigner with Friends of the Earth Cyprus said: “The EastMed pipeline is a disaster for communities and the climate. It is not in the interests of local people in the region who will bear the costs of fossil fuel lock-in, and the harm to the ecologically-sensitive Mediterranean Sea. All along the route of the EastMed pipeline people are saying no to new fossil fuel infrastructure and yes to climate justice and to peace. EU funding must focus on supporting projects that implement just, fair, safe, and renewable energy solutions.”

The European Commission now has up to 22 weeks to reply. The end result could be a judgement clarifying how the EU should take the climate impacts of infrastructure into account.

Notes to editors

What is the Projects of Common Interest list?

In November 2021, the EU Commission published a list of priority energy infrastructure – as it does every two years – which includes 30 fossil gas infrastructure projects. This list entered into force in April 2022.

  • These projects can receive streamlined environmental impact assessment, a fast-tracked permitting procedure and are eligible for EU funding.
  • They are aimed at facilitating gas transport, storage or import. They include pipelines and LNG terminals such as the EastMed pipeline, the Melita Transgas pipeline, the Cyprus LNG import terminal, the Baltic Pipe, the Poseidon pipeline, etc.
  • The cost of all gas projects on the list is estimated at €13 billion. But this doesn’t include the cost on nature, human health and climate.

The list is governed by the Trans-European Energy Networks (TEN-E) Regulation which was revised recently. Despite initial intentions to get rid of fossil fuel projects in TEN-E, the EU Council and Parliament have proposed loopholes that would still leave considerable room for gas projects on future editions of the priority list. The process of establishing the list has been repeatedly criticised for lack of transparency and for being heavily influenced by vested fossil gas industry interests.

What is the legal procedure used in this case?

ClientEarth has fought a decade-long battle to improve access to justice rights at EU level. In 2021, a landmark reform of EU access to justice laws was approved. This has lifted the main barriers preventing NGOs and people from challenging environmental wrongdoings in court.

Environmental NGOs now have the right to ask EU institutions and bodies – in this case the European Commission – to review one of their own decisions for contravening EU law related to the environment. The Commission must officially reply to such a request within 16 weeks, a deadline that can be extended up to 22 weeks. If the claimants find that the Commission’s reply does not fix the legal violation, the claimants can sue the Commission in the Court of Justice of the European Union.

What are the climate impacts of gas and methane?

Gas extraction and transportation not only emits huge amounts of CO2, it is also a big emitter of potent and poisonous greenhouse gas methane. The drilling and extraction of gas from wells and its transit through pipelines results in emissions of methane – its primary component, which is a whopping 86 times more powerful than carbon dioxide in storing heat over 20 years. Beyond climate, methane also has devastating impacts on human health – via air pollution – and ecosystems.

Both the IEA and the IPCC have clearly said no new oil and gas extraction projects  should be built if we are to keep warming within 1.5C. Additionally, a recent study found that nearly half of existing fossil fuel production sites need to be shut down early if 1.5C is to be achieved.

EU recovery plans – a threat to nature

The report reveals the failure of EU recovery funds to address the biodiversity crisis – one of the biggest of our time – and exposes biodiversity damaging investments and reforms from the recovery plans of nine central and eastern European countries. 

The alarming state of biodiversity in the EU calls for immediate action, and the vast amount of EU funds now available provide a unique opportunity to address this crisis. The EU Biodiversity Strategy states that a minimum of EUR 20 billion per year is needed to address biodiversity loss. Yet less than 1 per cent of recovery fund spending has been allocated to nature protection or restoration projects, critical to achieving the objectives of the strategy. Even worse, some of the projects from the recovery plans are likely to cause further damage to biodiversity.  

In Bulgaria and Latvia, projects aimed at increasing renewable energy highlight the potential conflict between climate action and biodiversity, underlining the need for sufficient environmental safeguards. This issue could have been avoided by better planning and by taking into consideration the expertise delivered by civil society organisations. The Latvian government is simplifying permitting procedures which allow wind farms in forests, and snuck support for such projects into its recovery plan after the public consultation and ‘do no significant harm’ assessment had already been carried out.  

Similarly, water management projects in Hungary, Croatia, Latvia and Poland will support building reservoirs, pumping stations, channels, or rivers’ regulation, often in highly sensitive areas, including Natura 2000 sites. These threaten to turn rivers and streams into dead channels and ponds devoid of life, degrading water quality as a consequence. The cases from Slovenia, Estonia, the Czech Republic and Romania show how forestry projects that appear positive at first sight will instead most likely encourage even more intensive forest cutting. 

Many of these projects were planned and negotiated behind closed doors with no information on their location and without proper assessment of their impact on nature. Potential harm to biodiversity cannot be reverted and these examples show why and how EU funding must be biodiversity-proofed.   

Quotes 

Daniel Thomson, EU policy officer for biodiversity with CEE Bankwatch Network, said: ‘Billions of euros of public recovery funds are now in the process of being disbursed, yet we still don’t know the full details of what’s actually being financed. At first glance, many projects may appear harmless – or even beneficial – to nature. But digging a little deeper reveals a new wave of biodiversity-damaging funding that will have consequences for years to come.’ 

Thomas Freisinger, EU policy officer with EuroNatur, said: ‘Member States were given a unique opportunity to make this recovery a turning point to address biodiversity loss. Yet, business as usual was chosen. The Commission needs to create the incentives and safeguards that are necessary for a real shift.’ 

For more information contact   

Daniel Thomson  
EU policy officer for biodiversity  
CEE Bankwatch Network  
daniel.thomson@bankwatch.org 

Thomas Freisinger  
EU policy officer 
EuroNatur 
thomas.freisinger@euronatur.org  

The report ‘Behind the ‘green recovery’: how the EU recovery fund is failing to protect nature and what can still be saved is available here. 

EU Ombudsman reprimands EIB for lack of transparency on funding’s environmental impacts

The self-declared “world first climate bank” claimed it dedicated Euros 27,6 BLN to climate action and sustainability projects in 2021. But it consistently failed to disclose information which could help verify that the projects it supports are consistent with these claims or with environmental laws.

In three decisions published today, the EU Ombudsman called on the bank to adopt a “more ambitious approach to its disclosure practice” to act in line with EU transparency laws.

Non-governmental organisations ClientEarth, CEE Bankwatch Network and Counter Balance have applauded this decision, which follows a complaint lodged two years ago. 

ClientEarth Senior Law and Policy Advisor Sebastian Bechtel said:

“The Ombudsman confirmed today that the EIB financing decisions were not exempted from public scrutiny – this is good news for democracy and the planet.

“We want to know the details of the environmental impacts of the projects the EIB plans to fund, how it is assessing them and what it is doing about them. This is crucial information to be able to verify whether the EIB is actually really being the climate bank it claims it is and to hold it accountable, if necessary.”

NGOs argue that the EIB – a public institution recently condemned for illegally avoiding environmental scrutiny – prevents the public from fully expressing its views on environmental issues before the EIB takes its decision to finance projects.

Secrecy is deeply rooted in the EIB’s culture, according to a report highlighting that the bank is less transparent than other public financial institutions such as the World Bank. This is also confirmed by the 2020 Aid Transparency Index, in which the EIB only scored 58.9 out of 100 points, while the World Bank received 97.1 points.

 Xavier Sol, Director at Counter Balance, said:

“Today’s decision blows another hole in the EIB’s claims to be a world leader on transparency.”

“EIB shareholders and other EU institutions like the Parliament and Commission must now make sure the bank genuinely addresses the Ombudsman’s suggestions.”

“The EIB has been allowed to cloak itself in secrecy for too long. It’s time the bank stopped hiding information and let the public check that public money is being invested in projects that are in the public interest.”

One area of particular concern are projects financed through “financial intermediaries”, such as national banks. For these projects, the EIB usually does not publish the name, place and nature of the projects, even if they significantly impact on the environment. The Ombudsman suggests changing this.

Anna Roggenbuck, EIB Policy Officer at CEE Bankwatch Network, said: 

“For years we have been calling on the EIB and its governing bodies to enhance  transparency of operations through financial intermediaries. With the same concern, the European Parliament called on the bank to include contractual clauses requiring mandatory disclosures on lending activity.”

“Now the European Ombudsman concluded that the bank must publish relevant information on projects financed by intermediaries and that there is no justification for confidentiality here.” 

The EU Ombudsman released preliminary findings in 2021 providing suggestions to the EIB that the bank partly ignored. The Ombudsman regretted this and reissued many of the suggestions, which she considered to be in the public interest.

With this decision released today, the watchdog closed the inquiry, giving the EIB until the end of October to explain how it has implemented its suggestions.