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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.

Activists call on EU to stop promoting fossil gas dependence in the Western Balkans

36 civil society organisations have today sent a joint letter (1) to the European Commission President Ursula von der Leyen, calling on the EU to stop promoting the use of fossil gas in the Western Balkans.

The region is currently much less gas-dependent than the EU, which is struggling to free itself from fossil gas imports after Russia’s invasion of Ukraine. 

Serbia and parts of North Macedonia and Bosnia and Herzegovina use Russian gas, mainly for heating. Albania, Kosovo and Montenegro do not have gas networks at all (2).

Despite the fact that the Western Balkans have committed to phase out fossil fuel use by 2050 (3), the Commission has in recent years actively encouraged increasing fossil gas consumption in the region, mainly via the Southern Gas Corridor from Azerbaijan (4), despite the Shah Deniz gas field project being 20 per cent owned by Russia’s Lukoil (5).

Today’s letter calls on the Commission to ramp up sustainable energy investments that are being neglected in the region, instead of continuing to promote fossil gas.

Denis Žiško from the Aarhus Center in Bosnia and Herzegovina, said, ‘Promoting increased fossil gas use in the Western Balkans at this stage of the global climate emergency is irresponsible and counterproductive. Our low gas dependency is a plus, not a minus, as we move towards electrification of heating and transport. New infrastructure built now will end up either as stranded assets or as a fossil gas lock-in that will hinder renewables development in the region’. 

Nevena Smilevska of Eko-Svest in North Macedonia, said, ‘Irrespective of whether it is from Russia, Azerbaijan or elsewhere, increasing our import dependency is the last thing we need – a fact underlined by this winter’s gas price hikes and Russia’s invasion of Ukraine. As the EU finally realises that its own energy security cannot be based on fossil gas imports, so too must the Commission urgently stop promoting this dead end in the Western Balkans’. 

Nataša Kovačević of CEE Bankwatch Network, said, ‘Tackling electricity distribution losses, increasing the use of heat pumps and rooftop solar, innovative heat storage technologies and deep renovation of residential buildings need much more high-level attention from the European Commission to make up for the years lost promoting fossil gas’.

Contacts

Pippa Gallop, Southeast Europe Energy Advisor, CEE Bankwatch Network

pippa.gallop@bankwatch.org

+385 99 755 9787

Natasa Kovacevic, Campaigner for Decarbonisation of District Heating in Western Balkans 

natasa.kovacevic@bankwatch.org 

+382 67 030 033

Notes for editors

  1. The letter can be found here. 
  2. Serbia uses fossil gas for district heating, but use for power and individual households is relatively low. North Macedonia has increased its fossil gas consumption for power and heat in recent years. In Bosnia and Herzegovina, only four towns and cities are connected to the gas network, while Kosovo, Montenegro and Albania hardly use gas at all and do not have functional distribution networks. The Trans-Adriatic Pipeline crosses Albania but so far provides no gas to the country. 
  3. Sofia Declaration on the Green Agenda for the Western Balkans, 10 November 2020. The Declaration includes a pledge to adopt the EU Climate Law, which makes climate neutrality by 2050 a legal obligation. 
  4. E.g. The European Commission’s 2020 Economic and Investment Plan for the Western Balkans overtly promotes gas. It claims – without providing any evidence – that new gas pipelines could later be used for renewable gas.

In February 2022 alone: 

5. Lukoil, Lukoil completes the deal on acquiring interest in Shah-Deniz project, 18 February 2022.

Statement of solidarity with Ukraine

The strength of our network is our people.

Right now, a number of colleagues in Ukraine are at risk, including our member groups Ecoaction, the National Ecological Centre of Ukraine and the frontline communities that we support.

Our concern first and foremost is for their safety and security in the dangerous times ahead.

We are doing everything in our power to ensure the well-being of them and their families.

Nearly three decades of experience in the region demonstrate the resilience of our team and collaborators.

In that time, we have seen that no good has come from the violence of war.

We remain in solidarity and offer strength to the Bankwatch family and people of Ukraine in these precarious moments.

We welcome the European Bank for Reconstruction and Development’s action to suspend financing for Russia and Belarus, and we demand that all international financial institutions immediately suspend Russia’s membership, divest from all Russian and Belorussian companies and suspend all operations in Russia and Belarus.

Progress with EU recovery fund hampered by fossil fuels investments and threats to nature

The report looks at ten plans submitted by Czechia, Estonia, Hungary [1], Italy, Latvia, Portugal, Romania, Slovakia, Slovenia and Spain to the European Commission and approved by the Council to access funds from the facility.  

The report is available here. 

The facility is designed to help Member States recover from the pandemic and to fund a green recovery, requiring that at least 37 per cent of a country’s investments address the climate emergency. It also requires all reforms and investments included in national recovery plans not to harm environmental goals [2]. 

However, several countries have prioritised measures such as investments in fossil gas boilers over renewable energy sources. For example, Italy, Czechia and Slovakia all plan to fund fossil gas boilers as part of broader measures for building renovation and heating, running the risk of extensive lock-in in gas infrastructure that contradicts EU climate objectives. In Romania, the recovery plan includes building a fossil gas distribution system in the Oltenia coal region, which was accepted simply because the pipeline will be used in part to transport hydrogen. 

Fossil fuels have cropped up in several plans in the form of financial support for hydrogen, which is worrying given that it is not always guaranteed that only renewables-based hydrogen will be used. While the development of renewables-based hydrogen is necessary for sectors that are difficult to electrify, a number of recovery plans dedicate important resources to hydrogen without maximising first the potential of renewable energy and energy efficiency investments.   

Other Member States have included investments that could severely harm Europe’s natural environment and hamper the bloc’s drive towards the aims of the Biodiversity Strategy 2030. In Latvia, for example, 29 irrigation projects are planned that would irrevocably alter local ecosystems, and Slovenia has proposed a hydropower plant suspected to be the Mokrice one on the Sava river, a Natura 2000 protected area. The Estonia’s recovery plan includes support for the main terminal in Tallinn of the Rail Baltic project, which itself is planned to be built through forests and wetlands of high conservation value, including Natura 2000 areas. 

At the same time, the report does find that in some key areas, Member States have committed to important reforms and investments for climate mitigation. For instance, changes to national legislation in Italy, Romania and Spain aim to expand renewable energy sources, and Portugal, Slovenia and Latvia include reforms for improving their public transportation systems.  

Isabelle Brachet, EU Fiscal Reform Policy Coordinator for CAN Europe, said, “We urge Member States and the European Commission to ensure a genuine green recovery throughout the implementation of the recovery plans and other EU funds. At the very minimum this requires increasing the share of climate positive investments while fully respecting the ‘do no significant harm’ principle. Indeed, it is critical to realise that the recovery plans’ investments earmarked for the green transition often pale in comparison to the green investment needs of Member States.”

Christophe Jost, Senior EU Policy Officer for CEE Bankwatch Network, said, “When people are involved in planning, the results speak for themselves: more acceptance and ownership of the plans and a greater chance that harmful and wasteful spending is avoided. The Commission and Member States must ensure proper public monitoring of the recovery spending as the funds start to flow.” 

Contacts 

Christophe Jost, Senior EU Policy Officer 
CEE Bankwatch Network
christophe.jost@bankwatch.org 

Nina Tramullas, (Interim) Head of Communications 
CAN Europe
nina.tramullas@caneurope.org 

Notes 

[1] The Hungarian recovery plan is pending approval by the Commission over rule of law concerns. 

[2] For more information on the ‘do no significant harm’ principle, see this briefing from the Green 10 group of environmental organisations.