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EU Just Transition Mechanism needs local ownership and concrete steps to decarbonisation

Initially proposed as a Fund in November 2018 by parliamentarians from central and eastern Europe, the Just Transition Mechanism will also include a dedicated scheme under InvestEU and a public sector loan facility with the European Investment Bank to mobilise additional investments to the target regions concerned.

 

Bankwatch welcomes that the proposed 7.5 billion euro Fund will be available only for projects that are low-carbon and climate-resilient, including re-skilling programmes for miners, jobs in new economic sectors and energy-efficient housing and territorial transition plans, and that it explicitly excludes any support for fossil fuels. However, it is disappointing that the InvestEU scheme leaves a door open for the financing of gas infrastructure.

 

In order to access the Mechanism, countries need to propose one or more territorial just transition plans, which need to be consistent with National Energy and Climate Plans (NECPs). But especially in central and eastern Europe, the NECPs are lacking ambition and many have insufficient provisions to lead to the EU 2050 carbon neutrality target.

 

Examples from central Europe show that a just transition is possible provided that locals own the planning and big polluters do not receive back door subsidies. In July 2019, the Slovak government approved a plan for the redevelopment of Upper Nitra coal region, which was created based on inputs from the local community provided through focus groups since 2018.

 

The Action Plan also rejected a new mine at the Novaky coal complex, which private company Hornonitrianske bane Prievidza (HBP) was intent on opening. Locals’ inputs have resulted in a plan that aims for “developing economic activities in symbiosis with a clean environment”.

 

Raphael Hanteaux, EU policy officer with CEE Bankwatch Network, said, “We can’t afford the money from the Mechanism ending up in the wrong pockets. Clear and strict criteria must be established and adhered to so as to ensure that this money is used for the purpose for which it is intended: to alleviate the economic and social impacts of the transition away from fossil fuels for the most vulnerable communities.”

 

Juraj Melichar, national coordinator for Slovakia with CEE Bankwatch Network, said, “The just transition will be a difficult process, and each region faces very different challenges and opportunities. It is imperative to involve local communities and develop tailor-made solutions to region’s specific needs. As we’ve seen in Slovakia, a just transition begins at the local level, so the Mechanism must give communities the means to be involved in the process by building their capacities and providing them with the necessary technical assistance to apply and manage EU funds.”

 

Contacts

 

Raphael Hanoteaux
EU policy officer
CEE Bankwatch Network
+32 2 894 46 00

 

Juraj Melichar
Slovakia coordinator
CEE Bankwatch Network
+421 903 473 816

Consensus on EU long term emissions reductions paves way for climate action in central and eastern Europe

Acceptance from the remaining holdouts in central Europe – Hungary, Czechia and the delay given to Poland – circumvents a roadblock that could have halted the deal, meaning that these states and others in eastern Europe must now ensure that proper plans and funding are in place to reach the deal’s objectives.

The Council deal points out that this ambitious target is an important compass point as Member States formulate how each country will spend its slice of the next one trillion euros EU budget after 2020. To be in line with this commitment, the next EU budget should exclude fossil fuels and give clear priority to climate action. 

Central and eastern European Member States are in a prime position to plan for an energy transition that transforms the carbon-intensive economies of the region and leads to a sustainable and just future for the communities that will be affected most by the inevitable move away from fossil fuels. 

Raphael Hanoteaux, EU policy officer with CEE Bankwatch Network, said, “This deal should be applauded across Europe and is the clearest sign yet that fossil fuels, including fossil gas, have no place in the energy mix and should not receive precious public money.” 

“The next step is for the EU to update its interim 2030 objective to a more ambitious target of greenhouse gas emissions, if the bloc is serious about getting to net zero by 2050.”

Izabella Zygmunt, Poland national campaigner with CEE Bankwatch Network, said, “Even with the Council pandering to Poland’s domestic pro-coal supporters, this won’t stop EU action on climate change. Poland has no choice but to follow suit, and it now needs to start working out a robust, just transition plan with cities, municipalities, businesses and the citizens who overwhelmingly support carbon neutrality.”

Alexandra Botar, Hungary national campaigner with CEE Bankwatch Network, said, “The rubber has hit the road in central and eastern Europe, and it is high time to plan a real transition that modernises the energy and economic systems of the region and readies it for a net-zero world.”  

Hungary cannot use climate neutrality as a bargaining chip in future discussions over its share of the EU budget. The costs of becoming carbon neutral pale in comparison to the cost of inaction.”

Contacts 

Raphael Hanoteaux, EU policy officer

Email: raphaelh AT bankwatch.org

Izabela Zygmunt, Poland campaigner

Email: izabela.zygmunt AT bankwatch.org

Alexa Botar, Hungary campaigner

Email: alexa AT mtvsz.hu

New report: Western Balkan coal plants in severe breach of air pollution limits

According to the research, total sulphur dioxide emissions from coal plants in Serbia, Kosovo, Bosnia and Herzegovina and North Macedonia were more than six times as high in 2018 as the overall ceiling agreed with the Energy Community in the countries’ National Emission Reduction Plans. 

One power plant in Serbia, Kostolac B, single-handedly emits more SO2 than the total allowed for the four countries together despite being the only plant in the region with recently installed desulphurisation equipment. The China Machinery and Engineering Corporation (CMEC), the company which installed the equipment, has also been entrusted to build a whole new unit at the Serbian coal complex. 

Dust emissions from coal plants in Serbia, Kosovo, Bosnia and Herzegovina and North Macedonia also exceeded the ceiling by over 60 per cent. Serbia’s and Kosovo’s contributions alone were enough to breach the overall ceiling. Kosovo B was the highest emitting plant for dust, producing around half of the total allowed for the four countries.

Countries in the Western Balkans are signatories of the Energy Community Treaty, which includes industrial pollution reduction targets, the first of which should have been implemented by 2018. Yet the new research highlights that, not only are the countries breaking their commitments, but at some plants in the region, pollution levels have worsened. 

“Given the life-threatening nature of air pollution, the neglect of this issue by the region’s governments is incomprehensible and reprehensible. Investing in pollution control is not just a legal obligation, it is also the duty of any government which cares about its people,” says Ioana Ciuta, Bankwatch Energy Coordinator and one of the authors of the report. 

“Instead of investing in pollution control and steadily decreasing the share of coal in the energy mix, the Bosnia and Herzegovina, Kosovo and Serbian governments are planning new coal plants, all of them in contradiction to EU legislation on environment, state aid and/or procurement. Instead of locking themselves into decades of increasingly expensive coal use, Western Balkan countries need to ensure existing plants meet pollution requirements or close them down, and plan for a coal-free future,” says Pippa Gallop, Bankwatch Senior Energy Advisor for South East Europe and co-author of the new research. 

The report includes recommendations for how national governments can improve pollution monitoring and control, as well as for how the European Union should act to strengthen the Energy Community, to ensure that pollution breaches do not continue unsanctioned. 

The report will be officially launched Dec. 10 during an event in the European Parliament hosted by MEP Viola von Cramon, the Greens/EFA and MEP Petros Kokkalis, GUE/NGL. Please feel free to join: starting at 9.00 in the European Parliament, Brussels, room ASP 1E1. 

The agenda is available here, representatives of the European Commission and Energy Community will be discussing the findings of the Bankwatch report. 

Notes for editors

Read the new Bankwatch report, “Comply or Close”

See the agenda of the event in the European Parliament where the report is launched and its findings discussed by representatives of key EU institutions: 

For more information, contact

Ioana Ciuta

CEE Bankwatch Network

E-mail: ioana.ciuta@bankwatch.org

Mobile: +40724020281

Pippa Gallop

CEE Bankwatch Network

E-mail: pippa.gallop@bankwatch.org

Mobile: +385 (0)99 755 9787

 

New analysis: Belgrade incinerator public-private partnership a textbook case of corporate capture

The analysis is available here.

In September 2017, the City of Belgrade signed a 25-year PPP for the provision of municipal waste treatment and disposal services with a consortium including France’s Suez and Japan’s Itochu, for the construction of a 340 000 tonnes per year municipal waste incinerator. 

But the city and the International Finance Corporation, its lead transaction advisor, bypassed Belgrade’s official waste management plan and urban plans (2) and selected a project company without requiring any municipal waste separation, recycling or pre-treatment to be part of the project – a move likely to bring Serbia into conflict with EU waste targets.

The PPP also relies on an outdated subsidies model that is now illegal under EU rules and was approved in breach of Serbian law. (3) EU legislation allows only biodegradable waste to be classified as a renewable resource, not fossil-based waste such as plastic. And new feed-in tariffs are no longer allowed for larger facilities.

The PPP is highly likely to prevent Belgrade contributing to Serbia meeting recycling targets set by EU legislation. This is due to competition for waste materials and financial resources, which is expected to discourage the development of waste prevention, composting and recycling systems. According to Eurostat, in 2017 Serbia recycled only 0.3 percent of municipal solid waste. (4) 

Financing has been approved by the IFC, European Bank for Reconstruction and Development (EBRD) and Austrian Development Bank (OeEB), but the European Investment Bank pulled out of the deal, citing clashes with EU waste policies. (5)

Ksenija Radovanović, an architect/urban planner and author of the analysis, said, “This is a textbook case of corporate capture of public policy-making, and is exactly the opposite of what international donors should be supporting in Serbia. The project was designed according to the wishes of the potential private partners, and of course the bidders chose what was easiest and most profitable for them: incineration.”

Pippa Gallop of CEE Bankwatch Network said, “International donors need to help Serbia apply the rule of law and work towards a future-proof circular economy. Instead the EBRD, IFC and OeEB’s promotion of the private sector resulted in them turning a blind eye to legal irregularities and keeping Belgrade stuck in the twentieth century. 

That the EIB refrained from backing the project while others went ahead shows a serious lack of donor coordination and puts the onus on the EBRD, IFC and OeBB to withdraw from the project while they still can,” she added.

Janek Vahk of Zero Waste Europe, said, “This project is completely at odds with the EU’s resource legislation. Incineration and energy recovery from waste are the two least desirable options for materials at the end of life in a circular economy. The most cost-effective way to move away from landfills and increase recycling is by focusing primarily on separate collection and recycling, rather than investing in waste-to-energy.”

Contacts

Ksenija Radovanović, report author

E-mail: radovanovic.ksenija AT gmail.com

Tel: +381 669655293

 

Pippa Gallop, CEE Bankwatch Network

E-mail: pippa.gallop AT bankwatch.org

Tel: +385 997559787

Skype: pippa.gallop

 

Janek Vahk, Zero Waste Europe

E-mail: janek AT zerowasteeurope.eu

Tel: +32 (0) 49 3553779

 

Notes for editors

  1. Directive 2008/98/EC on waste sets a 50% target by 2020 of preparing for re-use and recycling of municipal waste, while Directive (EU) 2018/851 amending Directive 2008/98/EC sets targets of 55% by 2025, 60% by 2030 and 65% by 2035. Even with a potential delay of 5-10 years, depending on Serbia’s accession negotiations, the analysis finds that the amount of waste required for the incinerator is likely to prevent Belgrade from contributing to the meeting the country’s recycling targets.
  2. Building a facility for direct incineration of municipal waste was not in line with the Local Waste Management Plan of the City of Belgrade 2011-2020 or the Detailed Regulation Plan for the Vinča Sanitary Landfill, City Municipality of Grocka. While the solution foreseen by these documents, the pre-treatment of waste to form refuse-derived fuel before incineration, is also not one we would support, at least these documents were adopted via the legally-defined process, and the Local Waste Management Plan at least foresees 20% recycling by 2020. After the signing of the PPP Agreement, the contracted technological solution was semi-legalised by changing the Detailed Regulation Plan for the Vinča Landfill (DRP) in September 2018, however the higher order spatial plans and waste management plan remain unchanged.
  3. For more information see the new analysis and also here.
  4. Eurostat
  5. For more information see here

European banks must not support a “new Šoštanj 6” in Bosnia-Herzegovina, warn NGOs

An offer of a loan for the construction of the controversial Tuzla 7 coal power plant in Bosnia and Herzegovina from Slovenian NLB Banka and Italian Intesa Sanpaolo poses serious risks to the banks and their shareholders due to a slew of legal and economic issues around the project, warned a group of non-governmental organisations in a letter to NLB today (1). 

A consortium comprising NLB Banka, Italy’s Intesa Sanpaolo and Russia’s Sberbank was recently the only bidder to provide a EUR 74 million to Elektroprivreda Bosne i Hercegovine (EPBIH) to part-finance the Tuzla 7 coal plant (2). 

NLB’s shareholders include the European Bank for Reconstruction and Development and the Slovenian government (3), both of which were involved in Slovenia’s disastrous Šoštanj unit 6 coal power plant, which has brought huge losses as a result of cost overruns, alleged corruption and unrealistic economic analyses (4) and which is the biggest CO2 emitter and contributor to climate change in the country.

The remaining 85 percent of financing for Tuzla 7 – EUR 614 million – is to be provided by the China Exim Bank. However controversy is raging about the Federation of Bosnia and Herzegovina’s guarantee for the loan, which is in breach of Energy Community Treaty rules on State aid (5) and is currently undergoing a dispute settlement procedure.

The project has also come under criticism for failing to take into account CO2 prices in its feasibility assessment, as well as for counting on unrealistically low prices of coal. 

Tuzla 7’s environmental assessment is also under scrutiny both at the Supreme Court of the Federation of Bosnia and Herzegovina, and under the Espoo Convention, which requires the assessment of transboundary environmental impacts for certain large infrastructure projects.

“As world leaders gather in Madrid to try to address climate change, and the new European Commission takes office pledging to make Europe the world’s first climate-neutral continent, it is nothing less than shameful that European banks, including one part-owned by the Slovenian government and the EBRD, is considering financing a new coal plant in Bosnia and Herzegovina,” commented Denis Žiško of the Center for Ecology and Energy from Tuzla.

“It would be a bitter irony if the Slovene government and the EBRD let NLB contribute to a new Šoštanj 6 in Bosnia and Herzegovina,” commented Pippa Gallop of CEE Bankwatch Network. “Unfortunately Tuzla 7 has many of the same hallmarks as Šoštanj, including glaring deficiencies in its feasibility study and a lack of transparency surrounding its development”, she continued.

Contacts

Denis Žiško, Centre for Ecology and Energy, Tuzla

Email: denis.zisko@ekologija.ba

Skype: denis.zisko

Mob: +387 61 140 655

 

Pippa Gallop, CEE Bankwatch Network

pippa.gallop@bankwatch.org

Skype: pippa.gallop

Mob: +385 99 755 9787

Notes for editors

  1. The letter is available at: https://bankwatch.org/letter-nlb-tuzla 
  2. https://zurnal.info/novost/22581/vlada-fbih-uzela-120-miliona-elektroprivreda-se-zaduzuje?fbclid=IwAR2dUjGSwItDFPVxPXcshzFB_Pbw8wYxLTLCUrtvqUmlmnLjP-3_j8W7WQQ
  3. https://www.nlb.si/shares
  4. https://www.focus.si/files/programi/energija/2014/mythbuster.pdf, https://www.counter-balance.org/new-investigation-reveals-how-the-eus-bank-fails-to-tackle-fraud-and-corruption-in-its-investments/
  5. https://www.energy-community.org/news/Energy-Community-News/2019/03/04.html, https://www.energy-community.org/news/Energy-Community-News/2019/03/26.html

World’s largest multilateral bank ends fossil fuels financing

According to a Bankwatch analysis, between 2013 and 2018, the EIB awarded the fossil fuels industry a total of EUR 13.5 billion – or EUR 6.2 million every day over this six year period.

The bank’s fossil fuels financing will end by 2021. From then on, the EIB’s fossil fuels portfolio should be virtually zero.

People around the globe, and particularly young people, have been mobilizing to demand governments take bold climate action. By no longer wasting billions in European public money on fossil fuels, the EIB – owned by the EU’s 28 Member States – is finally acknowledging its responsibility towards future generations.

But if the EIB is to become Europe’s climate bank, as touted by incoming European Commission President Ursula von der Leyen, it needs to swiftly step up its support for energy efficiency and renewable energy projects — not only in the richer Member States, but also in regions like Central and Eastern Europe which have traditionally been dependent on fossil fuels. This can be achieved through the proposed Energy Transition Package. However, this instrument must be reinforced with concrete measures to enable the needed energy transition in those regions.

Today’s landmark decision should also prompt other international financial institutions – multilateral development banks in particular – to immediately halt all support to the fossil fuels industry.

Two years ago, the World Bank pledged to cease funding for upstream oil and gas after 2019, but it is yet to set a deadline for all fossil fuels lending. The European Bank for Reconstruction and Development (EBRD) continues to support the fossil fuels industry. It has invested in equity in Romania-based Black Sea Oil and Gas, in bonds of several fossil fuels companies in Ukraine, Bulgaria, Greece, Turkey, Egypt, as well as in a number of gas grid projects like the Trans Adriatic Pipeline, the Trans Anatolian Pipeline and the BRUA pipeline.

But the sun is setting on fossil fuels subsidies. Both the EBRD and the World Bank should follow in the EIB’s footsteps and divest from fossil fuels.

Xavier Sol, Director of Counter Balance, said:

“This is a great step forward for the EIB – and an achievement for civil society to celebrate. But given the bank’s commitment to align all its operations with the Paris Agreement by the end of 2020, there are serious challenges ahead for the EU’s bank. Firstly, it needs to implement this new energy policy in a stringent manner and not allow fossil gas projects to receive public funding. Then, it needs to update its overarching climate strategy and stop financing carbon-intensive transport modes, as it currently does. Civil society will keep a vigilant eye on these upcoming challenges.”

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

“This is a historical moment for the European Union. Its financial arm denies further financing for fossil fuels projects as it found them uneconomic and detrimental for the environment. It is laudable that the EIB is the first international development bank to say ‘no’ to fossil fuels. Other international financial institutions should follow suit. Central and Eastern Europe will especially benefit from a dedicated Energy Transition Package. The bank has finally acknowledged it must enhance its support to the deployment of energy efficiency and renewable energy projects.”

For additional information please contact:

Anna Roggenbuck
Policy Officer, CEE Bankwatch Network
annar@bankwatch.org
+48-918315392
+48-509970424

Xavier Sol
Director, Counter Balance
xavier.sol@counter-balance.org
+32(0)2 893 08 61