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Home > Archives for Press release

Press release

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

NGOs reaction to preparatory works kicking off at Tuzla 7 coal unit in Bosnia-Herzegovina: “This plant is not ready for construction”

“Tuzla 7 would sentence Bosnia and Herzegovina and its neighbours to several more decades of pollution and greenhouse gas emissions. This project reminds me of a Hans Christian Andersen’s story, The Emperor’s New Clothes. It’s high time that we finally acknowledge that the emperor is naked,”  Denis Žisko of the Centre for Ecology and Energy from Tuzla said. “Europe is moving away from coal – Montenegro just recently announced it was dropping a new coal unit at Pljevlja. This is not only because of coal’s climate and health impacts but because it no longer makes economic sense.”

“Bosnia and Herzegovina’s politicians are hailing this project as the country’s largest post-war investment, but it’s not too big to fail,” warned Pippa Gallop of CEE Bankwatch Network. “The price of coal cited in the feasibility study is unrealistically low and the future price of CO2 was barely taken into account. Similar issues plagued the Šoštanj 6 project in Slovenia and that ended up with huge losses and 10 people being charged for corruption. Instead of pretending that everything is ok, authorities in Bosnia and Herzegovina should face all the problems afflicting this project and reconsider it altogether.”

The project attracted criticism from the EU’s Enlargement Commissioner in March this year after the Bosnia and Herzegovina authorities ignored warnings that a loan guarantee for the project would be illegal (1). The guarantee, for a EUR 614 million loan from China Exim Bank, is subject to an infringement case under the Energy Community Treaty. (2) The case is still ongoing.

Several other issues still plague the project, including an open court case against its environmental permit (3), an ongoing case under the Espoo Convention on Bosnia and Herzegovina’s failure to consult its neighbours over the expected transboundary pollution from the plant (4), and the fact that no site for the plants’ ash waste has been confirmed yet, after community protests resulted in the originally planned location at Šićki Brod being ditched (5).

Contacts

Denis Žiško
Center for Ecology and Energy, Tuzla
Tel: +387 61 140 655
E-mail: denis.zisko@ekologija.ba

Pippa Gallop
CEE Bankwatch Network
E-mail: pippa.gallop@bankwatch.org
Skype: pippa.gallop
Tel: +385 99 755 9787

 

Notes for editors

  1. For more information, see: https://www.euractiv.com/section/enlargement/news/bosnian-energy-project-surprises-eu-enlargement-chief/
  2. See: https://www.energy-community.org/news/Energy-Community-News/2019/03/26.html
  3. The complaint, submitted by Ekotim in September 2016 and still pending, challenges both the process of issuing the permit and the content of the environmental impact assessment study.
  4. See https://www.unece.org/fileadmin/DAM/env/eia/documents/ImplementationCommittee/45th_Session/Documents/ece.mp.eia.ic2019.4e_advance_copy.pdf for the advance report from the September 2019 session of the Espoo Implementation Committee.
  5. https://www.oslobodjenje.ba/vijesti/bih/sljakom-ce-se-puniti-praznine-u-rudniku-495428

For more on the Tuzla 7 project, see https://bankwatch.org/project/tuzla-7-lignite-power-plant-bosnia-and-herzegovina-2

For more info about Sostanj see https://bankwatch.org/press_release/slovenia-coal-fraud-charges-serve-as-warning-for-other-balkan-countries-say-ngos and here for an overview of the issues around the Šoštanj 6 project: http://www.focus.si/files/programi/energija/2014/mythbuster.pdf

EU bank drops Belgrade incinerator, citing impact on recycling: EBRD and other banks press on

The EIB said that both its appraisal and an opinion from the European Commission on the project found that the incinerator would prevent Serbia from achieving its environmental targets on recycling and the circular economy as part of the EU accession process.

In contrast, the European Bank for Reconstruction and Development (EBRD), the International Finance Corporation (IFC) and the Austrian Development Bank (OeEB) have recently signed loans for the project (3).

Ne Davimo Beograd and Bankwatch have recently filed an official complaint (4) to the EBRD about the Vinca project. The groups claim that the bank breached its own policies by failing to avoid negative environmental impacts from the project. This could have been achieved by supporting more sustainable practices like waste prevention, re-use, composting and recycling, which are at an extremely low level in Belgrade.

The complaint also highlights the fact that incinerators tend to crowd out waste prevention and recycling measures due to lengthy contracts that require city authorities to deliver consistent amounts of waste. In the groups’ view, the EBRD did not adequately respond to the concerns raised on this issue.

Pippa Gallop from CEE Bankwatch Network said, “The EBRD and IFC have persistently claimed that the incinerator would not affect recycling, without providing any evidence. Now the EIB and Commission say the opposite. The EBRD and IFC have a lot of explaining to do.”

Aleksa Petković from Ne Davimo Beograd said, “We welcome the EIB and the Commission’s recognition that Belgrade should not be prioritising incineration. We are already suffering from low recycling levels and dire air quality. The last thing we need is another source of pollution and another diversion from setting up a functional recycling system. The EBRD, IFC and OeEB need to withdraw from this project while they still can.”

Contacts:

Aleksa Petković
Ne Davimo Beograd
Email: nedavimobeograd@gmail.com
Tel: +381(0)11 420 85 96

Pippa Gallop
CEE Bankwatch Network
E-mail: pippa.gallop@bankwatch.org
Skype: pippa.gallop
Tel: +385 99 755 9787

Notes for editors:

  1. For more information about the project, see: https://bankwatch.org/project/belgrade-incinerator-public-private-partnership-ppp-belgrade-serbia
  2. For more information see: https://nedavimobeograd.rs/english/

  3. In addition to the planned incinerator, the project would include the construction of a new landfill, a landfill gas plant, a construction waste depot and a cosmetic rehabilitation of the existing Vinca waste landfill, but no recycling or composting of municipal waste. The EBRD is contributing a EUR 128.5 million syndicated loan, including a loan of EUR 72.25 million from its own account, a loan of EUR 35 million provided by Erste Group Bank AG, and EUR 21 million in concessional finance funded by TaiwanICDF. The International Finance Corporation (IFC) and Oesterreichische Entwicklungsbank (OeEB) are lending up to EUR 72.25 million and EUR 35 million, respectively. Source: https://www.ebrd.com/news/2019/belgrade-to-get-new-waste-management-facilities.htm

  4. See complaint, here: www.ebrd.com/documents/occo/belgrade-solid-waste-ppp-complaint.pdf?blobnocache=true

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