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Just Transition funding needs to support real transitions

In June, the governments of Czechia, Poland, Hungary and Estonia opposed the EU’s long-term climate neutrality goal because of financial concerns. The Just Transition Fund, initiated by the European Parliament and currently under development in the European Commission, aims to address this concern and help EU’s fossil-fuel dependent regions in their swift transition to clean energy.

While NGOs welcome the earmarking of EU funding to support the transition to a net-zero emissions economy, questions remain whether the new Just Transition Fund will be sourced with additional funding beyond what is available under Cohesion Policy funding. Using the revenues from additional aviation allowances under the Emissions Trading Scheme could be such an additional source of income.

Furthermore NGOs insist that transition funding should only be given to countries and to activities that accept and support a vision to fully decarbonise and ensure that the money is aimed to support the people that need it rather than wasting it on greedy companies.

Wendel Trio, director of Climate Action Network (CAN) Europe said:
“EU leaders rightly consider that climate change requires targeted finance for climate action, particularly in the Europe’s most fossil-fuel dependent regions. However the Just Transition Fund alone will not do the trick. The entire EU Budget has the potential to catalyse the transformation needed in all sectors of the economy. And the EU funds going to the regions are well designed to deliver such support, only if Member States set their priorities accordingly.”

Raphael Hanoteaux, Policy Officer at CEE Bankwatch Network said:
“Discussions about the size of a Just Transition Fund or the overall EU Budget should not overshadow a more important conversation about the quality of spending. EU leaders must ensure that local communities are involved in how any money is spent to ensure ownership of the long-term transition.”

ENDS

Major gas projects in Romania enabled by regulatory acrobatics – report

BUCHAREST — A new report released today by the environmental group Bankwatch Romania finds that much of the burgeoning gas development in Romania over the past two years has been enabled by a set of questionable changes in the regulatory framework.

The full report is available here: https://bankwatch.org/publications/state-capture-a-case-study-about-natural-gas-exploitation-and-transportation-in-romania

The report shows legislative measures have been time and time again adopted in a non-transparent manner, and without any public participation.

Romania has a clear set of rules for projects considered of national or strategic importance. But, as the report shows, gas projects such as the BRUA pipeline and plans for offshore gas drilling in the Black Sea have taken a different route – a legal bypass, in fact.

Specifically, they have benefited from legal derogations and legislative reinterpretations regarding the protection of the environment, of protected areas, or property rights. In this way, protected natural areas like Danube Delta or the Jiu Valley National Park are made eligible for the construction of gas pipeline and gas treatment stations.

Moreover, the legislation analysed in this report was the one in force until September 1st, 2019. Yet, the law concerning offshore oil operations is again subject to change.

These mega-projects have been enjoying both the government’s backing and financial support from the European Investment Bank and the European Bank for Reconstruction and Development.

Yet, while these institutions have policies to uphold, and even promote, certain standards of democracy, the rule of law, transparency and public participation, they appear to have been particularly tolerant to deviations from international law in the cases described in the report.

„The projects and legislative changes analysed in this case study prove that in Romania, climate and environmental policies and objectives mean too little. Facilitating the construction of pipelines and natural gas facilities in the middle of protected natural areas casts a serious doubt over the integrity of the institutions involved and the ability of Romanian authorities to develop the energy sector without further degrading the environment,” said Laura Nazare, campaign coordinator at Bankwatch and author of the report.

Contacts:

Laura Nazare
Campaign coordinator, Bankwatch Romania
laura.nazare@bankwatch.org
+40770209187

Decision on a fossil fuels ban at the EIB postponed once more

Counter Balance, Bankwatch and a large number of civil society groups and local authorities part of the Fossil Free EIB campaign have been urging the EIB to stop lending public money to fossil fuels. Back in July 2019, the EIB came up with a first proposal for its new Energy Lending Policy which featured an ambitious plan to stop support to fossil fuels by the end of 2020.

But since then, several EIB shareholders – the EU Member States – and the European Commission have succeeded in watering down this proposal by expanding loopholes to this fossil fuels ban – allowing for more gas projects to be financed. Driven in particular by Germany, they have succeeded, following September’s EIB Board meeting, in pushing the EIB to publish a weakened second draft. 

And now the decision on the policy is further postponed to the next EIB Board of Directors meeting on 14 November 2019.

“The EIB Directors need to adopt a Fossil Free energy policy at their next meeting in November. As of 1st January 2021, the EIB should stop handing out public money to fossil fuels projects. Otherwise, the whole idea of turning the EIB into a climate bank will inevitably fall apart.

The EIB President Werner Hoyer committed to align all the EIB operations with the Paris Agreement by the end of 2020. When announcing this plan to the European Parliament last week, he received significant support from most political groups. But if a weak energy policy is adopted, this objective will not be reached.

It is now time for the European Commission, Germany and those countries that opposed the EIB’s fossil fuel ban to stop acting as climate laggards and recognise the urgency of stemming the climate crisis. The European Commission should also clean up its act, as it cannot on the one hand publicly promote its European Green Deal as a game changer and on the other object to climate commitments at the EU’s financial arm. It’s now time to act., Business as usual won’t work for the climate or for citizens,” said Xavier Sol, Director of Counter Balance

“The European leaders are again confirming that climate protection is an empty phrase for them. They are not making necessary decisions that should have been made long time ago and are undermining the right proposals made by the EU’s bank, the EIB. We are disappointed by this delay but still hope that the initial proposal will be adopted in November” – said Anna Roggenbuck, Policy Officer, CEE Bankwatch Network

Can European Parliament make ICT fair?

The breakfast was organised to raise awareness of sustainability and human rights abuses in the supply chain of information communication technology (ICT) products, as well as facilitate the discussion on the role of MEPs in promoting EU policies on human rights, European development banks and public procurement.

MEP Abir Al-Sahlani said: “Our societies have benefited greatly from globalisation. But it is important to raise awareness of human rights risks associated with the production of some of the most popular products that many of us enjoy- like smartphones. People should never be in danger when doing their jobs.”

The breakfast began with a video testimonial addressed to MEPs from Pak Kin Wan, a worker in the Labour Education and Service Network in Hong Kong, and a speech by Anna Shahnazaryan who works in Armenia and had experienced first-hand the violations to human rights.  Following this, speakers from SETEM, Bankwatch and ICLEI gave talks on the priority EU areas of action: business and human rights, European development banks and public procurement.

Make ICT Fair participant organisations presented the MEPs with a list of case studies conducted by members of the consortium, as well as a briefing document outlining the key actions MEPs can take to ensure the implementation of fair and sustainable EU policies on the priority areas.

Participants could upload photos and footage using the hashtag #MakeICTFair and #fairelectronics on social media.

For more information contact the lead project researcher Linda Scott Jakobsson at linda@swedwatch.org.

Notes

Make ICT Fair is an EU-wide project that aims to improve the lives of workers and communities affected by the production of ICT devices such as smartphones and laptops. We target EU citizens, public procurers, development banks, decision-makers, and companies to improve their purchasing practices and to align policies. The partners: SETEM Catalunya, CATAPA, ICLEI, the University of Edinburgh, Le Monde Diplomatique, People & Planet, CEE Bankwatch, Swedwatch, Electronics Watch, Towards Sustainability Association, and Südwind.

Too soon to call the “Juncker Plan” a success – new report

The full report can be found here

Brussels, Prague — The European Fund for Strategic Investments (EFSI), the cornerstone of the Juncker Plan, was jointly launched by the European Commission and the European Investment Bank (EIB) in Spring 2015 with the goal of leveraging EU budget to mobilise private capital and catalyse strategic, transformative and productive investments with high economic, environmental and societal added value. It has been hailed as a success even before a solid assessment of the plan’s achievements was completed.

Examining the performance of the EFSI’s pilot phase, the new report identifies a number of serious shortcomings that need to be addressed if its successor is to have the intended impact.

  • Sustainability: EFSI support for projects labeled ‘climate action’ (see the full list here: https://bankwatch.org/efsi-climate-action) has only moderately exceeded EIB’s standard climate action while handing out EUR 2.6 billion in guarantees to fossil fuel projects and additional guarantees worth EUR 5 billion to carbon intensive transport projects.
  • Geographic distribution: Most signed guarantees have been to projects in France, Italy and Spain.
  • Additionality:the European Court of Auditors concluded in its latest report that the amount of investment mobilised by the EFSI may have been overestimated. The report showed that EFSI’s support has replaced pre-existing financing or alternative funding sources, mainly in the fields of energy and transport. 
  • Governance, integrity and transparency: despite some progress compared to the early stages of implementation of the plan, key information about the approved projects still remains undisclosed and the EFSI Investment Committee has failed to fulfil the criteria of independence, with several cases of conflict of interest. Furthermore, support for projects under fraud investigation should be avoided.

The Juncker Plan was initially supposed to help revive the European economy in a moment of economic crisis. The EFSI’s lifetime was first extended until the end of 2020 – with its investment target increased from EUR 315 billion to at least EUR 500 – and then rebranded “InvestEU” as part of the EU post-2020 budget.

Yet, the report depicts the EFSI as a mixed bag, falling short of what would be expected from a multi-billion euro investment scheme.

Xavier Sol, Director at Counter Balance, said:

“If InvestEU is to occupy a central role in the future European Green Deal, the European Commission needs to learn lessons from its previous flagship initiative, the ‘Juncker Plan.’ There is room to exert a much more stringent control to ensure that investment plans are not just business as usual. The ‘Juncker Plan’ has at best a mixed track record, and there’s room for major improvements to get EU investments more transparent and better working for European citizens and territories”.

Anna Roggenbuck, policy officer at CEE Bankwatch Network, said:

“The EFSI’s contribution to tackling the climate crisis is still too limited. EFSI has only slightly exceeded the support to climate action projects in comparison to standard EIB’s operations. In central and eastern Europe, EFSI has failed to give any boost to climate action investments. This is not what we expected from what was supposed to be an innovative financial mechanism. The Fund has also reached the maximum geographical concentration limit with its support to France, Spain and Italy. Indeed if the size of the economy is considered other countries benefited most such as Greece, Finland, Bulgaria or Slovakia. However, these considerations bring us no closer to understanding which market failures these investments addressed in a systemic way, especially in Central and Eastern Europe. 

Contacts:

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

New report: hydropower subsidies wreak environmental havoc and line influential pockets in the Western Balkans

CEE Bankwatch Network * Euronatur * RiverWatch * WWF Adria

Brussels, Radolfzell, Vienna, Prague, Zagreb 

The report is available here 

Fuelled by generous state-sponsored feed-in tariffs that contradict EU guidelines on state aid for environmental protection and energy, the number of hydropower plants under 10 megawatts in Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia quadrupled from 108 to at least 488 between 2009 and 2018. 

Whilst the speed of development on solar and wind power projects has been glacial, in 2018 no less than 70 per cent of renewable energy incentives awarded in the region benefited small hydropower. Despite this support, small hydropower only generated 3.6 per cent of total electricity.

This boom in small hydropower has also caused public outrage across the region as rivers and streams, often in ecologically valuable and protected areas like the Stara Planina Nature Park in Serbia and Valbonë Valley National Park in Albania, have been dammed and put into derivation pipes, leaving riverbeds dry and the communities who depend on them without vital sources of water. 

The incentive schemes have lost credibility among the public by benefiting well-connected business people. For instance:

  • North Macedonia’s Deputy Prime Minister for Economic Affairs, Kocho Angjushev – owns at least 27 small hydropower plants – and the president of the main opposition party, Hristijan Mickoski also holds at least 5 concessions.
  • In Serbia, companies connected to Nikola Petrović, the best man (kum) of President Aleksandar Vučić, are among the top beneficiaries of hydropower support.
  • Montenegro’s renewables incentives system has mainly benefited people close to the President, Milo Đukanović. 

Pippa Gallop of CEE Bankwatch Network and lead author of the report, said: “It is high time to end hydropower subsidies in the Balkans. Perceptions that these schemes benefit the wealthy and fuel environmental damage endanger public acceptance of the whole transition to a sustainable and efficient energy system. Those countries which have not done so urgently need to switch to more transparent schemes based on auctions and premiums to ensure affordable and proportionate incentives,” she added.

Ulrich Eichelmann, CEO of Riverwatch, said: “The subsidies for hydro are the major driver of ecological destruction and social conflicts in the region, and worst of all, without generating a noteworthy amount of energy.  Governments need to end incentives for mature technologies such as hydropower. Only technologies which are still developing and whose costs are expected to fall further, like solar and wind, need support.” 

Petra Remeta, Conservation programs director of WWF Adria, said: “The fact is that the  Western Balkan countries have committed to apply EU subsidies rules by signing the Energy Community Treaty and Stabilisation and Association Agreements with the EU, so we call on the European Commission and the Energy Community to make sure this really happens. These rules include sustainability conditions and would help to stop subsidies for the environmental destruction of European rivers”.

Gabriel Schwaderer, Executive Director of Euronatur, said: “Existing feed-in tariff contracts for small hydropower plants need to be reviewed as they are valid for several more years. Any which granted incentives without all the legal conditions being fulfilled or for which the environmental permits have expired must be cancelled.”

Contacts

Pippa Gallop

CEE Bankwatch Network and lead author of the report

E-mail: pippa.gallop@bankwatch.org

Skype: pippa.gallop

Mob: +385 (0)99 755 9787

 

Ulrich Eichelmann

CEO, Riverwatch

Petra Remeta

Conservation programs director, WWF Adria

Anja Arning

Head of Public Relations, Euronatur

E-mail: anja.arning@euronatur.org

+49 7732 9272 13

 

Notes for editors

[1] Montenegro is phasing out renewables incentives altogether and Albania approved a law in early 2017 introducing an auction-based system for larger plants by 2020. North Macedonia has also taken steps towards an auction system, but left feed-in tariffs for hydropower intact, giving it an unfair advantage over solar and wind. The remaining countries – Serbia, Bosnia and Herzegovina and Kosovo – are yet to start with substantial changes to their renewables incentives regimes.