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EU Parliament shirks responsibility for climate action in future funding of Europe’s most needy regions

Climate Action Network (CAN) Europe and CEE Bankwatch Network have criticised the outcome in the Regional Development committee, which undermines a vote from the previous day on the Common Provisions Regulation that prohibited Cohesion Funds being allocated for the most polluting forms of energy.

The Regional Development committee voted to amend the European Commission’s proposal from May 2018 on the ERDF which initially excluded funding for projects with heavy environmental impacts, such as waste incinerators and landfills, fossil fuels infrastructure and regional airports.

The amended report voted by the REGI committee also called for no increase in funding under the so-called thematic concentration in Policy Objective 2, a key piece of legislation that earmarks money for green projects. At the same time the range of measures eligible for funding under this objective has been expanded, watering down the original intent to fund a ‘green, low-carbon transition’.

Raphael Hanoteaux, EU policy officer with CEE Bankwatch Network, said:

“The Parliament has failed to follow suit and show that EU funds are committed to delivering for the climate in the regions that need support the most. Everybody involved in how EU funds are spent – managing authorities, investors and local partners – needs a clear signal about what is and is not eligible for funding, and the ERDF vote muddies the waters.”

“The silver lining is that Parliamentarians can still reverse course in March, when the report is being voted by the plenary in Strasbourg. MEPs that are genuinely committed to EU ambitions on climate action could still overturn this unfortunate detour. ” [1]

Markus Trilling, Finance and Subsidies Policy Coordinator at Climate Action Network (CAN) Europe, said:

“Members of the committee today proved a lack of economic foresight. Allowing fossil fuels investments in future Cohesion Policy funding will lock EU’s regions into high-carbon dependency for decades. Slowing down the transition to net-zero emission economies will be costly in the end as EU citizens will have to pay for the missed opportunities in green jobs and modernisation of energy, transport and housing.”

Note to editors:

[1] The plenary vote will probably take place on 27 March.

 

European Parliament greenlights clean cohesion policy

With today’s plenary vote on the Common Provisions Regulation (CPR), EU funds for the regions are for the first time set to become climate-proof, paving the way to economic development policies that are not harmful to the climate and that boost the clean energy transition.

Nowhere is the need greater for effective and focused spending than in central and eastern Europe, EU funds’ main beneficiaries, whose economies are on the whole more carbon-intensive than in the rest of Europe. The adopted CPR should allow EU funds to put these regions on a path to sustainable development and a just transition that creates high-quality employment for the long term.

However, these climate friendly provisions still need to translate into adequate spending priorities for EU’s regions as the Committee on regional development of the European Parliament will take its position on the future of European Regional Development Funds tomorrow [1]. It is worrying that some members of the committee continue to push for funding for fossil fuels despite their harmful impacts on the climate.

Markus Trilling, Finance and Subsidies Policy Coordinator at Climate Action Network (CAN) Europe, said:

“This is the right framework for the EU budget to match the unprecedented economic shift required by runaway climate change. Focusing regional development spending on climate action will clearly help lesser developed European regions, which are on the whole more carbon-intensive, get out of the fossil fuels era and enjoy the economic and social benefits of the clean energy transition.”

“However these climate-friendly provisions must be fully reflected in the future European Regional Development Fund, whose vote in the European Parliament is scheduled for tomorrow. First of all, fossil fuels have to be excluded. Any compromise allowing fossil fuels would fly in the face of the climate progressive MEPs who have adopted the Common Provisions Regulation today.”

Raphael Hanoteaux, EU policy officer with CEE Bankwatch Network, said:

“Today’s outcome is a step in the right direction for Cohesion Policy to lead Europe’s regions on the path towards a clean and just energy transition. But without consistency between the Common Provision Regulation and tomorrow’s vote on the Regional Development Fund, Parliamentarians will have failed to act on climate change by permitting more funding for fossil fuels.”

Note to editors:

[1] On the one hand, the Common  Provisions Regulation (CPR) lays down common provisions, general rules and guiding principles for multiple EU funds, including the European Regional Development Fund and the Cohesion Fund. On the other hand, the Regulation on the European Regional Development Fund specifies the monetary allocations, concrete measures and projects that can be funded or excluded from the fund.

The EU’s bank downplayed climate risk in granting record loans to Europe’s largest fossil fuel project

The complaint can be downloaded here.

Despite commitments to align its activities with the Paris Agreement, the EIB approved last year two loans to the Trans Adriatic Pipeline (TAP) and the Trans Anatolian Pipeline (TANAP) sections of the mega project totalling EUR 2.4 billion. The TAP loan – worth EUR 1.5 billion – is the largest sum of public money ever extended to an energy project. This loan is also covered by an EU guarantee from the European Fund for Strategic Investments.

An analysis undertaken by Bankwatch, Counter Balance, Friends of the Earth Europe and Re:Common reveals that the EIB substantially underestimated the greenhouse gas emissions associated with the project. In the case of the Trans Anatolian Pipeline, the bank’s figures are 2.5 times smaller than those calculated by the project consortium, and for the Trans Adriatic Pipeline the emissions estimated by the bank are 3.5 times smaller.

In part, the reason for these striking discrepancies is the EIB’s use of outdated methodologies which do not reflect contemporary scientific understanding of the climate impact of natural gas. According to the complaint, the bank underestimated the global warming effect of methane, known as a relatively short-lived but extremely potent greenhouse gas, up to 86 times more powerful than carbon dioxide, according to the Intergovernmental Panel on Climate Change.

In addition, while a pipeline of the scale of the Southern Gas Corridor is typically planned to be operational for about half a century, the EIB’s carbon footprint assessment does not consider the project over its full lifetime [1].

Furthermore, the analysis shows the environmental and social impact assessments submitted to the EIB by project promoters also systematically underestimate ‘fugitive emissions’ – unplanned but inevitable releases of methane. These are a widely acknowledged source of greenhouse gas emissions in gas projects, expected throughout the exploration, production, processing, storage and distribution stages of the Southern Gas Corridor. These assessments also exclude key parts of the project such as the gas extraction and the pipelines carrying it through Azerbaijan and Georgia.

In reality, the Southern Gas Corridor’s climate impact could be as devastating as a coal alternative, a 2018 Bankwatch study showed. [2]

In detailing these miscalculations, the complaint filed today argues the EIB has failed to meet its own standards as stipulated in the bank’s Environmental and Social Practices Handbook – namely, it failed to conduct or require a comprehensive climate impact assessment for the project.

The complainants now urge the EIB to undertake the necessary additional assessments of the Southern Gas Corridor’s climate footprint and to propose ways to mitigate it. Until then, the bank must avoid disbursing its loans to TAP and TANAP.

The civil society groups have repeatedly warned of risks to human rights and the environment of this mega-project – including serious risk of corruption, compromised land rights and inadequate public participation throughout the pipelines’ routes, the horrendous human rights record of the Azerbaijani government, the questionable viability of the project and its incompatibility with EU and international climate targets.

This year, the EIB is reviewing its energy lending strategy and the NGOs call on the bank, the world’s largest multilateral lender, to seize this opportunity to live up to its promises to align with the Paris Agreement and finally commit to halting support to fossil fuels.

Anna Roggenbuck, Policy Officer with CEE Bankwatch Network, says: “It is unacceptable, three years after the Paris Agreement was signed, for the EU’s financial institution to support a giant fossil fuel project without having it thoroughly assessed for climate impacts. This is all the more shocking that the EIB’s calculation of annual emission is a few times lower than its clients’ flawed assessments.”       

Xavier Sol, Director of Counter Balance, says: “It was already clear to us that the motivations behind financing the Southern Gas Corridor were mainly political. We now realise that on the climate front, the EIB’s assessments were not serious – despite its public mandate to invest in a sustainable and responsible manner. It is time to stop ignoring the harmful impacts of gas projects on the climate and put an end to public money injected into dirty projects”.

Colin Roche, Fossil Free Europe campaigner with Friends of the Earth Europe, says: “This shoddy approach to measuring the climate impact of this gas mega-project highlights the European Investment Bank’s careless disregard for the climate crisis. We have no room left to build anything that emits CO2, so what is the bank doing shackling us to a new generation of fossil fuels? The bank must move its money from fossil fuels to 100% renewables, right now.”

Elena Gerebizza, researcher at Re:Common, says: “A project of the magnitude of the Southern Gas Corridor should have received an even closer attention than usual. The EIB and the European Commission appear to have overlooked  the Southern Gas Corridor’s true climate price tag, on top of other serious environmental issues that the Public prosecutor in Lecce has been investigating. EU citizens and residents along the pipeline should not pay the environmental, social and climate cost for this controversial project. We call on the EIB to put on hold the disbursement of the loan until this complaint is addressed and an investigation is concluded.”

Notes to editors:

[1] The EIB’c carbon footprint assessment considered only 10 billion cubic meters (bcm) annually of gas while the pipeline is designed to carry 20 bcm (via TAP) and 24 bcm (via TANAP)

[2] Smoke and mirrors. Why the climate promises of Southern Gas Corridor don’t add up, CEE Bankwatch Network, January 2018 

For additional information please contact:

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

Elena Gerebizza
Re:Common
egerebizza@recommon.org
+39 3406705319

Colin Roche
Friends of the Earth Europe
colin.roche@foeeurope.org
+32 2893 1021

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

Case to the European Ombudsman calls out Commission for failing to protect Bulgaria’s biodiversity

The “Save Kresna gorge” coalition of Bulgarian environmental groups and CEE Bankwatch Network have petitioned the Ombudsman to end the prolonged maladministration by the Commission of EUR 610 million in EU Cohesion  funds that the Bulgarian government intends to spend on the Struma motorway planned in the country’s richest area of biodiversity.

The 16 kilometre section of the Kresna gorge where the Struma motorway project is planned is the most biodiverse region in Bulgaria, home to 92 protected species, and part of the EU’s Natura 2000 network of protected areas. More butterfly species live on one square kilometre of the Kresna gorge than in all of the UK. Since construction of the motorway started in 2011, the traffic through the Kresna gorge has caused severe decline of the populations of protected bats, turtles and snakes.

In 2013 the Commission conditioned funding of the Struma motorway on “avoiding the environmentally sensitive Kresna Gorge”, a prerequisite for further financing of other parts of the motorway. But insufficient oversight of Bulgaria by the Commission has allowed the project to proceed in spite of violations to the EU’s Habitats Directive, the Environmental Impact Assessment Directive, and international conventions.

The “Save Kresna gorge” coalition has repeatedly alerted the Commission of these developments with the project [2], and has even developed alternative routings that would preserve the gorge , but construction of the motorway continues  in spite of the well-documented risks to the gorge.

The complainants are asking the Ombudsman to ensure that the Commission executes its duty to prevent the deterioration of the Natura 2000 site.

Daniel Popov of the “Save Kresna gorge” coalition said:

“Any attempt of this kind should be stopped and the government sanctioned. In addition to  destroying a valuable natural site of European importance, the motorway erodes the role of the European Commission as the guardian of the EU’s founding principles, provoking the already-widespread Euroscepticism in Bulgaria.”

Anelia Stefanova, Program Director at CEE Bankwatch Network, said:

“The EU has some of the strongest laws on biodiversity protection but still, in the EU, only 17 per cent of habitats and species and 11  per cent of key ecosystems protected under the EU legislation are in a favourable state. This means that no further biodiversity loss can be tolerated, especially  when EU money is at stake. The Commission body on Regional Policy should change how it manages the project to ensure EU funding is a tool for implementing EU law.”

Contacts:

Desislava Stoyanova
+359888714688
Za Zemiata, Friends of Earth Bulgaria / CEE Bankwatch Bulgaria

Anelia Stefanova
anelias AT bankwatch.org
+393338092492
CEE Bankwatch Network

Notes

[1] https://bankwatch.org/publication/eu-funds-maladministration-complaint-to-the-european-ombudsman 

[2] See for instance https://bankwatch.org/press_release/legal-complaint-lodged-to-save-protected-bulgarian-gorge-from-destructive-motorway and https://bankwatch.org/blog/bulgaria-s-struma-motorway-becomes-test-case-for-european-commission-s-commitment-to-eu-nature-protection-law

 

Future EU funds for the regions set to become climate-proof

The regulation adopted today in the REGI committee improves an earlier proposal from the Commission through the introduction of new provisions aiming at climate proofing the funds dedicated to bettering Europe’s regional development.

In addition to cutting funding for fossil fuels in the future Cohesion Policy, the provisions emphasise the energy efficiency-first principle and prioritise emission cuts and a zero-carbon pathway in line with the EU’s climate and energy targets for 2030. The regulation also encourages a socially-just energy transition and greater public participation in planning and implementing EU funding.

Markus Trilling, finance and subsidies policy coordinator at Climate Action Network (CAN) Europe, said: “The European Parliament’s vote acknowledges the urgent and imperative need to align Cohesion Policy funding with the Paris Agreement. The agreed climate proofing is a big step in the right direction as it should allow the EU to foster its regions in a sustainable and climate-friendly way, particularly in central and eastern European countries which are still relying heavily on fossil fuels.”

“Now MEPs must stay consistent at the upcoming vote on the European Regional Development Fund post-2020 and fully take into account these new safegards on climate protection.”

Raphael Hanoteaux, EU policy officer with CEE Bankwatch Network, said: “A just transition is well underway in central and eastern Europe, and the Parliament’s vote today recognises the essential role that local communities and authorities must play in remaking their energy futures. Ending funding for fossil fuels and guaranteeing civic engagement through the partnership principle is the best way to ensure an energy transformation that leaves no one behind.”

 

Contacts:

Nicolas Derobert, CAN Europe Communications Coordinator, nicolas@caneurope.org, +32 483 62 18 88

Raphael Hanoteaux, EU policy officer, CEE Bankwatch Network, raphaelh@bankwatch.org +32 496 205 903

Future EU investment package falls short of climate ambition

Today the European Parliament gave its go-ahead to InvestEU, a new programme set to leverage up to EUR 650 billion of private investments around Europe from 2021 to 2027 [1]. This investment initiative was proposed by the Commission as part of the next EU budget post-2020 and will be the successor of the ‘Juncker Plan’ [2].

The Parliament adopted a mere 40 % target for climate-oriented investments under this programme, which does not allow to better align EU finance with the objectives of the Paris Agreement [3].  Still, a higher specific climate target of 65 % for investments in infrastructure projects was adopted [4].

On a positive note, the regulation will encourage all projects under Invest EU to undergo sustainability proofing. If well implemented, this measure should ensure that projects with harmful climate, environmental and social impacts are not supported.

And yet, the vote by the Parliament proves incoherent with the EU’s climate commitments, as it falls short of explicitly ensuring genuine alignment with the Paris Agreement. Indeed, the Parliament fails to recognize the role of the energy efficiency first principle, which should be used to channel financing towards demand side projects in the EU.

Under the approved regulation fossil fuel investments – in particular support to gas infrastructure – still remain eligible for public finance, warn CEE Bankwatch Network, Climate Action Network (CAN) Europe, WWF European Policy Office, and Counter Balance. Proposals to ban support to fossil fuel projects were repeatedly rejected by several political groups in discussions both at committees and at plenary level.

Xavier Sol, Director at Counter Balance, said:

“The outcome of today’s vote is disappointing since it gives a blank check to future fossil fuels subsidies – especially for gas projects – and contradicts the climate objectives of the European Union. As elected representatives, MEPs should have better integrated the citizens’ concerns on climate in the next EU budget and investment plans.”

Markus Trilling, Finance and Subsidies Policy Coordinator at Climate Action Network Europe, said:

“Just two months ago the Commission put forward a draft climate long-term strategy and Member States started to discuss the tabled proposal to achieve net zero emissions by 2050. In this context it is economically short-sighted to promote further investments in fossil fuel infrastructure and to put the brakes on clean investments. The upcoming climate proofing mechanism needs to ensure that EU funding fully supports climate objectives.”

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

“The EU is visibly inconsistent in its approach to climate change mitigation. On the one hand, in June last year, it adopted new, higher renewable energy and energy efficiency targets, but on the other hand it failed to reflect properly these ambitions into its financial tools. The adopted climate target for InvestEU remains on the same level as the one for the Juncker Plan from a few years ago! Without high climate targets in the InvestEU we will not attract private investments to mitigate climate change.”

Arianna Vitali Roscini, Senior Policy Officer for Energy Conservation at WWF European Policy Office, said:

“It is disappointing that Parliament failed to incorporate energy efficiency first as a guiding principle in InvestEU. This could have helped to prioritize investments in projects that save energy in line with the EU’s long-term climate strategy and the massive ensuing health and economic benefits.”

 

Notes to editors:

[1] InvestEU will be equipped with a EUR 15.2 billion guarantee fund, expected to leverage forty-times this amount in private investments via the European Investment Bank (EIB) and national promotional banks.

[2] The text adopted today by the European Parliament will now be negotiated with the European Council and the European Commission.

[3] The Parliament agreed on a target of 40 % for climate investments under InvestEU, which does not go farther than the current climate target under the European Fund for Sustainable Investments,

[4] A specific target of 65 % for climate action in the so-called “Sustainable Infrastructure” investment window under InvestEU was agreed by the vote in leading committees, and was maintained despite an offensive by the EPP group to shrink it down to 50 %.

Contacts:

Markus Trilling
Finance and Subsidies Policy Coordinator, Climate Action Network (CAN) Europe
markus@caneurope.org
+32 2 8944688

Anna Roggenbuck
EIB Policy Officer, CEE Bankwatch Network
annar@bankwatch.org
Mobile: +48 509970424 Office: +48 91 831 5392

Xavier Sol
Director, Counter Balance
xavier.sol@counter-balance.org
+32 473 223 893

Arianna Vitali Roscini
Senior Policy Officer for Energy Conservation, WWF European Policy Office
avitali@wwf.eu