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Serbia pushes ahead with beleaguered coal plant at Kostolac

The Serbian government has announced today [1] the start of construction works on a new 350 megawatt lignite power plant at Kostolac in the country’s north east.

In response to the announcement, Bankwatch energy co-ordinator Ioana Ciuta said:

The government is deluding itself by doing the same thing and expecting different results. This is the third time it has announced that construction will start at Kostolac B3, in spite of problems at the project persisting since the start of the permitting process. There have been no environmental and social impact assessments of expanding the Drmno mine that will feed the power plant, and the local community’s request to be relocated from the mine borders has not been taken into account.

The project is also not in line with the latest pollution standards adopted this year by the EU. With so many countries in Europe announcing a phase out of coal power, Serbia is again thumbing its nose at the EU and its policies, which it would have to follow if it serious about joining the bloc.

Preparations began in earnest on the Kostolac project in January 2015, when the Serbian parliament ratified a loan agreement worth USD 608 million with China’s ExIm Bank for the coal plant’s construction, and since then the project has been dogged by irregularities at every turn.

The Serbian government took the loan on behalf of its state company EPS, raising issues of compliance with its state aid obligations [2] under the Energy Community Treaty. In addition to concerns about the project’s adherence to state aid rules, the environmental impact assessment process had to be repeated after the original approval expired and the Espoo Convention Implementation Committee [3] criticised Serbia for failing to assess the impacts in neighbouring countries. A new EIA report was then published for consultation in February 2017 and received a final decision in October 2017 [4]. An impact assessment of the mine expansion, which is needed to feed the new unit, was exempted in 2013 [5], a decision potentially at odds with Serbian legislation and the EIA Directive within the Energy Community Treaty.

Moreover, with the European Union updating its legislation governing industrial emissions in November last year, Kostolac B3 would now be obliged to adhere to emissions limits stricter than those set in the EIA decision from October. This means that should Serbia continue towards EU accession, Kostolac would already be saddled with expensive retrofit costs necessary to bring the plant in line with EU standards. [6]

Notes

[1] The announcement is available on the Serbian government website: http://www.srbija.gov.rs/vesti/dogadjaji.php?id=1516#307844

[2] http://bankwatch.org/publications/risks-coal-and-electricity-investments-western-balkans-ukraine-and-moldova-due-state-ai

[3] http://bankwatch.org/news-media/blog/cross-border-coal-pollution-first-time-under-scrutiny-un-body

[4] The EIA decision, including a summary of all inputs received during the consultations: http://www.mmediu.ro/app/webroot/uploads/files/2017-10-17_Decision_Environmental_Impact_Assessement_Study.pdf

[5] Ministry of Energy, Development and Environmental Protection of the Republic of Serbia: Decision no.353-02-901/2013-05, dated 26.07.2013.

[6] https://bankwatch.org/blog/balkan-governments-unprepared-for-new-eu-pollution-rules

For more information contact

Ioana Ciuta
Energy co-ordinator, CEE Bankwatch Network
ioana.ciuta@bankwatch.org
+40 724 020 281
Twitter: @unaltuser

New report: Juncker Plan backs billions in fossil fuels and carbon-heavy infrastructure

Brussels, Bonn — While in Bonn at the UN climate talks the EU touts the Paris Agreement, back in Brussels the European Union is set to continue a funding tool that in last two years has lent billions of euros for fossil fuels projects, finds a new study from CEE Bankwatch Network, CAN Europe, Counter Balance and WWF European Policy Office.

Established in 2015 to leverage private capital with money from the EU budget to guarantee risky loans by the European Investment Bank (EIB), the European Fund for Strategic Investment – also known as the ‘Juncker Plan’ – has since then doled out EUR 1.85 billion for fossil energy, almost 30 percent of its energy loans, and is increasingly funding carbon-intensive transport like motorways and airports, which have received EUR 2.5 billion since the fund’s inception [1].  

Backed by the European Commission and the EIB as a strong instrument in the fight against climate change, the Juncker Plan will be under the microscope of the Parliament one last time on Wednesday this week, before MEPs are set to approve a proposal from the Commission for a two-year extension to the fund during a vote next month.

Already blasted by the European Court of Auditors for not clearly proving its worth [2], the Juncker Plan is being further criticised in the NGO report for the shroud of secrecy cloaking its operations. Scant details are offered about the merits of projects that receive an EFSI guarantee, and the fund’s executive body – Investment Committee – does not publish a rationale for its investment decisions, which now total over EUR 20 bn.

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

“EFSI clearly fails on sustainability. It is incomprehensible that the EU budget is in a way financing new gas and motorway projects in countries that do not lack for them. It contradicts all of Europe’s green commitments.”

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

“EFSI exposure to fossil fuels breaches the Paris Agreement. The Juncker Plan must work for the climate, not against it.”

Xavier Sol, Director of Counter Balance, said:

“As a flagship initiative paving the way for sustainable investments in Europe, EFSI has so far scored poorly on transparency and accountability. In view of its extension, it is imperative that the bar is set much higher:  the minutes of its governing bodies need to be regularly disclosed, together with the assessment of projects under the so-called scoreboard of indicators.”

Sebastien Godinot, Economist at WWF’s European Policy Office, said:

“While EU leaders are bragging about their climate leadership at the UN Climate talks, they are financing fossil fuels almost as much as renewables with the Juncker Plan. This schizophrenia must end once and for all. It is up to the European Parliament to ensure consistency with its position on the Paris Agreement.”

Contacts

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

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

Sebastian Godinot
Economist, WWF European Policy Office
sgodinot@wwf.eu
+32 489 46 13 14
Twitter: @Sebgodinot

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

Notes

[1] The new report is available for download at https://bankwatch.org/wp-content/uploads/2017/11/same-thing-EFSI.pdf

[2] See the European Court of Auditor’s report at https://www.eca.europa.eu/en/Pages/NewsItem.aspx?nid=7767

Civil society joins forces to push Europe beyond coal

Bonn, Germany, November 2, 2017: To combat the worsening impacts of climate change and air pollution, civil society groups across 28 nations are today launching Europe Beyond Coal, a collective campaign to catalyse and hasten the move away from coal and towards clean renewable energy.

Underscoring the need for this urgent shift, new health impact modelling released by the campaign shows that in 2015 the EU’s coal fleet alone was responsible for an estimated 19,500 premature deaths and 10,000 cases of chronic bronchitis in adults. The health costs of coal are equally staggering, with up to 54 billion euros in the same one year period.(1)

“Momentum is building for Europe to be coal free by 2030, and civil society is coming together to make it happen, and happen sooner,” said Kathrin Gutmann, Europe Beyond Coal Campaign Director. “For nations to meet their commitments under the Paris climate agreement and to protect the wellbeing of its citizens, coal plants need to be closing far faster than they currently are. A coal plant in any one country is a liability for all of Europe, and our planet as a whole.”

“We’re calling on governments, cities, companies, banks and investors to cement their plans to move out of coal before the 2018 international climate meeting in Katowice, Poland. The UN climate meeting starting in Bonn next week is an excellent opportunity for additional, ambitious commitments to phase out coal,” said Gutmann.

Since 2016, Europe Beyond Coal groups have helped retire 16 coal plants across Europe, and 39 more are to close, with the governments of the Netherlands, the United Kingdom, Finland, France, Portugal and Italy all committing these countries to being coal-free by 2030 at the latest. The campaign is focussing its efforts on turning these government coal phase out announcements into actions, and hastening the closure of Europe’s 293 remaining plants.

Concrete plans are particularly pertinent for countries like Germany, whose coal use is making it the worst greenhouse gas polluter in Europe and preventing it from meeting its climate objectives. Germany’s coal plants were responsible for an estimated 3,800 premature deaths and up to 10.5 billion euros in health costs inside and outside its borders in 2015.

Europe Beyond Coal groups are urging the new German government and all European countries dragging their feet on coal to stop backing coal utilities at home and in Brussels; to commit to coal phase-outs that ensure a fair and equitable transition for impacted workers and coal dependent regions; and to put their full weight behind a European-wide transition to a clean, renewable energy system.

Joint Statement: Launch of the European Beyond Coal Campaign

Contacts

Greg McNevin, Communications Director, Europe Beyond Coal

greg@beyond-coal.eu, +49 174 565 9356 (Germany) +90 546 873 4512 (Turkey)

Kathrin Gutmann, Campaign Director, Europe Beyond Coal (German, English)

kathrin@beyond-coal.eu, + 49 (0) 1577 836 3036

Mahi Sideridou, Managing Director, Europe Beyond Coal (Greek, English)

mahi@beyond-coal.eu, +45 93 602033

Notes

1) Europe’s Dark Cloud, 2015 update

2) Countries where Europe Beyond Coal groups are active: Albania, Austria, Bosnia & Herzegovina, Bulgaria, Croatia, Czechia, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Kosovo, Macedonia, Montenegro, Netherlands, Poland, Portugal, Romania, Serbia, Slovakia, Slovenia, Spain, Sweden,Turkey, United Kingdom.

3) More analysis and detailed data available at www.beyond-coal.eu/data/. We have the most Complete, comprehensive, up-to-date set of data on the entire European coal power plant fleet, covering all EU-28, Western Balkans, and Turkey. All information comes from a combination of official sources and national campaign groups and is provided in an open source, “share alike” format.

4) Overview of national coal phase out announcements

 

About: Europe Beyond Coal is an alliance of civil society groups working to catalyse the closures of coal mines and power plants, prevent the building of any new coal projects and hasten the just transition to clean, renewable energy and energy efficiency. A similar, sister campaign by the Sierra Club in the US has been running for a number of years now, and has led to 263 announced coal plant closures – more than half of the entire US fleet. These closures continue in spite of the Trump administration’s pro-coal agenda. Our groups seek to replicate this success in Europe, and are devoting their time, energy and resources to this independent campaign to make Europe coal free by 2030 or sooner.

Major European loan to controversial Azerbaijani gas pipeline risks fuelling corruption, human rights abuse and climate change

Prague, Brussels – A USD 500 million loan approved today by the European Bank for Reconstruction and Development (EBRD) for the construction of the Trans Anatolian Pipeline (TANAP) would enable this massive fossil fuels project while overlooking the continued repression of civil society and media in both Azerbaijan and Turkey.

Traversing Turkey, from its border with Georgia to the border with Greece, the 1850 kilometre long TANAP is the central piece of the Southern Gas Corridor, the largest energy project the EU is currently pursuing.

The controversial pipeline is planned to ship 6 billion cubic metres of Azerbaijani natural gas to Turkey every year. TANAP is also intended to feed the Trans Adriatic Pipeline with additional 10 billion cubic metres destined for Europe, despite repeated warnings that new gas deliveries could jeopardise the EU’s commitments under the Paris climate accord.

International civil society groups condemn the decision of the EBRD’s board of directors to approve the loan, and called on the bank to condition disbursement of the loan on the promoter, the Azerbaijani state-owned company Southern Gas Corridor JSC and both Azerbaijani and Turkish governments ensuring full compliance with international human rights, social and environmental standards, including standards on transparency of extractive revenues and civil society participation as stipulated by the Extractive Industries Transparency Initiative (EITI).

In March, Azerbaijan decided to quit the EITI, after its membership had been suspended due to the regime’s ongoing crackdown on journalists and rights defenders in the country. EBRD officials have repeatedly voiced the bank’s commitment to the EITI, but have so far failed to demonstrate how granting Azerbaijan financial support for the realization of the Southern Gas Corridor can help address the regime’s alarming human rights record.

In early September, an investigation by a number of media outlets revealed the USD 2.9 billion Azerbaijani Laundromat, a slush fund allegedly operated by the Azerbaijani regime, with the aim of buying influence among key European decision makers. According to the investigation, Kalin Mitrev, Bulgaria’s director on the EBRD’s board received nearly half a million dollars through the scheme.

The generous financial support for the TANAP project agreed today follows three earlier loans the bank has extended to the Shah Deniz II project, the gas production project off the coast of Azerbaijan that is intended as the source of the Southern Gas Corridor. With it, the EBRD’s overall investment in the Southern Gas Corridor now amounts to more than USD 1 billion.

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

“With this loan, the EBRD has showed disrespect to its fundamental principles of multiparty democracy, the rule of law and respect for human rights. We regret to see the extraction and import of additional fossil fuels into Europe, benefiting only a handful of corporations and oppressive governments, is valued more than sustainable development and freedom of ordinary people.”

Xavier Sol, Director of Counter Balance, says:

“We witnessed today a historical mistake by the EBRD. By approving this loan, the bank is showing its poor consideration of climate challenges, as well as its disregard to the problematic human rights situation in Turkey and Azerbaijan. The strategy of ‘constructive engagement’ with the Erdogan’s and Aliyev’s regimes does not stand: giving a blank check to these regimes is likely to reinforce repression on the ground.”

Tim Ratcliffe, senior campaigner at 350.org, said:

“With significant amounts of existing gas infrastructure sitting idle, and demand across the region falling, there is simply no reason for public banks such as the EBRD to be sinking money into climate-wrecking fossil fuel projects. Rather than a European dash for gas we need investment in just renewables to provide clean, affordable energy for everyone.”

For more information contact:

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 2 893 08 61

Mark Raven
European Communications Specialist, 350.org
mark@350.org
+447841474125 (UK) +90544145425 (Turkey)

Bulgaria to carve motorway through nature haven

Friends of the Earth Europe & CEE Bankwatch Network

The Bulgarian government has yesterday evening (12/10/2017) announced it will construct an international motorway partially through EU protected wildlife haven Kresna Gorge, threatening tragedy for one of Europe’s most biodiverse nature sites.[1]

The 16km-long Kresna Gorge is a hotspot of magnificent and irreplaceable Bulgarian and European biodiversity, home to 35 protected habitats and 92 protected species. According to expert estimates, twice as many butterfly species live in Kresna Gorge than in all of the UK.[2]

The plan concerns the last remaining section to be built of the European E79 highway, which links Germany with Bulgaria and Greece, and has been funded with 800m EUR of EU taxpayers money.

The “Save Kresna” coalition alleges that construction of the motorway through  Kresna Gorge would have devastating effects on rare wildlife, on local people who will be cut off from accessing their homes and businesses, and on the development of sustainable eco-tourism in the Gorge. NGOs have proposed multiple alternatives that are more sustainable environmentally and socially and would bypass Kresna Gorge.[3]

On 12 July 2017 CEE Bankwatch Network, Friends of the Earth Europe, and the “Save Kresna” coalition filed a legal complaint to the EC, claiming that the plans already break EU nature laws, and they will file new documents to challenge the decision in the coming days.[4]

The European Commission will next be expected to pass judgement on the decision on funding for the EU motorway and to assess compatibility with EU nature laws.

Robbie Blake, nature campaigner for Friends of the Earth Europe, said:

“It is distressing to see the Bulgarian Government decide needlessly to destroy this European natural jewel with this motorway. The European Commission must not allow Kresna Gorge’s stunning endangered wildlife to be massacred using EU taxpayer funds – it would be a crime under EU nature protection laws and much less damaging alternatives exist.”

Anelia Stefanova, Programme Director CEE Bankwatch Network, reacted:

“The Bulgarian Government has taken an outrageous decision that breaches EU law, destroys European natural heritage, and violates the rights of local communities. The European Commission has no choice now but to seriously consider the case and block Bulgaria from using EU funds to break EU laws.”

For more information, contact:

Robbie Blake
Nature campaigner for Friends of the Earth Europe,
robbie.blake@foeeurope.org
+32491290096

Anelia Stefanova
Programme Director CEE Bankwatch Network
anelias@bankwatch.org
+39 333 809 24 92

Notes

[1] Link to decision: http://www.moew.government.bg/bg/vees-odobri-iztochen-variant-g-10-50-na-lot-3-2-na-magistrala-struma/

First Bulgarian media coverage: http://bnr.bg/post/100883647/ekspertniat-ekologichen-savet-kam-mrrb-odobri-iztochnia-variant-za-izgrajdaneto-na-am-struma

[2] http://www.nmnhs.com/butterfly_areas_bg/area.php?q=16_kresna_g

[3] http://www.foeeurope.org/bulgaria-risks-unecessary-breach-nature-laws-threatens-800m-eu-funding-020317 ; http://kresna.org ;

https://bankwatch.org/project/kresna-gorge-struma-motorway-bulgaria

[4] http://www.foeeurope.org/Legal-complaint-lodged-protected-Bulgarian-gorge-120717

Azerbaijan’s Laundromat scandal raises concerns over the EU’s growing business ties with the authoritarian regime

Brussels – Adding up to the list of shady practices of Azerbaijan’s authoritarian regime the Azerbaijani Laundromat corruption scheme raises serious concerns over the EU’s intensifying relationship with the government in Baku. In particular, the latest revelations, cast even more doubts over the already controversial Southern Gas Corridor, the largest energy project the EU is currently pursuing together with Baku. Record loans in European public money [1] are currently being considered for sections of this mega pipeline, where Azerbaijan’s state-owned energy firm is a key shareholder.

Uncovered by a recent joint investigation led by OCCRP, the Laundromat is a USD 2.9 billion-worth international system of money laundering that over two years (2012-2014) fuelled the Azerbaijani “influence machine”, and was used for bribing European politicians and generating benefits for the country’s elite close to President Ilham Aliyev.

The Azerbaijani regime has long been cracking down on journalists, civil society members and political proponents. The new revelations add to several earlier corruption cases allegedly enabled by Azerbaijani money. In May, Malta’s Prime Minister called early elections after allegations his wife and government officials had received Azerbaijani money. In April 2016 the Panama Papers investigation revealed offshore companies linked to family members of President Aliyev. In April, an investigation published in the Italian magazine L’Espresso exposed international schemes linking Azerbaijani oligarchs with companies close to Russia’s Vladimir Putin and Turkey’s Recep Tayyip Erdogan. The indictment of Luca Volonte, formerly the chair of the center right group in the Council of Europe’s parliamentary assembly, over bribery is considered to be part of Azerbaijan’s ‘caviar diplomacy’ efforts.

Yet, the EU is worryingly reinforcing the bond with Azerbaijan, ready to turn a blind eye to the country’s human rights abuses and offer loans of millions of euros to a massive gas infrastructure project that would fill the pockets of the Azerbaijani corrupted elite.

Such a position indicates a concerning trend in the EU’s energy choices, increasingly dictated by the questionable need for gas, for which even the most fundamental European values can be sacrificed.

Xavier Sol, Director of Counter Balance, says:

These revelations come at a time when the European Union is strengthening its ties with the Azeri regime. First of all, the EU is currently negotiating a comprehensive agreement with Azerbaijan to replace the existing Partnership and Cooperation Agreement. Secondly, the European Commission is heavily supporting the Southern Gas Corridor, a chain of pipelines aiming to channel gas from Azerbaijan to Italy.

He continues:

European public banks, both the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) are considering huge loans for the Southern Gas Corridor  – that are to be approved in the coming months. Such loans would send a worrying signal of political support to the Azeri regime despite ongoing human rights violations in the country.

Anna Roggenbuck, EIB campaigner at Bankwatch adds:

The EU energy diplomacy is currently leading to a concerning neglect of human rights and democracy in so-called partner countries. Therefore, we call on the European Union to uphold its values and not to provide a blank check to the Azeri regime by feeding it with public money. No section of the Southern Gas Corridor should be financed by European public banks.

Notes

[1] The EIB Board of Directors will discuss the EUR 1 billion loan on its upcoming meeting on 19 September 2017: http://www.eib.org/projects/pipelines/pipeline/20150676. The EBRD USD 500 million loan is scheduled for discussion on 18 October 2017 http://www.ebrd.com/work-with-us/projects/esia/azerbaijan-southern-gas-corridor.html