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Italian authorities overrun communities in a bid to enable Europe’s dash for gas

In a last minute attempt to force facts on the ground, the Italian authorities have enabled the removal of a group of olive trees to make room for a future construction site of the Trans-Adriatic Pipeline (TAP), despite an earlier agreement between the company and local institutions. Nevertheless, the company has not been able to clear the site by the official deadline and the residents have vowed to step up their protest against the largest energy project the EU is currently pursuing.

The 3500 kilometers long Southern Gas Corridor (SGC) is intended to bring to Europe 10 billion cubic meters of gas per year from Azerbaijan via Georgia, Turkey, Greece, Albania, and Italy. TAP, the western leg of the SGC, is planned to reach the shores of southern Italy, near the town of Melendugno.

Yet, local communities on Italy’s southern coast fear the massive pipeline and its accompanying infrastructure could have irreversible impacts on the peaceful Apulia region whose economy is dependent on tourism and agriculture.

In late March the company, TAP Ag, started works intended to uproot over 200 olive trees to make room for the construction of the western end of the pipeline. This move was met with fierce but peaceful popular resistance, and in late April, after a series of meetings with the mayor of Melendugno and the local prefect, the company decided to suspend the works ahead of the official deadline of April 30th, until the end of the 2017 tourist season.

Still, in the last week of April the company’s excavators unexpectedly arrived at the site late at night, after police had breached the protest barricades, blocked nearby roads and rounded up local activists. Although 11 more trees were removed, the company will not be able to commence construction as 16 other ancient olive trees, which have a legal protection as natural monuments, remain at the site.

The local residents have repeatedly stressed that their concerns extend well beyond the local olive grove. They have campaigned against the TAP pipeline since nearly five years, as they perceive it as an imposed mega-project, bound to impact people and the environment in Europe and beyond. Feeling betrayed by their own state, a few Melendugno residents have started a hunger strike demanding the government to engage in an open dialogue on its support to the project.

But the people in Melendugno are not alone in opposing this pipeline. Farmers and land owners in Greece have also been protesting the pipeline project on very similar grounds, and residents in more than 30 communities across Albania, whose livelihoods depend on agriculture, have been raising similar concerns about the removal of vineyards, plum trees and olive groves for the construction of the TAP pipeline.

In parallel, the project has raised serious concerns in terms of transparency. Already contested for its dodgy links to the Azeri regime, the pipeline was recently the subject of an extensive investigation conducted by the Italian magazine L’Espresso. Shedding light on TAP and TANAP (the Trans-Anatolian Pipeline) and the network of state-owned companies with links to Vladimir Putin, Recep Tayip Erdogan and Ilham Aliyev as well as Russian oligarchs involved in the projects, the investigation reinforces earlier concerns that the project was designed to serve the interests of a few, at  citizens’ expense.

Gianluca Maggiore, spokesperson of the No TAP Committee, says: “The local residents have made it clear we will not allow this destructive project to go ahead. Our opposition has gained broad support across the country and beyond, proving this project is simply not feasible. There are still numerous outstanding technical issues around the next phases of the works and their compliance with the requirements of the environmental impact assessment. However, we don’t oppose the TAP project just to defend our lands. Designed to fill the pockets of three authoritarian regimes with dismal human rights record – in Azerbaijan, Russia and Turkey – this project prioritises geopolitical games over the actual needs of people and the environment.”

Elena Gerebizza, campaigner with the Italian NGO Re:Common , says: “The Italian government and the European Commission should acknowledge the reasons behind the peaceful resistance to TAP in Italy for years now, and review the political and financial support to the project. TAP is not bringing any benefits to Italian and EU citizens, who are rather asked to bear the costs of this mega-project”.

Xavier Sol, from the European civil society coalition Counter Balance, says: “The situation on the ground looks very far from the rosy picture described by the promoters of the project. It is high time for the European Commission to stop supporting this project which is faced with local resistance, is not in line with the EU’s climate commitments under the Paris Agreement and supports oppressive regimes.”

For more information contact:

Gianluca Maggiore, local NO TAP committee spokesperson
+39 339 684 7706

Elena Gerebizza, Energy Campaigner Re:Common
egerebizza@recommon.org
+39 340 670 53 19

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

Planned power plants in the Balkans need review as EU adopts tougher pollution standards

The European Union has today approved an updated set of binding standards for power plants, which include new, stricter pollution limits.

The standards, known as the LCP BREF [1], were adopted today by the IED Article 75 Committee [2]. These standards do not address CO2 and other greenhouse gas emissions, and therefore would not help countries meet their obligations under the Paris Agreement. Yet, once implemented, they will help prevent thousands of premature deaths caused by air pollution from coal power plants [3], by restricting emissions of sulphur dioxide, dust, nitrous oxides, hydrogen chloride, hydrogen fluoride and mercury.

Several Western Balkans countries already require the use of the EU’s BREF standards in their legislation as a basis for issuing permits. As a result, as soon as the new standards are published in the EU’s Official Journal later this year, they will also apply to new plants across most of the region [4]. Therefore, governments in Bosnia-Herzegovina, Kosovo, Macedonia, Montenegro and Serbia – where planned new coal power plants are most likely to be affected by the updated BREF [5] – need to revisit investment plans to ensure the project designs are indeed in line with the new standards and consider the possible financial implications.

Ioana Ciuta, Energy Co-ordinator at CEE Bankwatch Network, says:

Governments across the Western Balkans urgently need to review their plans for new thermal power plants. If they fail to comply with the new standards they will be landed with expensive investment costs within just a few years.

Pippa Gallop, Research Co-ordinator at CEE Bankwatch Network, says:

None of the new coal plant projects in the region appears to have taken these new standards into account in their planning. But it would be a lot cheaper for them to adjust the project designs now than to have to carry out retrofits in a few years’ time.

For more information contact:

Pippa Gallop
Research Co-ordinator, CEE Bankwatch Network
pippa.gallop@bankwatch.org
+385 99 755 9787
Skype: pippa.gallop

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

Notes:

[1] Large Combustion Plants Best Available Techniques reference document. This is one of a series of BREF documents for different industrial sectors.

[2] The Industrial Emissions Directive (IED) Article 75 Committee is a body established by Article 75(1) of the IED, assisting the Commission in elaboration of implementing acts. The Committee is composed of the Member States and is chaired by the Commission. The Committee adopts decisions on BAT conclusions.

[3] EEB, HEAL, CAN Europe, WWF European Policy Office, and Sandbag: Lifting Europe’s Dark Cloud, October 2016: http://www.eeb.org/index.cfm?LinkServID=E3882544-5056-B741-DBB3E8DE57F619F6

[4] All of the Western Balkans countries refer to Best Available Techniques in their legislation but only Albania, the Federation of Bosnia and Herzegovina, Macedonia and Montenegro explicitly refer to the EU reference document. Serbia and Republika Srpska need to adopt these standards as soon as possible to provide clear guidance and increase regulatory certainty for investors.

[5] These include:
Bosnia-Herzegovina: Tuzla 7, Banovići, Kakanj 8, Ugljevik III, Gacko II
Kosovo: Kosova e Re
Macedonia: Oslomej reconstruction
Montenegro: Pljevlja II
Serbia: Kostolac B3

Overlooked carbon costs could turn Western Balkans’ new coal power plants into white elephants – analysis

A new Bankwatch analysis examining ten coal-fired power plant projects across the Western Balkans finds that, once the cost of carbon emissions allowances are factored in, they could become a serious liability for both the companies involved and the public. Moreover, only a few feasibility assessments for coal power plants in the region are publicly available, and most of those have failed to properly take carbon costs into account, the briefing authors note.

The full briefing can be downloaded from here: https://bankwatch.org/sites/default/files/briefing-Balkans-CO2-29Mar2017.pdf

The EU’s Emissions Trading Scheme (ETS), one of Europe’s key instruments for reducing greenhouse gas emissions and tackling the climate crisis, obliges companies to purchase allowances for every tonne of carbon dioxide they emit. As countries of the Western Balkans are already working to join the EU, entering the ETS could effectively render a number of coal-fired power plants across the region stranded assets, the analysis shows.

Even at just EUR 5 per tonne of CO2, Montenegro’s Pljevlja II project, among the smallest in the region, would have to foot an additional EUR 8 million bill every year for its carbon emissions. With CO2 price set at EUR 35 per tonne – a price that may well be reached by 2030 – this extra annual cost would climb to no less than EUR 55.6 million.

For the 600 MW Ugljevik III in Bosnia-Herzegovina, the largest coal power station currently planned in the region, the yearly carbon bill would range between EUR 21 million and EUR 146 million, depending on the CO2 price.

Promoters of new coal projects, primarily state owned utilities, have so far overlooked these extra costs. For example, the feasibility study summary for Serbia’s Kostolac B3 plant explains that carbon costs had been left out on the assumption that they would be covered by the state. In practice, however, state aid rules that apply to Serbia as a signatory to the Energy Community Treaty forbid this kind of payment.

At the same time, the project’s sensitivity analysis, which does include carbon costs, leaves no doubts that “even a low CO2 price is enough to render the plant uneconomic,” according to Bankwatch’s assessment.

These findings illustrate the grave economic risk that investment in new coal power entails for companies and the public alike. Decision-makers, the briefing authors state, should revisit the feasibility of all coal power projects after applying shadow carbon pricing, and before allowing any further implementation of these plans.

In addition, governments that seek to secure future electricity supply have to “prioritise demand-side energy efficiency as the most sustainable long term way to avoid shocks from prices of either CO2 or imported fuels.”

Pippa Gallop, Research Co-ordinator at CEE Bankwatch Network and co-author of the briefing, says:
“New energy infrastructure built now will last for several decades and has to be future-proof. Legislation and demand patterns are going to change significantly, and investments have to be flexible enough to take account of this. But the Balkan coal plans are the opposite of flexible – they are not even likely to be feasible under today’s conditions of low electricity prices, let alone tomorrow’s conditions with CO2 pricing and higher environmental standards.”

Ioana Ciuta, Energy Co-ordinator at CEE Bankwatch Network and co-author of the briefing, says:
“Even with low CO2 prices, stranded assets are already reality in many parts of Europe. E.ON already plans to close 13 GW of its coal and gas capacity across Europe, and Enel intends to close 23 coal and gas power stations by 2019 in Italy alone. Behind these developments are the rise of renewable energy and the drop in electricity prices across most of Europe. So decision makers in the Western Balkans would be wise to put the money where the future is, rather than wait and adapt when they have no other choice.”

For more information contact:

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

Pippa Gallop
Research Co-ordinator, CEE Bankwatch Network
pippa.gallop@bankwatch.org
+385 99 755 9787

Azerbaijan suspended from the EITI – a Bankwatch and Counter Balance statement

A decision to suspend Azerbaijan’s membership in the Extractive Industries Transparency Initiative (EITI) adopted yesterday (Mar 9) is the latest reminder for international financial institutes to avoid supporting the Southern Gas Corridor (SGC) project.

In 2015, the EITI board downgraded Azerbaijan’s membership status due to its relentless crackdown on civil society, political opponents and journalists in the country, and in its October 2016 meeting board members decided to give Baku another chance to comply with international standards.

Yet, the Azerbaijani authoritarian regime that’s running a country completely dependent on the extraction and export of oil and gas, has so far proven that the concepts of democracy and human rights are simply foreign to it.

In the latest case, on Friday (March 3), Mehman Huseynov, a prominent blogger and chairperson of the Institute for Reporters’ Freedom and Safety, has been sentenced for two years in jail on defamation charges. Civil society figures believe this sentencing might be linked, among others, to the organisation’s work on the EITI.

Last month, an international group of 22 civil society organisations including Human Rights Watch, Reporters Without Borders and Bankwatch, has written to EITI board members, urging them to suspend Azerbaijan’s membership in the EITI.

Azerbaijan’s membership status in the international body is considered key to the Southern Gas Corridor project that is intended to bring 16 billion cubic meters of gas from Azerbaijan to Turkey and the EU every year.

The European Investment Bank (EIB), the EU’s house bank, is currently mulling a record EUR 2 billion loan to the western section of the SGC, the Trans Adriatic Pipeline (TAP), as well as a EUR 1 billion loan to the central section of the project, the Trans Anatolian Pipeline (TANAP).

The European Bank for Reconstruction and Development (EBRD) – which has already helped finance the Shah Deniz II project, the SGC’s source gas field – has also stated it is considering a loan of up to EUR 1.5 billion for TAP, and possibly another for the TANAP project.
Both institutions have committed to EITI compliance in their energy policies and are official partner organisations of the EITI.

“If there is no progress [on the implementation of EITI standards in Azerbaijan] it will be quite difficult to justify a large amount of financing,” the EBRD’s now former Managing Director for Energy and Natural Resources, Riccardo Puliti, told Anadolou Agency in a September 2016 interview. “It is important for both TAP and TANAP, but it is particularly important for TANAP, because [Azerbaijani state owned energy company] SOCAR is so prominent in TANAP,” he added.

In an open letter published in January, jailed Azerbaijani opposition politician Ilgar Mammadov warned European governments, as well as potential financiers of the SGC, about engagement with Azerbaijan’s rulers.

Specifically, Mammadov, who had worked closely with the EITI as a member of the Natural Resource Governance Institute until his arrest in March 2013, clearly warned that at this week’s board meeting, “those driven by pressing commodity and geopolitical interests … may ask the international financial institutions to disconnect the SGC loans from Azerbaijan’s compliance with the EITI.”

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

“The EITI board’s decision is but the latest confirmation that Azerbaijani fossil fuels export projects like the SGC only fuel the autocratic regime in Baku as it intensifies its repression of civil society and media in the country. The EIB and the EBRD should recall their commitments to human rights and take the EITI board’s decision as their cue to disengage from the project.”

Xavier Sol, Director of Counter Balance, says:

“EU leaders, who have long cited democracy and human rights as the cornerstones of modern day Europe, should recognize the EITI board’s decision for the stark warning sign it is. Knowing that any revenues from the Southern Gas Corridor project will only serve to entrench Azerbaijani President Ilham Aliyev’s regime, now is the time for Europe to think whether it is willing to put its highest energy bets on such partner.”

For more information please contact:

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

Xavier Sol
Director, Counter Balance
xavier.sol@counter-balance.org
+32 2 893 0861
@xavier_sol

EU watchdog investigating European Investment Bank for maladministration

The European Investment Bank (EIB) is being investigated for maladministration, after the European Ombudsman sent a formal letter opening the case this week (27 February 2017).

The investigation comes after ClientEarth, CEE Bankwatch Network and Counter Balance highlighted the lack of transparency at the bank, and its attempts to block scrutiny. This complaint, submitted in September 2016, was accepted by the Ombudsman, which announced it would investigate the case and ask the EIB to explain its transparency policy and reaction to the NGOs’ challenge.

ClientEarth, CEE Bankwatch Network and Counter Balance complained because the EIB – which invests around €80 billion in projects annually – blocked a challenge to its new transparency policy from the three NGOs.

The EIB has a huge impact on environmental decisions around the world, from whether a dam will be built on vulnerable ecosystems to whether funding will go to renewables or fossil fuels.

Its transparency policy keeps all information about investigations – including of corruption and fraud – confidential. It also creates illegal exceptions to people’s right to scrutinise the bank. Given the amount of money at stake, this raises serious concerns about the accountability of the bank.

ClientEarth lawyer Anaïs Berthier said: “If the EIB stops public scrutiny of its actions using its so-called transparency policy – and blocks challenges to that policy – it is failing doubly in its duties. The complaint mechanism is there to make sure the bank – and the projects it funds – are accountable for every Euro of public money spent, so it is essential that people can use it.”

Director of Counter Balance Xavier Sol said: “As an NGO coalition promoting a high level of transparency for the EU public banks, we welcome the Ombudsman’s decision to open an investigation. We hope this will shed light on the culture of secrecy still prevailing at the EIB and on the need for the bank to raise the bar on transparency. Indeed it is key for European taxpayers to know that European funds are spent in the public interest.”

Anna Roggenbuck, Policy officer at CEE Bankwatch Network said: “The European Ombudsman opened its investigation after our initial complaint was rejected by the Complaints Mechanism of the EIB on inadmissibility grounds. The Ombudsman decision is a clear signal the claims were admissible. We are glad she will investigate the way the complaint office took its decision a few months after it first confirmed admissibility for the complaint, and whether it was caused by management intervention.”

Now, the Ombudsman will ask the European Investment Bank to respond to the complaints. If she finds the bank guilty of maladministration, she will make recommendations to improve its transparency. This would shed light on the bank’s practices and exert significant pressure to improve.

Read ClientEarth’s Complaint to the European Investment Bank about its Complaint Mechanism alleging noncompliance of the European Investment Bank’s Transparency Policy with EU and international law on access to information

Read ClientEarth’s complaint to the European Ombudsman on the European Investment Bank’s Transparency Policy

Read the letter from European Obmudsman responding to ClientEarth’s complaint about the European Investment Bank

Bulgaria risks unnecessary breach of nature laws, threatening EUR 800 million of EU funding

The building of an EU-funded motorway linking Bulgaria and Greece, through Kresna Gorge – a stunning wildlife haven protected by EU nature laws – would be a disaster for nature and local people, and could result in up to €781 million being returned to the European Commission, claim Bulgarian and international NGO experts.

If the project is given the go-ahead in April, it would also provide the first test of EU Environment Commissioner Karmenu Vella’s recent pledge to better implement EU nature laws.

Good alternatives exist to complete the Sofia-Thessaloniki highway outside the protected gorge. At least one route – the “full eastern” option – complies with EU legislation, according to NGO experts. Any route inside the gorge would break EU nature laws, as damage to the gorge would only be permitted if no alternatives exist.

The European Commission determined in 2008 that routing motorway traffic through the gorge would be illegal. [1] The “full eastern” option would also prevent losses of endangered species of European importance, and foster local economic development of agriculture, wines and tourism. [2]

The gorge is home to more than 3,500 species of flora and fauna, including many snakes, turtles and bats found nowhere else in Europe. There are more species of butterfly in one square kilometre of Kresna Gorge than in all of the UK.

Construction of the motorway must be completed by 2023 and in full compliance with EU nature laws. If either of these conditions are breached, the Bulgarian government risks having to repay up to €781 million of grants to the European Commission.

Robbie Blake, nature campaigner for Friends of the Earth Europe said: “I visited Kresna Gorge and saw with my own eyes how this stunning natural jewel is a vital hotspot for Bulgarian and European nature. No motorway could be built here without completely destroying nature in the gorge and the local community.

If this project is railroaded through, all eyes will be on EU Environment chief Karmenu Vella – will he stick by his recent decision to better enforce and implement vital nature protection laws?“

Fidanka Bacheva-McGrath, international campaign coordinator of CEE Bankwatch Network said: “If the Bulgarian Government tries to route the motorway through the gorge, this would break our obligations under EU law, would result in legal challenges, and cause delays that risk Bulgarian taxpayers having to pay back the entire grant of nearly €800 million. Building through the Gorge would be a disaster for Bulgaria, it would lead to a whole new fiasco.”

Danniel Popov, Bulgaria national coordinator at CEE Bankwatch Network said: “There’s absolutely no need to carve the motorway through the Gorge, as a good bypass route to the east exists, which would save the wildlife haven, be much less environmentally damaging, would avoid so many road deaths in Kresna, and would be better for local people and sustainable local development. The authorities should move forward with this plan, and fast, as it’s the only option to get the job done in time and legally.”

What’s next?

The Bulgarian Government is currently carrying out an Environmental Impact Assessment to decide on the most appropriate route, with the results expected by the end of April. The local community and the wider Bulgarian public then will be able to express their views on this, and it will have to be approved by the EU Commission. The NGOs have met with the Kresna municipatily, the Bulgarian Government and Road Agency to offer assistance in creating a high quality assessment fit with EU law, so that the Struma motorway bypassing Kresna Gorge can be developed before 2023.

Notes:

[1] In 2008, the Environmental Impact Assessment for the Struma Motorway project, endorsed by the European Commission, deemed that any motorway construction in the gorge and the option to maintain the current road for international traffic (the so-called zero option) is not in compliance with the EU Habitats Directive because of the detrimental and unavoidable impacts on the protected biodiversity. The legally agreed conclusion was to route the motorway through the tunnel.

[2] Table comparing the differences between the “Semi Eastern” route half through Kresna Gorge and the “Full Eastern” motorway’s route fully bypassing the Gorge to the east.