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EU’s Modernisation Fund continues to fund fossil fuels and waste incineration projects, undermining climate and environmental goals

While some of the 39 announced projects approved by the Commission in this disbursement cycle are essential for the EU’s energy transition, such as investments in electricity grids, energy storage, building renovation and transport electrification, a significant share of the funding is again going to new gas power plants and waste incinerators, most notably in the Czech Republic and Romania.   

According to Bankwatch’s calculations, almost EUR 500 million from this disbursement cycle has been allocated to gas and waste incineration projects in the Czech Republic and Romania, and these projects may receive an additional EUR 776 million support in the later stage of their implementation. This raises concerns that the Modernisation Fund is being used to lock in fossil fuel and other unsustainable infrastructure rather than to supporting real modernisation of the region’s energy systems.  

Czech Republic: Over EUR 130 million for gas and waste incineration in this round, with more to come  

Several projects in the Czech Republic stand out for receiving substantial funding despite their climate and environmental impact: 

  • Teplárna Power Plant (EUR 50 million): replacement of lignite burning with gas and biomass combustion. 
  • ZEVO Vráto (EUR 5 million in this round, EUR 187 million in total from the Modernisation Fund): replacement of two lignite-fired boilers with waste incineration in a combined heat and power (CHP) plant. 
  • ZEVO Opatovice (EUR 5 million in this round, EUR 161 million in total): replacement of lignite-based energy with waste incineration.  
  • ‘Replacement of a coal block with a gas source – STAGE III’ (EUR 62 million): Replacement of a coal fired unit with a combined-cycle gas turbine (CCGT) system. 
  • ‘Replacement of a coal block with a gas source – STAGE IV’ (EUR 5 million in this round, EUR 78 million total): Replacement of a coal fired unit with a combined-cycle gas turbine (CCGT) system. 
  • Energetika Power Plant (EUR 5 million in this round, EUR 77 million total): replacement of a lignite-fired heat and power plant with a fossil gas-based one. 

Romania: EUR 362 million for gas power plants that will replace gas power plants 

  •  ‘Support for development of high-efficiency cogeneration capacities – in the district heating sector’ (EUR 362 million): replacement of old fossil gas plants with new ones in Bucharest’s district heating sector.  

While the Modernisation Fund has disbursed significant amounts to much needed investments since 2021, at least EUR 1.45 billion have already been directed to fossil gas, at least EUR 584 million to waste incineration, at least EUR 228 million to biomass plants, mainly in its largest beneficiaries, such as Czechia, Poland and Romania. 

Gligor Radečić, CEE Bankwatch Network — ‘The never-ending push for fossil gas and waste incineration under the Modernisation Fund diverts funds away from truly sustainable solutions.  

‘Romania remains trapped in a heating model based on burning fossil fuels. Government programs fail to integrate renewable heating sources, even as our cities suffer from pollution’, adds Raluca Petcu, campaigner for Bankwatch Romania.  

Such investments risk locking countries into high-emission infrastructure for decades to come, and crowding out renewables, heat pumps, waste prevention, reduction, reuse and recycling. The Commission must ensure that the Modernisation Fund prioritises truly future-proof projects, such as sustainable renewable energy, energy efficiency, and grid investments, while rejecting proposals that rely on fossil fuels and burning waste.

Contact  

Gligor Radečić, Gas campaigner, CEE Bankwatch Network 

gligor.radecic@bankwatch.org 

Bern Convention: Western Balkan countries need to propose new protected natural areas

The Western Balkan countries have currently designated Emerald sites to protect only a small percentage of the species and habitats covered by the Convention – 0.7 per cent in Bosnia and Herzegovina, 13.5 per cent in Serbia, 16 per cent in North Macedonia, 16.3 per cent in Montenegro and 28.3 per cent in Albania. By 2030, they will have to increase this share to 35 percent.

The situation is particularly difficult in Albania, where a new law allows even highly destructive major infrastructure projects in supposedly protected areas and no new Emerald sites are expected to be proposed soon.

In its decision from 6 December, the Convention’s Standing Committee ‘endorsed the proposed targets for the Emerald Network for the period to 2030 consisting in (sic) the submission of updated and improved Emerald Network databases resulting in biogeographical evaluations, the improvement of the sufficiency index and the adoption and management of sites.’ Besides the 35 percent sufficiency target, by 2030 each country will have to report its progress at two evaluation meetings called ‘biogeographical seminars’ and 40 percent of the Emerald sites will need to have management plans.

Andrey Ralev, CEE Bankwatch Network: ‘This is a crucial decision and brings hope that the aims of the Emerald for Rivers campaign will be achieved. Rivers like the Vjosa, Black Drin, Neretva, Bosna, Morača, Vardar, Danube and their tributaries support numerous endangered and endemic species and are vital for the livelihoods of local communities. They should be the backbone of the European network of protected sites.’ 

In the Emerald for Rivers campaign, scientists and NGOs are asking the Western Balkan governments to commit to expanding the Emerald Network and protecting the most important rivers. A proposed list of priority rivers was drawn up at a seminar organised by CEE Bankwatch Network in December 2022, where participants provided scientific data on fish species and their habitats. 

At the Standing Committee meeting, the representatives of Bosnia and Herzegovina, Montenegro and Serbia admitted that there is sufficient information to propose new Emerald sites, but for political and administrative reasons no new sites have been proposed since 2011. Nevertheless, they expressed their readiness to work on improving the situation in the next year. In earlier meetings with civil society groups, experts from the environmental ministry of North Macedonia also expressed their willingness to expand the Emerald Network.  

Andrey Ralev, andrey.ralev@bankwatch.org, +359 884 268552 

Notes for editors:

#EmeraldForRivers campaign and video: https://bankwatch.org/project/emerald 

List of decisions of the 44th Standing Committee meeting of the Bern Convention, Strasbourg, France (Emerald Network is Agenda Item 5.6.1): https://www.coe.int/en/web/bern-convention/-/44th-standing-committee 

List of rivers to be added to the Emerald Network and the fish species of European importance that inhabit them: https://bankwatch.org/publication/shadow-list-of-rivers  

 

Western Balkans: Civil society groups call on European Commission to strengthen support for just transition

In a new briefing (1), they outline concrete steps that the Commission, international financial institutions and national governments should take to accelerate a just transition and enable local economic diversification, ensuring they respond to people’s needs and leave no-one behind. 

An EU platform aimed at supporting carbon-intensive regions to prepare for the energy transition and exchange experiences with EU communities in a similar situation, called the Initiative for Coal Regions in Transition for the Western Balkans and Ukraine (2) ran from late 2020 to late 2023, but has not yet been replaced, leaving local authorities uncertain about what further support they can expect for this complex process. 

Nevena Smilevska, Just Transition Coordinator for the Western Balkans, CEE Bankwatch Network — ‘There is an urgent need for the EU to renew and expand support for coal-dependent communities, to enable a just transition towards a decarbonised economy. Our recommendations aim to ensure that local authorities are empowered and have the necessary resources to plan a process that will allow their communities to thrive, instead of being left behind as the energy transition inevitably advances.’ 

The recommendations emphasize the need for targeted financing for municipal level projects, as local authorities often lack the resources and expertise to create and implement redevelopment plans for just transition on their own. Dedicated financial tools to facilitate economic diversification and create small-scale pilot projects can help to showcase the possibilities a decarbonised future offers. To ensure accountability and impact, funding must depend on strong local governance and transparent monitoring.  

Similar recommendations were put forward last week in a manifesto signed by six mayors from coal-dependent municipalities in the Western Balkans (3). The mayors are calling on the European Commission to support their efforts to decarbonize their local economies by increasing technical assistance, promoting success stories, and facilitating stronger partnerships with carbon-intensive regions in the EU. 

Davor Pehchevski, Balkan Energy Coordinator, CEE Bankwatch Network — ‘The new European Commission must seize the opportunity to make a positive impact by addressing these urgent needs and helping the Western Balkans set a course toward a just and sustainable future. We urge the Commission to reaffirm its commitment to our coal-dependent regions and provide the necessary support for a fair and effective energy transition.’ 

Contact information 

Nevena Smilevska, Just Transition Coordinator for the Western Balkans nevena.smilevska@bankwatch.org  

Notes for editors 

  1. The briefing can be found here. 
  1. More about the EU’s Initiative for Coal Regions in Transition for Western Balkans and Ukraine can be found here. 
  1. The manifesto can be found here.  

Western Balkans: NGOs launch proposals to revive EU’s flagging Green Agenda

Launched by the European Commission in October 2020, the Green Agenda for the Western Balkans (2) is a major initiative to encourage the region’s governments to use EU funds for decarbonisation, depollution, circular economy, sustainable rural development and biodiversity protection. It is managed by the Regional Cooperation Council (RCC)(3). 

Yet four years since its launch, and three years since an Action Plan 2021-2030 (4) was endorsed by Western Balkan leaders in October 2021, a lack of clear structure, timetable and targeted reporting is still preventing effective oversight by civil society. 

This raises concerns about the Green Agenda’s effectiveness and added value, particularly as many of the Action Plan items duplicate countries’ pre-existing obligations under the Energy Community Treaty (5) and Transport Community Treaty (6).

‘…the responsibilities for implementation are unclear and it cannot be properly monitored or reported on. The RCC’s Implementation Report (7) published in 2023 has great difficulty identifying whether actions have been completed or not, and if so, whether this happened due to the Green Agenda or would have happened anyway,’ write the groups. 

Among others, today’s NGO proposals request a rethink of the Green Agenda’s voluntary nature, asking governments to publicly commit to specific actions. They also urge the RCC to break down the Action Plan into time-bound steps, clearly stating who is responsible, together with baseline information to allow effective progress tracking.

The proposals include detailed suggestions for actions to advance decarbonisation, depollution and biodiversity, prioritising enforcement of key EU environmental legislation, legal protection of natural areas and other high-impact activities, while eliminating poorly-defined, unmeasurable or meaningless ones.

Pippa Gallop, Southeast Europe Energy Policy Officer, CEE Bankwatch Network – ‘With climate chaos accelerating across the Western Balkans, the Green Agenda is a must. But we’re almost halfway to 2030 and it’s hardly got started. It’s now urgent for the EU’s new Enlargement Commissioner to take the helm and make sure EU funds are used effectively in the region, for the good of people and the environment.’

Contacts

Pippa Gallop, Southeast Europe Energy Policy Officer, CEE Bankwatch Network

pippa.gallop@bankwatch.org

+385 99 755 9787

Notes for editors

(1) The proposals are available here (Action Plan and Roadmaps) and here (Green Agenda governance).

They are supported by the following organisations:

Aarhus Centar in BiH, 

Belgrade Open School, 

CEE Bankwatch Network, 

Center for Environment, 

Center for Economic Analyses (CEA) (supported the governance proposals), 

Climate Action Network (CAN) Europe, 

EcoZ, 

EDEN Center, 

Eko-svest, 

Front 21/42, 

Group of Rural Activists of Dibra-GARD, 

Network Albania, 

NGO Eco-team, 

Protection and Preservation of Natural Environment in Albania (PPNEA),

Resource Environmental Center (REC) Albania,

Resource Environmental Center (REC) Bosnia and Herzegovina

Resource Environmental Center (REC) Montenegro 

Resource Environmental Center (REC) North Macedonia.

(2) A working paper on the implementation of the Green Agenda accompanied the Economic and Investment Plan for the Western Balkans published by the European Commission in October 2020. This was followed in November 2020 by the Sofia Declaration, endorsed by the region’s leaders at a Western Balkans Summit under the auspices of the Berlin Process.

(3) For more on the Regional Cooperation Council, see here. 

(4) The Green Agenda Action Plan can be found here. Produced by the Regional Cooperation Council, it contains 58 actions to advance the region’s decarbonisation, depollution, circular economy, rural development and biodiversity, and outlines a monitoring and governance structure. From the outset, updates of the Plan were envisaged in 2024 and 2027.

(5) For more on the Energy Community Treaty, see here.

(6) For more on the Transport Community Treaty, see here. 

(7) Implementation Report published in 2023 can be found here. 

European Parliament fails to halt disastrous hydropower project jeopardising local livelihoods and endangered species

27 September, Brussels, Sofia, Bucharest

The hazardous Turnu Măgurele–Nikopol hydropower project on the Lower Danube has been added to the EU’s priority investment list, despite the fact it will increase flood risk for over 100 towns and villages, threaten protected areas and the survival of critically endangered species, and violate the EU’s own policies. This happens just before the world gathers at the Convention on Biological Diversity COP16 to discuss how to accelerate action to protect rivers under the Global Biodiversity Framework. This strategy commits the EU to protect 30% of its rivers and other inland waters.

The European Parliament chose to ignore the joint call of Bankwatch, WWF and 36 other environmental organisations across the continent to take more time and thoroughly review the scientific evidence and socio-economic arguments against the project [1]. The Turnu Măgurele-Nikopol Hydraulic Structures Assembly (TMNHSA) hydropower project, designed over forty years ago, has consistently failed to attract investors due to its massive costs, relatively low energy returns, and significant social and environmental impacts.

Along with its impact on communities and nature, it would also devastate local economies dependent on agriculture, fisheries, and tourism, disrupt waterway transport, and even pose risks to the nuclear power plant in Kozloduy. 

By not requesting an extension of the scrutiny period or voting against the list of projects by September 24, the European Parliament has silently green-lighted the project. As a result, on September 24, this environmentally and socially destructive project was officially added to the List of Renewable Energy Cross-border Projects (CB RES), making it eligible for EU funding under the Connecting Europe Facility programme.

‘We are disappointed that the European Parliament missed the opportunity for scrutinising the project. Without proper assessment, the rushed approval of this project undermines the EU’s stated goals of biodiversity protection and climate resilience’, says Irene Lucius, WWF-CEE Regional Conservation Director. ‘Beyond environmental destruction, the project will cause irreversible harm to communities in Romania and Bulgaria. Over 100 towns and villages will be affected by the dam’s reservoir, which is expected to cause widespread flooding of farmland, homes, and critical infrastructure.’

Call for Immediate Action by the European Commission

CEE Bankwatch Network, WWF and the 36 partner organisations urgently call on the European Commission to remove the Turnu Măgurele – Nikopol project from its list of priority renewable energy projects. 

‘The Commission must act swiftly to reverse this mistake’, says Andrey Ralev, Biodiversity Campaigner at CEE Bankwatch Network. ‘As the EU faces a biodiversity and climate crisis, pursuing projects that exacerbate these challenges is irresponsible and short-sighted. There are far more sustainable energy alternatives available, including solar and wind power, which can meet the region’s energy needs faster and cheaper without destroying natural habitats or threatening livelihoods. The Turnu Măgurele – Nikopol project is an outdated, cost-inefficient and destructive dinosaur, and the EU cannot afford to endorse it.’

The environmental organisations underline that the TMNHSA project contradicts not only key EU environmental laws and policies, such as the Water Framework and the Habitats Directive. It is also in conflict with EU Member States international commitments, including under the historic Kunming-Montreal Global Biodiversity Framework signed in December 2022. 

‘How can the EU appear on the global stage and expect the world community to take action on biodiversity conservation and climate change adaptation when it promotes outdated infrastructure that destroys large protected areas and threatens the survival of critically endangered species such as the iconic Danube sturgeons – the most endangered wildlife species group in the world?’ says Beate Striebel-Greiter, WWF’s Sturgeon Initiative Coordinator.

Note to editors

[1] A delegated act sent to the European Parliament and Council for a two-month scrutiny on 24/07, added the project to the list of cross-border renewable energy projects (CB RES list) eligible for funding under the Connecting Europe Facility Programme. The European Parliament and Council had two months to scrutinise the list, and could approve or reject it, or ask for a two-month extension of the scrutiny period. Link to the delegated act: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=PI_COM%3AC%282024%295129&qid=1723042928236  

Additional information 

Briefing on EU priority project Turnu Măgurele – Nikopol Hydraulic Structures Assembly (TMNHSA) threatening Lower Danube communities and ecosystem here 

Pictures 

Download pictures from here.

Contact details:

WWF contact:

Irene Lucius, WWF-CEE Regional Conservation Director
Email: ilucius@wwfcee.org

Bankwatch contact:

Andrey Ralev, Biodiversity Campaigner
Email: andrey.ralev@bankwatch.org

42 civil society organisations call on EU leaders to secure funding for the just transition in the next EU budget

Currently, 92 regions across Europe are using the Just Transition Fund to mitigate the impacts of the closure of high-carbon industries in regions throughout the EU. Some countries will complete the process within a few years, but others face a much longer and more painful journey towards full decarbonisation.  

The timing of this statement is particularly significant given the upcoming mid-term review of the EU’s cohesion policy, the review of the Just Transition Fund, and the European Commission’s proposal for the new Multiannual Financial Framework, which will be followed by negotiations with other EU institutions.  

While the political guidelines for the next European Commission include a commitment to ‘significantly increase our funding for a just transition across the next long-term budget’, there are also signals from various corners of the EU that the fund should either be discontinued entirely or be significantly modified. This could lead to much dissatisfaction in regions that have already embarked on the just transition pathway.   

With this statement, Europe’s leading civil society organisations underline the importance of keeping the Just Transition Fund as a dedicated financial instrument under the cohesion policy, while preserving its territorial focus to ensure targeted support. In addition, they call on EU leaders to ensure that the next version of the fund applies stronger social conditionalities to protect the most vulnerable communities, including dedicating a minimum proportion of spending to social projects. They also call for more robust environmental conditionalities to ensure that funded projects make a greater contribution to the EU’s climate and biodiversity targets.  

Miłosława Stępień, Just Transition Coordinator for Central and Eastern Europe at CEE Bankwatch Network: ‘In regions transitioning away from high-emission industries, especially in central and eastern Europe, the Just Transition Fund is seen as the only dedicated and easily accessible fund they can use. It provides enormous support in revitalising areas that have been in decline for decades. These regions will continue to struggle if they’re not further assisted in their efforts to shift to a green economy.’ 

Olivier Vardakoulias, Finance and Subsidies Policy Coordinator at Climate Action Network (CAN) Europe: ‘The European Green Deal is in its implementation phase and, while it promises to reduce emissions, it also requires ongoing dialogue with citizens to maintain their trust. It’s crucial that Member States and EU institutions show that they can meet their basic needs and provide a safety net. Extending the Just Transition Fund beyond the current long-term EU budget would demonstrate that the EU is serious about the public’s demands for a socially just energy transition, particularly in regions shifting away from fossil fuels.’ 

Mags Bird, Senior Policy Officer for Just Transition at WWF European Policy Office: ‘Addressing environmental, economic and social challenges in a coordinated way is a key challenge for the green transition. The Just Transition Fund is unique in aiming to do exactly that via plans tailored to local needs and contexts. It’s an important instrument for a more integrated and place-based shift towards sustainable societies.’ 

Contacts: 

Miłosława Stępień, Just Transition Coordinator for Central and Eastern Europe at CEE Bankwatch Network

miloslawa.stepien@bankwatch.org, +48 607 491 322 

Olivier Vardakoulias, Finance and Subsidies Policy Coordinator at Climate Action Network (CAN) Europe

olivier.vardakoulias@caneurope.org, +30 697 816 2538 

Mags Bird, Senior Policy Officer for Just Transition at WWF European Policy Office:

mbird@wwf.eu  

Notes for editors:

(1) Keeping the promise: Why the Just Transition Fund must be maintained in the next EU budget – Bankwatch

About Bankwatch

CEE Bankwatch Network is today the largest network of grassroots environmental groups in countries of central and eastern Europe and a leading force in preventing dubious public investments that harm the planet and people’s well-being in this region and beyond.

About CAN Europe

Climate Action Network (CAN) Europe is Europe’s leading NGO coalition fighting dangerous climate change. We are a unique network, in which environmental and development organisations work together to issue joint lobby campaigns and maximise their impact. With over 200 member organisations active in 40 European countries, representing over 1,700 NGOs and more than 40 million citizens, CAN Europe promotes sustainable climate, energy and development policies throughout Europe.

About WWF EPO

WWF’s mission is to stop the degradation of the planet’s natural environment and to build a future in which people live in harmony with nature. The European Policy Office contributes to this by advocating for strong EU environmental policies on sustainable development, nature conservation, climate and energy, marine protection, sustainable finance and external action. We represent 27 national and regional WWF offices and over 3 million supporters.