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The energy dissonance: How EU development funds fuel climate change while leaders talk decarbonisation

EU leaders repeatedly voice commitments to spearhead the global effort to tackle climate change, primarily through long-term decarbonisation targets. But a Bankwatch research into the EU’s development funds for neighbouring regions finds that considerably more European taxpayer money is supporting fossil fuels than facilitating a sustainable energy transition.

The main findings of the study will be presented today at the European Parliament. The study’s executive summary can be found here:
https://bankwatch.org/sites/default/files/ENP-energy-exec-summary.pdf

An infographic summarising the findings can be found here:
https://bankwatch.org/publications/infographic-how-eu-development-funds-fuel-climate-change

Guiding the EU’s relations with 16 countries to its east and south, the European Neighbourhood Policy instructs the bloc’s public investments in these countries and should in part help spur sustainable development. Between 2007-2014 EU [1] financial support to the energy sector in Europe’s neighbourhood exceeded EUR 9 billion.

Of the 16 European Neighbourhood countries [2], the top four recipients were Ukraine (EUR 2.5 billion), Egypt (EUR 1.8 billion), Tunisia (EUR 1.1 billion), and Morocco (EUR 1.1 billion). Together, these four countries received nearly 75 percent of the total EU financing.

Yet a new Bankwatch analysis shows that fossil fuel projects in European Neighbourhood countries have received three times more EU financial support than energy efficiency and renewable energy projects.

For example, while Tunisia received nearly EUR 1 billion in support of fossil fuels, it obtained only EUR 8 million in investment for renewables and energy efficiency. In Egypt, the EU financial institutions contributed with EUR 1.5 billion to hydrocarbons. At the same time, their support for renewables amounted to EUR 74 million, that is 5 percent of the financing for fossil fuels.

This discrepancy is most evident in the lending portfolio of the European Investment Bank (EIB) which provided the largest volume of financing. During this period, the bank extended loans to 51 projects totalling EUR 5.6 billion. But while energy efficiency and renewable energy projects were awarded EUR 780 million, fossil fuel-related project received from the bank no less than EUR 3.2 billion.

The second main funder, the European Bank for Reconstruction and Development (EBRD), supported 105 projects with a total of EUR 2.8 billion. Of this amount, energy efficiency, wind, solar and other sustainable energy projects in European Neighbourhood countries were granted EUR 582 million over this eight years period. Yet gas, oil and other fossil fuel projects were granted EUR 557 million in 2014 alone, of a total EUR 991 million between 2007 and 2014.

“The EU lenders talk of leading Europe’s neighbourhood to the next level when it comes to renewable energy. But their track record says the opposite,” Klara Sikorova, Senior Researcher with Bankwatch and lead author of the report. “Europe must radically change course if its rhetoric on sustainable energy investments is to become a reality.”

For more information contact:

Manana Kochladze
European Neighbourhood Co-ordinator
CEE Bankwatch Network
manana@bankwatch.org
Tel.: +995 599 916 647

Klara Sikorova
Senior Researcher
CEE Bankwatch Network
klara.sikorova@bankwatch.org
Tel.: +420 274 822 150 (ext. 27)

Notes to editors:

[1] The analysis examined financing from the major EU financing institutions and energy cooperation programmes including the European Investment Bank, the European Bank for Reconstruction and Development, Neighbourhood Investment Facility, Inogate and the European Atomic Energy Community.

[2] The European Neighbourhood countries include Algeria, Armenia, Azerbaijan, Belarus, Egypt, Georgia, Israel, Jordan, Lebanon, Libya, Moldova, Morocco, Palestine, Syria, Tunisia and Ukraine.

For more see here: https://bankwatch.org/ENP-energy

Harmful hydropower projects in SE Europe enabled by sub-standard environmental assessments


South East Europe Sustainable Energy Policy project press release

Zagreb – WWF and civil society organisations in the framework of the SEE SEP project have today published a new report: EIA/SEA of hydropower projects in Southeast Europe – Meeting the EU standards. The report, prepared in collaboration with a team of international independent experts, looks at the quality of 25 environmental impact assessments (EIA) and 2 strategic environmental assessments (SEA) done for hydropower projects in seven countries [1] in the last five years and examines how the mistakes made in these cases could be avoided in the future.

The report concludes that the main shortcomings come from the fact that transposition of EU directives has not been followed up by specific rules, regulations and guidelines to fully implement the requirements of the directives. The most serious failures relate to a widespread lack of application of standard procedures by competent authorities i.e. lack of public consultation and transparent decision-making, but there are also serious setbacks in terms of content specific issues i.e. very limited field research and use of outdated scientific data.

“The general standard of the EIA and SEA studies in the region is very low. Study developers often ignore their professional responsibility and produce bad assessments without making fundamental research and analysis. Many studies rely on hydrological and ecological data from 20-30 years ago and do not include data on land use or climate change. Alternatives and cumulative impacts are rarely assessed, and the same goes for the preservation of ecological flows in rivers to protect biodiversity and other water users downstream,” said Peter J. Nelson, editor of the report.

These shortcomings arise in part due to inadequate financial and technical capacity in ministries and agencies, but they also reflect the reluctance of the competent authorities to fully engage local communities and the non-governmental sector. According to the report, this resistance stems from deep-rooted traditional practices, political influence of private interests, and in some cases corruption and illegal activities.

The main findings of the report were presented on 28th October 2015 at the Energy Community Environmental Task Force meeting in Vienna, Austria.

“EIA is of particular importance in the energy sector, where decisions may have long term effects on the energy structure and consumption, as well as on the general environmental situation. In the case of hydropower projects, sound EIA is particularly important to ensure that the impact on river ecosystems is as small as possible. The provision of early and effective public participation is one of the key elements of sound EIAs, which increases the legitimacy of any project,” commented Janez Kopač, director of the Energy Community Secretariat.

“The adverse environmental and social impacts of large hydropower plants are well known. The report also highlights the serious consequences of a multitude of small power plants that are now actively promoted across the Balkans in some of the most valuable Natura 2000 sites without adequate measures for the protection of nature,” said Petra Remeta, Freshwater program manager in WWF Adria.

Evidently, action is urgently needed at all levels, from the EU and major investment banks, to the individual governments, regulators, experts, investors and consultants, for whom the report lists 25 recommendations, including a regional study on energy and protected areas and the development of guidelines for the preparation of EIA/SEA studies. The report also provides detailed recommendations to individual governments in order to help improve EIA/SEA procedure and content in the future.

The whole report is available for download at:
http://seechangenetwork.org/eiasea-of-hydropower-projects-in-southeast-europe-meeting-the-eu-standards/

Signatory organisations: SEE Change Net, Analytica (Macedonia), ATRC (Kosovo), CEKOR (Serbia), CPI (Bosnia and Herzegovina), CZZS (Bosnia and Herzegovina), DOOR (Croatia), EDEN (Albania), Ekolevizja (Albania), Eko-Svest (Macedonia), Forum for Freedom in Education (Croatia), Fractal (Serbia), Front 21/42 (Macedonia), Green Home (Montenegro), MANS (Montenegro), WWF Adria, CEE Bankwatch Network

For more information:

Petra Remeta, Freshwater program manager in WWF Adria
+385 95 256 77 74
premeta@wwfadria.org

Masha Durkalić, Communication Officer in SEE Change Net masha@seechangenet.org

ABOUT THE SEE SEP PROJECT

The South East Europe Sustainable Energy Policy (SEE SEP) is a multi-country and multi-year programme which has 17 CSO partners from across the region (Albania, Bosnia and Herzegovina, Croatia, Kosovo, Macedonia, Montenegro and Serbia) and the EU, with SEE Change Net as lead partner. It is financially supported by the European Commission. The contribution of the SEE SEP project will be to empower CSOs and citizens to better influence policy and practice towards a fairer, cleaner and safer energy future in SEE.

Notes for the editors

1. Albania, Bosnia and Herzegovina, Croatia, Kosovo*, Macedonia**, Montenegro and Serbia
* This designation is without prejudice to positions on status, and is in line with UNSCR 1244 and the ICI Opinion on the Kosovo Declaration of Independence.
** The European Union’s official title ‘FYR Macedonia’ continues to be used pending resolution of the dispute between Greece and the Republic of Macedonia over use of the shortened title.

Environmental organisations deplore ‘lost year’ for environmental protection

Brussels, November 2 – One year since the entry into office of the current European Commission headed by Jean-Claude Juncker, environmental groups have criticised the EU executive for a paralysis in policymaking on issues related to the environment.

CEE Bankwatch Network, Climate Action Network Europe, European Environmental Bureau, Friends of the Earth Europe, Greenpeace, and the Health & Environment Alliance said that this had been “a lost year” for environmental protection.

The environmental organisations said: “The dieselgate scandal shows that a lax approach to environmental protection comes at a high cost to our health, the economy and the environment we depend on. The Commission’s first vice-president, Frans Timmermans, has sustainable development in his job title, but this has not manifested itself in concrete policy action. This has largely been a lost year for environmental protection. Without a radical change of course, the corporate capture of EU policy-making will lead to more scandals like dieselgate and more irreversible damage.”

The Commission claims that its 2016 work programme – released last week – responds to citizens’ concerns. For these words to be translated into action, there needs to be a significant shift in priorities in the new year towards sustainable development, with benefits for the environment, health, employment and prosperity, warned the environmental groups.

Detailing the policy areas in which the Commission’s stance has been particularly disappointing the groups pointed to:

  • Despite the growing momentum around the Paris climate change summit and the over 120 countries joining the European Union in making climate action pledges, the Commission has failed to develop proposals to ratchet up the EU’s 2030 targets. The target to cut carbon emissions is below the EU’s fair share of the global effort to tackle climate change, while renewable energy and energy efficiency targets remain woefully weak. The Commission has instead proposed a reform of the Emissions Trading Scheme which does not resolve the chronic oversupply of emission credits that drives down the carbon price. At the same time, the Commission has not ensured that the financial tools at its disposal, namely the European Investment Bank, the Juncker investment plan and the EU’s regional development funds, will steer billions of euros in taxpayer money towards helping Europe meet its long-term goal of a clean energy economy.
  • The Commission has come under fire from civil society and European governments for threatening to weaken nature protection legislation. On Tuesday, nine governments called on the Commission to protect EU nature laws and improve their implementation. In July this year, an unprecedented half a million citizens and organisations responded to a Commission consultation on the future of European nature protection. All the evidence suggests the answer to Europe’s shocking biodiversity loss is making sure these laws are better implemented – not undermined.
  • The Commission’s secretive trade talks with the US have so far side-lined environmental concerns. Negotiations for a transatlantic trade agreement (known as TTIP) have focussed on granting privileges to big business at the expense of environmental, health and social rights protection.
  • Despite the severity of the air pollution problem, which kills more than 400,000 people in Europe every year, the Commission has defended a weak proposal on air quality which would still result in unnecessary premature deaths of European citizens and a huge additional health burden.
  • President Juncker’s commitment to improve democratic accountability in the approvals of GM food and feed has proved to be an empty promise. Instead of taking action to reform the EU’s approval system, the Commission tabled a proposal so unworkable that it was rejected by the European Parliament. The Commission wants EU member states to decide individually about GM crops, exposing them to legal challenges.
  • One of the Commission’s first acts at the end of 2014 was to controversially withdraw its circular economy package, which included targets to reduce waste and improve recycling. A new circular economy proposal is due to be released in December 2015. This has been a year of unnecessary delay. Industry lobbyists have been pressing the Commission to water down any binding measures. True ‘ambition’ means not only dealing seriously with waste and recycling, but also taking concrete steps to address the fundamental problem of resource overconsumption in the EU.
  • The European system to phase out highly toxic chemicals from industrial processes and consumer products has been painfully slow. The Commission has come under fire from its own chemicals agency and EU member states for failing to speed up the process. Under pressure from the United States to water down EU restrictions on chemicals for TTIP, the Commission has also been strongly criticised for blocking long overdue legislation to ban endocrine disrupting chemicals (EDCs). These chemicals can interfere with people’s hormones, and are linked to serious health impacts, such as hormone-related cancers, fertility problems, diabetes and obesity as well as behavioural problems in children. Exposure also disrupts the hormonal systems of species of wildlife.
  • Overall, we see the Commission pursuing more and more dangerous deregulation. Its so-called ‘better regulation’ agenda seeks to reduce regulation for industry at the expense of protection for citizens. Essential social, labour, environmental, consumer, financial regulation and public health standards are all under threat of being weakened, delayed or scrapped and subordinated to corporate interests.
  • European economic policy was described at the UN sustainable development goals summit as “Cappuccino policy”: a lot of coffee (economic dimension), if things get better some milk (the social dimension), and if they get even better some chocolate (the environmental dimension). This sort policy cannot bring Europe out of the crisis, but will instead worsen it as more inequalities are created and more natural resources are destroyed.
  • Transparency International reviewed the number of high level meetings obtained by lobbyists in the Commission: 75 per cent of meetings were with business representatives. Business Europe came top, followed by Google and General Electric. European policymaking is shaped by this unbalanced influence at the expense of European citizens.

Contact details:

CEE Bankwatch, David Hoffman, david.hoffman@bankwatch.org, + 420 274 822 150

Climate Action Network Europe, Ania Drazkiewicz, ania@caneurope.org, +32 2 894 46 75

EEB, Philippa Nuttall Jones, philippa.jones@eeb.org, +32 4 71 57 81 01

Friends of the Earth Europe, Francesca Gater, francesca.gater@foeeurope.org, +32 485 93 05 15

Greenpeace EU, Mark Breddy, mark.breddy@greenpeace.org, +32 496 15 62 29

Health & Environment Alliance, Lucy Mathieson, lucy@env-health.org, +32 2 234 36 47

Ukrainian court backs state attempt to stifle public debate on ageing nuclear fleet

Kiev – Today a Kiev court ruled in favour of a defamation lawsuit brought by the Ukrainian state against a civil society organisation, thus backing the government’s attempts to suppress public debate on the country’s ageing nuclear fleet.

The state nuclear energy operator Energoatom brought the suit against CEE Bankwatch Network member the National Ecological Centre of Ukraine (NECU), alleging that NECU had published misleading information about safety standards at Unit 2 of the South Ukraine nuclear power plant.

The lawsuit referred to a press release from 15 May 2015 in which NECU reported on the state nuclear regulator’s decision to shut down the nuclear unit once it reached its design lifetime because the insufficient safety standards at the time did not allow the prolonged operation.

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Earlier this month Greens MEP Rebecca Harms visited Kiev and discussed the lawsuit against NECU with Energoatom representatives and Ukraine’s deputy environment minister. “This (lawsuit) is nonsense, discussion is needed instead,” she said in a radio interview.

In its ruling today, the court upheld Energoatom’s request, which was later joined by the state nuclear regulator, to order NECU to publish a statement saying that parts of the press release were false.

“Nuclear safety is one of the pressing issues facing Ukraine. But today’s court ruling makes clear that the state can guarantee neither nuclear safety nor public debate,” says Iryna Holovko, Bankwatch’s national campaigner in Ukraine.

Despite the case attracting international attention, the Ukrainian government appears keen to block the public debate, not only at home but also abroad. International treaties oblige Ukraine to launch environmental impact assessment and public consultations in neighbouring countries before extending the lifetime of the Soviet-era reactors.

The European Commission has acknowledged this requirement, and the authorities in at least three neighbouring EU countries have already approached their Ukrainian counterparts on the matter, but Kiev so far refuses to cooperate.

In the meantime, Ukraine’s ageing nuclear fleet receive EUR 600 million in loans from the EU’s nuclear energy body Euratom and from the European Bank for Reconstruction and Development for safety upgrades even though nine nuclear units will have exceeded their initial expiry date by 2020. Three units already operate beyond their designed lifetime.

In less than two months, the Ukrainian nuclear regulator will consider again the lifetime extension for the South Ukraine nuclear unit in question, and for unit 1 at the Zaporizhia nuclear power plant, which is just 250 kilometres from the front lines of the ongoing conflict in eastern Ukraine.

“It is crucial that Ukraine’s decision making procedure is brought in line with international requirements, in particular with those that provide for full environmental impact assessment, assessment of alternatives and proper public participation,” says Holovko. “Today’s court decision will not prevent us from continuing to demand this.”

For more information contact:

Iryna Holovko
National campaigner for Ukraine
CEE Bankwatch Network
iryna@bankwatch.org
Tel.+380 50 647 6700

Note to editors:

For more on Ukraine’s nuclear units lifetime extension program see here: https://bankwatch.org/our-work/projects/nuclear-power-plant-safety-upgrades-ukraine

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EBRD policy breaches at Serbia coal mine confirmed by bank’s own complaint mechanism

Prague, Belgrade – A day after the Board of Directors of the European Bank for Reconstruction and Development (EBRD) approved a new EUR 200 million loan for Serbia’s electric utility Elektroprivreda Srbije (EPS), an internal review at the Bank finds that it breached its own environmental and social policy when approving the previous EUR 80 million loan to the same company.

The report (pdf) published today by the EBRD’s independent Project Complaint Mechanism (PCM) is the result of an investigation into a 2011 loan to EPS to buy new mining equipment for the highly controversial Kolubara lignite mine.

The findings of the PCM report respond to two complaints – the first (pdf) filed with the bank by the Ecological Society of Vreoci and the Vreoci local council in 2012, and the second (pdf) by CEE Bankwatch Network member the Centre for Ecology and Sustainable Development (CEKOR) in 2013.

“The EBRD’s pick-and-choose approach to environmental and social assessment enabled straightforward support for the lignite sector to be presented as an ‘environmental improvement’ project,” says Fidanka Bacheva-McGrath, EBRD Policy Officer at Bankwatch. “The compliance review findings now confirm our view that this is unacceptable.”

The complaints centred around the EBRD’s pre-project environmental and social assessment, which evaluated the impacts of only selected parts of the Kolubara mine basin. The assessment also downplayed the negative aspects of the project, such as supporting mine expansion and creating the preconditions for the construction of a new coal power plant. Most notably, by excluding the village of Vreoci from its assessment, the bank attempted to avoid responsibility for the collective resettlement of 1180 households from Vreoci.

“Vreoci’s over 3000 residents suffer from unbearable noise, dust, limited access to running water, and smoke from spontaneous combustion of coal due to the mine operations and related transportation infrastructure, but have been waiting for nearly a decade to be collectively resettled”, explains Zvezdan Kalmar, Co-ordinator for Energy and Monitoring of International Financial Institutions at CEKOR. “The EBRD maintained that Vreoci is not part of the project it finances. But as well as being morally bereft this claim has now also been shown to be incompliant with the bank’s own policies”.

As the new report shows, the EBRD also failed to adequately assess the extent of greenhouse gas (GHG) emissions from the project. The bank admitted in a document presented to its Board of Directors before project approval that the new mining equipment would enable the production of lignite with more uniform quality, which was a precondition for a new power plant at the site. However, it omitted the GHG emissions from the new plant in its calculations and as a result presented the project as leading to reductions of emissions instead of increases. As the compliance report puts it: “The GHG assessment undertaken on the ‘Project’ is piecemeal, unsubstantiated in terms of supporting information […] and inconsistent with EBRD guidance and international good practice.”

The new loan, approved yesterday, is to be the bank’s fifth loan to EPS since 2001. The EBRD’s Management has responded (pdf) to the PCM report by persuading its client EPS to develop “an overall Resettlement Framework which will apply to all of its activities, including across the Kolubara mining basin”. It also committed that the EBRD will monitor the implementation of the plan.

“If the EBRD has learned any lessons from the PCM process, the new loan must come with strong conditions that demonstrate both the EBRD’s and its client’s commitments to ensure resolution for impacted communities through a new ambitious and well-resourced environmental and social strategy,” says Ioana Ciuta, Bankwatch’s Energy Co-ordinator. “The bank must also fulfil its commitment to help Serbia phase out coal and thus include conditions to ensure that EPS develops a strategy for diversification of the energy sector, including increased investment in energy efficiency and sustainable renewable energy.”

For more information contact:

Zvezdan Kalmar
Co-ordinator for Energy and Monitoring of International Financial Institutions, CEKOR (Serbia)
vodana@gmail.com
+381 65 55 23 191

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

Czech government pushes people to edge in new coal mine expansion

Prague – In a landmark decision today, the Czech Republic reversed a quarter century-old ban that prohibited the expansion of surface mining in an area of Northern Bohemia, allowing excavation in close vicinity of homes of more than 120 000 people.

Established in 1991 shortly after Czech independence, the limits of the Bílina mine have been redrawn, now allowing the mining operations to expand to up to 500 meters from the homes of the town of Braňany, raising concerns about the eventual toll on local residents’ health.

In a letter sent last week by the Czech Academy of Science to Prime Minister Bohuslav Sobotka, scientists detailed how health costs and related economic losses as a result of extending the mine’s boundaries would cost the country EUR 370 million and the European Union almost EUR 5 billion [1].

Coal use in the region has already been found to be related to instances of asthma, respiratory and cardiovascular disease and cancer. Alena Dernerova, member of the Czech senate and doctor by profession, said in a statement from September 24th that a year of breathing Northern Bohemian air reduces life expectancy by nine and a half days each year.

The low quality lignite to be extracted in the newly opened area of Bílina mine is also responsible for five percent of all carbon dioxide emissions of Czech coal deposits.

Ondřej Pašek of CEE Bankwatch Network said:

“The Czech government has sent a clear signal to the public and made a mockery of the EU’s commitment to a low-carbon transition. While the government has received billions of euros in EU funds for much needed energy savings measures, today’s decision makes those investments wasted money and a step backwards for the Czech energy sector and economy.”

Notes:

[1] See Environment Centre, Charles University: “Quantification of environmental and health impacts (externalities)”, 2015; http://download.mpo.cz/get/53560/61109/636770/priloha001.pdf

For more information please contact:

Ondrej Pasek
Energy expert, CEE Bankwatch Network
E: ondrej.pasek@bankwatch.org
Twitter: @opasek