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MEPs challenge EU financial support for Ukraine’s Soviet-era nuclear fleet

Twenty-five Members of the European Parliament (MEPs) have signed a letter today urging the European Bank for Reconstruction and Development (EBRD) and Euratom to suspend their financial support for Ukraine’s ageing nuclear reactors until the potential environmental impacts of their prolonged operation in Ukraine and on neighbouring countries are fully assessed.

The letter is available on the Bankwatch website.

Three of Ukraine’s 15 nuclear energy units are already operating beyond their design lifetime, and nine others are expected to be given similar permissions by the State Nuclear Regulatory Inspectorate by 2020.

A Safety Upgrade Programme, necessary to enable lifetime extensions for these units, is partially financed by loans from the EBRD and Euratom totalling EUR 600 million.

Since a prolonged operation of nuclear energy units beyond their design lifetime could have dramatic consequences for people and the environment across the border, the Espoo Convention, to which Ukraine is a party, requires projects of this kind to have a transboundary Environmental Impact Assessment (EIA).

Meeting this legal obligation is also one of the conditions for the loans from Euratom and the EBRD. And yet, the Ukrainian government has so far refused to launch such assessment.

Meeting with campaigners from CEE Bankwatch Network and Nuclear Transparency Watch earlier today at the European Parliament, MEPs from across the political spectrum decided to join the call for freezing the loan proceedings until a proper transboundary EIA is carried out.

Addressed to Jyrki Katainen, the European Commission’s Vice President for Jobs, Growth, Investment and Competitiveness in his position as the Governor of the EBRD as well as to the heads of the EBRD and Euratom, the MEPs’ letter warns, that “the prolonged operation of nuclear reactors implies an increased risk of a severe nuclear accident with potentially devastating impacts on the environment and the people in Ukraine and beyond.”

“Spending millions of EU tax payer’s money on keeping open high risk and out-of-date nuclear power stations in Ukraine is utter madness,” says MEP Dario Tamburrano. “Ukraine’s nuclear authority (SNRIU) has a record of ignoring safety risks and cannot be trusted. In 2013, the SNRIU extended the lifetime of a reactor in the South Ukraine Power Plant until 2023, despite independent studies showing that safety limits have been breached by up to 10 times the acceptable levels! With war still raging in Ukraine, the EU approach to extending the lifetime of nuclear power plants in the country is like having a sword of Damocles hanging over the heads of all European citizens.”

In April and May, following calls from Bankwatch campaigners, the governments of Slovakia, Romania, and Hungary have approached their counterparts in Ukraine with requests for information on the plans for prolonged operation of these nuclear units and for initiating public consultations in their countries.

“But Ukraine appears to be staunchly consistent on disregarding its international environmental obligations,” says Iryna Holovko, Bankwatch’s campaigner for Ukraine. “Two earlier cases, where lifetime extension permits had been granted to the Rivne 1 and Rivne 2 nuclear units, have already been found to be in breach of the Espoo Convention requirements. It is now high time for the EBRD and Euratom to help ensure this does not happen again. In fact, Ukrainians could certainly benefit from a proper and comprehensive EIA process, most of all because it would explore alternative, safer solutions.”

For more information contact:

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

Note to editors

More information about Ukraine’s nuclear units lifetime extension programme is available on the Bankwatch website.

Romanian environmental inspectorate orders closure of two coal plants operating outside EU pollution laws

Last week the Environmental Inspectorate in Hunedoara, Romania demanded the closure of two thermal power plants at Mintia and Paroşeni, because neither of the units complies with air quality requirements of the EU’s Large Combustion Plants Directive (LCPD). Hunedoara Energy Complex, which manages the Mintia and Paroşeni plants, has challenged the decision in court.

After its permit expired [1] in 2010, the Paroşeni unit had received a loan of EUR 32.6 million from the European Investment Bank for the installation of a flue gas desulphurization system, [2] yet the plant has so far failed to install the upgrade. In addition to the EIB loan, Hunedoara Energy Complex received EUR 37.5 million in state aid [3] for the purchase of greenhouse gases emission allowances.

The Mintia plant has been operating without an IPPC permit for over a year, but because of shortfalls nearing EUR 80 million, Hunedoara Energy Complex [4] does not believe it can finance the upgrades.

The Environmental Inspectorate’s decision is not surprising in light of the plant’s track record with previous violations.[5]

Ionut Brigle, campaigner for Bankwatch Romania said: “Coal power plants are the largest source of pollution in Romania, so ensuring compliance with air pollution rules and monitoring emissions is imperative. Hunedoara must suspend activities until it brings its facilities up to par.”

Hunedoara Energy Complex consists of the two coal power plants, Mintia and Paroşeni, and four hard coal mines considered viable: Lonea, Livezeni, Lupeni and Vulcan. Although the state aid is intended “to save the company” – as described in the government authorization – the contradiction remains for the company, since most of its employees work in mining divisions, while much of the coal is being imported.[6]

For more information contact:

Ionut Brigle
Campaigner, Bankwatch Romania
ionut.brigle AT bankwatch.org

Notes

[1] Integrated Pollution Prevention and Control (IPPC) Permit
[2] http://www.eib.org/projects/loans/2009/20090514.htm
[3] http://energie.gov.ro/home/14042015
[4] http://www.glasul-hd.ro/CEH-prelunge%C5%9Fte-agonia-termocentralelor-Dac%C4%83-nu-ar-fi-atacat-%C3%AEn-instan%C5%A3%C4%83-decizia-G%C4%83rzii-de-Mediu-directorii-CEH-ar-fi-avut-dou%C4%83-variante-ori-oprirea-activit%C4%83%C5%A3ii-ori-%C3%AEnchisoarea_12_24575.html
[5] http://cronicavj.ro/wp/?p=26049
[6] http://cronicavj.ro/wp/?p=13910

European Parliament approves Juncker Investment Plan, lacks guidance and oversight

Today the European Parliament approved the regulation establishing the European Fund for Strategic Investments (EFSI) at the heart of President Juncker’s EUR 315 billion investment plan. But critics say that the regulation lacks clear provisions for oversight of the fund and guidance for investments in green, sustainable and resource-efficient projects that are part of the fund’s mandate.

At EUR 21 billion, the European Fund for Strategic Investments aims to leverage via the European Investment Bank (EIB) a total of EUR 315 billion in new projects by 2018. The fund should target projects with a higher risk profile than normal EIB investments and should as well increase lending for investments with so-called “European added-value” – projects with European relevance which go beyond what Member States can achieve individually.

Xavier Sol, Counter Balance director says:

“President Juncker promised targeted investments into sustainable sectors that could create jobs, but in the text approved today there is nothing that can guarantee this. The regulation we have now is a blank cheque for the European Investment Bank to carry on with business as usual.”

The fund’s regulation doesn’t include the necessary accountability mechanisms towards Europeans and the Parliament. Technocrats will decide which projects to support and these will have significant impacts on people and their environment.”

Markus Trilling, EU funds campaigner for Bankwatch and Friends of the Earth Europe says:

“The EFSI is an example of how the EU budget is being used to guarantee safe investments for the private sector while the public bears the risk. To increase the effectiveness of the investment fund and make sure it invests in projects that are future proof, the EIB needs a climate policy to guide its action on green energy. Investing in energy efficiency and renewable energy sources is where the smart money is at.”

For more information contact

Markus Trilling
EU funds policy officer
email: markus.trilling AT bankwatch.org
mobile: +32 484 056 636

Xavier Sol
Director, Counter Balance
email: Xavier.sol AT counter-balance.org
mobile: +32 473 22 38 93

Illegal coal subsidies could cost south-east European countries dearly, warns new study

Prague – New investments in coal mines and power plants could cost the Western Balkans and Ukraine dearly if they fail to take into account binding rules on subsidies (State aid), according to a new briefing released today by CEE Bankwatch Network.

The full paper, as well as accompanying case studies and press briefing, can be downloaded from http://bit.ly/state-aid-risk

Practices such as preferential loans and guarantees, equity measures, long term contracts, and privatisation have been subject to strict rules under the Energy Community Treaty [1] since it entered into force in 2006. And yet, the signatory countries [2] are still planning new coal power plants and mines [3] without adequate attention to State aid risks. As a result, investment projects and existing facilities could face serious problems, especially if the state is forced to recover the sum of the aid granted, according to the briefing’s authors, lawyers Peter Staviczky and Phedon Nicolaides [4].

Image of Pljevlia

See a slideshow of cases

Among the cases examined is the controversial plan for the Kosovo C power plant in Kosovo [5], which may be supported with a 20-year long-term power purchase agreement. While such contracts reduce the risk of the plant not being able to sell its electricity at a profit, they are usually considered as interfering with competition and are thus rarely allowed.

In January this year, the Serbian parliament ratified a USD 608 million loan for the Kostolac B3 power plant [6] and the Drmno mine. For the development of the mine the state directly took a loan from the China ExIm Bank on behalf of state-owned electricity company Elektroprivreda Srbije (EPS), thus leaving EPS with no payback risks at all, and putting the company at an unjustified advantage on the market.

“South-east European governments can no longer hand out money to energy companies as they please. They need to learn the rules as soon as possible – certainly before committing to finance any more major energy projects,” said Pippa Gallop, Bankwatch’s Research Co-ordinator. “In a sector where decisions have impacts lasting several decades, energy investments are highly cost-dependent and policymakers need to take all necessary steps to ensure legal certainty. State aid issues are no exception”.

“Governments not complying with State aid law requirements face serious legal risks both at national and European level, including for decisions taken long before EU accession. In some cases they may even have to recover the aid. The Energy Community countries would do well to learn from the case of Hungary, which signed long-term power purchase agreements with power plants in the mid 1990s, but was subject to a 6-year legal procedure after EU accession in 2004 followed by several lawsuits and international arbitration tribunals. Ultimately Hungary had to calculate the difference between the market price and the price it paid for the electricity under the agreements and recover the difference, plus interest,” warned Ioana Ciuta, Bankwatch’s Energy Co-ordinator.

Contacts:

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

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

Notes for editors:

[1] The Energy Community Treaty entered force in 2006, with the goal of creating a common energy market between the EU and some of its neighbours. It also aims to extend the EU internal energy policy to south east Europe and the Black Sea region. This includes the obligation for member countries to implement certain EU energy and environmental legislation and renewable energy targets.

[2] The Contracting Parties are currently Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Moldova, Montenegro, Serbia and Ukraine.

[3] For an overview of planned coal power plants in the Balkans, see https://bankwatch.org/campaign/coal .

New coal power plants are also planned in Ukraine, but due to the revision of the country’s energy strategy and the political situation, the plans are currently unclear.

[4] Péter Staviczky studied law at the Pázmány Péter Catholic University Faculty of Law and Comparative Law at the International Faculty of the University Robert Schuman Strasbourg. He did a banking-lawyer postgraduate training and took part in the common European specialist course of the Ministry of Foreign Affairs and the French École National d’Administration. He has been working at the State Aid Monitoring Office in Budapest since 2001. In 2007, he was appointed as head of the unit. He is a regular speaker at the seminars on State aid. Since January 2011 he is the attaché responsible for State aid at the Permanent Representation of Hungary to the EU in Brussels.

Professor Phedon Nicolaides holds the Jan Tinbergen Chair for European Economics at the College of Europe. He is also Professor at Maastricht University and holds a PhD in economics and a PhD in law. His research interests are European integration, competition policy and state aid, and policy implementation and he has published extensively on these subjects.

[5] https://bankwatch.org/our-work/projects/kosova-e-re-lignite-power-plant-kosovo

[6] https://bankwatch.org/our-work/projects/kostolac-lignite-power-plant-serbia

Eighty hectares of forest still standing in the lignite county of Gorj, court rules

Bucharest – Another environmental permit for the deforestation of 80 hectares of forest has been cancelled by a Bucharest court, following a Bankwatch Romania petition. The decision curtails plans to expand a lignite quarry in the Gorj county.

The request to cancel the environmental permit was based primarily on the grounds that the permit granting procedure was performed partially – only for a related activity, deforestation – while the main activity, expanding the lignite quarry by 80 hectares, was not assessed at all.

In other words, the main project consists of lignite surface mining, involving several works with environmental impact, whereas deforestation is just one of them. In addition, the environmental permit does not provide compensation measures for the clear cuts, although those measures are mandatory by Romanian law.

The environmental permit has been issued by the Environmental Protection Agency Gorj, at the request of the state-owned Oltenia Energy Complex.

The Pinoasa open pit mine is located near the town of Rovinari, home to one of Romania’s largest coal power plants. Surrounding this power plant are ten more lignite mining operations, whose cumulative effects have never been assessed.

The Bucharest court decision comes two months after an earlier ruling saved 130 hectares of forest from felling for expansion of the same quarry. [1]

“We believe that the Environmental Protection Agency (EPA) is one of the most important Romanian institutions whose main concern should be the compliance with all environmental procedures. And when it comes to projects that have a major environmental impacts, the agency must carefully consider all of their aspects,” said Ionut Brigle, campaign coordinator for Bankwatch Romania. “In particular, we urge the EPA to treat lignite mining expansion more seriously because of its negative implications.”

As defendants, Oltenia Energy Complex and Environmental Protection Agency Gorj can still appeal the court decision within 15 days of notification.

Throughout last year, Bankwatch Romania has been involved in legal actions resulting in the revocation of 28 deforestation permits, preventing the clearance of 23 hectares of forest for the expansion of the Rosia open pit mine. The court has also ordered the cancellation of two other environmental permits, near Tismana 1 (59 hectares) and Pinoasa (130 hectares) lignite quarries. Eight other similar cases are still pending a court decision.

Note to editors:

A photo of the mining operations can be downloaded here. Credits for the photo should be “Mihai Stoica for Bankwatch Romania”.

1. See https://bankwatch.org/news-media/for-journalists/press-releases/victories-piling-130-more-hectares-forest-saved-lignite-mi

For more details, please contact:

Ionuț Brigle
Campaign coordinator, Bankwatch România
ionut.brigle@bankwatch.org

Cătălina Rădulescu
Lawyer
catalina.radulescu@gmail.com

Civil society groups form ‘Better Regulation’ Watchdog to protect citizen, worker and consumer rights

Brussels, 18 May 2015 – More than 50 civil society organisations have joined forces to create the ‘Better Regulation Watchdog’ – a network to protect citizens’, workers’ and consumers’ rights. The network was launched today in Brussels, one day ahead of the expected announcement of the European Commission’s so-called ‘Better Regulation’ reforms.

The network of organisations from around Europe is concerned that the ‘Better Regulation’ agenda aims to weaken or undermine essential regulations and subordinate the public good to corporate interests.

The creation of the network is a response to the European Commission’s attempts to remove what it deems regulatory burdens under the ‘Better Regulation’ initiative. Commission First Vice President Frans Timmermans is expected to unveil a package of measures in support of this initiative tomorrow.

The network comprises a wide range of public interest groups including consumer, environmental, development, financial, social, and public health organisations and trade unions, and represents tens of millions of European citizens. The members are united by a desire to build an inclusive and competitive Europe founded on economic, social and environmental sustainability.

The network will examine actions taken under the Better Regulation initiative to identify possible risks to existing and future social, labour, environmental, consumer, financial regulation and public health standards. It will then inform civil society, media and decision makers of these risks by organising public debates, promoting research, and through joint campaigning and advocacy work.

Monique Goyens of BEUC – the European Consumer Organisation said: “We observe a lack of willingness from the new European Commission to take the measures necessary to protect consumers from unhealthy food, dangerous chemicals in consumer products or to provide for better labelling. Several initiatives have been delayed or are not being pursued anymore. The Better Regulation Watchdog network which unites civil society interest groups from various sectors is a clear signal to the European Commission not to jeopardise legislation protecting public interests.”

Christophe Nijdam, secretary general of Finance Watch said: “Growth and jobs need financial stability. The completion of a solid regulatory framework for the financial sector is one of the “big things” that Europe should focus on. As a member of this network we will watch the outputs of the Better Regulation initiative closely.”

Magda Stoczkiewicz, director of Friends of the Earth Europe said: “What the European Commission presents as a ‘better regulation’ agenda is in reality all about deregulation. In response to strong business lobbying, the Commission is planning to weaken, delay and scrap environmental standards.”

Oliver Roethig, Regional Secretary of UNI Europa said: “The idea to create the Better Regulation Watchdog was formed in a conversation between a small group of people. Now we are over 50 organisations! Together we will share intel, watch the Commission, and united react to safeguard the interests of workers, civil society and consumers.”

For more information please contact the following ‘Better Regulation Watchdog’ steering group member organisations:

  • BEUC: Ursula Pachl, +32 2 743 15 91, upa@beuc.eu or Johannes Kleis, +32 2 743 15 90, jkl@beuc.eu
  • Finance Watch: Joost Mulder, +32 484 54 27 11, joost.mulder@finance-watch.org
  • Friends of the Earth Europe: Paul de Clerck, +32 494 38 09 59, paul.declerck@foeeurope.org
  • ÖGB: David Hafner, +32 2 230 74 63, david.hafner@oegb-eu.at
  • UNI Europa: Christina J. Colclough, +32 471 93 67 51, christina.colclough@uniglobalunion.org

Notes

The founding statement of the Better Regulation Watchdog and the full list of members can be found at
https://bankwatch.org/documents/BRWN_Founding_Statement_and_Members.pdf