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Juncker’s investment offensive risks turning against Europeans

Brussels – Environmental NGOs call on President Juncker, the European Commission and the European Investment Bank to consider for financing from the 315 billion growth package only projects which are sustainable and in line with EU goals and only after proper public consultation with potentially affected communities.

“The idea of an investment offensive to stimulate the real economy in Europe is potentially good, but seeing what projects member states want prioritised for financing raised alarm bells,” comments Markus Trilling from CEE Bankwatch Network. “Offering public guarantees for highly risky projects such as mega-coal units, nuclear plants or incinerators is no way to ensure the sustainable development of European economies. On the contrary, it’s making Europeans pay for projects which contradict EU goals such as fighting climate change. It’s an offensive against Europeans.”

“There is a huge pipeline of energy efficiency, renewable energy and more green projects in Europe that should be the focus of this investment package: they are the best placed to deliver more and better jobs, a safer and more stable energy market, and a healthier environment. President Juncker should not miss the opportunity to invest public money where it most benefits the people and their future”, said Sébastien Godinot, Economist at WWF European Policy Office.

Ahead of the European Council December 18-19, during which the approval of member states will be sought for the investment package, six major European environmental NGOs sent a letter to the European Commission and the European Investment Bank asking the institutions to pay heed to five recommendations concerning the selection of projects:

  1. that full transparency is ensured during the process of selection of projects and that meaningful public consultations are conducted before financing is agreed,
  2. that projects selected are fully in line with the EU 2050 climate and biodiversity goals,
  3. that projects financed contribute to energy and resource efficiency and to the decarbonisation of energy and transport systems in line with the climate imperative, which would come with important economic gains,
  4. that money is benefiting local communities instead of being wasted on carbon and resource intensive large scale projects [*],
  5. that financial instruments are used wisely making sure that investment risks are not socialised while profits privatized.

An example of how such smart spending from the growth package could look like can be found in Anne Valley, Ireland, where an integrated wetland was constructed instead of installing a traditional water treatment plant. Not only is the wetland more efficient in clearing mostly livestock wastewater than a traditional plant, it also offers multiple benefits like flood control and climate regulation. Capital costs were €715,000 for the project – less than half the estimated cost of an equivalent traditional plant (€1,530,000). Annual maintenance costs are also lower. In addition €220,000 was spent on new tourism facilities which are creating additional economic value, impossible with a traditional plant.

Xavier Sol from Counter Balance says: “If this growth package is to be anything more than smoke in the eyes of Europeans, then the Commission and the European Investment Bank must exercise political will and ensure that only those projects which can indeed contribute to the sustainability and resilience of the European economy are selected and financed.”

Notes for the editors:

*A special report from the European Court of Auditors recently criticised the spending of EU and EIB funds on unnecessary “white elephant” airport projects: http://www.eca.europa.eu/Lists/ECADocuments/SR14_21/SR14_21_EN.pdf
Airports are among the proiects proposed by member states for financing from the investment package.

CEE Bankwatch Network is publishing every day a profile of one of the projects proposed for financing by member states:
https://bankwatch.org/news-media/blog/juncker-investment-offensive-against-europeans-economy-and-environment

Read the letter sent by NGOs to the EC and the EIB:
https://bankwatch.org/sites/default/files/letter-EC-EIB-EFSI-16Dec14.pdf

See an infographic about how countries in Central and Eastern Europe plan to use EU Budget money for problematic spending, including fossil fuels and incinerators, an omen for how the Juncker money could be spent in the region:
https://bankwatch.org/newmoneyoldideas

For more information, contact:

Markus Trilling
EU campaigner, Bankwatch
Markus.trilling@bankwatch.org
+ 32 484 056 636

Sebastian Godinot
Economist
WWF European Policy Office
sgodinot@wwf.eu
+32 2 740 0920

Xavier Sol
Director
Counter Balance
xavier.sol@bankwatch.org
+32473223893

Balkan coal projects face mounting challenges as China and CEE leaders meet in Belgrade


Belgrade/Banja Luka/Sarajevo, 16 December 2014: As the third annual summit of Chinese and Central and Eastern European leaders gets underway today in Belgrade, [1] problems are mounting for the lignite projects planned in the Balkan region [2]. Today alone, an official complaint [3] has been submitted to the Energy Community Secretariat on the planned 600 MW Ugljevik III lignite power plant in Bosnia and Herzegovina, and a new analysis [4] has been published showing that the planned 450 MW Tuzla 7 lignite plant – also in Bosnia and Herzegovina – is likely to be economically unviable.

The complaint on Ugljevik III outlines how the EU’s Directive on Environmental Impact Assessment has been violated by failure to include in the plant’s environmental study most of the important elements needed to assess the plant’s likely impact on the environment. Most alarmingly, the data on emissions of SO2, NOx and dust from the plant are demonstrably false. However this was not picked up by the Ministry approving the study, which means that the authorities have not adhered to Republika Srpska law or Bosnia and Herzegovina’s obligations under the Energy Community Treaty.

The analysis of Tuzla 7 by economist Vladimir Cvijanovic published today shows that with even relatively minor additional costs for the planned loans, the price of lignite or investments in the lignite mine the investment may turn out to be uneconomic. Rises in all three of these factors are considered likely.[5]

In addition the Federation of Bosnia and Herzegovina appears to be planning to free the project from paying VAT, thus depriving the public budget of an income of EUR 133 560 500 and effectively subsidizing the project. It is also considering the possibility of signing a long-term power purchase agreement which may also be seen as a subsidy for the project and risks subjecting electricity consumers to higher than necessary prices if the deal is badly done.

The new revelations come on top of a disastrous year for coal in the Balkans, which has seen the Kolubara mines in Serbia and Sikulje mines near Tuzla in Bosnia and Herzegovina flooded in May, the Kostolac mines in Serbia flooded in July and August, an explosion at Kosovo A in June which killed two workers, a mine accident at the Raspotocje mine in Bosnia and Herzegovina in September that killed 5 miners, and two fatal accidents at the Kolubara coal mines in Serbia [6].

“The latest revelations show that it’s time to stop treating the lignite sector as a holy cow which will save our economies”, said Igor Kalaba of Center for Environment. “When subjected to closer analysis, it is revealed that lignite is no longer a driver of our economy but a drain on it. The last thing we need is another case like the Sostanj plant in Slovenia which is predicted to lose EUR 70-80 million annually and is only employing a fraction of the people predicted”, he added.[7]

“Chinese companies have shown increasing interest in investing in the energy sector in the last 2-3 years in our region, but we advise them and other investors to look at new forms of renewable energy like wind and sun rather than poorly planned lignite projects”, added Rijad Tikveša of Ekotim.

Contacts

Rijad Tikveša, Ekotim, Sarajevo
Tel: +387 33 812 515
Mob: +387 61 554 302
E-mail: rijad@ekotim.net
ekotim@bih.net.ba

Igor Kalaba, Center for Environment, Banja Luka
Tel : +387 51/433-142
Mobile: +387 65/860-796
igor.kalaba@czzs.org

Pippa Gallop, CEE Bankwatch Network
pippa.gallop@bankwatch.org

Notes for editors

[1] For more details see the official summit website at: http://china-ceec-summit.gov.rs/

[2] For an overview of the new plans and the problems surrounding them, see https://bankwatch.org/coal

[3] The complaint is available at: https://bankwatch.org/sites/default/files/complaint-EnCom-Ugljevik-16Dec2014.pdf

[4] The analysis is available at: https://bankwatch.org/sites/default/files/critical-analysis-economics-Tuzla7-16Dec2014.pdf

[5] These changes in the project conditions are considered likely because:

– the cost of lignite production in the Kreka mine is already above the price needed to keep the project feasible (4.75 BAM/GJ). In 2012 it cost 7.18 KM/GJ to produce.

– the offer from China’s Gezhouba is subject to further negotiations before signing any contract and experience from other projects shows that price rises are likely, especially as there were no other final bidders after Hitachi withdrew.

– information is given about the potential loan conditions for a loan for 85 percent of the cost of the project but not about the conditions for the other 15 percent.

– no information about potential loans for expansion of the lignite mines is mentioned.

[6] For more information see:

– Kolubara mines flooding: http://serbia-energy.eu/serbia-mining-kolubara-mines-basin-the-floods-what-was-affected-chronology-of-recovery/

– Sikulje mines flooding: http://tuzlalive.ba/aktuelna-tema-zasto-je-potopljen-rudnik-sikulje/ (in Bosnian)

– Kostolac mines flooding: http://www.balkanmagazin.net/struja/cid189-100744/izgradnja-bloka-b3-u-kostolcu-ceka-zeleno-svetlo-iz-kine (in Serbian)

– Kosovo A explosion: http://www.reuters.com/article/2014/06/06/us-kosovo-powerstation-blast-idUSKBN0EH10N20140606

– Raspotocje mine accident: http://uk.reuters.com/article/2014/09/05/bosnia-mine-accident-idUKL5N0R620520140905

– Kolubara accidents (January and November): http://www.danas.rs/danasrs/kolumnisti/inspekcija_kolubara_je_bezbedna.884.html?news_id=292960

[7] For more on the Sostanj plant, see https://bankwatch.org/news-media/for-journalists/press-releases/sostanj-lignite-plant-mistake-not-be-repeated

Green 10 open letter to VP Timmermans: “Do not kill laws crucial for our health, environment and the economy”

The 10 leading environmental NGOs in Europe appeal to Vice President Timmermans not to sink the air and waste packages: “Polluton kills 58,000 persons every year. Are they not European citizens? Shouldn’t the Commission protect their interest too? ”

After the leaks of the 2015 Working Plan of Juncker’s Commission, appeared on the Press today, the 10 leading environmental NGOs in Europe, the Green 10, have written an open letter to Vice President Timmermans expressing their grave concerns.

Angelo Caserta, Director of Birdlife Europe and current Chair of the Green 10, states: “We are deeply concerned that environmental protection and sustainability is not only going to be absent in the Commission’s Workplan for 2015 but that Vice-President Timmermans is even planning to withdraw two recently proposed pieces of legislation that would bring major benefits for citizens’ health, the environment as well as for Europe’s economy – the air package and circular economy package“.

“By withdrawing the air quality proposal – Birdlife’s Caserta added – the European Commission would miss the opportunity to prevent as many as 58,000 premature deaths per year that result from air pollution, when the current toll is 400,000 premature deaths per year. We would also miss a huge economic benefit to the European economy as the air quality directive would deliver health benefits of €40-140 billion in avoided external costs and provide about €3 billion in direct benefits due to higher productivity of the workforce, lower healthcare costs, higher crop yields and less damage to buildings”.

The Green 10 letter also states: “Withdrawing the circular economy package would also go against the number one priority of the European Commission. Europe would fail to create as many as 180,000 new jobs through turning waste into a resource while making business more competitive and reducing demand for and dependency from costly scarce resources from outside the continent”.

NOTE

Link to Green 10 Open Letter

http://www.green10.org/publications/?logout=1

New money, old ideas: How EU spending plans for central and eastern Europe are selling short a greener future

Brussels, December 11 – Central and Eastern European countries are planning to use unacceptable amounts of their €350 billion allocation from the EU budget on dirty energy projects, polluting forms of transport and incinerators, according to a comprehensive analysis of draft government spending plans published today by CEE Bankwatch Network and Friends of the Earth Europe.

A visualisation* of spending plans in CEE and the new report are available at https://bankwatch.org/newmoneyoldideas

The European Commission last year made ambitious plans to transform the European economy away from fossil fuels and heavy resource use, meaning potential green benefits for the newer, more energy-intensive EU member states.

Yet the spending plans for 2014–2020 submitted to Brussels by eight Central and Eastern European countries would lock them into dirty energy futures at the expense of citizens and the environment.

“This EU budget was meant to herald a new era of greener spending and help Central and Eastern European countries become better equipped for the environmental and economic crises facing the world today. Instead what we see is a continuation of the same old spending patterns with governments planning to use the money for fossil fuel-fed, resource intensive projects” said Markus Trilling, EU funds coordinator at Bankwatch and Friends of the Earth Europe.

CEE Bankwatch Network and Friends of the Earth Europe obtained the draft spending plans of Poland, the Czech Republic, Hungary, Slovakia, Latvia, Estonia, Lithuania and Croatia from for 2014–2020 and compared these with how funds were allocated seven years ago. The analysis finds that:

  • Money meant for the development of the region will continue to fund fossil fuels – primarily gas but also coal via co-generation projects. In Poland and Estonia, fossil fuels account for over 20 percent of the energy infrastructure planned to be financed from the EU Budget.
  • Central and Eastern European countries plan to spend over half their transport funds on roads, with only token amounts going to sustainable and public transport infrastructure.
  • Funding for renewable energy is static compared to the previous seven years, or even declining in some countries (particularly in the Czech Republic); much of this funding – virtually all in Estonia, Latvia and Lithuania – goes to potentially environmentally damaging biomass projects
  • More than half of funds meant for waste will be spent on incineration and landfills as opposed to more sustainable practices such as prevention, recycling and reuse.
  • Funding for energy efficiency has increased, roughly quadrupling in the Czech Republic and Poland – although some of this money will go to large polluters.

“Plans for using the new multi-billion Euro budget are little more than spending as usual. We’re seeing the same old types of projects being financed when a new era of more modern greener spending was promised. We need more public investments in sustainable energy and transport and in waste reuse and recycling which could work as catalysts for private investors,” concluded Markus Trilling.

The only significant improvement in the next seven year budgeting period is an increase in funding for energy efficiency – although it must be ensured that this is spent on the citizens and communities who need it, and not to cut the energy bills of polluting industries.

The European Commission has yet to approve the vast majority of national spending plans for the EU funds. Fewer than 40 out of a total of 535 EU-funded programmes have so far been approved, meaning the Commission can still insist on greener spending.

CEE Bankwatch Network and Friends of the Earth Europe are calling on the European Commission to make sure authorities in Central and Eastern Europe revise their plans and use European public funds to modernise their economies and bring long-lasting, sustainable benefits to citizens. They are calling for subsidies for dirty activities by major companies to be stopped.

***

* The visualisation is available for publication. The necessary code can be made available upon request.

For more information please contact:

Markus Trilling, EU funds campaigner for CEE Bankwatch & Friends of the Earth Europe
Tel: +32 (0) 2 893 10 31
Email: markus.trilling@foeeurope.org

Juncker’s investment package to be hijacked by countries’ destructive plans

Brussels – A list of projects member states want to see financed from the Juncker investment package has been made public in expectation of tomorrow’s summit where finance ministers will discuss the package. Coal, nuclear and incinerators are among the various countries’ priorities, which fail to add up to the long-term strategic plan to stimulate growth and sustainability in Europe that Juncker promised.

“Scary is the first word that came to my mind as I looked at the list of projects proposed by the various member states to be financed from Juncker’s billions,” comments Bankwatch’s Markus Trilling. “There is a huge amount of coal being proposed by the various countries, including Poland, Croatia and Romania, and this is in full contradiction not only to EU goals but also to Juncker’s rhetoric on sustainability.”

“Poland is proposing a big number of coal plants, including Gubin, Laziska, Blachownia and Kozienice, and it also put forward the expansion of lignite mines at Gubin,” notes Trilling. “But this is ridiculous in the context of a growth package. Polish state owned mines have been systematically losing money and burdening the Polish economy and a new mine is only going to make things worse. Perhaps now that former Prime Minister Donald Tusk has moved to Brussels to become Council President, he might be more inclined to see Poland’s ambitions as they really are: self-deluded and destructive.”

Projects included on the priority list to be financed from Juncker’s package are supposed to be economically viable, but the example of the Polish mines proves that countries have not necessarily adhered to this condition and that further screening is crucial.

While there are some laudable projects on some of the countries’ lists – notably, Lithuania’s plans to invest 7.2 billion euros in household energy efficiency – these get completely crowded out by the numerous projects which would have a damaging impact on Europe’s environment, economy and financial stability if implemented.

“This list of projects gives us a startling view of what most EU countries plan to focus on in the near future: fossil fuel reliance in the energy sector, large-scale infrastructure, expansion of risky public private partnership schemes (PPP) to sectors like health and education,” comments Counter Balance’s Xavier Sol. “Such projects are not putting Europe on a sustainable growth path but rather they are increasing Europe’s vulnerability while passing the risks onto taxpayers.”

Bankwatch and Counter Balance express concern about how the priority projects list was put together by the mandated so-called “task force” made up for member states, the European Commission and the European Investment Bank. According to the NGOs, the selection process has lacked transparency and it has involved disproportionately more representatives of the business sector than any other type of participants.

The list of projects is to be further discussed – and reduced – by the European Council, Commission and the European Investment Bank and no final decisions have been made yet. The European Parliament too will play a role in the approval of the investment package, though it is unclear yet what impact it can have on the actual list.

“The European Commission and the European Investment Bank proved that they can act fast with this package but now they have to prove they can also act responsibly,” says Sol. “As guarantors of the good use of public funds, the EC and the EIB have to help Europeans escape this madness of bad and dirty infrastructure and make sure transformative sectors such as energy efficiency and renewables get priority over fossil fuels. The EU institutions have to check properly every single project and make sure the public has a chance to comment on the list of projects that will get priority financing.”

For more information, contact:

Markus Trilling, Bankwatch
markus.trilling@bankwatch.org
+32 484 056 636

Xavier Sol, Counter Balance
xavier.sol@bankwatch.org
+32473223893

Boskov Most suspected of breaching Council of Europe nature protection convention

Skopje/ Strasbourg – The Standing Committee of the Bern Convention, a binding international legal instrument in the field of nature conservation for signatory countries, announced today (pdf) that it will open a case file to address the complaint made by Eko-svest about the planned hydropower plants in Mavrovo national park.

The complaint alleges that Macedonia is not complying with several articles (2, 4, 5 and 6) of the Convention and that the country did not make the necessary efforts to protect wild flora and fauna in the Mavrovo protected area when it decided to construct 18 hydro power projects on the territory of the park.

One of the largest projects planned, the Boskov Most HPP project, involves the construction of a 68 MW hydropower plant including an accumulation dam of 33 meters. The construction would seriously jeopardise the small population of Balkan lynxes living in the region, a species on the verge of disappearance, out of which around 40 specimens still survive in Macedonia today.

“The Bern convention Standing Committee found our claims that the Balkan lynx would be close to extinction in case the Boskov Most and other hydro projects are finalised very persuasive,” explains Ana Colovic Lesoska, Bankwatch campaigner in Macedonia. “The Committee said it would look into the case and carry out an on the spot appraisal to establish the level of threat to biodiversity posed by this project.”

The Boskov Most project has been marred with controversy in addition to the biodiversity concerns. It has been advancing without a proper comprehensive environmental impact assessment, which is problematic in itself but also from the point of view of breaching the standards of the European Bank of Reconstruction and Development, which committed to a loan for the project. Moreover, recent evidence raises serious doubts about the economic viability of the project. To date, no transmission line that could connect the dam to the grid has been planned for, and the EBRD is yet to initiate an economic feasibility study for the project. Finally, even the environmental permit on the basis of which works would be started, as incomplete as it was, has expired.

“This sudden attention from the Bern Convention Standing Committee should make it clear to our authorities that this project cannot go ahead like this, with so many aspects of it being problematic,” says Ana Colovic Lesoska. “And the EBRD, as a responsible public institution accountable to taxpayers in the EU and elsewhere, should step out of this project at least until all the doubts related to it are cleared.”

After the on the spot appraisal, the expert appointed to conduct it will draw recommendations to be met by Macedonia. If the country complies with the recommendations and shows good faith in collaboration, the case will be closed. If Macedonia does not comply, the case will remain open and the Standing Committee could recommend other means to mediate the problematic situation. In any case, the attention of the Council of Europe on these issues has historically brought about dramatic changes to initial governmental plans in other countries, so similar effects can be expected in Macedonia.

For more information, contact:

Ana Colovic, Eko-svest and Bankwatch
ana@bankwatch.org
Tel.: +38972 72 61 04

Read more about the Bern Convention:
http://www.coe.int/t/dg4/cultureheritage/nature/bern/default_en.asp

And about Boskov Most:
https://bankwatch.org/publications/boskov-most-hydropower-plant-macedonia