Press release

Dirty coal gets closer to receiving almost half a billion euros from EU taxpayers

The European Investment Bank (EIB) is gearing up to pay 440 million euros to a new 600 MW lignite plant in Slovenia at a time when calls for an end to subsidies for fossil fuels are intensifying all over the world.

On Friday, November 30, the Slovenian ministries of finance and infrastructure signed contracts with the management of TES (the constructors of a new block at the Sostanj lignite plant) in view of offering a state guarantee for a loan of 440 million euros from the EIB needed if the 1.3 billion euro project is to go ahead. The guarantee still has to be discussed by the Slovenian government and ratified in the parliament.

“Despite huge controversy over this project in Slovenia, the ministries pulled it off to sign these contracts on the very last day of the most recent deadline set by the EIB,” explains Barbara Kvac from Slovenian NGO Focus. “Yet these signatures actually put the EIB in front of a serious test of its credibility. On the one hand, the bank must be under significant pressure to hand over the money, but on the other, state guarantee or no state guarantee, there are still several investigations ongoing into suspected corruption in the project that the EIB should see the results of before paying any money.”

Both OLAF (the European Anti-Fraud Agency) and the EIB are currently conducting investigations into corruption allegations in the management of Sostanj.

“In addition to corruption, the EIB has to also worry about the risks to its credibility represented by such a large investment in a lignite plant at a time when bodies like the International Energy Agency, the World Bank and others are calling for an end to subsidies for fossil fuels,” says Pippa Gallop, Bankwatch research coordinator. “In October this year, the EIB started a process of reviewing its energy policy, partly to make it more in line with climate science. What kind of an energy policy can we expect from the bank next year if the debate around it coincides with payments made to a new coal plant?”

There are also serious concerns about the viability of the project as a whole, which should serve as serious warning for a European public bank. In July, Slovenia’s parliament gave a half-hearted go-ahead to the project, but only under certain conditions, laid out by the government in February, such as keeping project costs below EUR 1.3 billion, completing construction by 15 February 2016, keeping carbon emissions under a certain level and the maximum price of lignite at EUR 2.25/GJ and ensuring that the project has an internal rate of return of at least 9 percent.

The problem is, some of the conditions set out by the government are virtually impossible to meet. Even in the revised investment program (IP5), projections on the project’s profitability do not come anywhere near 9 percent, and are diminishing as time goes on. Keeping the lignite price at EUR 2.25/GJ is also unrealistic given that it already cost EUR 2.7/GJ in 2011 and as the Velenje mine (the source of the lignite) becomes exhausted – projected to happen at around the same time as Sostanj Unit comes to the end of its life – it is hardly likely to get cheaper.

For more information, contact:

Barbara Kvac
Focus Slovenia
Barbara at focus.si
Tel.: +386 5 907 13 25

Pippa Gallop
CEE Bankwatch Network
pippa.gallop at bankwatch.org
Tel.: +385997559787

Collapse of EU budget talks short-changes people and planet

With todays collapse of negotiations at the EU budget summit in Brussels, environment groups CEE Bankwatch Network and Friends of the Earth Europe called on countries to focus their efforts on agreeing a deal in the new year that has quality EU spending [1] at the top of the agenda.

Markus Trilling, EU Funds coordinator for CEE Bankwatch Network and Friends of the Earth Europe, said: ”Europes people and our environment have been let down by our leaders once again, and for what? While opposing member states have been fixating over sums as tiny as 0.005 percent of total EU GDP, the pressing issues of climate change, environmental degradation and resource use have been totally short-changed.

“If a further Budget summit goes ahead in the new year, it must put the quality of EU spending at the top of the agenda, and recognise the huge potential of this money for improving the quality of life in Europe, our shared environment and our economic prospects.

“A 25 percent green EU budget for 2014-2020 would unlock substantial investment money for projects like energy savings and renewables that will cut our greenhouse gas emissions, create millions of new green jobs and reduce fuel poverty.

“Linking direct payments for farmers to strict environmental conditions and dedicating funds to protect nature will be crucial for delivering overall green objectives.

“Europes leaders simply cannot afford to let a positive, quality-driven deal go begging again.”

For more information please contact:

Markus Trilling
EU Funds campaigner at CEE Bankwatch/Friends of the Earth Europe
Tel:+32 (0) 484 056 636
markus.trilling AT foeeurope.org

Notes

[1] Visit www.wellspent.eu to see how European projects funded by Cohesion Policy are working for the environment, society and the economy.

EU budget negotiations must tackle mistakes of past with focus on quality spending

Brussels, November 22, 2012 – As European leaders gather in Brussels today for the EU budget summit, quality spending must be the focus of discussions if the future European budget is to tackle Europe’s environmental and economic crises, according to environment groups CEE Bankwatch Network, Friends of the Earth Europe and Transport & Environment.

European spending has often been misguided and damaging, through investments promoting fossil fuel use, carbon-intensive projects or the destruction of nature [1], according to the three organisations. In times of economic and environmental crisis, quality spending on public transport, sustainable food production, renewable energy and energy efficiency projects can trigger environmental protection and sustainable development [2].

Markus Trilling, EU Funds coordinator for CEE Bankwatch Network and Friends of the Earth Europe, said: “Discussions on how much to spend have predictably dominated the run-up to the Budget summit, but negotiators need to focus on the quality of spending. People living in Europe could be forgiven for not knowing the huge potential this future budget has to work for them, their quality of life, their shared environment and their economic prospects.”

The environment groups maintain that the European Commission’s proposal to allocate 20 percent of the total budget for measures to address climate change does not go far enough, and are instead calling for a 25 percent ‘climate mainstreaming’ figure to be agreed in order to tackle both Europe’s environmental and economic crises [3].

Markus Trilling continued: “The EU’s budget for 2014-2020 represents a historic opportunity to address the environmental crisis, protect biodiversity, and help stop the worst impacts of climate change. A 25 percent ‘green’ EU budget for 2014-2020 would unlock even more investment money for projects, like energy savings and renewables, which will cut our greenhouse gas emissions, create millions of new green jobs and reduce fuel poverty.”

Speaking on greening commitments for the Common Agricultural Policy, Stanka Becheva, agriculture campaigner for Friends of the Earth Europe said: “European rural areas have lost millions of farmers, and intensive agriculture practices have led to the loss of biodiversity and polluted soil and water. The present economic and planetary crises are putting small scale sustainable farmers out of business. Linking direct payments to obligations to protect the environment – strong mandatory greening – will ensure targeted spending that tackles these challenges.”

Transport and Environment maintain that support for regional airports in Poland and Spain with little air traffic do not justify the significant costs incurred. European money should be spent on more efficient projects – those that manage existing infrastructure more smartly, such as road user charges or the European Rail Traffic Management System.

Nina Renshaw, deputy director of Transport & Environment, said: “Our prime ministers and presidents have a real opportunity to prove that they have learnt from past mistakes and have smarter, more sustainable plans for our money. In the past, EU money has been wasted, with subsidies for highly polluting industries, new airports and highways being built in the wrong places, for the wrong reasons. These kind of projects cost far more in false hope than they gave back to local communities.”

“This time around the EU should direct the billions to where they can make the biggest difference, such as smart grids to bring clean renewable energy to homes and to electrify transport, and to projects which save energy and ultimately save money, instead of wasting it,” Nina Renshaw concluded.

For more information please contact:

Markus Trilling
EU Funds campaigner at CEE Bankwatch/Friends of the Earth Europe
Tel: +32 (0) 484 056 636
markus.trilling at foeeurope.org

Sam Fleet
Communications officer, Friends of the Earth Europe, (EN)
Tel: +32 (0) 2893 1012
Mob: +32 (0) 470 072 049
samuel.fleet at foeeurope.org

Notes for editors:

[1] EU funds in Central and Eastern Europe: Roadmap to sustainability or dead-end investments. The CEE Bankwatch map presents environmentally and socially harmful projects financed or in line for financing by the European Union during the period 2007-2013:
https://bankwatch.org/billions/

[2] Visit http://www.wellspent.eu to see how European projects funded by Cohesion Policy are working for the environment, society and the economy.

[3] http://www.foeeurope.org/MEPs-positive-signal-greening-EU-budget-111012

Press Briefing for European Summit 22-23rd November: How to ensure strong green spending runs throughout the Multiannual Financial Framework 2014-2020

Download the full briefing as pdf

This week’s European Council will be crucial for ensuring that the Multiannual Financial Framework 2014-2020 (MFF) mobilises sustainable investments that can create millions of jobs and take Europe forward on a solid footing out of the crisis. Environment NGOs – Birdlife Europe, Conservation International Europe, CEE Bankwatch Network, European Environment Bureau, Friends of the Earth Europe, Transport & Environment and WWF – are campaigning for future EU funds to bring more environmental benefits and public goods, deliver on jobs and economic opportunities, cut harmful subsidies and achieve European 2020 and 2050 climate, energy and environmental targets.

Ensuring that funds are better spent is therefore our main priority. The current overall MFF proposal is far from green: it is a lost opportunity. There is a lot of room to shift MFF allocations towards better spending and to relocate funds to greener sectors. Therefore we wish to draw your attention to five key issues for the Council that could substantially increase the chances of the next MFF delivering multiple benefits:

1. Climate action: Ensure that 25% of the next MFF supports climate action

The European Commission introduced a 20% MFF support for climate action, endorsed by the Parliament and recently too by President of the European Council, Mr Van Rompuy. We are asking for 25%, a minimum for incentivising an eco-innovative economy based on renewables in Europe. It will help Europe to create new quality jobs, improve the well-being of EU citizens and achieve near decarbonisation by 2050.

2. Common Agricultural Policy (CAP): Ensure the delivery of public benefits

Increasing the long term sustainability of the farming sector is essential for preserving environmental public goods and for job creation in rural areas – achievable through mandatory greening of direct payments and a strong Rural Development pillar. We consider that half of total CAP funds should be allocated to Rural Development, of which at least 50% should be earmarked for the environment. In addition, a minimum 30% of direct payments should support a greening package of meaningful agricultural practices at the farm level linked to the basic payments.

However, the proposal of the President of the European Council, Mr van Rompuy, fails to rebalance the allocations between the two pillars – it may very likely be the opposite.

3. Cohesion Policy and Connecting Europe Facility (CEF): Put sustainability at the heart of regional development and infrastructure investments

In order to deliver on Europe 2020 objectives as well as 2050 climate and environmental objectives, Cohesion Policy and the CEF should aim at reducing – not increasing – energy and resource consumption in order to create sustainable and secure jobs and boost economic opportunities.

Prioritised support for energy savings, renewable energy and clean transport projects should be accompanied by the prevention of any harmful social and environmental impacts. For this purpose environmental safeguard mechanisms (‘climate and biodiversity proofing’) throughout the whole programming cycle need to be applied.

4. Ensure that LIFE (Environment and Climate fund) receives 1% of the next MFF

The Parliament is asking for LIFE to be strengthened. A modest 1% of the MFF for this successful fund will strongly contribute to achieving the EU target to halt biodiversity loss by 2020 through innovative environmental projects.

5. Europe’s external dimension: important international commitments that are being forgotten

The European Commission’s proposal for an increased Heading 4 is a bare minimum, as underlined by the Parliament. It should be maintained, and not cut, to allow Europe to deliver on its international development, climate and biodiversity commitments. President van Rompuy’s proposal does not satisfy this and threatens EU’s credibility at the global stage.

[…]

Download the full briefing as pdf

London — Monsanto, the world’s largest seed producer and one of the most prominent promoters of GMO crops worldwide, is set to receive 40 million US dollars of public financial support via the European Bank for Reconstruction and Development.

The EBRD has provisionally approved a 40 million US dollars financial guarantee to cover Monsanto in case farming companies cannot pay for seeds or agrochemical products they committed to buy from the corporation. The support is to be offered by the EBRD for contracts made by Monsanto with medium and large farmers and distributors in Bulgaria, Hungary, Russia, Serbia, Turkey, and Ukraine. (1)

US corporation Monsanto is the world’s largest seed producer, the fourth largest agrochemical company worldwide and a Fortune 500 company.

„It is absolutely outrageous that the EBRD plans to use public money to support a giant that already dominates the global seeds and agrochemicals markets,” comments Ionut Apostol, CEE Bankwatch Network’s EBRD coordinator. „The EBRD has as a stated goal to promote the private sector and competition in transition countries; how could giving money to one of the world’s richest corporations possibly count as fulfilling this mission?”

„Even more troubling is that the EBRD claims to enhance food security by supporting Monsanto expansion in our region,” adds Apostol. „But the farming model promoted for decades by this corporation, centred on chemicals, mono-cultures, genetically modified organisms* and the marginalisation of the smallest producers is precisely what diminishes food security in an era of increasingly unstable climactic conditions.” (2)

CEE Bankwatch, together with 157 NGOs from all over the world, are this week sending a letter to the management of the EBRD (3) arguing against the approval of this financial aid package for Monsanto and also calling on the bank to reassess its approach to food security, from a focus on promoting large-scale industrial farming to encouraging more sustainable, biodiversity friendly and smaller scale farms. (4)

The financial assistance for Monsanto has already passed some internal procedures at the EBRD and is set to be fully confirmed in April 2013. The final approval of this guarantee entails a vote by representatives of countries that are stakeholders of the bank, including the United States, Australia, European countries and the EU itself.

For more information, please contact:

Ionut Apostol
Bankwatch EBRD Coordinator
ionut at bankwatch.org
Tel.: 0040721251207

Pippa Gallop
Bankwatch Research Coordinator
pippa.gallop at bankwatch.org
Tel.: 00385997559787

Notes for the editors:

1. Read about the guarantee for Monsanto on the EBRD page:
http://www.ebrd.com/pages/project/psd/2012/43925.shtml

2. Read more arguments against this guarantee and the profile of Monsanto:
https://bankwatch.org/news-media/blog/european-public-development-money-monsanto-whatever-next

3. Read a letter sent by Bankwatch and 157 other organisations around the world to the EBRD to oppose this loan:
https://bankwatch.org/publications/we-will-not-share-monsantos-risk-open-letter-ebrd

4. Over 100 organisations around the world criticise the EBRD’s vision on food security:
http://www.grain.org/article/entries/4572-why-are-the-fao-and-the-ebrd-promoting-the-destruction-of-peasant-and-family-farming

* The EBRD says that none of its financing would go to GMO support, but considering the track record of Monsanto (read more here and here) it would be important to know more about how the bank plans to ensure that.

Press release

For more information, contact:

For more information please contact:

Notes

For more information please contact:

Notes for editors:

Download the full briefing as pdf

1. Climate action: Ensure that 25% of the next MFF supports climate action

2. Common Agricultural Policy (CAP): Ensure the delivery of public benefits

3. Cohesion Policy and Connecting Europe Facility (CEF): Put sustainability at the heart of regional development and infrastructure investments

4. Ensure that LIFE (Environment and Climate fund) receives 1% of the next MFF

5. Europe’s external dimension: important international commitments that are being forgotten

For more information, please contact:

Notes for the editors:

For more information, contact:

Notes for editors:

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