Press release

On 14 December 2023, the European Bank for Reconstruction and Development (EBRD) could decide to end all fossil fuel investments

Between 2018 and 2021, the EBRD pumped EUR 2.9 billion in public money into oil and fossil gas projects around the world.

Now, public calls for the EBRD to stop backing the fossil fuel industry are growing louder. During public consultations on the energy strategy, the Bank received over 6200 emails demanding that it finally divest from fossil fuels. In late September, an open letter signed by Bankwatch and 130 civil society groups from over 40 countries urged the EBRD to join, not impede, the global effort to tackle the climate crisis. They called on the Bank to fully exclude support for fossil gas, including through financial intermediaries, and to increase investments in a just energy transition.

At COP 28, the EU is lobbying governments to end all fossil fuel subsidies. The EBRD, in which EU countries hold a collective share of over 50 per cent, must not undermine this effort.

Yet, despite the Bank boasting that its activities are in ‘full alignment’ with the Paris Agreement, the draft strategy, released in July, indicates that the EBRD might in fact continue financing fossil gas projects, particularly pipelines and power plants.

In recent years, the EBRD has gradually restricted its backing for fossil fuels and, based on its draft energy strategy, could impose new conditions on the financing of fossil gas infrastructure. Yet, despite warnings from the world’s top experts such as the IPCC and the IEA, the Bank’s shareholders appear determined to keep sinking public money into fossil energy.

Civil society groups call on the EBRD’s board of directors to acknowledge the climate emergency and ensure that the Bank’s next energy strategy ends all support for fossil gas.

*We have updated the date of the board meeting in light of new information.

For additional information and comments, please contact:

Gligor Radečić
Gas Campaign Lead, CEE Bankwatch Network
gligor.radecic@bankwatch.org
+385-977-454-467

Ido Liven
Communications Officer, CEE Bankwatch Network
ido.liven@bankwatch.org
+420-737-294-589 (also via Signal and Whatsapp)

Amidst the climate crisis, European Commission green-lights new fossil gas projects in Poland and Croatia

Yesterday, the Commission endorsed the revised recovery and resilience plans of Poland and Croatia, including their REPowerEU chapters.[1] The Polish and Croatian reform and investment programmes, worth EUR 59.8 billion and EUR 10 billion, respectively, include the expansion of LNG terminals and the construction of new pipelines. According to the Commission, these planet-heating projects are deemed ‘necessary’ to ensure security of supply in central and eastern Europe. For Poland and Croatia[2] to receive funding, the Council of the European Union now has four weeks to endorse the Commission’s positive assessment of the plans.

The approved investments include a 250-kilometre fossil gas pipeline between Gdansk and Gustorzyn in Poland worth EUR 630 million, and the expansion of the LNG terminal on Krk island in Croatia as well as new pipelines connecting Croatia with Slovenia and Hungary worth a combined total of EUR 559 million. The Gdansk–Gustorzyn pipeline will connect to a future floating storage regasification unit (FSRU) terminal in Gdansk. Initially included in Poland’s REPowerEU proposal, the terminal was later removed during negotiations with the Commission, probably because the project could not meet the Commission’s deadline of being operational by the end of 2026.[3]

Croatia will not only double the annual import capacity of the Krk terminal from EUR 2.9 to 6.1 billion cubic metres, but will also expand its national gas pipeline infrastructure to increase gas transmission to Slovenia and Hungary. This includes the expansion of the Zlobin–Bosiljevo pipeline, the Bosiljevo–Sisak–Kozarac evacuation pipeline linking Hungary, and the Lučko–Zabok section of the Croatia–Slovenia interconnector.

Due to environmental and climate concerns, both the Polish[4] and Croatian[5] LNG terminals have met with fierce opposition from civil society organisations and local communities.

Gligor Radečić, gas campaign lead with CEE Bankwatch Network: ‘While both plans provide badly needed reforms and investments for the energy sector – including support for solar PVs, building renovations and energy communities – it’s simply unacceptable that public funds are still being used to bankroll new fossil gas projects. The companies set to directly benefit from these funds posted record profits from the energy crisis last year. These countries are now effectively being rewarded for their lack of action, with Poland actively stopping wind farm investments and Croatia solar PVs in households in recent years.’

Krzysztof Mrozek, EU funds expert with the Polish Green Network: ‘Thanks to the tireless efforts of Polish civil society, many of our recommendations made it into Poland’s final plan. But the biggest one of all did not: stopping investments in fossil fuels. Instead of celebrating Poland’s first fossil fuel-free instrument, we find ourselves having to oppose these projects yet again.’

Contacts

For questions related to gas:
Gligor Radečić, Gas campaign lead, CEE Bankwatch Network
gligor.radecic@bankwatch.org

For questions related to the Recovery and Resilience Facility and REPowerEU:
Christophe Jost, Senior EU Policy Officer, CEE Bankwatch Network
christophe.jost@bankwatch.org

Krzysztof Mrozek
Head of the EU Funds for Climate Programme, Polish Green Network
krzysztofmrozek@zielonasiec.pl

Notes for editors:

[1] The REPowerEU plan is a set of measures aimed at ending the EU’s dependence on Russian fossil fuel imports by 2027. The plan emphasises the diversification of gas and oil supply sources, the replacement of fossil fuels with renewable energy sources by accelerating Europe’s clean energy transition, and the reduction of energy consumption, primarily fossil gas, in the EU.

[2] CEE Bankwatch Network, Cutting off the pipeline from REPowerEU to the fossil gas industry, CEE Bankwatch Network, 27 July 2023.

[3] European Commission, Commission staff working document: Analysis of the recovery and resilience plan of Poland, European Commission, 15, 17 June 2022.

[4] Paulina Januszewska, ‘Gaz to nie alternatywa, ale wyrok’, Krytyka Polityczna, 5 April 2023.

[5] Friends of the Earth Croatia, ‘The contract for the Krk LNG expansion condemns us to the climate crisis’, Friends of the Earth Croatia, 19 April 2023.

Montenegrin NGOs counter Varhelyi pledge on LNG terminal

Montenegro is not connected to international gas networks and uses only small volumes of the fossil fuel, putting it in a more favourable position for decarbonisation than the EU, which is struggling to free itself from fossil gas imports after Russia’s invasion of Ukraine.

The Western Balkan countries as a whole are much less gas-dependent than the EU (3) and have committed to phase out fossil fuel use by 2050 (4). But as explained in the letter, the LNG terminal, if built, would create a carbon lock-in for Montenegro, that the country would not be able to resolve before the 2050s.

A whole network of new pipelines would need to be built, with the government also proposing three new gas power plants. It is unrealistic that Montenegro, based on its size, limited institutional capacity and empty state coffers, would be able to make another transition from gas towards renewables by 2050. Yet the European Commission has in recent years actively encouraged increasing fossil gas consumption across the Western Balkans (5).

Nataša Kovačević of CEE Bankwatch: ‘We hope Commissioner Várhelyi’s statement does not represent the European Commission’s stance on the Montenegro LNG project – he has already recently been caught speaking without first consulting his colleagues (6). But the fact remains that the Commission’s support for increasing fossil gas use in the Western Balkans is irresponsible and counterproductive. Our low gas dependency is a plus, not a minus, in a future based on electrification of heating and transport.’

Diana Milev-Čavor of Eco-Team: ‘It makes no sense to increase our energy import dependence, irrespective of the source of the gas. Just as the EU is finally realising that its own energy system cannot be based on fossil gas imports, the Commission must urgently help to stop the Western Balkans repeating this expensive mistake. New infrastructure will end up either as stranded assets or as a fossil gas lock-in that will hinder renewables development in the region.’

Zenepa Lika of Dr Martin Schneider-Jacoby (MSJA): ‘An energy-efficient transition to 100 per cent renewables can happen relatively quickly in Montenegro if the political will is there. The European Commission and other international donors must focus on tackling electricity distribution losses, increasing the use of heat pumps and solar, innovative heat storage technologies and deep renovation of residential buildings instead of diverting attention and funding with fossil gas.’

Contacts

Natasa Kovacevic, Campaigner for Decarbonisation of District Heating in Western Balkans

natasa.kovacevic@bankwatch.org

+382 67 030 033

Pippa Gallop, Southeast Europe Energy Advisor, CEE Bankwatch Network

pippa.gallop@bankwatch.org

+385 99 755 9787

Notes for editors

The letter can be found here.
Commissioner Várhelyi’s statement can be found here.
Serbia uses fossil gas for district heating, but use for power and individual households is relatively low. North Macedonia has increased its fossil gas consumption for power and heat in recent years. In Bosnia and Herzegovina, only four towns and cities are connected to the gas network, while Kosovo, Montenegro and Albania hardly use gas at all and do not have functional distribution networks. The Trans-Adriatic Pipeline crosses Albania but so far provides no gas to the country.
Sofia Declaration on the Green Agenda for the Western Balkans, 10 November 2020. The Declaration includes a pledge to adopt the EU Climate Law, which makes climate neutrality by 2050 a legal obligation.
E.g. The European Commission’s 2020 Economic and Investment Plan for the Western Balkans overtly promotes gas. It claims – without providing any evidence – that new gas pipelines could later be used for renewable gas.
Last week, over 70 MEPs asked for Commissioner Várhelyi’s resignation after he misleadingly announced the suspension of “all payments” to the Palestinian authorities following Hamas’ terrorist attacks on Israeli civilians.

Thousands demand European development bank stops financing fossil fuels

Between 2018 and 2021, the EBRD has lent EUR 2.9 billion to various oil and fossil gas projects around the globe, making it the fossil fuel industry’s third most generous multilateral financier. [1]

The Bank is currently in the process of updating its Energy Sector Strategy which would guide its energy investments until 2028. The current policy, adopted in December 2018, excluded support for thermal coal and upstream oil exploration and production, and last year the EBRD decided to stop financing all oil and upstream gas projects, apart from exceptional cases. The new draft strategy [2] suggests that the EBRD could continue lending to midstream and downstream fossil gas projects such as pipelines and power plants.

In fact, in parallel to the strategy update process and despite claiming its operations are aligned with the Paris Agreement, the Bank is nowadays considering financial support to multiple fossil fuels projects, including a controversial fossil gas pipeline between Greece and North Macedonia. If materialised, this massive project could be responsible for up to half of North Macedonia’s carbon budget by 2030. [3]

More than 6200 emails have been sent to the EBRD during the public consultation period for its next Energy Sector Strategy, which ended on Friday, 15 September, thanks to an online tool set up by civil society groups 350.org and CEE Bankwatch Network.

In these emails, members of the public urged the Bank to cease all support to the fossil fuels industry and instead double down on financing for a just energy transition in its countries of operation.

These calls come as deadly floods have devastated cities in Libya and India and massive wildfires wreaked havoc in Canada and Greece, hitting first and worst those most vulnerable.

The growing public pressure on the EBRD to finally divest from all fossil fuels also echoes repeated warnings from the scientific community that there is no more room for investments in coal, oil or gas to have a chance at arresting global temperature rise at 1.5 degrees.

Nicolò Wojewoda, Europe regional director with 350.org says: “The EBRD’s shareholders, including European countries and major economic powers like the U.S, Canada and Japan, cannot claim to be climate leaders while supporting the use of public funds to finance fossil fuels. Many of these countries bear a historical responsibility in the climate crisis. We’ve seen again its devastating impacts across the world this summer — which was the warmest ever on record. This is a time when world-leading economies should listen to the demands of their citizens to build a better future, and show climate leadership by driving the transition from fossil fuels to renewables.”

Gligor Radečić, gas campaign lead with CEE Bankwatch Network, says: “The EBRD cannot claim it is aligned with the Paris Agreement while it is financing fossil gas projects. Using limited public funds to finance fossil fuels clearly undermines the Paris Agreement goal of keeping the 1.5 degrees Celsius within reach. While it is commendable that the draft policy prioritises decarbonisation of energy systems in the Bank’s countries of operations, it is unacceptable that the EBRD failed to end financing fossil fuels at a time of an accelerating climate emergency.”

Petr Hlobil, Program Director with CEE Bankwtch Network, says: “The EBRD was created to assist the transition of economies of the former communist bloc. So, it is perfectly positioned to speed up the transition of its region’s energy sector. But this requires the EBRD management to think about moving away from the last century’s energy sector based on large fossil fuel sources and focus on smart, more decentralised renewable and energy efficiency solutions. In a true energy transition, investments in fossil gas — which the EBRD is still defending — have no place.”

Notes to editors

[1] How the European Bank for Reconstruction and Development Can Shift Millions From Fossil Fuels to Clean Energy Through the Glasgow Commitment, IISD (October 2022) https://www.iisd.org/publications/brief/ebrd-shift-millions-fossil-fuels-clean-energy

[2] Draft Energy Sector Strategy 2024-2028, EBRD (July 2023) https://www.ebrd.com/draft-energy-sector-strategy.pdf

[3] The EBRD must not support further fossil gas lock-in for North Macedonia, CEE Bankwatch Network (May 2023) https://bankwatch.org/wp-content/uploads/2023/05/2023_05_08_The-EBRD-must-not-support-further-fossil-gas-lock-in-for-North-Macedonia.pdf

For further information please contact:

Mark Raven, mark@350.org, +447841474125 – Europe Communications at 350.org

Sophie Guibert, sophie.guibert@350.org, +33663211472 – Europe Communications at 350.org

Gligor Radečić, gligor.radecic@bankwatch.org, +385977454467 – Gas Campaign Lead at CEE Bankwatch Network

Bulgarian court rules out Sofia waste incinerator plant due to unassessed health risks and lack of public consultation

Despite its flaws, the project received financing from the European Commission and the European Investment Bank. For over a decade now, both institutions have ignored the repeated concerns raised by local people and environmental organisations. The incinerator was expected to account for up to 30 per cent of the EU’s cohesion policy funding for waste management in Bulgaria from 2014 to 2020 [1].

Earlier this year, the Municipal Council of Sofia finally decided to return the EU funding allocated for the project, having failed to meet the 2023 deadline for completing the project due to legal, administrative and technical delays.

According to the court decision, the authorities failed to ensure proper public participation and did not assess the health risks for the population directly affected by the project. Serious deficiencies in the air quality impact analysis were also identified. For example, the EIA failed to account for the existing excess levels of particulate matter and other forms of air pollution in Sofia, one of Europe’s most polluted cities.

Additionally, the court criticised the inadequate risk assessment of the emissions of highly carcinogenic dioxins and furans, as well as the large amounts of toxic ash the plant would produce.

The EIA was also judged to have used unreliable data to estimate the quantity and types of waste that would be burnt. In reality, the amount of hazardous household waste – such as paints, varnishes and batteries – collected by Sofia Municipality is less than one per cent of the total waste collected in the city.

The capacity of the planned unit would have been three times greater than current RDF production in Sofia, raising concerns about the potential environmental and safety impacts of the incineration process.

Regrettably, this latest development in the ongoing saga continues to diverted efforts and funding away from other urgently needed actions like separate collection and biowaste composting, both of which will become mandatory from the end of 2023 across the EU.

‘The idea of burning 180,000 tonnes of waste annually in a local district heating plant is at odds with the goals of a circular economy. It’s also one of the most inefficient and costly ways of dealing with Sofia’s waste,’ says Evgenia Tasheva from environmental association Za Zemiata, Bulgaria, one of the complainants and long-time opponents of the project.

‘We welcome the court’s ruling, which confirms that the Sofia waste incinerator plan is a prime example of a short-sighted and undemocratic investment decision by the local government. At the same time, we urge EU institutions to focus on funding real circular economy solutions and divest from end-of-pipe projects such as waste incinerators,’ says Danita Zarichinova, Zero Waste Coordinator at Za Zemiata.

Sofia Municipality may appeal the decision within 14 days.

Additional notes:

[1] The cost of the construction is estimated at around EUR 180 million. In March 2020, the European Commission approved funding of EUR 77 million from the European Regional Development Fund. The European Investment Bank signed a EUR 67 million loan in December 2018.

[2] Court decision (in Bulgarian and in English)

Contact:

Desislava Stoyanova

Za Zemiata – member of Friends of the Earth Europe

desislava@zazemiata.org

Phone: 0888714688

Skavica mega dam: Albanian court to scrutinise special law for U.S. contractor Bechtel

Joint press release by EuroNatur, CEE Bankwatch, Black Drin Association and Group of Rural Activists of Dibra

Radolfzell, Prague, Tirana – Nature conservation and human rights organisations have secured an important first milestone in the fight against the planned 210 MW Skavica hydropower plant in the Albanian municipalities of Kukës and Dibër: a constitutional complaint submitted by the Albanian Helsinki Committee and the Black Drin Association, with the support of EuroNatur and CEE Bankwatch Network, has now been accepted for trial in public plenary. The complaint alleges, amongst other things, the violation of the principles of legal equality and economic freedom in the award of public contracts.

This ruling is a major step forward, as only 15 per cent of all cases submitted to the Albanian constitutional court are eventually considered admissible, and they rarely include submissions by civil society organisations.

The contract for preliminary works and project documentation for the highly controversial Skavica dam was awarded to the U.S. construction giant Bechtel in July 2021, seemingly without any tender procedure. This followed parliamentary approval of a special law which specifically mentions Bechtel.

‘By circumventing open procurement and competition, this deal raises risks of possible corruption and doubts about the value for money of the project. It also undermines the meaningfulness of the environmental and social impact assessment,’ fears Andrey Ralev, Biodiversity Campaigner at CEE Bankwatch Network.

In addition to the lack of transparency, there is still no official information about the exact construction and location of the dam. Four technical scenarios are currently being considered, according to KESH, Albania’s state-owned energy utility and promoter of the Skavica project. The largest one involves a dam 147 metres high and a reservoir with a capacity of 2.32 billion cubic metres, which would make it one of Europe’s largest man-made reservoirs.

‘With 41 villages and more than 2500 houses in Dibër municipality threatened by the project, Skavica’s social impacts may be among the worst of any dam built in Europe in the 21st century. Residents have been fighting against Skavica for years. The vast majority doesn’t want the dam,’ says Majlinda Hoxha, coordinator of the Group of Rural Activists of Dibra.

Skavica’s ecological consequences would also be devastating, particularly for the critically endangered Balkan lynx.

‘The dam would disrupt the only bio-corridor between Albania and North Macedonia where the two remaining viable reproductive lynx populations cross,’ says Dr Amelie Huber, Freshwater Project Manager at EuroNatur. ‘Skavica would also flood what could be Albania’s largest floodplain forest, meaning that an array of biodiversity and habitats and a huge carbon sink would be lost. These impacts invalidate any argument that Skavica would drive green and climate-friendly energy development,’ concludes Huber.

Background information:

The Skavica dam would flood the last free-flowing stretch of the Black Drin River in Albania which originates from Lake Ohrid, in North Macedonia, and flows into the Adriatic Sea. Plans for the project date back to the 1960s, when Skavica was conceptualised as part of the Drin Cascade comprising three other large hydropower plants, which are already in operation.
The financial costs of the project have risen four times to over a billion euros but financing has not been secured yet. Bechtel has gained notoriety in the region and globally for its involvement in various unsuccessful and/or overpriced projects, often awarded without tender processes. 
The Skavica reservoir would submerge much of the impoverished but historic region of Dibra, a long, fertile, and scenic valley surrounded by snow-capped mountains. In recent years it has emerged as a hub for ecotourism and organic farming, partly subsidised by the Albanian government.

Contact:

Anika Konsek, EuroNatur: anika.konsek(at)euronatur.org, phone: +49 (0) 7732 9272 22
Andrey Ralev, CEE Bankwatch Network: andrey.ralev(at)bankwatch.org, phone: +35 9 8842 685 52
Majlinda Hoxha, Group of Rural Activists of Dibra/Black Drin Association: lindahoxha83(at)gmail.com, phone: +35 5674 8755 06

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