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Bankwatch reaction on Commission’s new budget proposal No more excuses for clean energy budget holes


Reacting to today’s European Commission Communication on the forthcoming EU budget review for the 2014-2020 period, the public funds watchdog group CEE Bankwatch Network called for concerted Commission and member state commitment to boost EU-funded clean energy programmes in central and eastern Europe. [1]

For the current 2007-2013 EU budget period, Bankwatch research has found the ten new member states to be spending a mere 2.4 per cent (EUR 4.2 billion) of their total EU Funds on energy efficiency and renewables initiatives. [2]

Markus Trilling, EU funds coordinator for Bankwatch and Friends of the Earth Europe, said: “Today’s announcement from the European Commission on the future EU budget sets out intentions for a more flexible budget to address ‘unforeseen events’. Yet the huge climate change challenge has been staring Europe in the face since well before the current budget billions were allocated across the member states, and so far we have seen an astonishing lack of ambition in funding for real clean energy outcomes via energy efficiency and renewables projects.

“It’s now up to the Commission and the new member states to indeed learn the lessons of the past and of now. Amidst the budget skirmishes to come, there must be underlying commitments to seriously ramp up clean energy funding that can catalyse low-carbon economies and deliver good news for jobs and the environment. While energy efficiency and renewables don’t feature heavily in today’s communication, it is certainly encouraging that the Commission is talking of future budgetary resources being used to mainstream green technologies and services across all EU policies.”

For more information

Markus Trilling
EU Funds coordinator
CEE Bankwatch Network/Friends of the Earth Europe
Mobile +32 2 893 1031
Email: markus.trilling AT foeeurope.org

Notes for editors:

1. European Commission’s Communication on the EU Budget Review:
http://ec.europa.eu/budget/reform/index_en.htm

2. See the Bankwatch study Potential unfulfilled – EU funding and Cohesion policy can do more for sustainable climate and energy development in central and eastern Europe at: http://bit.ly/8YYAiU (pdf)

No public money for Nabucco – mega gas project a drain on clean energy, human rights and the environment, says Bankwatch


Budapest, Hungary — Reacting to today’s announcement by the Nabucco Consortium that international public banks are now officially commencing their appraisal of the EUR 7.9 billion (estimated) Nabucco gas pipeline project, watchdog group CEE Bankwatch Network called on the international financiers to reject what would be record European public finance for the project and instead to focus on the financing of clean energy in central and eastern Europe, particularly climate-friendly, job-boosting energy efficiency. [1]

As announced today, the Nabucco Consortium is seeking EUR 800 million from the International Finance Corporation (IFC), the World Bank’s private lending arm, EUR 2 billion from the European Investment Bank, and EUR 1.2 billion from the European Bank for Reconstruction and Development (EBRD). In the case of the two European institutions, these would be unprecedented sums for one single fossil fuel project.

Piotr Trzaskowski, Bankwatch’s Energy & Climate Coordinator, said: “Now that the gloves are off, and a mandate letter has been signed by the banks to start their official appraisal process, we would expect the terms of this mandate to be made fully available to the public, as it’s clear that there is a wide range of hurdles to be cleared if the banks are to be able to satisfy their lending requirements and provide finance to Nabucco.

“Chief among these, in our view, are the controversial supply issues. There is a high probability that so-called European energy security via Nabucco will be reliant upon major gas supplies from Turkmenistan, an oppressive regime state that ranks alongside North Korea in widely-recognised human rights rankings.

“When it comes to the overall economic viability of the Nabucco project, deep scepticism has been levelled at the project from many quarters. Although they are supposed to be development institutions, as they insist repeatedly the bottom line for these public banks is ‘project bankability’. With billions of public money on the line here, the public has a right to know the economics of this project, or is the banks’ role simply to provide political cover at any price for an unconvincing project? We have seen corners being cut by both the EBRD and the IFC on the Baku-Ceyhan oil pipeline in the past.” [2]

As would be expected from a 3,300 kilometre pipeline set to stretch from Turkey to Austria via Bulgaria, Romania and Hungary, sensitive environmental issues will have to be negotiated. In Hungary alone, the route of the Nabucco pipeline is set to cross European Union-protected Natura 2000 sites at 12 points, as well as crossing a national park.

Bankwatch is calling for the international public banks to desist from financing this fossil fuel project and instead to ramp up their financing of energy efficiency projects in central and eastern Europe, a region still blighted with shocking levels of energy wastage.

A study from the Central European University in June this year details the benefits for Hungary of a much bigger emphasis on energy efficiency over supply side measures via a strong retrofit programme in buildings. In January, for instance the peak month for imports, and the month of highest risk for energy security the energy savings to be achieved by 2030 would be equivalent to 59 percent of Hungary’s gas imports reducing dependency on Russian gas. Up to 131,000 net jobs would be created by 2020, including losses in the energy supply sector. [3]

Piotr Trzaskowski concluded: “There are a million and one reasons for the EIB, the EBRD and the IFC not to back Nabucco, namely the urgent energy saving measures in the region’s homes and businesses that can reduce CO2 emissions massively and create hundreds of thousands of jobs.

“The EIB is supposed to be the EU’s financial powerhouse and it should follow EU climate commitments. Yet in 2009, in the 12 new EU member states of central and eastern Europe the EIB loaned a miserly EUR 190 million to energy efficiency, of which EUR 120 million went to construct new power plants fueled with gas or coal. In this context, a EUR 2 billion loan from the EIB for Nabucco is a highly unusual and downright risky way of approaching the climate maths.”

For more information

Piotr Trzaskowski
Energy & climate coordinator
CEE Bankwatch Network
Tel: +48 509162988
Email: piotrt AT bankwatch.org

Notes for editors

[1] See today’s press release from the Nabucco consortium.

[2] See comprehensive background information about the Nabucco project, including the human rights issues, at the Bankwatch website.

[3] See Employment Impacts of a Large-Scale Deep Building Energy Retrofit Programme in Hungary, Central European University, June 2010

Civil society groups welcome cancellation of Slovak D1 motorway PPP

Friends of the Earth CEPA (Slovakia) and CEE Bankwatch Network applaud today’s cancellation [1] of the 9 billion euros public-private partnership (PPP) for the first phase of the D1 motorway in Slovakia and urged the new government to change the project’s routing to avoid damaging the Mala Fatra and Velka Fatra National Parks.

The news comes as new Slovak transport minister Jan Figel yesterday refused to extend the deadline for the financial close for the project, which had been delayed by several months by uncertainty over whether the European Investment Bank (EIB) would be able to participate.

“Cancelling this extremely expensive PPP will bring great savings to Slovakia’s public finances and opens up the opportunity for choosing the less environmentally damaging tunnel variant on the controversial Turany-Hubova section” said Lucia Lackovicova of Friends of the Earth CEPA.

After official complaints from NGOs were lodged regarding the damage that the chosen route would cause to the national parks, the European Commission opened an investigation into whether the biodiversity impact assessment of the project was carried out adequately, an inquiry that is still ongoing. Also prompted by NGO complaints, the EIB set further conditions for the Slovak government, which remained unfulfilled.

Meanwhile the European Bank for Reconstruction and Development (EBRD) approved the project without even waiting for the results of the EC’s investigation, a move that is being challenged by Friends of the Earth CEPA through the EBRD’s internal complaints mechanism.

“Neither the EIB nor the EBRD did their homework properly during the original project appraisal, so it was the task of civil society to raise the alarm,” said Roman Havlicek of Friends of the Earth CEPA. “Without the EC taking up the case and the national authorities cancelling the project for financial reasons, both our public finances and our biodiversity would be in a sorry state. We now ask the government to follow up one wise decision with another and change the route of the motorway to the less damaging tunnel variant.”

Contacts

Roman Havlicek
Friends of the Earth-CEPA/CEE Bankwatch Network
Mobile: +421 908 967633
Email: havlicek AT priateliazeme.sk

Notes for editors

[1] For more on the cancellation see this example from the Slovak press.

Khimki Forest movement leader violently detained in Moscow

Yevgenia Chirikova, the leader of the Movement to Defend Khimki Forest, has today been forcibly detained by police in Moscow immediately after a press conference on the persecution of activists opposing the construction of a motorway through the Khimki Forest just outside Moscow. [1]

At the time of writing she has been released after several hours of interrogation, but urged to come to Khimki’s police station tomorrow for another round of questioning.

The arrest comes after several tense weeks in which illegal felling of trees began in the Khimki Forest and was opposed by local activists who set up a camp there. Yevgenia herself was physically attacked by unknown perpetrators in the forest on 16 July and suffered minor injuries. After initial success in temporarily stopping the logging, activists were forcibly evicted by police from the area that is now heavily guarded. At an unsanctioned rally in the Khimki forest this Monday approximately 10 more demonstrators were arrested by the police. [2]

Khimki Forest forms part of the planned route of the EUR 8 billion Moscow – St. Petersburg motorway project carried out by a consortium headed by French company Vinci, and potentially financed by the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB). However local people argue that routing the motorway through the forest, a popular respite area for local residents in the polluted and densely populated region and home to elks, boars and other animals, is unnecessary as a straighter route variant exists that would most likely cost less.

“Several Khimki activists have recently been detained on the streets and kept in prisons without court decisions”, according to Mikhail Matveev of the Movement to Defend Khimki Forest. “Why is the government pursuing the forest defenders and not the illegal forest cutters? They are making activists fight for their own freedom instead of Khimki Forest.”

“The European banks often like to argue that their involvement raises the standards of projects, but there isn’t much sign of it happening here. The EBRD and EIB must either intervene promptly and effectively to stop the human rights violations and change the route, or if they cannot, they must withdraw from the project”, concludes Vladlena Martsynkevych from CEE Bankwatch Network.

For more information

Mikhail Matveev, Movement to Defend Khimki Forest (English and Russian)
Mobile + 7 965 392 28 14

Vladlena Martsynkevych, CEE Bankwatch Network (English and Russian)
Mobile + 38 066 731 26 57

Notes for editors:

1. Video footage of the arrest can be seen on YouTube.

2. Based on newer information the number of arrests is smaller than in a Moscow Times article reporting on the incident.

Groups blast veiled decision-making at European Commission as mining industry revels in rejection of crucial Parliamentary resolution

Environmental organisations have today criticised Commissioner Janez Potocnik for heeding mining industry lobbyists over a democratically elected European Parliament, in failing to open public discussions and rejecting a resolution to ban the use of cyanide in mining processes throughout the European Union.

The resolution, put forward by Parliament in May and one of the strongest resolutions on environmental questions ever passed, calls “on the Commission to propose a complete ban on the use of cyanide mining technologies in the European Union before the end of 2011, since this is the only safe way to protect our water resources and ecosystems against cyanide pollution from mining activities.” [1]

Yet while repeated attempts by civil society groups to be involved in consultations on implementing the ban were stonewalled by the Commission [2], mining industry sources have boastfully circulated news about their active involvement in having the resolution shot down via the European Association of Mining Industries, an industry lobby committee formed to advise the Commission. [3]

“Is this the same EU that encourages citizens participation and active public engagement?” asks Maria Kadoglou from Hellenic Mining Watch in Brussels. “Its a bad start for the new Environment Commission if Mr. Potocnik is disregarding one of the strongest and most necessary environmental resolutions from the democratically-elected representatives of EU citizens.”

CEE Bankwatch Network campaigner Daniel Popov from Bulgaria added, While the Commission is convinced that the existing Mining Waste Directive is strong enough to ensure environmental and health safety from cyanide accidents and active participation of citizens in decision-making processes, the experience from Bulgaria doesnt support these claims. Environmental permits for leaching gold with cyanide are given without adequate public consultations, without proposals to use best available technologies, and without adequate emergency response plans. [4]

“It is appalling that the Commission took into account only one point of view – that of the mining industry lobby – and that there was no space for the arguments of Europeans whose health and environment are being destroyed and threatened by cyanide pollution. How can Mr. Potocnik accept mining companies as the best advisers on environment and health issues?” said Katerina Ventusova from Greenpeace in Slovakia.

“We demand that the European Commission opens its ears to the arguments of all interested parties and immediately starts a transparent and inclusive process of consultation on the implementation of this resolution.”

For more information

Daniel Popov
CEE Bankwatch Network/Center for Environmental Education and Information, Sofia
Tel: + 359 886 818 794

Maria Kadoglou
Hellenic Mining Watch, Brussels
Tel: +30 697 4371 552

Katerina Ventusova
Greenpeace Slovakia
Tel: + 421 905 921 918

Notes for editors

1. ‘The European Parliament resolution of 5 May 2010 on a general ban on the use of cyanide mining technologies in the European Union’ was passed with 488 votes supporting the ban compared to 48 against. It is available online.

2. Environmental organisations first sent a letter to Mr. Potocnik on May 21, asking for a transparent and inclusive process of consultations. No reply has been seen and recent phone calls to Mr. Potocnik’s cabinet have not succeeded in acquiring more information. See the Letter from CEIE and Alburnus Maior on behalf of environmental organisations from Cyanide-free EU coalition (pdf).

3. Mining Journal Online, EC rejects proposed cyanide ban, 05 July 2010

Proactive Investors, EMED Mining permitting boosted as EU knocks back proposed cyanide ban, 05 July 2010

4. One instance in which the implementation of the Mining Waste Directive by a Member State has failed is in the case of the introduction of cyanide at the Chelopech Mine in Bulgaria. Here the Bulgarian court revoked the environmental impact assessment approval, and several other proposals to use cyainde leaching technologies are currently being opposed with all legal means by local communities and environmental organisations. Additionally the risks of transboundary pollution have not been well-assessed and Greek communities living downstream on the Arda and Marica/Evros rivers have not been informed nor consulted, as required by the Espoo Convention on Environmental Impact Assessment in a Transboundary Context.

New report: EU funds must plug clean energy gap in central and eastern Europe

On the day that the European Commission launches its vision for 2020, its ‘Europe 2020 strategy’, a new report from CEE Bankwatch Network and Friends of the Earth Europe lays out how improved targeting of EU structural and cohesion billions for energy efficiency and renewables can get the EU – and particularly the new member states in the east – on track to meet and exceed emissions reduction targets for tackling climate change.

The new analysis from CEE Bankwatch Network and Friends of the Earth Europe [1] points to alarming shortcomings in how billions of EU funds earmarked for clean energy projects in the new member states are being deployed. It calls for big increases in the marginal allocations that the new member states have thus far given to clean energy schemes, citing widespread evidence from the ground that building efficiency schemes are ready to take off if they become more affordable and if EU money is better targeted.Markus Trilling, EU Funds coordinator for Bankwatch and Friends of the Earth Europe, said: “As the central and eastern European economies struggle through the economic crisis, and at the same time know they must play their part in combating the climate crisis, evidence from across the region shows that the low carbon development potential afforded by the EU funds for increased energy efficiency and renewables projects is not being tapped into.

“The EU’s new Europe 2020 strategy sets a course for economic development via green sustainable growth, but these aims need to be backed up by action and, crucially, funds. The European Commission and the member states must mainstream sustainability into all EU policies and ensure that all existing instruments, such as the structural and Cohesion funds, support the development of a sustainable, Europe-wide, low-carbon economy.

“Good practices such as the Green Invesment Scheme in Latvia, where energy efficiency measures are financed through surpluses from selling emissions allowances and combined with financial incentives, need to be promoted throughout the EU, while common obstacles, such as the administrative incapacity of local authorities to process sustainable EU-funded project applications as seen in Bulgaria, must be lowered.”

Today also saw the launch of the website www.sustainableeufunds.org – the site, a new Bankwatch initiative, will be a campaign support centre for NGOs from across Europe that are working to ensure sustainable use of the EU Funds.

For more information

Markus Trilling, EU Funds coordinator
CEE Bankwatch Network/Friends of the Earth Europe
Mobile +420 773557529
Email: markus.trilling AT foeeurope.org

Greig Aitken, Bankwatch media coordinator
Mobile: +420 605 216705
Email: press AT bankwatch.org

Notes for editors:

1. CEE Bankwatch Network and Friends of the Earth Europe have worked together over the last decade to ensure more sustainable use of EU funds in central and eastern Europe, in this time compiling a range of ground-breaking analyses that have raised the alarm about ineffective, non-sustainable use of EU money in central and eastern Europe.

The new report, Potential unfulfilled: EU funding and Cohesion policy can do more for sustainable climate and energy development in central and eastern Europe is available in pdf format here.

A short video clip introducing the report can be seen below or on youtube.