Three governments are seeking EU money to deepen fossil gas dependence under the guise of energy emergency

The full report is available here: https://bankwatch.org/publication/cutting-off-the-pipeline-from-repowereu-to-the-fossil-gas-industry 

EU Member States have until 31 August to request financial support for plans to steer their energy sectors away from Russian fossil fuels as part of the EU’s REPowerEU strategy. 

Bankwatch has been closely tracking the development of these plans in nine countries in central and eastern Europe. Our new report shows that three governments – in Poland, Bulgaria and Croatia – are still trying to exploit this emergency response by pumping EU taxpayers’ money into LNG import terminals and fossil gas pipelines.  

If realised, these projects would sabotage the EU’s efforts to cut greenhouse gas emissions and aggravate the greater global emergency that is the climate crisis. 

At least three other governments – in Romania, the Czech Republic and Hungary – have already abandoned previous plans to include fossil gas projects in their REPowerEU chapters following civil society pressure and negotiations with the European Commission. 

In addition, the REPowerEU chapter submitted by Estonia does not include any fossil gas projects, Slovakia’s includes limited support for fossil gas boilers, while Latvia is also expected to submit a REPowerEU proposal free of gas investments. 

Background 

In May 2022, the European Commission unveiled the REPowerEU plan, intended to reduce the EU’s dependence on imports of Russian fossil gas while ensuring security of supply. 

Under the plan, Member States are required to add an additional REPowerEU chapter to their national recovery and resilience plans – the EU’s post-pandemic financial stimulus package – outlining their investment schemes to facilitate the shift away from Russian gas imports. 

The perception at the time was that, to safeguard Europe’s energy security, new fossil gas imports are needed. Consequently, the REPowerEU strategy allowed governments to request EU public money to build new gas infrastructure as an emergency measure. 

In fact, the Commission effectively endorsed the fossil gas industry’s lobbying effort when a list of 11 gas projects drawn up by the European Network of Transmission System Operators for Gas (ENTSOG) was officially included in the REPowerEU plan, alongside 30 other so-called Projects of Common Interest. 

Now, after a bonanza year for the oil and gas industry, fossil gas companies are poised to swell their coffers even more thanks to projects enabled by REPowerEU funds. 

According to Bankwatch’s new report, fossil gas companies in central and eastern Europe posted massive profits in 2022 on the back of the energy crisis. Last year, gas grid operators in Bulgaria and Romania saw their revenues double, while Poland’s PKN Orlen made EUR 4.5 billion. These very same companies would be the main beneficiaries of the fossil gas projects proposed for EU financing under the REPowerEU chapters of their respective governments. 

Yet, given that the EU managed to cut its gas use by an impressive 17.7 per cent between August 2022 and March 2023, governments’ fossil gas ambitions – much like ENTSOG’s so-called needs assessment — now appear completely out of touch with reality. 

Gligor Radečić, gas campaign lead at CEE Bankwatch Network and co-author of the report, says: 

‘The very idea that EU taxpayers could once again be subsidising the fossil fuel industry is perverse, especially after a year in which fossil gas companies made record profits. Governments can no longer defend using EU public money to build new gas infrastructure. In any case, these projects would take years to complete and do nothing to alleviate an imminent energy shortage. The new gas pipelines and LNG import terminals that governments in Poland, Croatia and Bulgaria are seeking to develop with REPowerEU funds would perpetuate Europe’s dependence on fossil fuels. Instead, these governments should be ensuring that every cent of EU money targeted at ending the dependence on Russian fossil gas is used to drive the energy transition, not sabotage it. If these governments are to uphold Europe’s energy security, keep energy affordable and prevent global warming, they need to invest EU money in boosting energy efficiency and expanding renewable energy sources.’

For further information, please contact: 

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