Kostolac B power plant (B1, B2), Serbia

Serbia’s energy utility EPS secured financing for a complete overhaul of Kostolac B1 and B2 in December 2011. A USD 293 million loan was taken by the Government of Serbia on behalf of EPS from China Exim Bank to equip the two units with flue gas desulphurisation (de-SOx) technology and bring the plant’s SO2 emissions in line with the Large Combustion Plant Directive. This should have been done by the time the Directive entered into force in January 2018. The company contracted for the works was the China Machinery and Engineering Corporation (CMEC), the same company which is set to build a new unit at Kostolac B. 

The works were finalised in July 2017, according to the Government. However, EPS’ 2018 Environmental Report shows that the application for a construction permit for the de-SOx installation was submitted only in November 2018 – more than a year after the opening ceremony for the facility. The permit was actually rejected twice – once in December 2018 and once in January 2019 – although the grounds on which rejections were issued by the Serbian authority are unknown. 

The only explanation we have received so far from EPS and the Serbian Ministry of Energy and Mining is that the gypsum landfill is not ready for the de-SOx to start operation. A member of Serbia’s Parliament publicly asked about the situation with the permit due to increasing levels of air pollution in the country at the time, prompting the power plant’s operator EPS to put the de-SOx into operation in October 2020. But according to EPS’ 2020 Environmental Report, the permit request for gypsum storage at the Kostolac landfill was denied on 16.12.2020, so the problem seems to be far from solved. 

In April 2021, the Ministry of Mining and Energy announced that in fact the facility has been operating in testing mode since October 2020. Without access to monthly continuous monitoring data on emissions, it is difficult to verify this information. Even if only in the testing phase, a decrease in emissions should have already been recorded from October onwards, but the fact that annual emissions in 2020 were much higher than those in the previous year casts doubt on the Ministry’s triumphant statement. 

In December 2019, EPS launched a public consultation for an ‘updated’ Environmental Impact Assessment (EIA) report for the desulphurisation unit at Kostolac B, and public consultations were held in January 2020. The decision approving this new EIA for the already built de-SOx facility was made in August 2020. 

The fact that SO2 emissions increased in 2020 compared to those in 2019 reinforces doubts about this investment: what is wrong, and why is it taking so long to fix? More than four years after it was declared finalised, the public has received almost no information about the equipment’s lack of functionality. Such information should not be withheld from the public, who ultimately pays the costs – both financial and health-related.