Illustrative photo: Gas pipes stored in the Port of Burgas, Bulgaria

As the EU reduces its gas consumption, North Macedonia is planning the opposite. Why is it building a large new import pipeline, why has it failed to consult the public, and why are EU banks supporting it?

After years of attempts to diversify its gas supply, the EU is finally concentrating on reducing consumption. In 2023, EU fossil gas demand is estimated to have been 19 per cent lower than the 2019 to 2021 average. And the REPowerEU package aims to halve consumption by 2030 compared to 2019.

Not everyone got the memo, however. As we explain in a new briefing, North Macedonia’s appetite for gasification is growing, despite the fact that it has to decarbonise by 2050 at the very latest, the era of cheap gas is over, pipeline construction costs are up to 35 per cent higher than planned and household connection projections are overblown.

A major focus at the moment is the planned Greece – North Macedonia gas import pipeline. With a capacity of three times the country’s 2021 consumption, the project is clearly oversized, especially since the existing pipeline from Bulgaria would still operate as well. 

This will either stimulate the government to ramp up its gas frenzy, handing out subsidies for household gas connections and new power plants against all economic logic, or it will end up with stranded assets and wasted money that North Macedonia can ill afford.

But instead of asking the government to rethink its outdated and oversized plans, the European Commission and public banks are just playing along, inincreasing the country’s public debt as if the last three years had not happened.

The EIB and Western Balkan Investment Framework (WBIF) have already approved project financing, while the EBRD is considering it. They all have ample reasons to withdraw from the project if they want to, but have not done so. Projects financed from these sources must comply with national and EU legislation, but this one does not. Legal challenges have been mounted regarding the state guarantee for the EIB loan, as well as on the environmental impact assessment (EIA).

Mandatory public consultations not done

The EIA process breached both national and EU law. They should be compatible, because North Macedonia is part of the Energy Community Treaty, which obliges it to apply the latest version of the EU EIA Directive from 2014. However, the country has failed to transpose it, and is in breach of the Treaty.

The EIA Directive requires a public consultation period to be held, lasting at least 30 days. Details for announcements can be defined nationally, but must include online notices.

North Macedonia’s legislation is more old-school, mainly relying on newspaper notices. But it does at least require that EIA studies must be posted online, together with deadlines and contact details for delivering comments. In addition, the country’s legislation is stricter than the EU’s in insisting on a public discussion event being held, which in the EU is optional.

In reality, the relevant Ministry posted the EIA study in a well hidden part of its website, without any information on where to send comments and by when.

And no public consultation event was held. Two online events were held in November 2020, but the announcement for them stipulated that they were for people from specific municipalities, so they cannot be considered public. Moreover, the notice did not provide any link to the EIA study, so even those who did attend would not have any basis to ask relevant questions or make targeted comments.

Inadequate checks by the banks

The banks’ response to North Macedonia planning to spend at least EUR 58 million – and probably much more by now – without even holding a public consultation, has been limp. In reply to our letters, the EIB has merely cited answers from the North Macedonia government, apparently without doing its own due diligence. 

The EBRD, on the other hand, is convinced that holding its own parallel environmental assessment consultation is sufficient, despite this having nothing to do with the national permitting process. Posting an EIA study on a bank’s website is a welcome additional gesture, but it cannot undo the fact that the national legislation and North Macedonia’s Energy Community obligations have clearly been breached.

Meanwhile, the WBIF has not answered at all.

As well as the EIA process, consultations on land expropriation have to be carried out. The project’s Stakeholder Engagement Plan claims that in April-May 2022, twelve ‘public consultation meetings and data collection engagements’ were organised along the pipeline route, with more than 250 participants. These were too late for the EIA process, but could have contributed to consulting landowners whose land would be expropriated for the project.

In December, Bankwatch and our member group Eko-svest visited eight settlements along the planned route, to see whether local people are aware of the project, whether they have been consulted and how land expropriation is advancing.

Although the project promoter, Nomagas, claims that construction will start in March and the project will be operating by the end of 2025, our findings suggest this is unlikely.

Expropriation is still at an early stage. At least six of around thirty people we spoke to in the affected villages knew nothing at all about the project, while four others had only vaguely heard of it. Some people thought we were referring to the oil pipeline that was built in the same area more than two decades ago.

Expropriation had gone furthest in Tremnik and Dren, with individual landowners being notified. And it was in the early stages in Demir Kapija and Stojakovo. But in the other four settlements we visited, the people we talked with did not know anything about it.

‘We’ll be harmed not 100 per cent, but 1000 per cent’

One person we spoke to has a vineyard that would be intersected by the pipeline. He opposes this, but said he had no choice but to sign the expropriation document. In his opinion, the pipeline is dangerous and should go on a flat ridge higher up the hill. 

‘We’ll be harmed not 100 per cent, but 1000 per cent’, he underlined. He doesn’t care about compensation money, he just wants his vineyard to remain untouched. His vines are just reaching their best years. 

In Stojakovo, there had been a big meeting with landowners about a year prior to our visit, but people had not been individually approached yet. Many people felt affronted by the tone of the meeting, which made it clear that they had no choice about the use of their land. 

They were concerned that negative experiences with the oil pipeline two decades ago would be repeated. At that time, the fertile soil layer hadn’t been separated from the rest when excavated, so when it was returned, the land was less productive. They are also unsure whether there will be compensation for irrigation systems and other existing infrastructure.

In Ciflik, people had not heard of the pipeline but also cited negative experiences with the oil pipeline, when construction works took place without consultation or compensation.

While most people from settlements along the route were, understandably, concerned with land compensation, one summed up the situation perfectly: 

‘To be honest, I think this project is rather outdated. It’s a bit like installing a fixed-line telephone while everyone around is using smartphones’. 

We couldn’t have said it better ourselves.

North Macedonia is advancing with solar and wind installation but still needs additional work, particularly to strengthen its environmental safeguards and its distribution grid. It also needs to step up incentivisation of energy efficiency renovations and heat pumps. 

It’s high time for the European Commission, EBRD and EIB to take a long, hard look at the country’s oversized and outdated gas plans and help North Macedonia move beyond fossil fuels instead.