These slides provide a snapshot about the types of investments currently receiving EU financing - including EU funds, and money from the European Bank for Reconstruction and Development and the European Investment Bank - that are bad for citizens and the environment, and hindering the transition to a low carbon economy in central and eastern Europe.
Many of these projects are inconsistent with the EU’s 2020 and 2050 decarbonisation goals, and further scrutiny into some of these investments is needed to determine their net benefits. It is clear that missed opportunities exist for more targeted spending to catalyse a clean energy transition.
Locate a project in your country with the map below, and scroll through to find out more about each project.
This is a joint project of Bankwatch and Friends of the Earth – Europe
New household boilers, more support for fossil fuels
Aiming to reduce air pollution from household heating, the Operational Programme Environment has designed a scheme to exchange small boilers for heating homes with newer and cleaner ones. But because the programme supports home boilers that rely on burning coal, it misses an opportunity to reduce CO2 emissions together with air pollution. Moreover, to date just 12 per cent of the available subsidies have been used to exchange the coal boilers for newer ones, and 36 per cent has been used for swapping coal boilers with combined coal and biomass sources. Bankwatch member Hnutí DUHA continues its effort to stop this subsidy for coal in the next round of the Operational Programme Environment.
Total public funding: EUR 45 million
Motorways, fossil fuels and backdoor funding for pet projects
S7 motorway (8 kilometre section near Skarżysko)
As currently designed, the S7 expressway will destroy one of the most important habitats of the protected marsh fritillary butterflies, which is found in and around the Skarżysko Forest Natura 2000 site. For this reason, the project had been referred to the European Commission and is currently under the review by its Pilot mechanism, which is designed to resolve compliance problems without having to resort to infringement proceedings.
Yet while the EU Pilot procedure inches forward, preparatory works at the site are underway, threatening to destroy the habitat before the case is resolved. This situation is a clear example of how the Commission uncritically accepts the reassurances of the project developer, in spite of mounting evidence that EU funds might contribute to the destruction of a habitat that needs protected.
Total public funding: EUR 60 million
Odra-Vistula flood management project
While the official purpose of the project is to improve flood protection on the Odra and Vistula rivers, critics argue that it better serves the government’s whopping EUR 15 billion inland navigation plan. National experts argue that the project will not improve flood protection and runs counter to the EU’s flood directive, instead jeopardising several Natura 2000 sites along the Odra and the Vistula, two of Europe’s last near-natural rivers.
The involvement of the Commission is all the more surprising given that in June 2015, the European Court of Justice ruled that Poland failed to adequately transpose the Framework Water Directive.
Total public funding
- EUR 207 million in EU funds
- EUR 477 million from the EBRD
Technological development to improve oil extraction
How the more-efficient extraction of oil can be considered an intelligent project when the world desperately needs to move away from fossil fuels is the riddle to be solved with this investment. In the best case scenario, this kind of innovation will be a waste of money as Europe moves towards decarbonisation, and in the worst case, it will contribute to locking-in Poland to a dated model of energy extraction. The project is one of several where EU funds will be invested in Poland to develop ‘innovative’ fossil fuel technologies.
Total public funding: EUR 1.5 million
Modernisation and extension of Energa’s electricity distribution network
The European Investment Bank is considering a programme for the modernisation and extension of Energa’s electricity distribution network, one of Poland’s largest power groups. No details have been disclosed about the improvements, which is concerning given Energa’s plans to build a new coal power unit at Ostrołęka.
This means that EIB financing may indirectly contribute to the implementation of those plans, either by supporting grids that would distribute energy generated at the new coal-fired unit, or by improving the company’s overall financial standing and thus enabling it to obtain financing for the new coal unit. Until more details are released about the projects, it cannot be ruled out that EIB financing will indirectly contribute to the construction of a new coal-fired unit in Poland.
Total public funding
- EUR 250 million from the EIB
- EUR 564 million in EU funds
The long and winding road through the Kresna gorge
In development since 1998, the Struma motorway is part of the EU Corridor number 4 designed to link Dresden, Budapest, Sofia and Istanbul with an additional Sofia-Thessaloniki link. If constructed through the Kresna gorge, the motorway would have a detrimental impact on hundreds of protected species and their habitats. In 2001, then-EU environmental Commissioner Wallström argued the need for alternative routings, which was backed up by a 2002 Bern Convention ruling and a 2008 environmental impact assessment. Since 2009 Bulgarian officials have worked actively against the alternative tunnelled route.
Total public funding: EUR 50 million
Overpriced projects and more money for dirty energy
The Bratislava bypass D4/R7 in the Slovak capital was announced before a full project assessment had taken place and given the go-ahead based on manipulated data that belied a conflict of interest. The national police are currently investigating land purchases related to the bypass, on the suspicion that those who purchased the land knew in advance the routing of the project and so could anticipate that the value of the land would increase, thus making a significant profit. For the price tag of the bypass, Bratislava could have put in place other alternatives, like a modern, integrated transport system that would encourage people to switch from car to urban transport and help the EU pursue its decarbonisation objectives.
Total public funding
- EUR 28 million in EU funds
- EUR 426 million from the EIB via the EFSI
- EUR 148.5 million from the EBRD
Reconstruction of a coal and gas power plant
EU funds are almost certainly not needed for the modernisation of coal and natural gas boilers dating from 1964, as the project sponsor – Žilinská teplárenská – recorded decent profits in both 2015 and 2014. Financing fossil fuels undermines EU efforts at environmental taxation, while investments in energy efficiency would deliver three to four times the number of jobs created by comparable energy supply investments, like the ones in Zilina.
Total public funding: EUR 6.3 million
Financing the biggest polluter U. S. Steel Košice
In addition to being gifted delays for its emissions reduction by the Slovak government, US Steel Košice will also receive nearly EUR 14 million in Cohesion funds to implement measures for decreasing PM10 and PM2.5 levels. With an annual net profit of EUR 43 million in 2015, Slovakia’s biggest polluter could hardly be said to abide by the ‘polluter pays principle.
Total public funding
- EUR 13.9 million in EU funds
Unsustainable resource management solutions
The Hungarian government and the city of Budapest are considering a second waste incineration power plant to rid the country of sewage sludge, and while a relatively cheap method, it is not particularly effective. Though the Commission does not seem to support the proposal, it is still considering the possibility of co-incinerating the sludge with communal solid waste, which is now cheaper than landfilling.
A number of problems persist with the plans for the incinerator, most notably in that it contradicts other EU projects underway in Budapest aimed at recycling and composting. If recyclable and compostable waste are to be incinerated, it would need to be transported to Budapest from further afield in order to ensure enough waste inputs for the project to be economically viable.
Building such an incinerator is also much more expensive and would create much less jobs than recycling and re-use. As the waste input is low in energy content, the energy generated would be small, and nearly a quarter to one half of the outputs would be toxic and still in need of landfilling. There is also the health risk associated with air pollution from the incinerator, which would affect hundreds of thousands of people in Budapest and surroundings.
Total public funding: EUR 161 million
District heating - burned waste as a renewable energy source
The Hungarian Environment and Energy Operational Programme is planning to fund renewable energy developments for municipal district heating plants. The problem is that the plans do not exclude the option of producing heat by incinerating solid waste. Incinerating communal solid waste will jeopardise Hungary’s ability to meet its waste prevention targets and as well poses risks of air pollution. In addition, solar energy is not considered an eligible project under this scheme.
Instead of the proposed project, composting biodegradable waste should be given priority over its incineration, and clear criteria about what constitutes acceptable forms of biomass as renewable energy should be developed.
Total public funding: EUR 45 million
Shrouded in secrecy, firm local opposition
Riga tram infrastructure development
Because of its behind-closed-doors inception, the development of tram infrastructure in Riga has been met with stiff public opposition in Latvia. In addition to causing damage to a culturally-significant cemetery, the project has not demonstrated a clear value-for-money. The secrecy shrouding the project has raised red flags about the potential for fraud or corruption behind the process of project planning. These worries have only been exacerbated by the absence of public participation and the application of the ‘partnership principle’ with civil society.
Total public funding: EUR 70 million