What does the green recovery look like in Central and Eastern Europe


The first allocations of stimulus funds are flowing to the capitals of central and eastern Europe. While the European Commission has approved most of the national recovery and resilience plans submitted by these countries, civil society watchdogs fear that this is yet another missed opportunity to achieve the green breakthrough so much. expected.

Since joining the EU, the countries of Central and Eastern Europe (CEECs) have probably not faced such a window of opportunity to modernize their economies.

The first disbursements from the $ 724 billion Recovery and Resilience Fund (FRR), aimed at mitigating the economic and social impacts of the coronavirus pandemic while boosting green and digital transitions, have sparked a sense of optimism for countries lagging behind on the path to climate neutrality.

In the case of the CEECs, whose economies remain even more stagnant and dependent on fossil fuels than those of the rest of the Union, this huge financial boost comes at a very crucial time: it could be decisive for cleaning up polluted strategic sectors. and protect citizens from soaring fossil gas prices by stimulating the restoration of buildings and the deployment of clean heating.

State of the art

In record time, Brussels gave the green light to 22 of the 26 national recovery and resilience plans (PRNR) submitted by member states. Only the Netherlands have yet to present their plans to the Commission, while assessments of the Polish, Hungarian, Bulgarian and Swedish plans are still ongoing.

Bulgaria was the last EU country to send in a stimulus package, delayed due to internal political issues as a caretaker government has ruled the country since former Prime Minister Boyko Borissov completed his term in office in may.

The case of Poland and Hungary is quite different since their plans were submitted on time more than 6 months ago. Their approval is being delayed by the Commission for rule of law reasons, which is one of the pillars to be secured in the plans in order to access funds.

The rest of the NRRPs drafted by Eastern governments have already obtained the green light from the European Commission. To withstand the scrutiny of EU officials, each national plan must ensure that at least 37% of spending is allocated to investments and reforms aimed at achieving EU climate goals, while the remaining 63% respect the principle of the absence of significant damage. A criterion which, as we will see later, was applied in a fairly flexible manner,

silver linings

According to the Commission’s assessment, the countries of the East largely reach the percentage required by the measures to secure the green transition (37%). In the case of Slovakia, EU auditors say 43% of the plan’s total allocation for reforms and investments supports climate goals, while the figures are 42% in Czechia and Slovenia, 41 % in Romania and 38% in Latvia.

To achieve these green ratios, the governments of the East have deployed a series of different measures which range from the development of renewable energies to the protection of biodiversity, but also converge towards a common ambition: the decarbonisation of transport and buildings.

Rail, cycling and electrified mobility occupy an important place in all the plans of the East, in particular for Romania which allocates 20% of its stimulus funds to the renovation of its transport system, with 3.9 million to modernize its rail network and 1.8 million to support greener and safer urban mobility. Countries like the Czech Republic and Latvia have also devoted 16% of their stimulus budgets to clean transport infrastructure (from electric charging stations to cycle paths).

Regarding the renovation of buildings, which is a key measure to improve energy efficiency and help households meet their energy bills, most plans in the East include substantial commitments, with the Czech Republic in the lead. About 23% of the total ?? 7 billion of the Czech RRF has been approved to finance large-scale renovation programs aimed at increasing the energy efficiency of residential and public buildings, day care centers and long-term care facilities.

Slovakia will also use its stimulus budget to improve the energy and green performance of at least 30,000 residential units, while Latvia will devote 14% of its RRF to increasing energy efficiency in residential buildings, buildings public and business.

Perhaps the least ambitious plan for the decarbonisation of these two sectors is that of Slovenia, which allocates only 5% to the renovation of public buildings and 7% to rail infrastructure.

Fossil gas as usual

All that glitters is not green in the Eastern stimulus packages approved by the Commission. The lack of strategic vision, the weak engagement of civil society in the elaboration, the ambiguity of certain proposals, the widespread neglect of reforms and a strong focus on investments, some of which could seriously undermine, mean that the scope actual stimulus packages in Eastern Europe are much less promising than the Commission’s assessment.

Among the plans approved by the von der Leyen Commission, one can find glaring examples of measures misaligned with EU climate targets that could end up supporting fossil fuels.

Despite the positive approach of the Slovakian wave of building renovations on energy efficiency, the plan also includes 50 million euros of investments in fossil gas boilers, where clean heating alternatives, such as gas pumps. heat and solar thermal heating, are already available and would help fight energy poverty and domestic emissions.

In addition to heating, fossil gas appears in most recovery plans in the East as a necessary investment to phase out coal, produce hydrogen or even fuel transport.

Romania plans to use the recovery funds to develop fossil gas and hydrogen distribution infrastructure, which, according to our Romanian member Focus Eco Center, aims to consolidate and expand the national fossil gas transport network. This would hamper the development of other viable renewable energy projects. At the same time, the Slovenian plan provides for the financing of fossil gas refueling stations as a means of “supporting the establishment of infrastructure for alternative fuels in transport”.

In addition, the recovery plans still under examination by the Commission (Hungary, Bulgaria and Poland) place strong emphasis on the gasification of coal regions and the development of infrastructure linked to fossil fuels. Our scenario compatible with the Paris Agreement on energy proves that fossil gas is not necessary as a “transitional fuel”, since the switch from coal to renewable electricity production is possible and desirable since the costs of solar and wind power generation are now cheaper than fossil gas.

All of these projects paint a worrying scenario where Eastern Europe enters a potential long-term fossil gas blockade, endangering the EU’s climate and energy goals.

?? Do not significantly harm ?? failure

An aspect of strong common concern highlighted by civil society organizations in these countries is that the lack of clarity on “does not significantly harm”? (DNSH) will leave the door open for Member States to fund dirty projects with EU money.

Most EU governments have carried out a check-mark exercise of existing EU legislation to comply with the DNSH principle instead of providing accurate and truthful assessments to ensure environmental protection.

Many recovery plans do not contain enough detail to allow an assessment of their environmental impacts and it is only in very rare cases that Member States have called on independent experts to carry out the first DNSH assessments. In addition to a lack of transparency, third-party verification and public consultation, the lack of time and the absence of guidelines have contributed to the questionable outcome of the assessments of the national recovery and resilience plan.

The lessons learned from the recovery plans should lead to a review of “do no significant harm”? principle for other EU funding programs. In collaboration with the Green10 NGOs, the EEB recently sent the European Commission a list of recommendations for a “? public funding mechanism.

Deception of funds

Perhaps the most important failure of the NRRP is the lack of reforms that would align national spending and tax systems with the objective of EU funding. In fact, national policies often ridicule EU funding.

There are glaring examples of how Member States from Central and Eastern Europe are engaging in this funding sleight of hand. Several countries still subsidize coal combustion and urban sprawl, while almost all fund unsustainable agricultural practices. Many national budgets contemplate the construction of huge new highways and continue to provide huge tax breaks for the use of company cars.

In general, there are no plans to remove environmentally harmful subsidies and internalize external costs in any Central and Eastern European country. Overall, much more national public funds are spent on environmentally harmful practices than the funding provided for the environment through the RRF. This situation augurs well for further rapid environmental degradation.

Such an inconsistency between the climate objectives of the EU and the Member States ?? energy policy has its roots in Article 194 of the Treaty on the Functioning of the European Union, which recognizes the right of Member States to determine the conditions for exploiting its energy resources, its choice between different energy sources and the general structure of its energy reserve ??. This is why EU funding rules play a crucial role in steering countries’ energy policies.

At this point in the global climate and environmental emergencies, we can no longer afford to spend public funds on programs and projects that would seriously harm our future.

This news content was configured by the editorial staff of WebWire. Linking is allowed.

Press release distribution and press release distribution services provided by WebWire.

Previous Some new techniques for tapping asset-based lending for corporate finance
Next How to Customize Your MBA Application for Graduate Programs