8th Feb 2023

Slovenian coal plant highlights bungled EU policy, say activists

  • Europe hopes to reduce its CO2 emissions by 80-95 percent by the year 2050 (Photo: DerGuy82)

EU funding for a controversial coal-powered energy plant in Slovenia has reignited debate over the EU's Emission Trading System (ETS), with environmental activists saying the case represents an extreme case of EU policy conflict.

Slovenian government plans to replace outdated production units with a new 600 megawatt block at the country's Sostanj energy plant have attracted widespread controversy in recent months, with EU climate-change commissioner Connie Hedegaard set to discuss the issue during a visit to Slovenia on Monday (7 February).

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The commission says the decision to build the energy plant is essentially an internal member-state affair however, but activists say EU loans totaling €750 million for the project threaten to undermine the bloc's CO2 emission targets.

While the new block will see a reduction in emissions per kilowatt-hour for the whole plant, it will also lock Slovenia in to heavy carbon use until 2050, insists Bankwatch, a pressure group that monitors how the European Investment Bank and the European Bank for Reconstruction and Development disperses funding.

"It is clearly strange how current EU investments undermine long-term climate goals," the group's Piotr Trzaskowski told EUobserver. "Without the low-interest loans, the project would probably not go ahead."

EU leaders meeting in Brussels for an energy summit last Friday reaffirmed their commitment to cutting European CO2 emissions in order to contain global warming to two degrees centigrade on pre-industrial levels, the maximum amount if global warming and its effects are to be contained warn scientists.

"Reaching the EU objective ... of reducing greenhouse gas emissions by 80-95 percent by 2050 compared to 1990 as agreed in October 2009 will require a revolution in energy systems, which must start now," EU leaders said in the meeting's final conclusions.

Slovenia's government office for climate change acknowledges that, if built, the Sostanj energy plant will likely use up the entirety of Slovenia's permitted emission quota under the 2050 goal.

The commission says it is unfazed, insisting that EIB-funded projects must first pass strict environmental impact assessments. Officials also add that the EU's emission trading scheme will ultimately ensure companies reduce their CO2 production.

Currently struggling after cyber-thieves managed to steal an estimated €30 million in carbon allowances in recent months, the EU has put the cap-and-trade system at the heart of its efforts to fight global warming.

By placing a price on carbon, the system is designed to lower company emissions and promote clean energy over fossil fuel plants such as Sostanj. Brussels wants to see energy companies buy all their permits from 2013 onwards (phase 3), with other heavy industries gradually phased in by 2020.

Environmental NGOs are divided on the subject of the scheme's merits. Some such as Friends of the Earth argue that the ETS is little more than a "distraction" from more necessary actions such as binding energy efficiency targets, energy taxation and funds to help developing countries deal with the effects of global warming.

"Even under the third phase, the EU's ETS won't deliver the emission cuts that scientists say are needed," said campaigner David Heeler.

"The price for carbon is too low under the scheme and international offsetting means European companies can continue to pollute, with no guarantee that global emissions are decreasing overall."

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