Thursday

6th Aug 2020

Opinion

How a Croatian gas project exposes Green Deal hypocrisy

  • Investing in new fossil gas, knowing that it should be phased out in the near future, is simply the definition of hypocrisy. The EU's credibility is at stake (Photo: net efekt)

The approval of the European Green Deal and its €1 trillion plan to finance the transition to a low-carbon economy in Europe during the next ten years is a historic step, that follows the approval of an ambitious policy at the European Investment Bank (EIB) just a few months ago.

The EIB is the 'EU Bank' and it now aims to phase out its support to fossil fuels by 2021 and to become the "EU Climate Bank".

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

These commitments lie at the core of the financial delivery scheme for the European Green Deal.

So far so good. Were it not for a wave of controversial gas infrastructure projects that the European Commission is pushing through, in parallel to its much-touted climate credentials.

One of those gas projects is Croatia LNG, a flagship project of the Republic of Croatia, who currently chairs the EU presidency.

Croatia LNG is a project aimed to build and operate the required infrastructure on the Krk Island for receiving, storing, reloading and re-gasifying liquefied natural gas (LNG). It is comprised of an offshore plant as well as an onshore one, whose construction is planned in a second phase.

The project is co-financed by the Croatian government and by the Commission through a €101.4m grant. It is listed among the EU Projects of Common Interest (PCI) – a reference list of key cross border infrastructure projects at European level – and therefore eligible for funding by the EIB before its ban on fossil fuels enters into force.

The newest version of this PCI list still needs to be adopted by the European Parliament in its plenary session this week.

On the ground, the project is facing tough opposition from local residents and public authorities who denounce the lack of democratic consultation around the project and its harmful impacts on tourism and nature.

Among opponents we find the mayors of the various towns on the island, a broader coalition of environmental activists, as well as Croatian and international NGOs who have shared video testimonies with us.

Video testimonies

Croatia LNG is described as a strategic alternative to the import of Russian gas, however it is still struggling to garner interest from private investors.

Hungary and its energy company MOL showed interest to finance the project, but ultimately stepped back from it when a corruption trial against former Croatian prime minister Ivo Sanader was unfolding in Zagreb.

The case allegedly involved a bribe paid by MOL to get an advantageous position in the privatisation of Croatia's energy company INA.

But the lack of private funding did not stop the project from moving ahead. The approval of a special LNG law in Croatia to facilitate the delivery of a permit and the approval from the EU antitrust regulators gave the final greenlight to start the project's construction during the summer of 2019.

The company in charge of the construction is the Austrian company Strabag, who provided an update on the construction's progress in December 2019.

Strabag is involved in one of the largest corruption scandals in Austria. It is being investigated by the Austrian fiscal authorities and is accused - alongside a dozen of other peers - of cartel forming and price-fixing of construction work tenders in Austria since 2003, in violation of Austrian and EU law.

Strabag's offices were raided by the authorities in 2019. According to media, the expected fines are estimated to reach tens of millions of euros.

This adds an extra shade of grey to the Croatia LNG project, whose hidden interests have been challenged by international civil society in a report in 2019.

Strabag, who won several multi-million tenders for public works in Croatia, should be scrutinised by the European Commission considering that its money is involved in this controversial project.

Moreover, Croatia LNG hardly fits the 'green' image that the new commission tailored for itself. In light of the climate urgency, supporting new gas infrastructure risks locking our energy system into fossil fuels up to 2060 as a minimum.

If the EU is serious about reaching carbon neutrality by 2050, it should not support new LNG facilities which risk ending up as stranded assets, as flagged by a recent study from the consultancy firm Artelys.

Investing in new fossil gas, knowing that it should be phased out in the near future, is simply the definition of hypocrisy. The EU's credibility is at stake.

There is a fundamental incompatibility between aiming on one hand at a low-carbon economy, while on the other hand pumping millions of Euros in gas infrastructure. Those things simply cannot go hand in hand.

If European institutions want to put their money where their mouth is and invest in the future, then support for the Croatia LNG project should not be on the table anymore.

Author bio

Elena Gerebizza works for the Italian NGO Re:Common a member of Counter Balance.

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

Exclusive

Big Oil sponsors Croatia's EU presidency

Croatia's national oil company has become the EU council presidency's "official gasoline supplier" - in a move that appears to clash with aspirations of the European Green Deal. Critics say such sponsorships pose a reputational risk with the wider public.

Croatia's EU presidency optimism beset by problems

Croatia wants to focus on economic development, connectivity, internal and external security and a globally more assertive Europe over its six-month presidency - but Brexit and the next budget negotiations may put pay to that.

Agenda

Africa visit and EU parliament missions This WEEK

The European Commission will visit the Ethiopian capital, Addis Ababa, for a joint meeting with the African Union, ahead of the EU-Africa strategy being unveiled. MEPs will carry out missions in the Czech Republic, Turkey and the US.

Analysis

Why is EU off track for 2020 energy efficiency target?

Most EU member states are likely to miss the 2020 target on energy efficiency, since they were not legally-binding targets. "Transformative" measures are needed to reduce energy consumption while boosting efficiency, experts say.

Revealed: fossil-fuel lobbying behind EU hydrogen strategy

As with the German government – which presented its own hydrogen strategy last month – the European Commission and other EU institutions appear to be similarly intoxicated by the false promises of the gas industry.

Stakeholders' Highlights

  1. UNESDANext generation Europe should be green and circular
  2. Nordic Council of MinistersNEW REPORT: Eight in ten people are concerned about climate change
  3. UNESDAHow reducing sugar and calories in soft drinks makes the healthier choice the easy choice
  4. Nordic Council of MinistersGreen energy to power Nordic start after Covid-19
  5. European Sustainable Energy WeekThis year’s EU Sustainable Energy Week (EUSEW) will be held digitally!
  6. Nordic Council of MinistersNordic states are fighting to protect gender equality during corona crisis

Latest News

  1. Rainbow flag protesters charged by Polish police
  2. An open letter to the EPP on end of Hungary's press freedom
  3. Renew Europe has a plan to combat gender-violence
  4. Why EU beats US on green pandemic recovery
  5. Azerbaijan ambassador to EU shared anti-George Floyd post
  6. Polish party roars back at EU on LGBTI fines
  7. EU: Hong Kong election delay undermines democracy
  8. Why hydrogen is no magic solution for EU Green Deal

Join EUobserver

Support quality EU news

Join us