Wednesday

30th Nov 2022

Opinion

EU pandemic recovery plans set to bailout fossil-fuel companies

  • Across Italy, France, Portugal and Spain, at least €8.3bn of EU recovery funds are planned to be spent on hydrogen and renewable gases thanks to lobbying from the fossil-fuel industry (Photo: wfabry)

The official declaration of a global pandemic last spring brought with it a short lived sensation of optimism: the virus showed us that we could do things differently.

EU officials agreed: they said that in distributing EU recovery funds, they wanted to avoid repeating the mistakes made after the 2008 financial crisis when billions of euros of public money went to bailing out the fossil-fuel industry.

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Such statements echo politician's bold declarations after the 2008 meltdown of the financial system, essentially that 'never again will we let casino capitalism destabilise our economies and societies'. After spending trillions of tax payers' money on bailing out the banks, they then re-opened the casinos.

Now EU pandemic recovery funds are set to start flowing in the second half of July. With climate crises increasingly becoming a daily reality around the world, will the fossil-fuel industry be bailed out for a second time?

A new investigation from Fossil Free Politics and the European Network of Corporate Observatories (ENCO) shows the EU is doing just that: in Italy, France, Portugal and Spain, at least €8.3bn of EU recovery funds are planned to be spent on hydrogen and renewable gases thanks to lobbying from the fossil-fuel industry. Oil and gas companies see hydrogen as a lifeline for their business, as well as one of their main products: fossil gas.

The report reveals that in the countries worst hit by Covid-19, hydrogen and renewable gases are set to receive more money than much needed intensive care units and new medical equipment (Italy) or the entire national health system (Spain).

Italy, Spain, France, Portugal

Lobbying in Italy for example, has seen fossil-fuel firms secure more than 100 meetings with ministers and civil servants on pandemic recovery plans, at one point quadrupling earmarked spending on hydrogen.

In France, the fossil fuel industry had "the key aspects" of its hydrogen-heavy recovery plan roadmap "taken up by the French government", thanks to increasingly active lobbying from France Hydrogène. The group's lobby spending has doubled year-on-year from 2017, while overall lobbying activity on hydrogen has increased five-fold since 2017.

In Portugal, the same fossil-fuel industry executive that was invited to draft the national recovery plan, António Costa Silva, is now been appointed to oversee its implementation.

Meanwhile the Spanish government's recovery plan has been drawn up in collaboration with big energy companies and the big four consultancies, while excluding citizens' voices. As a result, hydrogen and renewable gas projects are getting 50 percent more public money than an already crumbling national health system.

The EU has tried to avoid recovery funds being spent on fossil fuel projects, including controversial 'blue' fossil hydrogen (which includes carbon capture or storage, CCS), but as the report shows, the industry sees 'green' hydrogen (from renewable electricity) as a Trojan horse for 'blue' fossil hydrogen.

Today less than 0.1 percent of Europe's hydrogen is 'green', while the vast majority comes from fossil gas.

Therefore by inflating the 'hydrogen hype' around a 'hydrogen economy', fossil-fuel companies are aiming for demand to outstrip limited supplies of 'green' hydrogen and ensure a reliance on 'blue' fossil hydrogen and their main product, fossil gas.

For instance, Shell has publicly stated that large volumes of 'blue' hydrogen will be needed in the future as there will not be enough renewable electricity to decarbonise the power sector and produce 'green' hydrogen.

The over-emphasis on hydrogen of any colour will not only see the EU handing public money to an industry notorious for trying to block and delay climate action, and for a disastrous human rights record, but it could lock Europe into decades more of fossil fuels.

First tobacco, now fossil-fuels?

For a fossil-free recovery citizens cannot rely on Greta Thunberg, young activists and court cases alone. We need fossil-free politics, and it is imminently doable if we learn from the effective way the tobacco industry has been shut-out of politics.

We need a similar firewall to protect our decision makers and political processes from the vested interests of the fossil fuel industry.

The new report also marks the launch of the Recovery Watch project, investigating how big business is influencing recovery plans at national and EU level and is seeking to capture the recovery funds for corporate interests.

The influence of big companies on public institutions is not new: corporate capture in Europe is an increasingly worrying trend.

The fossil fuel industry's capture of EU recovery funds via their push for hydrogen is just the latest example. But applying the lessons from the tobacco lobby could not just help save the climate, but also our political system.

Author bio

Lala Hakuma Dadci is coordinator at Fossil Free Politics. Pascoe Sabido is researcher at Corporate Europe Observatory.

Disclaimer

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

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