Region: Several EU states plan to use recovery fund for fossil fuel projects

Published on 2. June 2021., SEE Energy News

CEE Bankwatch Network survey of the recovery plans in Bulgaria, Czech Republic, Poland, Romania and Slovakia reveals gas investments totaling more than 2 billion euros. Bankwatch has warned that several EU member states plan to use the 672 billion euros Recovery and Resilience Facility to expand fossil gas infrastructure using loopholes in the fund’s regulations. These proposals do not comply with objectives of the European Green Deal and recent recommendations from the International Energy Agency to end funding for fossil fuels. Countries heavily dependent on coal, like Poland, Czech Republic or Bulgaria, consider fossil gas as a potential replacement, or a bridge fuel, irrespective of gas’ contribution to climate breakdown.

While member states are required to comply with a “do no significant harm” principle to demonstrate how a proposed recovery measure will not impact climate or nature, loopholes exist in the fund’s regulation that permit recovery money for fossil fuels projects. This goes against the recent recommendations of the IEA, which called for an immediate end to investments in the extraction of fossil fuels and a rapid decrease in their usage.

Investments in fossil gas boilers are one of the most common measures proposed by several member states, including The Czech Republic, Slovakia, and Poland. Slovakia plans to allocate approximately 50 million euros for gas boilers as a way to address energy poverty. However, the data from Slovak agencies shows that fossil gas is actually the most expensive fuel source compared to wood and heat pumps.

Meanwhile, Bulgaria intends to spend 244 million euros on a gas pipeline project developed by Bulgartransgaz. The pipelines are supposed to transport “low-carbon” gases: biogas and hydrogen, blended at different ratios with fossil gas, primarily to coal-based thermal power plants. The project will cause a coal-to-gas transition, locking Bulgaria into fossil gas dependency.

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