EU
countries scrap for cash from new green scheme
A fight is
brewing over plans to help the EU become climate-neutral by 2050.
By LILI
BAYER AND PAOLA TAMMA 1/13/20, 9:12 PM CET Updated 1/14/20, 12:08 PM CET
The
scramble is on to get extra EU money for going green.
The
European Commission hopes that larding €100 billion into a so-called Just
Transition Mechanism will build support for its goal to get the bloc to agree
to decarbonize by 2050. The mechanism is part of a bigger effort, the
Sustainable Europe Investment Plan, to mobilize one trillion euros over the
next decade.
But
Tuesday’s planned announcement on the workings of the mechanism has already set
off a fight among member countries for a slice of the pie. That poses a problem
for Commission President Ursula von der Leyen.
Access to
grants under the new seven-year initiative will be “based on the scale of the
decarbonisation challenge of the highest carbon-intensive regions,” according
to a draft of the Commission’s plan obtained by POLITICO, and primarily
allocated to heavily industrialized regions as well as those involved in coal,
peat and shale oil production, with the level of economic development also
taken into account.
The
Commission wants EU countries to provide €7.5 billion of fresh money for the
bloc's upcoming budget to finance the Just Transition Fund. But to receive any
of the cash, countries would be required to match each euro with between €1.50
and €3 from their cohesion funding allocations, as well as providing money from
their national budgets — something that doesn't sit well with some Central
European countries.
"Poland
must take a longer road to neutrality of carbon dioxide emissions than many
other EU countries." — Mateusz
Morawieck, Polish Prime Minister
“It is not
acceptable that in the European Union’s next budget we take money away from
cohesion funds and transfer it to climate protection goals,” Hungarian Prime
Minister Viktor Orbán said last week.
Hungary and
other Central European countries — all large recipients of EU cohesion funds —
want to ensure that the mechanism is filled with new money and doesn't simply
reshuffle existing funding.
To get to
the promised €100 billion figure for the Just Transition Mechanism, the
Commission hopes to mobilize between €30 and €50 billion in grants, €45 billion
in private investments through its InvestEU program, as well as generate €25-30
billion for a public loan facility with the European Investment Bank.
The call
for fresh funds isn't seen with much enthusiasm by net-payer countries, which
generally support spending more of the EU budget on combating climate change
but aren't keen on paying a bigger bill to the bloc's coffers, while poorer
countries want generous aid.
The
Commission’s Green Deal climate agenda “has very ambitious objectives and,
especially for the countries that are not at the level of development of the
most developed European countries, it means there would be some costs for us,”
Romania's Prime Minister Ludovic Orban told journalists, adding he is “very
interested in the way the Just Transition Fund will be set up and used.”
Romania is the EU's second-poorest member and generates about a fifth of its
electricity from coal.
Unhappy EU
That's just
one part of the cross-continental grumbling, as some countries fear that a
broad transition fund with 27 participating countries would leave insufficient
resources for those that need it most, especially countries that still depend
on coal.
The coal
camp is led by Poland, which uses coal to generate 80 percent of its power;
government plans call for that to drop only to 60 percent by 2040. That will
make it impossible to meet the Commission's target to become climate-neutral by
2050.
"Poland
must take a longer road to neutrality of carbon dioxide emissions than many
other EU countries," Polish Prime Minister Mateusz Morawiecki said in a
weekend interview with Germany's Die Welt.
Although
Poland is the only EU country not to agree to abide by the 2050 target, it
wants Just Transition money to help it decarbonize.
"We
think the Just Transition Mechanism should focus above all on regions relying
on fossil fuel extraction which will be most affected by climate policy,"
Adam Guibourgé-Czetwertyński, deputy minister at Poland's climate ministry,
told POLITICO, adding nevertheless that "this proposal shows that there is
a good understanding of the specific challenges faced by several Polish
regions."
The Polish
view is echoed by other countries in the region.
“I am
convinced that only member states that are most affected by the transition”
should have access to the Just Transition Fund, Czech Prime Minister Andrej
Babiš wrote in a text message to POLITICO. About a third of his country's power
comes from coal.
But others,
including from rich countries, also want a slice of the pie.
The EU is
in the midst of a difficult negotiation on its 2021-2027 spending plan, with
countries like Germany and the Netherlands pushing for a smaller post-Brexit
budget. Some EU officials believe that those countries would only agree to
finance the new Just Transition Fund if the EU budget’s big net payers could
also show their domestic voters they would benefit from the new program.
Peter
Liese, the German MEP who is environmental coordinator for the European
People's Party, said on Monday that German coal regions could count on direct
support from the new fund, as well as indirect financial support from the
European Investment Bank.
Coal
cutters
Countries
that have been more ambitious than those in Central Europe also don't want to
be forgotten.
The Greek
government has pledged to end all coal-fired power production by 2028, while
its public power corporation plans to switch off its coal-fired units even
earlier. Its region of Western Macedonia “is fully dependent on energy
production from lignite” while for another region it “is one of the key
economic activities,” Greek Alternate Foreign Minister for European Affairs
Miltiadis Varvitsiotis told POLITICO. “We will try to be one of the first
countries to use this fund,” he said.
Spain,
which in 2018 shut down 26 uncompetitive coal mines, also argues the fund
should go to regions that have tackled the transition with their own means, and
not just to climate laggards.
Italy hopes
to access fund money to clean up the Ilva steelworks in Taranto in southern
Italy, run by ArcelorMittal and linked with high rates of cancer. “We are
working to ensure that Ilva is at the center of this green plan,” Italian Prime
Minister Giuseppe Conte told Italian daily Il Corriere on Friday.
For Italy,
the fund should be “focused on all member states not just some of the member
states. It needs to focus on all the high energy intensive industry,
particularly steel,” said Italy’s Environment Minister Sergio Costa at a
December Council meeting.
Kalina
Oroschakoff and Carmen Paun contributed reporting
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