European Commission urged to stop funding Balkan fossil fuel projects – EURACTIV.com

The European Commission should stop supporting and funding fossil gas projects in the Western Balkans and instead focus on sustainable energy, a group of civil society organizations from the region has said.

As the war in Ukraine rages, driving up gas prices, Europe is struggling to wean itself off Russian gas. The solution for the Balkans is not more gas projects or alternative gas sources like Azerbaijan. It’s energy efficiency and sustainability, the groups say.

Western Balkan countries like Kosovo, North Macedonia and Bosnia and Herzegovina are heavily dependent on fossil fuels, especially coal. While it produces almost 100% hydroelectricity, Albania exports a large part of it and is then obliged to buy fossil fuels from neighboring countries at a higher price.

With goals of decarbonizing their economies, reducing emissions and achieving energy independence, countries in the region have turned to the EU for support. But instead of funding solar, wind, energy efficiency and other forms of sustainable energy, the bloc is poised to pour billions into fossil fuels, especially gas.

The coalition of organisations, 36 in total, sent a letter to the President of the European Commission, Ursula von der Leyen, calling for an end to gas dependency.

“We therefore call on the European Commission to refrain from promoting new gas infrastructure in the Western Balkans, either in public statements or in its investments such as those in the Economic and Investment Plan. Instead, we call on the Commission to redouble its efforts to encourage truly transformative investments that are not receiving enough attention in the Western Balkans,” according to the letter seen by EURACTIV.

He notes that the signing of the Sofia Declaration on the Green Agenda in November 2020 commits to decarbonization by 2050, which requires stopping the use of fossil fuels. While the Balkans are not yet very dependent on gas, governments are planning to expand its use considerably and have been “actively encouraged by the European Commission”.

In February alone, the EU Ambassador to Serbia participated in the launch of works on the new Serbia-Bulgaria gas pipeline, partially financed by an EU loan and grant. EU officials also issued statements promoting the gas at a summit in Baku. This includes showcasing Azeri gas as a way to phase out coal and decarbonise economies and Commissioner Oliver Varhelyi hoping for more strategic gas projects as an alternative to Russian gas.

Azerbaijani gas is problematic as the ruling regime is plagued with high-level corruption issues, particularly involving gas deals.

Furthermore, the Azerbaijani laundromat is a €2.9 billion slush fund used to bribe EU politicians, lobby the EU, the Council of Europe and UNESCO, and pay bribes related to commercial and gas interests. This has raised significant concerns about the integrity of Azerbaijani gas deals.

The letter says that for years the European Commission has promoted the Southern Gas Corridor as an alternative to Russian gas, but Russian oil company Lukoil has a 20% stake in the Shah Deniz gas project.

“The alternative to Russian gas for most of the Western Balkans is not Azeri gas, nor LNG or any other gas. It is an energy-efficient economy based on sustainable forms of renewable energy,” the signatories emphasized.

Instead of gas, the EU should focus on “much-needed investments such as tackling electricity distribution losses, increasing the use of heat pumps and deep renovation of residential buildings not receiving not half the public attention like gas,” noting that they are essential for a sustainable energy transition.

Moreover, given the extent of energy poverty and the political sensitivity of high bills in the region, consumers will be unable or unwilling to absorb high or volatile gas prices. Even if the gas is used, the letter says, governments will likely have to subsidize it during times of high prices, putting additional strain on limited public budgets.

If we don’t move away from gas in the region, “we will lead into a dead end, towards a new blockage of fossil fuels”, while costing a lot of money and taking many years.

“The Commission must see both the trees and the forest. The geopolitical concerns are real and immediate – for countries using gas – but so are climate change and economic realities,” the letter states.

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