Tuesday, January 25, 2022

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Western Balkans: an early coal exit will increase the share of the fund a country will receive

Western Balkan countries need a dedicated fund to ensure a just energy transition, suggests a new joint report by the Green Tank and CEE Bankwatch Network.

The analysis which is based on a specially developed model explores how such a fund could be allocated in the fairest possible manner. It also shows that committing to an early coal exit will significantly increase the share of the fund a country will receive.

“To avoid the huge challenges of an abrupt transition such as the one currently taking place in Greece’s lignite regions, Western Balkan countries should start to plan the transition of their coal regions immediately”, underscored Nikos Mantzaris, Senior Policy Analyst of the Green Tank.

“The EU should provide both technical and financial support in developing a truly Just Transition Fund for the Western Balkans, whereas the transition speed should definitely be included among the allocation criteria to correctly assess the urgency of the transition in each country”, he remarked.

According to the analysis, the country which could benefit the most from an early coal phase-out in five out of six scenarios is Serbia. The runner up is Bosnia and Herzegovina. It even surpasses Serbia in a scenario in which BiH phases out coal by 2030 and Serbia and Kosovo* continue with the coal-based electricity model until 2050 and 2040, respectively. Kosovo comes third on the list, provided that it moves away from coal by 2030.

North Macedonia which has committed to a 2027 coal phase-out date raises its fund share up to 13 per cent. This is almost double the share of 7.36 per cent it would have received had it decided to prolong its dependence on coal until 2050. Montenegro could potentially almost triple its share to almost 4 per cent of the fund if it decides to retire its only coal plant by 2022 instead of its pledged phase-out date of 2035.

Ioana Ciuta, CEE Bankwatch Network’s coordinator of the Balkans Beyond Coal campaign remarked that the transition away from fossil fuels in the Western Balkans is coming “much faster than governments expect and a Just Transition Fund is much needed to support this process”.

“This winter, much of the region has been struggling with power plant failures and coal supply difficulties. Antiquated coal power plants in North Macedonia, Serbia and Kosovo went offline, underlining the need to speed up investments in energy efficiency measures and sustainable forms of decentralised renewable energy generation”, concluded Ms Ciuta.

The authors of the analysis recommend to the European Commission to take into account the transition speed in the design of the Just Transition Fund. The six countries of Western Balkans, on the other hand, need to plan the transition immediately rather than wait until the funding is available.

“Early starters would definitely receive additional financial benefits as well as the guaranteed environmental benefits and drastic improvement in their climate performance”, states the report.

* This designation is without prejudice to positions on status and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo declaration of independence.

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