Region: Europe

EU split over subsidies for coal plants as Poland seeks extension

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A group of EU countries are fighting attempts by Poland to extend subsidies for coal plants, with Luxembourg’s energy minister describing the proposal as “astonishing”.

Luxembourg’s energy minister, Claude Turmes, said he could not believe the proposal, which was made on Friday, days before a planned summit of energy ministers from across the bloc, was even on the table given the EU’s commitment to combating the climate emergency.

“Friday, the Swedish presidency did something really astonishing which is weakening our climate policy by … reopening the possibility to subsidise coal power plants,” he told reporters before the summit in Luxembourg.

Some countries consider this a measure to help Poland, which uses coal to produce about 70% of its energy.

Poland is expected to soon surpass Germany as Europe’s top power polluter due to aggressive planned reductions in fossil fuel use across Germany, creating assumptions that Poland will have no choice but to remain Europe’s most coal-reliant nation for years to come.

So far this year, Poland has defied expectations by cutting coal use and pollution to the lowest level since at least 2014, and by raising clean power output to record highs just as Germany cut its clean generation by shutting nuclear reactors.

“We have a big bloc of countries that will reject the proposal of the Swedish presidency … so it’s a clear no,” Turmes said ahead of the summit on Monday.

Spain’s minister for ecological transition, Teresa Ribera, said some thought had to be given to Poland, which is heavily reliant on coal, while the French energy minister, Agnès Pannier-Runacher, said extending support to Poland was an “ambitious approach” – a hint Paris was more open towards the move than other member states like Germany.

“We need to take into account the reality of each country to ensure their capacity to provide energy to their people and to their industries,” she said.

Belgium sided with Luxembourg, describing such a move as “unacceptable”.

Tinne van der Straeten, the energy minister, said: “In Belgium we already have in our national legislation the obligation to become climate neutral and to have a steep decline in emission by 2030 and 2040. So [the proposal] is something that we cannot accept,” she told reporters.

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June 19, 2023
Berlin risks water shortages in fallout from Germany’s coal exit

[vc_section][vc_row][vc_column][distance desktop_type=”30″][lvs][distance desktop_type=”30″][vc_btn title=”Source – Straits Times” color=”sky” i_type=”material” i_icon_material=”vc-material vc-material-perm_device_information” add_icon=”true” link=”url:https%3A%2F%2Fwww.straitstimes.com%2Fworld%2Feurope%2Fberlin-risks-water-shortages-in-fallout-from-germany-s-coal-exit|target:_blank”][distance desktop_type=”30″][vc_column_text]BERLIN – On extremely hot and dry summer days, water in Berlin’s Spree River gets sucked upstream by an array of pumps to ensure the German capital has enough to drink. Reversing the natural flow is set to become more frequent as the country’s exit from coal means a key source of water is lost.

With Berlin already facing less rainfall due to the climate crisis, the end of lignite mining in nearby regions means groundwater pumped out to extract the fossil fuel will no longer feed the Spree.

On top of that, old mines are being flooded to create man-made lakes, further draining resources.

As a result, the critical artery for the city of 3.6 million could end up with 50 per cent to 75 per cent less water in dry summer months, according to a study released this week by the German Environment Agency.

“This is a very serious situation,” Mr Dirk Messner, president of the government agency, said in an interview. “The majority of water that Berlin is using for drinking comes exactly from this river.”

Surrounded by lakes and swamps, Berlin wouldn’t automatically seem at risk for water shortages, but its ecosystem is finely balanced and is losing a key pillar.

For more than a century, water from lignite mines fed the Spree and supported the marshy Spreewald, a Unesco-protected biosphere.

But as soon as 2030, Germany will end the use of coal and lignite and that source will cease, making the region more dependent on rainfall.

Plans to prevent erosion and landslides in the massive open-pit mines will add to the problem by soaking up water resources.

The dilemma reflects the ripple effects of climate change. Even measures to unwind the world’s reliance on fossil fuels can have unintended consequences.

Around two hours south of Berlin, the “Cottbuser Ostsee” is under development by LEAG, Germany’s second-largest mining company.

Planned as a recreation area, the former Cottbus-Nord mine is being flooded with 84 million cu m of water – equivalent to 40 per cent of the city’s annual water consumption.

After it is finished around 2025, Germany’s largest man-made lake will boast five beaches, a yacht harbour, and the country’s largest floating solar plant.

The flooding will not only reduce inflows into the Spree, but vast amounts of water will be lost through evaporation, according to the government’s study, urging the Cottbuser Ostsee to be used as storage that can be tapped in the hot summer.

But that would be high season for bathers and boaters, and LEAG is pushing back.

Using the lake as a drinking-water reservoir “was not the subject of the application” for redevelopment, a spokesman said, adding that “viable and sustainable concepts for dealing with the water-management consequences resulting from the coal phase-out” are now needed.

Despite being one of the few major cities with a self-sufficient water system, Berlin has historically been relatively arid, with some of the lowest rainfall rates in Germany.

Due to climate change, it will get worse. A study from Zurich’s ETH estimated that cities in the northern hemisphere will develop conditions equivalent to locations that are now 1,000km to the south. That would make Berlin more like southern France.

Berlin’s growth – the city forecasts nearly 4 million residents by 2040 – is adding to the strain.

A particular sore spot is Tesla’s factory in the suburb of Grünheide.

During construction in 2021, Chief Executive Officer Elon Musk enraged local activists by belittling their concerns.

The plant – located in a protected water area – is estimated to use as much as 60,000 people. Tesla didn’t respond to requests for comment.

One of the solutions is a huge concrete pool under construction in Schönerlinde, a small town on Berlin’s northern rim.

Here, a new facility is being built to further purify treated sewage.

The city’s water supplier Berliner Wasserbetriebe will invest €2 billion (S$2.9 billion) by 2031 to upgrade its six wastewater treatment plants – including an ultraviolet system that’s likely to become Germany’s largest solarium.

Projects aimed at climate-proofing the entire municipal water system total €6 billion.

Instead of letting treated wastewater flow down the Spree into the North Sea, the utility would like to pump it to the city’s so-called blue pearls, but that’s currently prohibited by national legislation.

About half of the roughly 350 ponds in Berlin are under “severe” stress, according to a report from environmental group BUND.

“Berlin’s water bodies, woods and swamps are already in the intensive care unit,” said Mr Christian Schweer, a water expert from BUND’s Berlin chapter. “If there’s even less water coming in the next years, the situation will become dramatic.”

To prepare for a hotter future, Berlin is also seeking to keep more of its rain, according to Ms Darla Nickel, head of Berlin’s Rainwater Agency. The “sponge city” concept calls for more planted roofs, storage tanks and fewer sealed ground surfaces to prevent run-off. The city is trying everything to head off scarcity, “but we can by no means compensate the causal problem”, she said.

That means that when it’s hot and dry, a sluice near the central Alexanderplatz will stop the flow of water in the Spree. Then pumps will reverse the river’s course diverting it into the city’s largest facility for treating drinking water. One way out is a water-management system that connects the regions via storage, reservoirs and redirects streams to Berlin.

“This is a different scenario from doing little or nothing,” the Environment Agency’s Mr Messner said. But there’s a catch: “These other rivers are also running out of water.” BLOOMBERG

Berlin’s legislature is working on a “master plan” to secure supplies for homes and businesses. It calls for demand reduction especially in peak times and more strategic planning between Berlin and other nearby states.[/vc_column_text][distance desktop_type=”30″][/vc_column][/vc_row][/vc_section]

June 19, 2023
Norsk Hydro produces world’s first aluminum using green hydrogen

[vc_section][vc_row][vc_column][distance desktop_type=”30″][lvs][distance desktop_type=”30″][vc_btn title=”Source – mining.com” color=”sky” i_type=”material” i_icon_material=”vc-material vc-material-perm_device_information” add_icon=”true” link=”url:https%3A%2F%2Fwww.mining.com%2Fweb%2Fnorsk-hydro-produces-worlds-first-aluminum-using-green-hydrogen%2F|target:_blank”][distance desktop_type=”30″][vc_column_text]Norsk Hydro ASA has made the world’s first batch of aluminum using green hydrogen in a step toward decarbonizing the production of the metal.

The Norwegian producer replaced natural gas with green hydrogen during a test at its extrusion plant in Navarra, Spain, it said in a statement on Thursday. Hydro’s renewable hydrogen company, Hydro Havrand, conducted the trial in partnership with Fives North America Combustion, an engineering firm with expertise in hydrogen burner technology.

For more than a century, Hydro has been searching for new uses for the vast amounts of hydroelectric power that Norway generates each year. The company first found success making artificial fertilizers via a pioneering electrochemical process, and later focused its attention on aluminum, which is one of the world’s most energy-intensive industrial commodities to make. Now, it’s betting that hydrogen could prove even more lucrative.

“Green hydrogen can remove hard to abate emissions from fossil fuels in processes where electricity is not an alternative, both in the aluminum industry and in other heavy industries,” Per Christian Eriksen, head of Hydro Havrand, said. “This test is part of developing commercial fuel switch solutions and to demonstrate that hydrogen can be used in aluminum production.”

Hydro will publish a final report from the test in the fall. The aluminum produced in the test will be utilized to make the world’s first extruded profiles using hydrogen.

“It’s a very powerful message to our customers rather than a powerpoint on net zero 2050 which everyone has,” Paul Warton, executive vice president for Hydro Extrusions, said in an interview. “We can say this is how we will do it.”

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June 16, 2023
Zaporizhzhia steel plant refuses to bend to Russian attacks

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urnace is blowing.

So when the siren sounds warning of a missile attack, which is often, Oleksii Klashnik doesn’t run down to one of Zaporizhstal’s 14 underground bunkers. Instead, he and a few key workers don protective vests along with their heatproof outfits. Then they continue working with the molten metal at temperatures up to 1,100 degrees Celsius.

Zaporizhzhia city is less than 30 miles from the front line in Ukraine’s high-stakes counteroffensive and has been frequently targeted by Russian forces. The air alarm signals real danger. But stopping a blast furnace in the middle of smelting molten iron used to create steel could be even riskier.

“People just adapted to it,” Klashnik, 29, said with a shrug. Despite the war, lives and livelihoods must go on — and Zaporizhstal, one of the largest steel mills in Ukraine, is a symbol of resilience in one of the core sectors of the country’s battered economy.

The plant has never been hit, Klashnik added, but “you can definitely hear the explosions in the city.”

Oleksii Klashnik, 29, wears a fireproof suit at the furnace of the Zaporizhstal steel plant on May 29. (Heidi Levine for The Washington Post)

Founded in 1933, Zaporizhstal is one of few mills that produces cold-rolled sheets of steel, vital for car manufacturers. It is a regional giant and workers describe its mammoth scale in abstract terms — you can fit two-and-a-half Monacos in here, they say, or 777 soccer pitches.

More than that, however, they describe it as evidence of Ukraine’s refusal to surrender to Russian aggression. The plant closed for 33 days at the start of the war but has operated ever since, retooling to help Ukraine’s national war effort despite the risk.

Because of the war, the giant Zaporizhstal has effectively shrunk. Roughly 10,000 people worked at the plant before the invasion. Last year, a thousand left to become soldiers. Another thousand, mostly women or men with families, moved away. Zaporizhstal has not operated at more than 70 percent capacity since the war began. Currently, just two of four furnaces are working, so production is even lower.

“We lost a lot of our clients,” Roman Slobodianiuk, acting general director, said in an interview.

One of the many bomb shelters at Zaporizhstal. (Heidi Levine for The Washington Post)

The struggles in the steel industry in many ways mirror the broader hardship wrought on Ukrainian industry since the invasion.

Ukraine’s economy shrank by 30 percent in 2022. Though the decline has stabilized this year, it is not clear when growth will return. Many in Ukraine’s steel industry worry they are falling behind as global production transitions to “green” steel, which uses hydrogen rather than fossil fuels and requires a different type of iron ore.

For many, it’s a personal struggle, too. Steel mills typically dominate their home cities, connecting families and serving as mainstays of the tax base. Several generations of a family might work together in hot, potentially dangerous conditions.

“Ukraine has a steel production culture,” said Stanislav Zinchenko, chief executive of GMK, a Kyiv-based economic think tank.

Steel culture

Oleksii Klashnik samples molten metal at the furnace of the Zaporizhstal steel plant. (Heidi Levine for The Washington Post)

That culture took hundreds of years to build up. In the 19th century, British investors began working with the Russian empire to tap the country’s enormous reserves of iron ore. Later, during the Soviet Union, much of this iron ore was used in steel designed for manufacturing in the domestic market.

When the Soviet Union collapsed, the industry pivoted, making use of the wide Dnieper River and the nearby Black Sea to export products as far away as North America and Asia. It became one of Ukraine’s largest industries, second only to the vast fields of agriculture like those that are just outside the city in the Zaporizhzhia region.

Before the Russian invasion, Ukraine was one of the world’s largest suppliers of iron and steel, with metals making up roughly a third of Ukraine’s exports. It contributed one dollar out of every 10 to Ukraine’s prewar economy and more than 560,000 people were directly or indirectly employed by the industry.

It can be tough work. New employees on the production line at Zaporizhstal were warned that they would sweat out 10 kilograms, or 22 pounds, in their first month on the job.

A control room at the Zaporizhstal steel plant. (Heidi Levine for The Washington Post)

Aside from the heat, there are carcinogenic fumes that coat much of the plant in rust-colored dust. Workers carry carbon monoxide meters because of fatal accidents during Soviet times.

The impact of the war on the steel industry was highlighted by the scenes at Azovstal Steel Plant in occupied Mariupol last year. That plant, as Zaporizhstal, is part of Metinvest, the metals giant owned by Rinat Akhmetov, Ukraine’s richest man.

Metinvest, Ukraine’s largest employer before the war, had about 35,000 workers in Mariupol alone. The Azovstal mill and its web of underground bunkers became an iconic holdout of Ukrainian military resistance before Russia took over the city more than a year ago. It is now decimated.

For the steel mills still operating in Ukrainian-held territory, there were other problems. They were cut off from the iron ore mines that once supplied them and they suffered rolling blackouts as Russian airstrikes targeted the electrical grid.

The Zaporizhstal steel plant in Zaporizhzhia, Ukraine, on May 29. (Heidi Levine for The Washington Post)

The recent collapse of the Kakhovka dam farther down the Dnieper River added a new problem: water. On Tuesday, a giant steel plant in Kryvyi Rih owned by metals giant ArcelorMittal announced that it would halt production indefinitely because of water supply issues.

Even when steel could be produced, the Russian blockade of Ukrainian ports meant lost access to international shipping that helped Ukraine thrive. Exports now travel via rail to Eastern Europe at a significant cost, limiting sales.

“What the Russians are doing now, it’s called by a very simple word: piracy,” Yuriy Ryzhenkov, chief executive of Metinvest, said.

Bending or breaking

A worker in the control tower as a block of molten metal moves through the production line at the Zaporizhstal plant. (Heidi Levine for The Washington Post)

For workers such as Klashnik, the biggest change isn’t the sirens: It’s the hours.

The shifts were lengthened from eight hours to 12 last year. The aim was to fit around the city’s nightly curfew, which keeps Zaporizhzhia residents indoors at night. It meant four more hours a day of hot, sweaty work at the furnace.

In the long run, staffing will probably be a major concern at Zaporizhstal, pointing to bigger issues surrounding the future of Ukraine’s heavy industry. Plant officials say that they are struggling to fill some specialist vacancies as that kind of skilled worker no longer lives in the area.

Only 100 or so Metinvest workers from Mariupol were transferred to Zaporizhstal. Metinvest originally hoped to find jobs across the company for 6,000 workers displaced from its facilities in Mariupol, but only half that number applied. Many opted to remain in Russian-held territory for personal reasons or even take a job in Russia’s much larger industry itself.

“It was a bit surprising for us,” said Ryzhenkov, adding that the limited number of jobs in Ukraine and language barriers in Europe were a factor. “So they chose Russia.”

Slobodianiuk, who is 34 himself, admits it is hard to convince young people that they should go for a job in a steel mill rather than, say, information technology, even though steel jobs pay well. “It’s hard physical labor,” said Slobodianiuk. “Not a lot of people are ready to commit to it.”

Roughly 7 million people have left Ukraine since the war began, compounding a long-standing demographic problem. Millions more have moved to Ukraine’s west, away from traditional industrial hubs such as Zaporizhzhia. And with military spending expected to remain high for years, hundreds of thousands of soldiers will be taken out of the job market.

A block of molten metal at the Zaporizhstal steel plant. (Heidi Levine for The Washington Post)

The war has also meant that Metinvest and other steel producers in Ukraine have fallen behind in the industry-wide race to move away from traditional steel, fed by coal and a major source of carbon emissions, to green steel. Countries such as China, India and South Africa have taken Ukraine’s place in international steel markets. Though Russian steel is sanctioned, its iron ore is not.

“Today the main supplier for Europe’s steel industry is Russia,” said Zinchenko, referring to the sponge iron and other special ore produced by Metalloinvest, a Russian producer whose largest shareholder is the sanctioned oligarch Alisher Usmanov. “Amazing, right? It should be Ukraine.”

The fame of Azovstal made Ukraine’s steel industry a source of national pride. But keeping the industry alive will require grappling with what sort of country Ukraine wants to be after the war.

“I was proud to work here before the war,” said Klashnik as he stood back from the furnace. “And now, it’s the same.”

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June 15, 2023
Vulcan on target for lithium extraction plant completion

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Vulcan Energy Resources has entered the final stage of development of its lithium extraction optimisation plant in Germany, with the company on target for the mechanical completion of its operation in August.

The extraction plant forms a key part of the company’s Zero Carbon lithium project as it aims to become the world’s first integrated lithium chemicals and geothermal energy producer with net-zero greenhouse gas emissions.

Once the plant reaches mechanical completion, Vulcan is targeting commissioning during September ahead of the full operation that will produce the first-ever tonnes of lithium chloride concentrate produced domestically in Europe.

Vulcan’s fully-operational plant will also produce the first tonnes of lithium using the commercially-proven method of sorption-type direct lithium extraction, using renewable heat instead of fossil gas. The completed extraction plant will supply lithium chloride to a second downstream optimisation facility that will produce the final lithium hydroxide product.

It will herald the beginning of Europe’s new lithium era.

Once the optimisation process has been completed, Vulcan will supply its automotive and battery customers, including carmaker giants Stellantis and Volkswagen, with a final product for testing and qualification. The completed plants will also serve as a training ground for the company’s production team to prepare for the first commercial phase of it Zero Carbon lithium project, that is also progressing.

It will allow management to optimise the process parameters for the commercial plant while it is being constructed.

Completing our Optimisation Plant and starting operations in the coming weeks and months will represent the culmination of over 5 years’ work on the Zero Carbon Lithium Project, and the birth of an entirely new domestic lithium industry in Germany and Europe, which we are very excited to share with our stakeholders.

Vulcan Energy Resources managing director and chief executive officer Dr Francis Wedin

Uniquely, the company will produce clean geothermal power for its own use and for sale into the market, in addition to producing lithium hydroxide. Vulcan’s model seeks to extract the sought-after battery metal from its lithium-laden hot brines percolating deep below in the picturesque Upper Rhine Valley that extends across France, Germany and Switzerland.

While more than 60 per cent of global lithium production is sourced from such brines, Vulcan’s competitive – and green – edge is that the heat at which these brines bubble to the surface is capable of generating power, courtesy of standard geothermal technology, with zero carbon emissions.

After extraction of geothermal energy and lithium, the brine is reinjected back into the bedrock to make a closed-loop process with minimal impact on the surrounding environment.

Significantly, Vulcan has also made a raft of senior appointments as its extraction plant draws nearer to operation, including Carsten Bachg as senior director of programs, Cedric Adam as director of construction and commissioning and Neil Davey as director of the project management office and project services. It also plans to leverage its strong cash position of about $270 million to negotiate early works agreements and place orders for key commercial plant equipment as its projects continue to gain momentum.

The company finds itself in the unique position of potentially becoming a major supplier of key battery components without the additional overhead of energy costs. In fact, it looks as if the company will be in a position to offset additional costs by selling off excess energy into the local grid.

With the world heavily-focused on zero-carbon energy production, Vulcan’s lithium project has the potential to become a game-changer in the battery production market.

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June 15, 2023
Eastern German coal phase-out threatens regional water supply – report

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The planned coal phase-out in eastern Germany could threaten water supply in and around the country’s capital, as significantly less groundwater will be pumped into the river Spree with the end of lignite mining in the area, a report by the Federal Environmental Agency (UBA) found. After the coal phase-out in Lusatia, the river Spree – which flows in the states of Berlin, Saxony and Brandenburg – could have up to 75 percent less water in certain areas during dry summer months, with consequences for lakes, canals and drinking water supply, according to the report. Since the beginning of lignite mining in the 19th century, around 58 billion cubic metres of groundwater – more than the volume of Lake Constance – have been pumped to allow mining, and fed into the Spree, said UBA. A good half of the water that the Spree carries today near Cottbus comes from pumped groundwater. The coal phase-out in the country is scheduled for 2038, but the government aims to push it forward to 2030 if possible. The report’s authors say it will fundamentally change the water balance in the entire region and, if water demand increases or remains the same, there is a threat of increasingly frequent and prolonged water shortages in the region. However, this is no reason to cancel the phase-out, the UBA head Dirk Messner said. “Coal mining has been harmful to the environment for decades. I am absolutely in favour of continuing to target the phase-out for Lusatia for 2030, otherwise we will hardly be able to achieve our climate targets.”

The authors recommend that households, industry and agriculture save water, and that the states find ways to pump water into the river from other regions through new pipe systems. Additionally, water storage should be expanded by upgrading existing reservoirs and creating new ones in mining lakes, for example. A short-term, emergency solution could be the continued operation of the mining pumps, but this would come with ecological consequences and is an expensive solution to prevent water shortage problems compared to other measures, the authors say. UBA also recommends that Saxony, Brandenburg and Berlin develop a cross-state master plan for water management in the region. The capital’s water supplier, Berliner Wasserbetriebe, and the state’s senate are already working on corresponding concepts.

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June 14, 2023
Dundee Precious Metals to earn stake in Velocity’s Iglika licence

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Canadian-based mining company Dundee Precious Metals (DPM) has signed a binding letter agreement to acquire a 75% interest in the Iglika copper-gold prospecting licence in Bulgaria from gold exploration and development company Velocity Minerals.

Under the agreement, DPM will have the exclusive option to acquire a 75% interest in the Iglika licence by making an initial cash payment of $250,000 (C$333.94m) to Velocity and funding the 40,000m drilling work on the property.

DPM is required to make the cash payment to Velocity within five business days from the signing of the letter agreement, while 10,000m of drilling must be completed prior to the first anniversary of the effective date.

The company will also fund and deliver a mineral resource estimate on a deposit located within the property; fund and deliver the deposit’s pre-feasibility study; and make an additional $1.5m cash payment to Velocity during a five-year period.

In a press statement, Velocity Minerals said: “DPM will be under no obligation to fulfil any of the remaining earn-in requirements and may accelerate the satisfaction of the earn-in requirements without penalty, at its election.”

DPM has started a drilling programme at the Iglika licence to test copper–gold porphyry, skarn and epithermal targets defined by geochemical and geophysical anomalies. The programme comprises 24 drill holes for 10,000m.

The Canadian company plans to complete detailed mapping, soil sampling and geophysical surveys to further refine drill targets at the property.[/vc_column_text][distance desktop_type=”30″][/vc_column][/vc_row][/vc_section]

June 14, 2023
Poland delays green energy plan as election nears

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WARSAW, June 13 (Reuters) – Poland has deferred a plan to cut its reliance on coal by changing the status of its energy policy update to a consultation ahead of elections later this year, following pressure from mining unions.

The climate ministry published in April a document it began working on after Russia invaded Ukraine in February last year, causing major disruption in energy markets.

It called for a doubling of renewable capacity to 50 gigawatts (GW) by 2030 and a further increase to 88 GW by 2040, but the climate ministry website said it will now feed into an all-industry strategy update.

“It has been decided that the work put into the document will be used to prepare a broader energy strategy encompassing other industries,” the ministry spokesman Aleksander Brzozka told Reuters on Tuesday.

Earlier this month, Prime Minister Mateusz Morawiecki signed an agreement with the biggest trade union that calls for more consultations on strategy for the Polish energy industry.

In 2021, the government said the country will continue mining coal, which is used to generate some 70% of Poland’s power, until 2049.

Michal Hetmanski, head of Instrat, a Warsaw-based independent think tank, said the change of status ruled out the plan’s being adopted before elections due in October or November, adding it “yet again questions the government mandate to plan an energy transition at all”. “It is peculiar that the government wants to consult the strategy soon after proposing it due to the pressure from powerful coal mining unions,” Hetmanski told Reuters.

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June 14, 2023
EU industry’s green transition in spotlight at ECON meeting

[vc_section][vc_row][vc_column][distance desktop_type=”30″][lvs][distance desktop_type=”30″][vc_btn title=”Source – European Commitee of the Regions” color=”sky” i_type=”material” i_icon_material=”vc-material vc-material-perm_device_information” add_icon=”true” link=”url:https%3A%2F%2Fcor.europa.eu%2Fen%2Fnews%2FPages%2FEU-industry%25E2%2580%2599s-green-transition-in-spotlight-at-ECON-meeting.aspx|target:_blank”][distance desktop_type=”30″][vc_column_text]The impact on regions and cities of the EU’s policy to reduce reliance on imports of critical raw materials, reducing dependency on net-zero industry technologies and the achievement of a just transition in the automotive industry were amongst the main topics discussed during the meeting of the commission for Economic Policy (ECON) on 7 June. ECON members also adopted a draft opinion on the reform of the EU Stability and Growth Pact, calling for European fiscal rules to be more effective and have greater democratic legitimacy.

Members of the ECON Commission voiced support for the more country-specific approach of the recent European Commission proposal for new economic governance rules. However, they insisted that the involvement of local and regional authorities in the definition of the new national mid-term fiscal plans must be mandatory. The adoption by the CoR commission comes just one week before national ministers assess the proposed reform of the economic governance framework at the Economic and Financial Affairs Council.

The rapporteur Elio Di Rupo (BE/PES), Minister-President of the Wallonia Region, said: “The status quo is not an option. Reform of the EU’s economic governance is inevitable given the impact of the COVID-19 pandemic and the war in Ukraine. There is a need for investments into the green and digital transitions of €650 billion per year over the next decade and almost €200 billion per year for social infrastructure. To strengthen public investment, the very least would be to exempt all expenditure incurred by Member States and local and regional authorities as part of Cohesion funds co-financing and Union programmes from fiscal surveillance.“

The opinion will be voted upon at the Plenary session of the CoR in October. For more information, please consult the related press release here.

During the meeting, ECON members debated on the draft opinions “Net Zero Industry Act“, prepared by Mark Speich (DE/EPP), State Secretary for Federal, European and International Affairs and Media of the State of North Rhine Westphalia, and “Critical Raw Materials Package“ drafted by Isolde Ries (DE/PES), Mayor of West Saarbrücken District. Members supported reducing dependency on net-zero energy technologies through the circular use of resources, but stressed that regional dependencies should be identified, as well as the consequent need for regions to take action to build sustainable and innovative value chains. Moreover, rising demand for raw materials also means growing dependence on countries rich in such materials. Many producer countries do not meet the EU’s environmental and social standards. At local level, this can lead to poorer mining conditions for people and the environment, and even military conflicts and corruption. It is therefore crucial to strengthen the preparedness of local and regional authorities for possible disruptions in supply chains and to develop reserves in the European Union to achieve strategic autonomy for critical raw materials.

ECON members further discussed the just and sustainable transition for automotive regions which is the key concern of the Automotive Regions Alliance. They highlighted that political and financial support from the EU for the automotive regions is needed in order to ensure a just and socially sustainable transition to a climate-friendly economy. The Alliance calls for the establishment of a European mechanism for the automotive regions comparable to the Just Transition Fund which is particularly important for the upskilling of workforce in this industry. On Monday, the Chair of the Automotive Regions Alliance and Saxon State Minister for Regional Development, Thomas Schmidt (DE/EPP), was invited by Thierry Breton, Commissioner for the Single Market, and Nicolas Schmit, Commissioner for Jobs and Social Rights, to discuss the social impact of the ongoing transition in the automotive industry and made clear the demands of the Alliance.

Finally, members of the ECON commission had a first exchange of views on the draft opinions “EU Cyber Solidarity Act and Digital Resilience“, by Pehr Granfalk (SE/EPP), Member of Solna Municipal Council, and “2022 Annual Report on Competition Policy“, prepared by Antonio Mazzeo (IT/PES), President of the Regional Council of Tuscany.

Background:

The Automotive Regions Alliance is a political network of regions committed to the successful transition of the European automotive and supply industry. The CoR is currently preparing a draft opinion on the just and sustainable transition for automotive regions, by rapporteur Sven Schulze (DE/EPP), Minister for Economic Affairs, Tourism, Agriculture and Forestry of Saxony-Anhalt, which aims to contribute to the ongoing transition process and to develop strategies on how these regional processes can be supported through a multi-level dialogue and EU Cohesion Policy.

As a response to the American Inflation Reduction Act, the European Commission published its proposal for a Net-Zero Industry Act (NZIA) on 16 March. The proposal is part of the Green Deal Industrial Plan with the overall goal of enhancing the competitiveness of Europe’s net-zero industry and supporting the fast transition to climate neutrality. The NZIA aims to scale-up clean tech manufacturing in the EU with the ambition that the EU’s strategic net-zero tech manufacturing capacity should reach at least 40% of the Union’s annual deployment needs by 2030.

The Critical Raw Materials Act, proposed by the Commission on the same day, leverages the strengths and opportunities of the Single Market and the EU’s external partnerships to diversify and enhance the resilience of EU critical raw material supply chains. The Critical Raw Materials Act also improves the EU capacity to monitor and mitigate risks of disruptions and enhances circularity and sustainability.

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June 13, 2023
EIB and EC instruments to support a just transition in mining regions
[vc_section][vc_row][vc_column][distance desktop_type=”30″][lvs][distance desktop_type=”30″][vc_btn title=”Source – European Investment Bank” color=”sky” i_type=”material” i_icon_material=”vc-material vc-material-perm_device_information” add_icon=”true” link=”url:https%3A%2F%2Fwww.eib.org%2Fen%2Fpress%2Fall%2F2023-208-just-transition-conference|target:_blank”][distance desktop_type=”30″][vc_column_text]
- The European Investment Bank (EIB), the European Commission and the Silesian Region have held a conference on loan and grant instruments that can be used under the Just Transition Mechanism.
- This financing can aid public and private investment in regions hardest hit by Europe’s ongoing transition to a climate-neutral economy.
The Just Transition Mechanism is one of the key elements of the European Green Deal — the European Union’s plan to achieve climate neutrality in Europe by 2050. The mechanism consists of non-repayable funds (grants) from the first pillar, the Just Transition Fund, as well as repayable and combined instruments from the second pillar, the Just Transition scheme under InvestEU, and funds from the third pillar — the Public Sector Loan Facility. The instruments are supported by a wide range of advisory support.

Under the Just Transition Mechanism, the European Commission provides support to Member States that have identified territories which are already affected or will soon be hardest hit by the transition to climate neutrality. The Just Transition Fund is the first pillar of the mechanism. It supports the economic diversification and reconversion of areas undergoing transition through, among others: the up- and re-skilling of workers, investment in small and medium-sized enterprises (SMEs), the creation of new businesses, research and innovation, improving the environment, investment in clean energy, job-search assistance, and the transformation of existing carbon-intensive installations.

The second pillar of the mechanism is the Just Transition scheme under the InvestEU programme. The goal of the programme, thanks to EC guarantees, is to mobilise both private and public investment, characterised by higher levels of risk, in just transition regions. The InvestEU programme focuses on four areas that reflect key EU policy priorities: (a) sustainable infrastructure; (b) research and development, innovation and digitalisation; (c) SMEs and (d) social investment and skills.

Thanks to an agreement between the European Commission and the EIB, regions most affected by Europe’s transition to a climate-neutral economy will be able to take advantage of the grants and loans available under the Public Sector Loan Facility, the third pillar of the Just Transition Mechanism. This facility aims to support the transition away from fossil fuels in a way that is fair and beneficial to all — including communities whose livelihoods have previously relied primarily on mining or on other industries with a negative impact on the environment.

The Public Sector Loan Facility allows public entities that plan to implement investment projects in affected regions to benefit simultaneously from EIB loans and EU grants, thereby reducing the financial burden on state budgets. The projects that are eligible for funding are those located in or benefiting territories which, in accordance with the Just Transition territorial plans presented by Member States and approved by the Commission, face the greatest challenges in terms of moving away from fossil fuels and carbon-intensive industries. In Poland, the following districts can expect to receive support under the Just Transition Mechanism: Konin, Wałbrzych, Piotrków, Sieradz, Rybnik, Bytom, Gliwice, Sosnowiec, Tychy, Katowice, Bielsko and Oświęcim.

The EIB will make available up to €10 billion in funding by 2027 to spur investment to reduce the socioeconomic costs of the transition, thereby facilitating the creation of new businesses, jobs and infrastructure.

EIB Vice-President Teresa Czerwińska explained, ”Moving away from fossil fuels is essential to curb global warming and should be a priority regardless of the difficult macroeconomic conditions and the war in Ukraine and its aftermath. Funds from the Just Transition Mechanism are meant to streamline this process and to bring financial relief to those EU regions where these funds are needed the most. Several regions in Poland are eligible, and we hope that this funding will support the transition and local development.”

During her speech, Commissioner Elisa Ferreira of the European Commission stressed that “Poland is one of the most carbon-intensive countries in Europe. This puts Poland at the forefront of the ongoing energy and climate revolution. It is also the reason why Poland receives the highest share of support among EU countries under the Just Transition Mechanism. Several regions of Poland — including Silesia, where we are meeting today — are particularly vulnerable.”

“Issues related to the disbursement of funds from the Just Transition Fund are no longer a matter of discussion, but of implementation. We have held meetings with representatives of the trade unions and have had another meeting with the Vice-President of the European Commission, Frans Timmermans. Step by step, we are indicating the areas where money from the JTF will be invested — and let me remind you that the sum involved is €2.2 billion. In a sense, our transition must be ‘smart’: We must be able to create new branches and areas within industry whose common denominator will be environmentally friendly technologies. It is highly likely that the mining sector will be gradually closed down over the coming years. The trade unions have signed a social agreement in which they have consented to this scenario. With this in mind, therefore, we need to create completely new industries. An important challenge is the revitalisation of post-industrial and former mining areas, which must be given a new lease on life. New jobs will be created there in the future. The Silesian Region, in cooperation with the Central Mining Institute, has completed the important task of carrying out an inventory of these areas, which has been under way since 2019. The region has approximately 330 former mining areas, and 270 post-industrial sites. Their ownership status varies. As a local government official, I would certainly prefer it if these areas were handed over to local governments, but it is nevertheless a very clear map for investors. What the future holds for these areas, only time will tell,” said Marshal of the Silesian Region Jakub Chełstowski.

“Now, even more than five years ago — when we proposed in the European Parliament the establishment of the Just Transition Fund — it is clear why such instruments are so needed in the European Union. Today, they are no longer just tools to fight smog or, more broadly, to protect the climate and the environment and to ensure that everyone receives adequate assistance during these essential transformations. Today, with Russia’s criminal attack on Ukraine and — finally! — our disconnection from Russian energy supplies, thanks to which Putin built his empire, the Just Transition Mechanism not only translates into economic and energy security, but also preserves our very existence. That is why it is also so important that the EIB is not only a climate bank, but above all an energy transformation bank, and that the funds it provides are used properly and efficiently in the EU regions in greatest need, such as Poland’s Silesian Region,” said Jerzy Buzek, Member of the European Parliament.

Just Transition Mechanism

The abandonment of coal mining and industrial production and energy generation using methods that generate large amounts of CO₂ entails a number of changes, namely:
- energy transformation, the aim of which is to find new sources of heat and electricity generation;
- ecological transformation, which involves, for instance, the cleaning up former mining areas;
- socioeconomic transformation, which is aimed at attracting new businesses and thus compensating for job losses and declining tax revenues;
- infrastructure transformation, which is a prerequisite for attracting new industries to the regions concerned.
The Just Transition Mechanism, which is a key element of the European Green Deal, addresses the social and economic costs associated with the transition to a climate-neutral economy. The mechanism supports projects located in Just Transition Mechanism regions identified by Member States and the Commission in Just Transition territorial plans or in areas where the implementation of projects will benefit JST regions.

The mechanism consists of three financial pillars: (a) the Just Transition Fund, (b) the Just Transition scheme under InvestEU, and (c) the Public Sector Loan Facility. The EIB supports all three pillars as described in the study entitled “Supporting the Just Transition Mechanism – comprehensive proposal of the EIB Group”. The InvestEU Advisory HUB, JASPERS, Target, and the Just Transition Platform also provide extensive advisory support.[/vc_column_text][distance desktop_type=”30″][/vc_column][/vc_row][/vc_section]
June 13, 2023