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These Countries Could Receive $21 Billion To Go Green, But Keep Burning Coal Instead

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Seven European nations that are to be awarded billions of dollars to help them go carbon neutral are planning to stick with coal-fired electricity generation until at least 2030, a new report has revealed.

Further, 11 out of 18 EU countries reviewed do not have a plan to phase out coal by that year—a target considered necessary to meet the Paris Agreement goal of limiting global warming to 1.5 degrees Celsius this century.

The findings raise questions about the effectiveness of the European Just Transition Fund, a financial vehicle intended to enable less prosperous, fossil fuel-dependent regions to develop into low-carbon economies. It’s part of the trillion-euro European Green Deal, the ambitious plan to take the continent carbon neutral.

In an analysis of 18 European countries’ national energy and climate plans (NECPs), environmental think tank Ember and the Climate Action Network (CAN) Europe found that only nine explicitly stated they would phase out coal by 2030.

Seven countries—Bulgaria, Croatia, Czechia, Germany, Poland, Romania and Slovenia—intend to continue using coal through 2030, with Poland using and producing more coal than any other European state, as revealed by Ember in an earlier report. By 2030, the eastern European nation will be responsible for 45% of the EU’s coal power capacity.

But astonishingly, under current proposals, those same seven countries are set to receive two thirds of the $21 billion Just Transition Fund intended to enable nations to catch up with their greener neighbours. Poland, despite not committing to end coal use, could potentially receive the largest share of any EU nation.

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Elsewhere in Europe, Greece, Hungary, Ireland and Italy, four nations that do have plans to phase out coal by 2030, will replace much of that capacity with another fossil fuel: natural gas. Some 10% of the transition fund money has been earmarked to go to these nations.

The report authors note: 

“While the Just Transition Fund is supposed to accelerate the transition towards climate neutrality in the coal and other carbon intensive regions, the current allocation methodology does not take into account the speed of Member States’ planned energy transition. Nor does it sufficiently account for the climate compatibility of the transition.”

But report author Dave Jones, senior electricity analyst at Ember, told Forbes.com that the analysis also contains some good news. For one thing, among the 11 countries phasing out coal, seven—Denmark, Finland, France, Netherlands, Portugal, Slovakia and Spain—are going directly from “coal to clean,” meaning they are replacing coal generation with renewable energy instead of gas or nuclear. 

“Overall, European gas generation is falling,” Jones said, “because the new-build of wind and solar is exceeding shutdowns of coal and nuclear and the extra electricity demand.”

Furthermore, even among the seven states that are retaining coal, that coal use is falling: Jones pointed out that coal capacity was forecast to fall 42% by 2030. “That leaves just 52 gigawatts of coal plants left in Europe; today EU-27 operational coal capacity is 138 gigawatts,” he said.

But Jones questioned the wisdom of awarding billions of dollars in green funding to states that were holding onto coal. “That's not very clever when such huge amounts of money don't deliver significant climate benefits,” he said. “I would describe the Just Transition Fund as a work in progress.” 

To that end, Ember and the Climate Action Network are recommending that the allocation of such funds must come with specific conditions—namely that all forms of fossil fuels are excluded from the scope of the fund.

“As one of the first pieces of legislation of the European Green Deal, the Just Transition Fund must live up to its name by supporting real transition, not talk,” said Elif Gündüzyeli, senior coal policy coordinator for CAN Europe. “If the EU wants to show commitment to the Paris Agreement, no coal power plant should be operational beyond 2030.”

It remains to be seen whether the EU will put safeguards in place to ensure that much-needed climate cash will be used appropriately. But the findings also offer lessons for other parts of the world. In the U.S., presidential hopeful Joe Biden has pinned key components of his environmental policies to such a plan, given the deep economic disparities between and within states. Should he overcome Donald Trump in November’s election, which many climate scientists agree would be the more desirable outcome, Biden would do well to pay close attention to the European experience.

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