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The European Investment Bank (EIB) decided this week to invest €1.5bn in a natural gas pipeline connecting Italy, Greece, and Albania – despite MEPs having requested a vote on such preferential treatment given to fossil-fuel gas projects, reported EUobserver.
The bank's decision has been heavily criticised by environmental groups, who said it was "one of Europe's largest ever loans to one of the EU's largest fossil fuel projects".
Among the concerns is that the project will increase greenhouse gas emissions, and that the use of gas will be prolonged beyond what some scientists say is the final gas phase-out deadline if Europe is to keep up to its Paris treaty promises.
The project is called the Trans-Adriatic Pipeline (TAP), and it is part of a larger concept, the Southern Gas Corridor.
The latest would transport natural gas from Azerbaijan, through Turkey, to Europe. The TAP would be the last leg of the gas route.
An environmental assessment released by the EIB last week acknowledged that the project "has attracted intense scrutiny by stakeholders, press, and civil society including international NGOs".
According to a separate statement on the EIB website, supporting TAP would increase security of gas supply and reduce energy dependence.
It would be an alternative to the natural gas coming from Russia via Ukraine – and reduce the geopolitical risk of Russian gas sanctions on Europe.
According to the European Commission's most recent report on the gas market, Russia supplied 44 percent of the EU's imported gas in the third quarter of 2017, followed by Norway with 33 percent.
The TAP pipeline would transport ten billion cubic metres (bcm) of natural gas per year, the assessment said.
Forecasts by the International Energy Agency say that the EU will need 464 bcm of natural gas in 2018, but only 459 bcm in 2021, and 458 bcm in 2022.
The EIB's assessment however, highlighted that domestic natural gas production in the EU was declining faster than demand, so imports were expected to increase.
Some NGOs question whether relying on Azerbaijan and Turkey for gas is that much better than being dependent on Russia, given their human rights track records.
But the EIB statement noted that the EU "has a policy of constructive dialogue and engagement with Azerbaijan, and maintains a continued policy dialogue on issues such as human rights and civil society organisations".
The EIB also said in the statement that natural gas is "a relatively low-carbon fossil fuel" – meaning, compared to coal-fired power plants or oil.
The EIB's environmental assessment said that the annual greenhouse gas emissions resulting from the gas flowing through the pipeline would be the equivalent of 476,000 tonnes of CO2.
According to the Environmental Protection Agency (EPA) emissions calculator, that is roughly equivalent to burning a million barrels of oil, or an average car driving a stretch of 1.9bn kilometres – or almost 47,000 road trips around the equator.
But some say that the way CO2-equivalent is calculated for natural gas pipelines is underestimated, because of the poorly documented phenomenon of leakages of methane gas – a very potent greenhouse gas which traps around thirty times more heat than CO2.
A report by the civil society group CEE Bankwatch and Spanish research foundation Debt Observatory in Globalisation said that the total emissions until 2050 for the entire Southern Gas Corridor – the whole stretch from Azerbaijan to Italy – could amount to between 3.9bn and 6.5bn tonnes of CO2-equivalent.
There are also concerns over how the expected lifespan of the pipeline relates to long-term climate action.
At the international climate conference in Paris in 2015, the EU and 195 other nations promised that they would do their utmost to limit global warming to 2C, and if possible to 1.5C – currently the average temperature rise compared to the pre-industrial age is already at 1.1C.
According to Colin Roche, campaigner for environmental lobby group Friends of the Earth Europe, the EIB was "shamelessly locking Europe into decades of fossil fuel dependency even as the window for fossil fuel use is slamming shut".
The company behind TAP expects that it will be operational in 2020, and run until at least 2070.
However, a recent study by two researchers from the University of Manchester & Teesside Universitysaid that if Europe wanted to keep its Paris promise, it would have to all but stop burning fossil fuels by 2035.
The study was commissioned by the Friends of the Earth Europe group (which complied with a request from this website to provide the tender to the study – which did not seem to steer the researchers in any direction.)
The EIB's assessment said that emissions from TAP would be lower than if gas imports from Russia would be increased, "due to the age and design of Ukraine's transmission system".
It also assumed that Nord Stream 2, which would bring Russian gas via the Baltic Sea to northern Europe, would not be more climate-friendly than TAP.
The environmental assessment did not compare the project's carbon footprint if natural gas were replaced by another fuel.
Another justification given in the EIB press statement, was that the TAP project is classified as Project of Common Interest (PCI).
The PCI list contains energy-related projects that are considered to be of pan-European importance and therefore deserve fast-track treatment by authorities, for example when applying for permits.
The EU commission updated the PCI list last November, and indeed TAP is still on there.
However, the list needs to be approved by the European Parliament before it can become law.
Last month, MEP filed a request with the parliament's environment committee to have a vote about the list, because they believed that it was too focussed on supporting gas projects.
That vote has not happened, which means in theory that the commission could still remove TAP or other gas projects from the PCI list, and submit a new one to the parliament.
On the other hand, TAP and the wider Southern Gas Corridor enjoy great support among the commission's two chief energy officials – Energy Union commission vice-president Maros Sefcovic and climate action commissioner Miguel Arias Canete.
Following a freedom of information request by the environmental and development NGO Counter Balance, the commission released a letter written by Sefcovic and Canete.
In July 2017, the duo wrote directly to EIB president Werner Hoyer, stressing the importance of the Southern Gas Corridor, and TAP in particular.
"Now that the projects have successfully reached the capital intensive construction phase, their promoters need to urgently secure adequate funding; Europe's commitment must therefore not wane," they wrote.
The decision to make the €1.5bn investment was done on Tuesday by the EIB's board of directors, which consists of 29 members – one nominated by each EU member state, and the European Commission.
According to the press statement released this week, the decision was taken after "detailed discussions".
EUobserver asked the bank's chief spokesman to describe the arguments used in favour and against the project during those discussions.
"Discussions in the board and between board members and civil society ahead of the board meeting covered considerations linked to EU energy policy, climate, human rights, transparency and compensation linked to resettlement," spokesman Richard Willis merely said.
When asked to specify, he said he could not comment on board discussions and procedures.
Read more at euobserver.com
show source https://euobserver.com/energy/140926