Gas companies look set to pollute Europe’s recovery fund

A vote in the European Parliament this week opened the door to new fossil gas projects in the European Union’s recovery fund. With the final negotiations around the corner, this may be the moment of truth for the European Green Deal.

Gas companies are eyeing up Europe’s biggest pot of cash set aside to help governments recover from the Covid-19 crisis.

In a Parliamentary vote this week, MEPs in the committee for economic and budgetary affairs refused to rule out that taxpayers’ money will be used to fund projects aimed at expanding the production and use of fossil gas across Europe.

The MEPs voted on the Recovery and Resilience Fund, which is the largest financial mechanism in the EU’s €750 billion recovery fund. It allows the EU to gather additional funds in its next budget that will include a 40% climate and biodiversity spending target, as agreed by the Parliament and member states also this week.

The move drew criticism from green groups which criticised MEPs for defying a previous vote in the Parliament’s environment committee explicitly calling for fossil gas subsidies to be excluded from the fund.

Barbara Mariani, a senior policy expert at the European Environmental Bureau (EEB), said that “it’s time to stop funding new projects that directly undermine the green objectives detailed in the Recovery Fund and in the European Green Deal.”

See open letter from civil society

Similarly, Silvia Pastorelli of Greenpeace EU lamented that “MEPs have blown their chance to secure a green recovery that rules out fossil fuels, and have handed the pen to gas lobbyists to write the rules.”

The vote was seen as a compromise amongst all political groups and was pushed through by conservative and liberal parties, which have made no secret of their support for fossil fuel industries despite calls for climate action.

Green MEPs reportedly accepted the deal after securing the inclusion of green spending criteria to be further defined in the upcoming taxonomy – a tool that will guide upcoming green investments in the EU.

Progressive lawmakers hope to set strict criteria for investments in new gas projects. However, NGOs fear the worst as the taxonomy has also recently been targeted by fossil gas lobbyists, and many MEPs have already echoed their demands.

Accepting this week’s vote as its final position, the Parliament now has a mandate to start negotiating the details of the Recovery and Resilience Fund with national governments and the Commission in what are known as trialogues. The first trialogue is expected to take place before the end of the month.

Put your money where your mouth is

The news comes as NGOs are increasingly concerned about the European Parliament’s position on green spending. From a recent decision to channel hundreds of billions to intensive and climate wrecking farming, to this week’s vote leaving the door open to new gas projects, the credibility of European Green Deal is at stake.

In an opinion piece published last week, EEB Secretary General Jeremy Wates and Greenpeace EU Director Magda Stoczkiewicz warned of “massive push by a large part of what is supposed to be the greenest European Parliament ever to include gas” in Europe’s recovery mechanisms and Green Deal.

Gas pipelines

The problem goes well beyond the Recovery and Resilience Facility and the taxonomy. After the summer, the European Parliament approved a loophole to include new gas projects in the Just Transition Fund – another financial mechanism aimed at funding the transition to clean energy and green jobs in Europe’s most coal-dependent regions.

Riccardo Nigro, an industry expert at the EEB, warned that ‘You don’t move away from fossil fuels by spending billions to expand their production. It’s high time to end fossil fuel subsidies once and for all – financial aid must focus on communities to help them shift to renewables, not fossil gas.”

The Parliament is currently negotiating the Just Transition Fund with the member states, some of which also support the inclusion of fossil gas subsidies. A final decision is expected by the end of the year.

The gas trap

From pipelines to power plants, new fossil gas projects are incompatible with Europe’s goal of limiting global temperature rise to 1.5°C, as agreed under the Paris Agreement.

Methane, the main component of fossil gas, is the second most damaging greenhouse gas and is responsible for a quarter of all global warming.

However, gas companies have been promoting gas as a ‘clean’ alternative to coal. In 2016, Brussels-based lobby groups have reportedly spent over €100 million to push for more investments in gas infrastructure.

“The more gas infrastructure we build, the further away we get from our decarbonisation goals,” said the EEB’s Jonathan Bonadio, pointing out that gas infrastructure is expensive and, once built, will lock Europe into burning fossil fuels for decades. “It’s like gambling with taxpayers’ money.”

“Whether Europe can overcome the climate crisis efficiently will depend very much on the investments we’ll make in the next few years,” he concluded.