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Platform Initiative launched to help energy transition of coal regions in Western Balkans, Ukraine

Photo: World Bank

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December 12, 2020

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Published:

December 12, 2020

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The Platform Initiative in Support of Coal Regions in Transition in the Western Balkans and Ukraine has been officially launched, with the aim of helping the countries to stop using coal in energy production.

Energy transition and coal phaseout must be just in order to be successful, which means that workers and local communities in the coal regions must not be left behind. The way to achieve this is to include them in all decision making, according to an online event held to inaugurate the Platform Initiative.

The Platform Initiative is led by the World Bank together with several partners who play a major role in the energy sector as well as the region – the European Commission, the Energy Community Secretariat, the European Bank for Reconstruction and Development (EBRD), the College of Europe (Natolin campus), and the Government of Poland.

In practice, this will be a platform for stakeholders from across the region to share knowledge on all aspects of energy transition. It will also connect coal regions in the EU with those in the Western Balkans and Ukraine through twinning projects, strengthen institutional capacities through a learning academy, provide technical assistance for coal regions to develop transition plans, and secure financing for transition projects.

Day-to-day operations of the Platform Initiative will be run by a Technical Secretariat, whose launch is expected in January 2021.

The burning of coal must not continue

Linda Van Gelder, Country Director for the Western Balkans Region at the World Bank, said that the burning of coal must not continue, and that cutting emissions from energy production is the most important task if the world is to achieve the climate goals.

She said that from now on the Western Balkans Investment Framework (WBIF) will be able to assist transition in the mining sector as well, becoming a source of financing for coal phaseout projects.

Solutions will need to match the local conditions in each region

Transitioning away from coal, according to her, requires cooperation between coal regions in the EU and those in the Western Balkans and Ukraine. Another important task is re-training and education in order to prepare residents of coal regions for jobs of the future. Finally, comprehensive environmental reclamation is needed to enable the re-purposing of land in order to create the space and opportunities for private sector investors, according to Van Gelder.

The coal phaseout is going to be a very long journey, and the assistance will need to match the local conditions in each region, because they are very different places, said Van Gelder.

Catharina Sikow-Magny, director for the internal energy market at the European Commission’s Directorate-General for Energy, said that a just transition is at the heart of the EU’s road map towards a climate-neutral economy by 2050, as envisaged in the European Green Deal.

The EU has realized it has to cooperate with neighbors to implement the European Green Deal

In 2017, the EU launched the Coal Regions in Transition Initiative to help the regions within the EU which lag behind on this path, she recalled. The initiative for the Western Balkans and Ukraine is very similar, and it is being launched because the EU has realized that implementing the European Green Deal requires cooperation with close neighbors, according to Sikow-Magny.

Pollution and greenhouse gas emissions know no borders, and energy flows between the EU and the Western Balkan and Ukraine must be based on a common approach when it comes to subsidies and the carbon-intensity of energy sources.

The Platform Initiative, according to Sikow-Magny, is largely based on the Western Balkans countries’ commitment to clean energy transition as expressed in the 2019 Podgorica Joint Statement.

The EU hopes to help the Western Balkans and Ukraine to phase out coal and build a new economy based on clean, renewable energy sources, she said.


NGOs call on the Platform to adopt four principles to ensure the success of this initiative

A total of 18 non-governmental organizations (NGOs) active in the Western Balkans and Ukraine have called for effective rules to be put in place from the start in order to ensure an inclusive transition away from all fossil fuels.

They urge the Platform to incorporate early on the following four principles, which, according to the NGOs, will ensure the success of this initiative:

  1. Adopting clearly defined, consistent, and measurable goals, set up within a clear time frame.
  2. Ensuring that all relevant groups (local communities, NGOs, trade unions, educational institutions, local businesses, etc.) are involved, from participation in the Platform’s meetings, to the selection of pilot regions, to project selection and implementation.
  3. Conditioning any funding channeled by this initiative on local and participatory plans, excluding any kind of support for fossil fuels, and incentivizing reasonably fast coal phase-out dates.
  4. Incentivizing the adoption of territorial just transition plans, which should be consistent at least with National Energy and Climate Plans (NECPs). If needed, to ensure consistency with achieving climate neutrality in the region by 2050, the just transition plans should go beyond the NECPs.

What the World Bank and the EU’s experience brings to the Platform Initiative

Each partner has pledged a different kind of assistance.

Christopher Sheldon, Sector Manager for Oil, Gas and Mining at World Bank, said the financial institution will bring to the table its experience from around the globe in dealing with problems in energy transition.

Miners’ pride must be taken into account

A big lesson from the bank’s experience, according to him, is that people’s social situation must be taken into account, targeting not only workers, but the whole community that relies on the coal industry.

The issue of social identity is also extremely important, because miners, according to him, are very proud, and they have an important social role that they now stand to lose. That is why it is important to be very sensitive when it comes to them, according to Sheldon.

The three-year experience of the EU’s Coal Regions in Transition Initiative will be invaluable for the Western Balkans and Ukraine.

Anna Sobczak, policy coordinator for the EU’s Coal Regions in Transition at the European Commission’s Directorate-General for Energy, said it is very important to engage all the right stakeholders from across the region – regional and local authorities, NGOs, coal mines and representatives of their trade unions, research centers, and universities.

The Platform’s Secretariat will create a database of stakeholders

They must jointly come up with a solution on how to help the region reach climate neutrality, she added.

Sobczak also said that six local workshops will be organized, and she called on those who would like to host such workshops to refer to the secretariat.

The Platform’s Secretariat will create a database of various stakeholders in the coal sectors in the Western Balkans and Ukraine in order to engage them. Perhaps the most important activity will be a twinning program for the coal regions from the EU and those in the Western Balkans and Ukraine that will enable peer-to-peer exchange of experience, according to her.

How to attract projects that will replace the coal-based industry?

Isabel Blanco, Lead Economist at the EBRD dealing with green economy transition issues, expects the Platform to create new jobs. The EBRD hopes to bring investment opportunities as well as appropriate policies to realize those opportunities.

Projects must deliver tailor-made solutions to the needs of communities

She expects the Platform to bring ideas for projects that will be part of a just transition, enabling the EBRD to provide financing. These projects, according to her, should deliver tailor-made solutions to the needs of particular communities.

It is important to understand that this is not about replacing a big industry with another big industry, but rather a big industry being replaced with smaller activities in different sectors, according to Blanco.

She is convinced that new projects will be attracted, but that this will require state incentives.

Dirk Buschle, Deputy Director of the Energy Community Secretariat, said that the organization is sometimes perceived as being “a little bit pushy,” but that its job is to implement laws aimed at setting an expiry date to the existing coal capacities.

There can be no transition if it is not just

It is important for the region to have a just transition, given the significance of social issues, he said, adding that “there can be no transition if it is not just.”

Nobody must be left behind, according to Buschle.

The Platform’s approach is sharing and exchange, which, according to him, is “better than preaching.”

Poland’s National Fund for Environmental Protection and Water Management (NFEP&WM) participates in the Platform on behalf of the Polish government. The fund has initiated twinning between coal regions in Poland and coal regions in Ukraine.

The social impact at the local level is the dark side of the transition

Poland is one of the EU member states with the largest consumption of coal in energy production, but it has begun to phase it out.

Artur Lorkowski, the fund’s deputy president, said that Poland would like to share the mistakes it has made in the transition with the Western Balkans and Ukraine so that they do not have to repeat them.

He said that people normally tend to talk about the successes of the transition, but that there is also a “shadow side,” mainly relating to the social impact on the local communities.

The number of miners in Poland has been reduced from 400,000 to 80,000

Lorkowski noted that the number of miners in Poland has been reduced from 400,000 to 80,000, but that this is still a lot of families that are dependent on coal mining, posing a huge challenge for the government.

Poland is now preparing for the final phase of the transition and is selecting projects that would be implemented in the coal regions by the middle of the century.

Speaking about the Learning Academy in detail, Marek Tabor of the College of Europe at Natolin said the academy will enable the participants to access knowledge and experience in the preparation and implementation of coal phase-out plans and the development of post-phaseout strategies.

The Learning Academy, according to Tabor, is meant for all stakeholders in the coal regions, but also state institutions and agencies.


Ioana Ciuta (Bankwatch): Ljudi u regionu nemaju poverenje u institucije

Ioana Ciuta from Bankwatch highlighted the problem of “a conflicting understanding” about what energy transition is and when it has to start. She noted that Bosnia and Herzegovina and Serbia are still planning new lignite mines and coal-fired power plants.

Interestingly, these two countries did not take part in this conference, which, according to her, begs the question of whether it means that they are not interested in the work of the Platform. She also said it is crucial that all the Platform stakeholders are on the same page.

Ciuta also stressed that people’s trust in authorities has been broken, which makes the transition more difficult since it is necessary to start with changes as soon as possible, and building trust will take time.


Distrust among miners is the main problem

What coal phaseout looks like in practice was the topic discussed by representatives of North Macedonia and Ukraine. North Macedonia is the first country that is considering a date for coal phaseout, while Ukraine has recently announced its plans to become climate-neutral by 2070, and to phase out coal by 2050.

Elena Markova Velinova, energy adviser at the Ministry of Energy of North Macedonia, said the country will shut down the Oslomej thermal power plant next year and gradually decommission the power generation units at coal-fired plant REK Bitola over the coming years. To replace these capacities, North Macedonia plans to build a hydropower plant called Čebren, as well as wind farms, solar parks, and gas-fired power plants, according to her.

Power plant closures without building new capacities would lead to a surge in energy imports

Norh Macedonia currently imports about 30% of the energy it consumes, and once we shut down coal-fired plants we will become an even bigger importer, she noted. It is therefore important to take one step at a time, and to build the Čebren hydropower plant, she said. Decarbonization must be carried out cautiously in order to make the transition as painless as possible, according to Markova Velinova.

In Ukraine, there are about 30,000 miners, but another 200,000 people depend on this sector. Valentyna Moskalenko, from the Ukrainian prime minister’s office, said the country is aware that its 29 mines cannot survive without subsidies, which is why it needs to carry out a transition.

The main problem at the moment is distrust among people in the coal regions, with one survey showing that miners cannot imagine their life without coal.

The government, according to Moskalenko, must work on convincing miners that there are other job opportunities.

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