Published on January 4, 2018

What you should know about the Slovakian coal phaseout announced in Paris

, Juraj Melichár (CEPA, Bankwatch)

The Slovak Minister of Environment László Sólymos announced a phaseout of coal mining in Slovakia and an end to burning coal in the Novaky power plant by 2023 during the One Planet Summit on 12 December 2017.

Located practically in the center of Slovakia, Upper Nitra is one of the three pilot regions in the new Platform for Coal Regions in Transition, founded by the European Commission at the end of 2017 with the aim to assist regions looking for alternative ways to develop to coal.

At first glance, it seems the Slovakian government – with assistance from the European Commission – is determined to clean up the energy sector and economy. But, on a closer look, things are more complicated. If the European Commission is keen to offer support for a just transition in the Upper Nitra region, there are a few more details to take into account.

Importantly, while the government announced a coal mining phaseout, the mining company in Upper Nitra is still considering opening a new mine in the region, which they argue is necessary to fuel the Novaky power plant up until its closing time.

There are five key elements in a discussion about the future of the Upper Nitra that all actors wanting to help out the region transition away from coal must take into account:

1. There’s a plan to open yet a new mine in the region

While the government speaks about a phaseout, the mining company HBP plans to extract 5-9 million tons of lignite in a new (the 12th) mining field between 2023 and 2034. The environmental impact assessment procedure for the new field restarted in September 2017 after a failed first attempt in 2016.

The opening of the new mine is estimated to cost EUR 27-30 million. HBP had already received EUR 17 million of state aid between 2007 and 2010 for the opening of the 11th mining field in the area, which involved the relocation of the Nitra river.

The Hungarian Ministry of Environment got involved in the transboundary environmental impact assessment for the 12th field and the Romanian one requested more information from Slovak authorities. According to the EU Water Framework directive, Slovakia has the obligation to refrain from authorizing any activities that could deteriorate the status of the Nitra River, particularly if this authorization has been given before 2021.

2. The Novaky power plant might burn redevelopment money

While the European Commission supports a coal phaseout in Upper Nitra, for the moment it is still unclear whether precious millions of euros that could be used for the redevelopment of the region will not be wasted on supporting the activity of the highly polluting Novaky power plant.

In 2015, the Novaky power plant was the second worst power plant in the EU when it comes to SOx emissions and the worst one in SOx emissions per installed capacity.

The electricity company, Slovenske elektrarne (SE), has been complaining for years that the Novaky power plant is obsolete and unprofitable and operates only due to the political decision of the Slovak government.

In 2015, EUR 40 million were invested in the modernisation of the plant’s boilers. The emission limit for the first and second boiler in the Novaky power plant decreased from 400 to 200 mg/m3 since 2016, the third and fourth boilers were closed as they had catastrophically high emissions. Even with this modernisation, SE does not plan to operate the power plant after 2021 due to technical reasons.

At the same time, the Slovakian government plans a closure of the plant after 2022-2023, which means further investments might have to be made in modernisation in order for the plant to keep up with new emission standards (2021 will bring further tightening of the 2016 standards). These would be investments of millions of euros made for a plant that would operate only a couple of years – money that might be better used for the redevelopment of the region.

Alternatively, the company might decide to occasionally operate an unmodernised third block just to meet the production requirements set by the government – it has done it before – which would come with major pollution.

Between Nov 2016 and Feb 2017, the third boiler operated ‘exceptionally’, in a so-called ‘operational experiment’, and SO2 emissions grew alarmingly. The Minister of Environment informed the mayor of a nearby city by letter that the sulphur dioxide emissions during the ‘operational experiment’ were ten times higher than the allowable emissions limits.

Despite burning approximately 200,000 tonnes of brown coal in the third decommissioned boiler in that period, HBP and SE were still not able to produce the amount of electricity required by the government in that period.

It is unclear what will happen with the Novaky power plant after 2021…

HBP has projects to replace approximately 96 MW of heat power with an incinerator that will burn up to 60,000 tonnes of municipal waste alone or together with coal. This would undermine Slovakia’s efforts to meet EU recycling targets, which are already insufficient at around 14.9 per cent of municipal waste recycled in 2015. It might also have a significant negative impact on air pollution.

3. Current planning does not include relevant stakeholders

It is best to solve almost any problem by including most of the relevant stakeholders, as the experience from other coal regions or participatory budgeting schemes show. It would be great if the Platform for Coal Regions in Transition would help bring together the local, regional and international levels.

So far, this kind of broad cooperation is missing in Slovakia. The Slovakian government organised an internal roundtable discussion in July 2017 – at the national level – only with representatives of HBP, the European Commission, relevant ministries and the administrative region.

Afterwards, the mayor of Prievidza organised a separate roundtable discussion about the future of Upper Nitra in September 2017, which was not attended by the regional and national stakeholders as they were busy with the pre-election period. During this local meeting, various stakeholders requested the possibility to participate in decision-making about the future of their region also at the national level. Local employers said they battled a shortage of qualified workforce and could use more information about the labour that would be freed if mines are closed.

Another discussion about just transition was organised with representatives of the Commission, Slovak government, mayor of Prievidza, HBP and German expert NGO E3G in October 2017.

What these meetings show is that there is a need for more coordination between the various levels of decision-making and for more inclusion of the impacted communities themselves. Without a quality participatory process, it is hard to imagine that a just transition of the Upper Nitra is possible.

4. The future of Upper Nitra cannot be left only up to foreign investors

The Prievidza district, where Slovakian coal mining is concentrated, belongs to the Upper Nitra region, part of the Trencin administrative area. The rate of unemployment in the Prievidza district (135,750 inhabitants) was 6.06 per cent in October 2017, in comparison to 10.58 per cent in October 2015. The mining company

Hornonitrianske bane Prievidza

(HBP) employs approx. 3,500 people, including 800 people in annex activities such as engineering tomato cultivation, fish breeding etc. The average monthly salary in HBP in 2015 was EUR 890. HBP claims that 11,000 jobs in the region are dependent on coal mining in total. On the other hand, the possible expansion of coal mining in Upper Nitra threatens the 900-year-old tradition of the Bojnice spa and its 300-1000 jobs.

According to the Ministry of Economy of Slovakia, the main hope for mining workers is for new investors to enter the region and create new jobs at adequate pay. But relying exclusively on the whims of foreign investors is risky, as Slovakia, one of the most open EU economies, has discovered over time. These jobs may or may not come and, even if they do, they may be precarious – this has happened in post-coal regions time and again.

Even more, overreliance on foreign investors does not leave much space for local people to shape their own future. A discussion about the future of the region, involving the concerned local communities, seems crucial at this stage. The assumption that foreign investors will come in and save the day is just not enough.

5. The European Union can help with the just transition

EU funds are crucial for retraining and economic diversification of the region. The Commission states that regions can also utilise the European Globalisation Adjustment Fund (EGF) for their development under certain conditions, such as the loss of more than 500 jobs in a particular company, sector or region as a result of major structural changes in world trade patterns caused by globalisation. Together with the European Investment Bank, the Commission also launched the URBIS – Urban Investment Support service – which provides tailor-made technical and financial counselling in cities willing to innovate.

We need to connect local, regional and national stakeholders for expert discussions on the just transition of the Upper Nitra region. Only if all stakeholders are involved could we hope to achieve a fruitful cooperation which can help overcome the challenges associated with the redevelopment of the region.