Bankwatch

Signs of trouble: Drainage pipe near the pristine Bunica river spring causes outcry as Corridor Vc construction affects Mostar communities

Michaela Kozminova — Thu, 30 Jul 2026 11:50:30 +0200

The Bunica Spring, near Mostar, is one of the country's most important karst springs and a unique natural oasis. The river and surrounding landscape form an area of exceptional ecological value and provide a habitat for diverse wildlife. The Bunica also holds significant importance for the local community. Nearby households depend on the groundwater resources connected to the area and the river supports recreation, local livelihoods and everyday community life. Its ecological and social value has already prompted formal actions for stronger and lasting legal protection. Against this background, the decision to place such a large drainage outlet so close to the spring and river calls for much closer scrutiny.

Unexpected flash flooding after start of works

These concerns about the drainage pipe are connected to other concerns local residents have. Following the start of construction works on the Tunnel Kvanj section of Corridor Vc in late 2025, the nearby settlement of Parila experienced severe surface runoff and flash flooding after heavy rainfall. Residents observed that these events occurred after extensive earthworks and vegetation removal on the hillside above the settlement. [gallery size="medium" ids="156504,156506,156508"]

The scale of excavation and land disturbance associated with the installation of the drainage pipe near homes and cultivated land beside the Bunica River. Photo: Sead Šašivarević.

Soon afterwards, the community was shocked to see a huge underground pipeline, with an opening nearly nearly the height of an adult, emerging from the stripped hillside and pointing towards the Bunica River. No clear explanation of why it had been installed was provided by the authorities or project promoter JP Autoceste FBiH (JPAC), nor an assessment of how much water it could carry or what might happen when the next heavy rains came.

High risks in a sensitive ecosystem

[caption id="attachment_156512" align="alignright" width="368"] The emerald waters of the Bunica River, reflecting the surrounding forested karst landscape.[/caption] Local residents are concerned that the new drainage system may alter the natural hydrological regime around the Bunica River or harm its sensitive karst ecosystem. Residents are particularly concerned about the area’s groundwater, the private wells used for drinking water by nearby households, and the Bunica bathing area, which is currently being restored by the city of Mostar. They also fear that, during heavy rainfall, the pipe could release large volumes of muddy runoff into the river, causing severe turbidity. It is distressing to imagine this captivating, crystal-clear emerald river suddenly overwhelmed by a torrent of murky water. Residents are also seeking clarification as to whether the current drainage solution formed part of the original approved project or represents a design modification introduced after construction had already begun. In a statement published in the media, JPAC said that the drainage system does not discharge motorway runoff into the Bunica River. According to the company, the external drainage system collects only natural surface runoff that already flows towards the Bunica catchment, while motorway runoff would be collected separately, treated and discharged in accordance with the project documentation and water permits. The company further states that the project does not introduce additional water into the Bunica River, does not alter its natural hydrological regime and that the protection of the river has been an integral part of the project's design from the outset.

Where things stand in late July

The local community welcomes these assurances and appreciates JPAC publicly addressing the issue. However, JPAC’s response and their covering of the pipe’s discharge point have not fully eased the concerns that have been raised. Is it really necessary to place such a large pipe so close to the spring and one of the area’s most beautiful and sensitive rivers? Given the ecological and social importance of the site, the intervention appears to have been approached far too lightly. Better and less intrusive solutions may have been possible. If, on the other hand, the pipe was not part of the original design, this raises an equally serious concern: was it introduced hastily in response to problems that emerged during construction, rather than through careful and transparent planning? Additional official information became available in late July in a response issued by the Federal Ministry of Environment and Tourism to a parliamentary question. According to the Ministry, the drainage solution now being implemented was developed in response to uncontrolled surface runoff that occurred during motorway construction in late 2025 and affected several residential properties in the nearby settlement of Parila. The Ministry added that the solution had been agreed upon in early 2026 following discussions with affected residents, and that the drainage pipe was installed in June 2026. [caption id="attachment_156510" align="alignright" width="225"] A flap now covers the pipe opening, but the pipe has not been sealed or removed as requested by local community. Photo: Azra Duraković[/caption] This timeline raises additional questions regarding the permitting process. The environmental permit was issued in May 2019 —well before the drainage solution was developed to address the surface runoff that occurred during construction in late 2025. As a result, the local community is seeking clarification on the approvals, technical assessments, and environmental documentation that support this subsequent intervention. Although the Ministry’s response provides useful context on how and when the drainage solution was developed, it does not include the underlying approvals or the technical and environmental documentation requested by the community. As July draws to a close, neither this response nor JPAC’s public statement has fully addressed residents’ concerns. The initial relief at reports that the pipe had been sealed has also quickly faded. According to the latest information from the site, no cap has been installed to stop water from flowing through the pipe into the river. Instead, only a flap has been placed over the opening to prevent material from entering from the outside. Given this, residents are still seeking access to technical documentation and scientific evidence supporting these conclusions.

The community’s requests

Given the above, the community requests clarification from JPAC regarding:

the hydrological analyses demonstrating that the natural drainage regime of the Bunica River will remain unchanged;

the hydrogeological studies confirming that the drainage system will not affect the Bunica karst spring, groundwater or nearby private wells;

the technical justification for replacing an originally planned open drainage channel with a large underground pipeline;

whether alternative drainage solutions were assessed during the planning and design process, including options that would avoid or minimise discharge towards the Bunica River, and why the current solution was ultimately selected;

the complete design of the drainage discharge system, including the exact location and function of all discharge points, infiltration structures, retention facilities and any other components through which collected water is ultimately released or infiltrated;

the environmental assessment of potential impacts on the Bunica bathing area and local drinking water sources;

the technical criteria and hydrological modelling used to demonstrate that the selected drainage solution represents the optimal option for protecting both the local community from flooding and the Bunica River and its karst groundwater system;

whether the drainage solution currently being constructed represents a subsequent design modification after the initial environmental permitting process, and if so, through which approval procedure that modification was assessed and authorised;

the long-term monitoring programme that will verify the effectiveness of the proposed protection measures; and,

whether this design modification required amendments to the original project documentation, environmental approvals or construction permits.

[caption id="attachment_156500" align="aligncenter" width="626"] Clear waters of Bunica.[/caption] The local community is not opposing the construction of Corridor Vc. Rather, it is asking for transparency and access to the technical studies on which the company's actions were based. Given the exceptional ecological importance of the Bunica River and the international financing of the project, local residents believe that making this information publicly available would help build trust, strengthen dialogue and demonstrate compliance with both national legislation and international environmental and social standards. We respectfully invite the international financial institutions supporting the Corridor Vc project to review these concerns and encourage a transparent dialogue between the investor, the competent authorities and the local community. Ensuring public access to the relevant technical documentation and providing clear, evidence-based answers would strengthen public confidence that the Bunica River and its unique karst ecosystem are being effectively protected. Institutional silence will only further weaken the community’s already fragile trust. Projects carried out in the public interest should not be managed in this way. This unresolved situation shows why continued public scrutiny and strong environmental safeguards are essential. Protecting the Bunica is not only about protecting a river. Access to the relevant technical documentation, a clear explanation of how this location was chosen and evidence that less-intrusive options were considered would go a long way towards rebuilding trust and showing that both meaningful community involvement and the protection of the river were treated as genuine priorities.

‘Changing lives’ in Bishkek: The cost of a green transport failure

Michaela Kozminova — Thu, 16 Jul 2026 12:36:37 +0200

Wasted green investment

Between 2011 and 2018, the EBRD invested EUR 15 million in Bishkek’s public transport system through sovereign loans, helping the Kyrgyz capital expand its trolleybus network. Additionally, more than EUR 8 million in technical cooperation grants were approved, among other purposes, for the preparation of Bishkek’s public transport development strategy, the design of a new public transport route network, and a review of the city’s strategic planning documents, including its urban transport master plan. In 2020, the EBRD provided an additional EUR 25 million loan to finance the rehabilitation of a bus depot and the purchase of buses running on compressed natural gas (CNG), co-financed with a capital grant of up to EUR 8 million to support implementation of a Green City Action Plan for Bishkek. In April 2024, the City of Bishkek announced plans to replace the city’s trolleybus network with buses and transfer its trolleybuses to the City of Osh. Bishkek’s mayor said the transition would be supported by new financing from the Asian Development Bank (ADB), comprising a USD 25 million grant and a USD 25 million loan for the purchase of electric buses intended to replace 95 diesel and 25 outdated trolleybuses. The removal of the capital’s trolleybus network began in June, although Bishkek City Council did not formally approve the transfer of 100 of these trolleybuses to Osh until August. By November, trolleybus services had been completely phased out, resulting in public transport shortages, increased use of car and CNG buses, worsening air quality and carbon emissions, loss of jobs for public transport workers, and reduced accessibility for passengers with special mobility needs. The impacts of the reform of Bishkek’s public transport system over the past two years have been analysed by local researchers with the support of Bankwatch. Their findings show that ‘the fleet renewal alone has not made public transport genuinely attractive or efficient’, as only 18% of the active fleet can be described as fully comfortable, inclusive, safe and environmentally friendly.

Residents seek solution to no avail

Since May 2024, people in Bishkek have reached out to both the EBRD and the ADB, requesting information on the Banks’ positions regarding the loss of the city’s trolleybuses. They have raised concerns about the anticipated negative impacts of removing the city’s most inclusive and environmentally friendly mode of public transport, while demanding more transparency and public participation in decision-making. In May 2024, an open letter signed by more than 1,600 people was submitted to the Bishkek mayor’s office concerning the planned removal of the trolleybuses and the Osh transfer. In June, when the city authorities initiated a perfunctory public consultation, local residents and environmental experts used the opportunity to submit 300 individual written appeals to Bishkek City Council demanding the retention of the trolleybus system. Beyond the consultation process, opposition to the decision continued through peaceful artistic protests, as well as legal action. Instead of engaging with local residents and the two banks, however, the city authorities responded with silence, with police blocking public gatherings and carrying out illegal detentions. Yet, despite this official suppression, the protesters’ arguments received major legal backing from within the government itself. According to an official opinion issued by the Kyrgyz Ministry of Natural Resources, Ecology and Technical Supervision on 9 April 2025, the dismantling of the trolleybus system violated the Kyrgyz Republic’s Nationally Determined Contribution under the Paris Agreement and risked causing adverse environmental impacts. In an update issued on 18 March 2025, the EBRD announced that the trolleybus fleet through its final loan would be converted into electric buses. However, no details or assessments were provided to the public, raising more questions than answers. By mid-2025, the EBRD’s Bishkek trolleybus loans had been repaid.

Accountability and remedy for harm

In August 2025, the environmental organisation Bishkek Smog submitted a complaint to the EBRD’s Independent Project Accountability Mechanism (IPAM). They requested a problem-solving process, provided that the Kyrgyz authorities agreed to engage voluntarily and in good faith in facilitated dialogue. Alternatively, they requested a compliance review to determine whether the EBRD had followed its 2008 Environmental and Social Policy (ESP). Nearly a year has passed since the complaint was submitted, and with Bishkek decision makers unwilling to engage in a voluntary mediation process, it has become apparent that a facilitated problem-solving approach is no longer viable. Consequently, in a letter sent to IPAM on 1 July 2026, the requesters formally called on the mechanism to initiate a compliance review. This review now represents the main avenue for redress to determine whether the EBRD failed to follow its ESP, with the ultimate goal of developing a management action plan to remedy the harms caused by dismantling the trolleybus system.

What do requesters expect?

The August 2025 complaint, submitted on behalf of Bishkek’s affected residents, represents the interests of people with disabilities, women, young people, retired people, trolleybus company workers, and environmentalists, with support from by international organisations, experts and human rights defenders. The majority of these individuals requested confidentiality due to fears of reprisals. They highlight the environmental and social harms resulting from the loss of the trolleybuses:

violation of the right to access to information and public participation in decision-making;

loss of jobs for trolleybus company workers without providing opportunities for retraining and employment on CNG or electric buses;

increased air pollution in Bishkek, leading to health risks;

negative climate impacts due to failure to deliver long-term greenhouse gas emission reductions;

worsening reliability and quality of public transport services;

expected higher costs and barriers to affordable public transport services;

reduced accessibility for vulnerable groups, including people with disabilities, mothers and women (gender impacts); and

damage to cultural heritage.

While the requesters acknowledged the EBRD’s limited leverage to influence decisions made by the City of Bishkek, they argue that, according to the 2008 ESP, the EBRD should have initiated an environmental and social assessment of the consequences of dismantling the trolleybus system, including impacts on air pollution and employment. Such an assessment was either not carried out at all, or not conducted transparently with the participation of those whose lives were changed for the worse. The EBRD must be accountable for whether it took all measures available and required under its ESP to defend the public interest and ensure appropriate mitigation of adverse impacts resulting from significant material changes to its Bishkek transport projects.

Western Balkans gets second chance at just transition: Can new support platform deliver?

Dimitar Dimitrovski — Wed, 15 Jul 2026 10:09:52 +0200

Local authorities, trade unions and other stakeholders affected by the just transition in the Western Balkans have been eager for a support platform ever since the Initiative for Coal Regions in Transition in the Western Balkans and Ukraine (CRiT WBUA) ended at the end of 2023. The initiative wasn’t perfect, but it did create some forward momentum. Coal region redevelopment was again deprioritised in the Western Balkans after the end of the initiative, placing local authorities in the very difficult position of knowing what was coming but having very few options. With no dedicated EU funding stream, things were moving forward only in North Macedonia, where funding from the global Climate Investment Fund had been secured. But even there, progress remains limited. Two and a half years later, although there is still no dedicated EU funding for the transition of coal regions in the Western Balkans, the long-awaited new support project has finally started.

JET Balkans project kicks off without key stakeholders

Implemented by Expertise France in partnership with the Slovenian Centre for International Cooperation and Development, the EUR 5 million project ‘supports the preparation of fair, credible and practical transition pathways by connecting evidence, dialogue, policy coordination, financing preparation and regional knowledge-sharing’. At the kick-off event in Sarajevo in June 2026, high-level decision makers in the just transition field were notably missing. This was hardly surprising, given the lack of interest that governments have shown in the topic. However, what was more surprising was that there was only one representative from civil society. Civil society organisations have kept the topic alive during the vacuum period, actively supporting affected coal communities despite operating with very limited resources.

Lack of clarity at local level

The premise of the project is that the just transition is now an implementation challenge. It begins by mapping transition pressures, affected territories, sectors and groups. This is followed by policy alignment, alongside territorial and workforce support for workers, municipalities and local economies in the affected regions. The fourth component focuses on preparing financing pathways, developing project pipelines and implementing selected pilot projects. Dialogue and cooperation are only the fifth component, which one can only hope will actually run throughout the entire duration of the project. It was emphasised that the project will build on what is already there, which is welcome considering that a lot has already been prepared. For the missing parts, the project will offer technical assistance for policy alignment, although what this involves is still unclear. While the project team may have a comprehensive plan, the process would be much more productive if local stakeholders, including civil society at both local and regional levels, received more details about how the project goals will be achieved so that they can provide support. At this point, it is still unclear to the public what the mapping will look like and how policy alignment will be approached. While the added value of this project is that it foresees pilot projects, these are still a long way off, with the details yet to be decided.

What we need to move forward

The project’s setup, with a national coordinator in each of the six Western Balkan countries – even Albania, which doesn’t use coal in its energy sector – gives more hope for moving the just transition process forward from within the countries than the previous support platform did. Still, as neither political will nor the promise of EU financial support for a just transition is present, implementation will likely be difficult. This makes it even more important to include local authorities in all activities, since they are currently the most interested in taking care of people in their communities. In 2024, several mayors from coal-dependent municipalities even signed a just transition manifesto that was sent to the Directorate-General for Neighbourhood and Enlargement, asking for support for the process. Broader groups of local people must also be included and consulted as much as possible, as must civil society organisations, which continuously follow and support the process on the ground. To put local people’s valuable experience to meaningful use, they and other civil society stakeholders need clarification on:

what can be expected from the mapping carried out as part of the project;

which policies will be aligned and with what, so that civil society can prepare to provide input in a timely manner; and

what can be expected from pilot projects and project pipelines.

Our previous asks from the CRiT WBUA initiative still apply to the JET Balkans project:

Presence on the ground is key. Events should be held in coal regions, not only in capitals, and should not always be associated with energy- and climate-related issues. At the local level, the just transition is a development challenge first and foremost.

Existing knowledge and expertise should be used whenever possible. The work carried out by civil society during the vacuum period – for example, a declaration by Serbian civil society and the Vision for Bitola initiative developed by Eko-svest in North Macedonia – is key to preparing up-to-date redevelopment plans and projects.

Supporting local stakeholders, particularly trade unions, but also directly workers and their families, in understanding their role in the redevelopment of their region is what will move this process forward or halt it completely. It’s up to the platform to facilitate the participation of all affected groups and up to civil society to support this, provided timely cooperation exists.

Local redevelopment plans for the regions, equivalent to the EU’s territorial just transition plans, should be drafted and include a pipeline of redevelopment projects. Education of the new workforce should feature prominently.

Any funding channelled by this or any other just transition support mechanism must be conditioned on these local, participatory plans, exclude any kind of support for fossil fuels, and incentivise reasonably fast coal phase-out dates.

We and other civil society groups working on the just transition in the Western Balkans are looking forward to working with the new support platform to give the process a much-needed boost.

Serbia’s district heating utilities approaching breaking point due to gas import dependence

Dimitar Dimitrovski — Tue, 14 Jul 2026 09:54:00 +0200

Serbia’s warning sign

Rather than racing ahead with costly new commitments, however, the region’s governments should look closely at Serbia’s district heating sector, which is approaching breaking point due to its reliance on imported gas. This increasingly chronic problem is the clearest example in the region so far of the risks associated with gas-dependent heating systems. Today, gas accounts for around 78% of fuel used in Serbia’s district heating sector, with around 90% of supplies imported. This has resulted in financial instability for heating companies, often driven by sharp fluctuations in international gas markets rather than domestic energy policy.

Financial exposure revealed

Even with significant overemployment in the sector – estimated at around 15% of total costs, with staffing levels far exceeding operational needs – fuel costs dominate. In 2024, the latest year for which data is available, fuel costs accounted for 60.5% of total district heating expenditure, leaving utilities highly exposed to fluctuations in imported gas prices. The consequences for the sector’s financial performance are devastating. In 2024, Serbian district heating companies recorded combined losses of EUR 22.3 million, while liquidity shortages reached EUR 189 million. In practical terms, nearly EUR 200 million in working capital is missing from the system. And the trend is worsening. Financial data shows that Serbia’s district heating sector has experienced a steady decline in performance over the past eight years. In 2024, out of Serbia’s 51 district heating utilities, 27 operated at a loss, while 24 reported positive financial results. Compared to 2023, total losses almost tripled, while 15 utilities have accumulated losses exceeding the value of their capital. One of Serbia’s last coal-fired district heating plants, in Kragujevac, was replaced by a gas installation in October 2022, with financing from the European Bank for Reconstruction and Development (EBRD). Just two years later, Kragujevac recorded the largest financial loss of any district heating utility in Serbia, amounting to EUR 10.3 million in 2024. This highlights the financial risks of new investment in imported fossil gas, where optimistic feasibility assumptions carry a high risk of leaving utilities with losses and long-term debt. These developments should raise concerns across the Western Balkans, where the push for new gas infrastructure continues.

Regional policy risks

Montenegro is still pursuing a government-to-government (G2G) initiative on infrastructure, including plans for a liquefied natural gas (LNG) terminal in Bar and three associated gas plants. Albania is also progressing with a planned LNG terminal and at least one power plant. Serbia is expanding its domestic gas network and planning new interconnectors, with new gas plants foreseen in Niš and Novi Sad, while North Macedonia is building a new gas interconnector with Greece and planning additional gas-fired generation. Bosnia and Herzegovina is also advancing the Southern Gas Interconnection with Croatia, whose planned capacity would be six times higher than current gas demand. The project relies on outdated demand and cost assumptions, increasing the risk of stranded assets and underutilised infrastructure. However, new pipelines and gas plants do not eliminate dependence – they create it. Unlike renewable energy sources, almost all gas consumed in the Western Balkans must be purchased on external markets, exposing consumers, public budgets and utilities to price volatility and supply disruptions. This is particularly relevant for Albania, Montenegro and Kosovo, which are currently almost entirely gas-free, as they are not connected to international gas transmission networks. Even for the three Western Balkan countries that do have gas import infrastructure – Serbia, North Macedonia and Bosnia and Herzegovina – the central energy security question is not how to safeguard additional gas supplies, but how to reduce the need for imported gas.

Alternatives and resilience

Serbian experts and heating utilities recently addressed this pressing issue at a panel discussion that deserves close attention across the region. They argue that investments in geothermal energy, solar thermal systems, heat pumps, energy efficiency and seasonal heat storage offer a more sustainable model – one based on domestic resources, lower exposure to global commodity markets and greater resilience to price shocks. At a time when Europe is moving towards electrification and reducing fossil fuel consumption, Western Balkan countries face a stark choice: continue investing heavily in infrastructure that deepens dependence on imported gas, or prioritise renewable-based technologies that strengthen energy security and reduce long-term economic vulnerability. The financial condition of Serbia’s district heating sector suggests that the cost of choosing the first option is extremely high – and likely to result in a dead end.

Spending without substance: Czech flagship industry programme fails to track climate impact

Dora Crnčević — Fri, 10 Jul 2026 12:54:42 +0200

With more than CZK 81 billion (EUR 3.3 billion) at its disposal, the Operational Programme Technologies and Applications for Competitiveness (OP TAC) is designed to help companies innovate, strengthen their technological capacity and reduce their energy intensity. In practice, however, the OP TAC’s evaluation framework remains heavily skewed towards monitoring the pace of spending rather than assessing whether the money is actually delivering meaningful results. Without rigorous, transparent monitoring of outcomes, it’s impossible to determine whether the billions in public funding are serving their intended purpose. Why OP TAC matters in the Czech context OP TAC is part of a broader ecosystem of national level programmes through which the Czech Republic channels EU cohesion policy funding. These operational programmes cover a wide range of areas, including the environment, transport, employment, research and regional development. The programme stands out not because its design is unique, but because it plays a central role in supporting the competitiveness and decarbonisation of Czech industry. It’s also one of the largest programmes in terms of budget and among the most significant for the country’s long-term energy transition. The Centre for Transport and Energy, a Czech-based Bankwatch member group, focuses closely on OP TAC because we have a direct seat at the table. Through our membership in the programme’s monitoring committee – the only seat reserved for civil society among its 42 members – we have gained a unique, first-hand insight into how the programme is being implemented, what information is being shared and where the gaps lie. This insider perspective allows us to monitor the programme’s functioning in a way that wouldn’t be possible in operational programmes where civil society has no representation. Chasing spending targets, ignoring real-world impact Throughout the work of the monitoring committee, the same issue resurfaces: the programme’s actual impact is impossible to assess. Discussions tend to revolve around financial absorption, the number of calls launched, the volume of applications submitted and the amount of funding approved. Meanwhile, outcome and performance indicators – the metrics that show whether the programme is achieving its goals – receive only marginal attention. This imbalance was once again evident at the committee’s most recent meeting in March 2026. Despite managing billions intended to support innovation, energy savings and circular economy measures, the programme’s real-world impacts remain largely secondary in the monitoring process. Yet the European Commission is clear: EU Member States must not only report on how quickly they spend EU funds, but also systematically monitor indicators and regularly assess the programme’s concrete results and achievements. Financial performance alone is not enough. Environmental indicators must not be sidelined Within the monitoring committee, the Centre for Transport and Energy has consistently argued that environmental indicators must be treated as a core part of programme evaluation. These include:

energy savings;

greenhouse gas emission reductions;

renewable energy deployment; and

circular economy outcomes.

We have repeatedly called for these indicators to be systematically included in the materials prepared for the committee, accompanied by short explanations of key trends and developments. So far, however, these proposals have been rejected, often on the grounds that there is ‘insufficient interest’ among committee members in receiving such information. This is particularly concerning given that the European Commission itself explicitly highlighted the need to strengthen the use of indicators within monitoring committees. The reluctance to integrate environmental data into regular reporting undermines the committee’s ability to fulfil its oversight role. Buried data, blind oversight What makes the situation even more problematic is that the data is already available. Internal documents prepared by the Ministry of Industry and Trade include indicators on energy savings, greenhouse gas emissions, renewable energy capacity and the volume of waste used as secondary raw material, along with corresponding targets and commitments. However, this information appears only occasionally, often as supplementary material and only upon request. It’s not integrated into the regular monitoring cycle, nor is it presented in a way that allows committee members to evaluate progress or identify shortcomings. For a programme of this scale and importance, such an approach is inadequate. Closing the accountability gap The operational programme manages more than CZK 81 billion intended to support innovation, energy efficiency and circular economy projects. Without systematic monitoring of indicators, it’s impossible to determine whether these funds are delivering the intended outcomes. The monitoring committee, whose role is to oversee the programme’s implementation, cannot act as a guarantor of accountable public spending if it lacks access to the data needed to evaluate performance. If the programme is to be evaluated credibly, it’s not enough to track how many billions have been allocated or disbursed. What matters is whether the programme is delivering tangible results and measurable impacts. This evidence based assessment should be one of the committee’s core responsibilities – one it has so far been unable to fully discharge. Strengthening the monitoring of indicators is not a bureaucratic exercise. It’s essential for ensuring that public money is spent effectively, that environmental goals are met and that the Czech Republic’s industrial transformation is grounded in real progress rather than optimistic assumptions. As long as indicators remain sidelined, the programme will continue to operate in an accountability vacuum, and the opportunity to steer the programme towards meaningful impact may be lost.

A new chapter for the EIB Group Complaints Mechanism?

Michaela Kozminova — Thu, 09 Jul 2026 12:51:23 +0200

For years, civil society organisations have warned that the current policy falls short of the UN Guiding Principles on Business and Human Rights and international best practice. The hard truth is that the mechanism has failed to deliver. It has simply been unable to achieve its mission independently, efficiently, or in a meaningful way for the very people it is supposed to protect. Yet people continue to turn to the EIB-CM to raise concerns about EIB-financed projects. According to the EIB-CM’s 2025 annual report, 21 admissible complaints were registered that year. Despite deploying approximately 90% of its financing within the EU, 88% of these complaints came from outside the EU. The vast majority of these complaints were submitted by individuals seeking redress for the negative impacts of projects on housing and land, living conditions and livelihoods (mostly related to resettlement), as well as inadequate stakeholder engagement. While we welcome the EIB’s recent consultative efforts and have actively taken part, consultation alone isn’t enough. Together with a coalition of partner organisations, we’ve put forward a number of recommendations to improve the mechanism. If the EIB Group wants to uphold its reputation for sustainability and accountability, it needs to turn these recommendations into reality.

When accountability fails

Our experience shows that numerous complaints from local communities and civil society organisations have not been adequately addressed, while the institutional response to EIB-CM findings has frequently been insufficient, resulting in ongoing harm to affected communities. One notable example is the expansion of Budapest’s Liszt Ferenc International Airport, which the EIB agreed to finance in 2018. The project aims to increase passenger traffic by 50% over eight years. Residents living near the airport, supported by Friends of the Earth Hungary (MTVSZ), filed a complaint alleging inadequate public consultation and raising concerns about the project’s environmental impacts, including its contribution to climate change, increased air and noise pollution, and wider social impacts on affected communities. In 2021, the EIB-CM concluded that the project failed to comply with both EU environmental legislation and the EIB’s own environmental and social standards, issuing a series of recommendations. Yet these recommendations have still not been fully implemented, despite the Bank being required to do so within 24 months of the conclusions report. Another example concerns the construction of the Corridor Vc motorway south of Mostar in Bosna and Herzegovina, financed jointly by the EIB and the European Bank for Reconstruction and Development (EBRD). In 2017, affected residents filed a complaint about the project’s environmental and social impacts. The EIB-CM initially concluded in 2019 that there were no instances of maladministration. The complainants subsequently submitted an updated complaint to the EIB-CM and, shortly after, with the EBRD’s Independent Project Accountability Mechanism (IPAM). In autumn 2021, the EIB-CM again found no shortcomings in the route selection process or public consultations. However, in early 2024, the IPAM reached the opposite conclusion, finding that the route selection process had not complied with the EBRD’s Environmental and Social Policy. It recommended a new alternative alignment analysis along with a proper environmental and social impact assessment. Regrettably, many of the underlying issues, including the flawed route selection, remain unresolved. As a result, several new complaints have already been submitted to the IPAM in 2026.

Promising reforms

The draft Complaints Mechanism Policy contains several welcome improvements and addresses some long-standing expectations regarding the EIB-CM’s independence. In particular, we welcome the explicit recognition that the EIB-CM has a mandate to ‘facilitate access to remedy to address the negative environmental and/or social impacts of EIBG Projects’. However, the review should go much further. The revised policy must strengthen the EIB-CM’s independence from the Bank’s operational services, increase its capacity to facilitate effective remedy, and improve transparency and predictability.

Closing the gaps

First, although the draft policy designates the Head of the EIB-CM as the guarantor of the EIB-CM’s independence, it contains no meaningful safeguards governing how the Head or staff are appointed, assessed or protected from conflicts of interest. In this context, introducing clear rules on recruitment, post-employment restrictions, and conflicts of interest would align the EIB Group with international good practice and the policy provisions of peer accountability mechanisms at other multilateral development banks. Second, the EIB-CM’s standing within the EIB’s unique governance structure should be strengthened. The draft policy should clearly define the responsibilities of both the Management Committee and the Board of Directors in ensuring that the EIB Group fulfils its remedy mandate. The Board approves loans under the condition that they comply, or will comply before signature, with the EIB Group’s Environmental and Social Policy. Yet, despite serving as the institution’s ultimate decision-making body and legally accountable for the projects it approves, the Board currently has no role in authorising development of corrective actions where the EIB-CM finds non-compliance and management disagrees to develop corrective actions. The policy should therefore allow the EIB-CM to refer such cases to the Board for a final decision. Third, complainants should be consulted much earlier in the process and not be omitted from discussions between the EIB and its clients when corrective actions are being developed. The views of complainants are central to designing measures that reflect realities on the ground and effectively address verified harm. Transparency should also be a guiding principle throughout the process. Complainants should receive the final compliance conclusions report before corrective measures are developed, enabling them to prepare and engage in consultations. Finally, the EIB-CM’s institutional learning function should not be overlooked. One of its most important roles is to translate case-specific findings and dispute resolution experience into lessons that improve the EIB’s policies, project due diligence, and lending conditions. In line with the EIB Group Evaluation Policy, the Board of Directors should be required to consider the EIB-CM’s reports systematically, use their findings to inform decision-making, and hold the EIB Group accountable for implementing the recommendations.

Building renovation in Latvia will cost EUR 32 billion: Impossible target or unavoidable necessity?

Dora Crnčević — Mon, 29 Jun 2026 14:47:42 +0200

The national building renovation plans must outline how the requirements set out in the revised Energy Performance of Buildings Directive, adopted in 2024, will be achieved. But progress has been slow. So far, only 15 Member States have submitted their plans, with infringement procedures initiated against the remaining countries, including Latvia. The first draft of Latvia’s national building renovation plan has been shared with stakeholders and is expected to be submitted to the Commission shortly. The plan outlines a trajectory for renovating residential and non-residential buildings in order to fully decarbonise the building sector and contribute to achieving climate neutrality by 2050. Although the plan is still in its initial, semi-completed stage, it lays out a potential scenario for the number of buildings that will need to be renovated each year until 2050. It also estimates the amount of public and private funding required to achieve this objective. Massive investment at stake The estimated investment required to meet the renovation targets for Latvia’s building stock by 2050 stands at a staggering EUR 32.33 billion. This is an enormous sum for a country whose annual GDP is approximately EUR 43 billion – a figure set to rise even further when taking inflation into account. To date, only around 4% of apartment buildings in Latvia have been renovated, despite at least 26,600 buildings requiring renovation. At this current pace, it would take around 150 years to fully decarbonise Latvia’s building stock. The goals set at the EU level are clearly ambitious. This is true not just in monetary terms, but also logistically. According to Latvia’s draft plan, a severe shortage of construction labour is expected as the country attempts to renovate 98,000 residential buildings and 39,000 non-residential buildings within the remaining 24 years. Unsurprisingly, discussions are taking place regarding the utility of creating a plan with such targets when it remains completely unclear how they can actually be achieved. Mobilising on all fronts Given the existential nature of the climate crisis, Latvia’s building renovation plan must align with the 2050 climate-neutrality goal. However, achieving this requires a massive mobilisation of collective effort. While many procedural improvements can be made at the national level to speed up delivery, a dedicated EU-level financing programme for building renovation is also vital. Such a programme should pool funds from various sources – including joint loans and revenues from polluting activities – given the extreme difficulty of mobilising such vast sums through the national budget alone. A short-sighted response to the implementation of these seemingly unrealistic goals would be to argue for lower EU renovation targets. Building renovation serves a range of critical purposes beyond reducing greenhouse gas emissions. It extends the technical viability of buildings, improves the safety of residents, reduces dependence on imported fossil fuels, strengthens local economies and lowers vulnerability to global energy shocks. Renovation is also essential for adapting buildings to increasingly frequent extreme weather conditions linked to climate change, including heatwaves and severe storms. Crucially, renovating the extensive building stock built in Latvia during the Soviet era – where economically justifiable – is a massive ask, regardless of the 2050 climate-neutrality goal. Multi-apartment residential buildings constructed during the Soviet occupation account for 72.2% of the total floor area for this type of housing. Some of these buildings have already reached the end of their service life. Without renovation, a housing crisis is inevitable. Redefining the economic picture Building renovation planning should also be considered in the broader context of reliance on imported fossil fuels. Policymakers must account for both the costs of this dependence and the economic benefits of reducing these imports. In 2025, the EU spent approximately EUR 396 billion on fossil fuel imports, equivalent to around EUR 880 per capita. By comparison, the European Commission estimates that the transition to a clean energy system will require EUR 660 billion in public and private funding annually by 2030. Evidently, the bulk of the investment required to shift to clean energy by 2030 will be close to the amount currently spent each year on imported fossil fuels. Unlike spending on imports, however, energy efficiency and renewable energy technologies represent a permanent investment in the local economy. According to the International Energy Agency, the EU saved EUR 51.4 billion in 2025 alone simply by reducing fossil fuel imports. These indirect benefits should be estimated and projected in monetary terms at a national level to understand the true, long-term economic picture and prioritise building renovation accordingly. A shift in public sentiment To add some positive news, the historically sceptical public attitude to apartment building renovations in Latvia is changing course, as demonstrated by the overwhelming demand for support under a recent EU-funded programme launched by the Ministry of Economics. Following the scheme’s launch in April 2025, the entire available budget of EUR 173 million was reserved within a record six weeks, with the rapid uptake partly driven by simplified administrative procedures. The programme received 413 applications, of which 387 remain active. However, the existing budget is only enough to cover roughly 100 projects. To fund all the eligible renovation projects, including those currently on the reserve list, an additional EUR 290 million is urgently needed. To this end, the Ministry is now scrambling to secure extra funds, exploring options such as reducing the intensity of financial support to extend assistance to a larger number of buildings, and a potential EUR 100 million international financing loan, which would allow state agency Altum to provide financing. Given these frantic efforts, however, and the overall lack of coordination at government level, building renovation clearly has yet to receive the urgent political attention and prioritisation it so desperately requires.

The Trump peace pipelines framework: a renewed threat to Western Balkan decarbonisation

Magda Wiejak — Fri, 19 Jun 2026 17:01:26 +0200

Most Western Balkan countries are known for their heavy coal use and slow decarbonisation, but the region has at least one advantage compared to its EU neighbours: low or no gas dependence. In 2024, fossil gas still made up 20.6% of the EU’s gross available energy. But in the Western Balkans, most gas-dependent countries are Serbia (14.3%) and North Macedonia (11.6%). In Bosnia and Herzegovina (BiH), gas makes up less than 3% of energy, with Albania, Montenegro and Kosovo not connected to international gas infrastructure. This is a strength to capitalise on, not a disadvantage to be remedied. The United States has for years lobbied southeast European governments to build new import infrastructure like the Greece to North Macedonia interconnector, LNG terminals in Montenegro and Albania and the southern gas interconnection between Croatia and BiH. And for a long time, EU policy encouraged them, promoting gasification even in the gas-free countries. But as the EU gradually moves away from promoting gas, US policy has doubled down on it. Fossil gas projects are no longer eligible for priority status under the Energy Community Treaty or for EU funding in the region, but overt US pressure on the Western Balkan governments to build new gas pipelines has ramped up during Trump’s second mandate. At the Three Seas Initiative Summit in Dubrovnik in April, all eyes were on the inter-governmental agreement between BiH and Croatia on the southern gas interconnection, which hit the headlines due to the appointment of a Trump-linked company, AAFS, as project promoter. AAFS was only founded in 2025, its ownership structure is not public, it has no track record and is represented by lawyers who campaigned on Trump’s behalf to overturn the 2020 U.S. election results. A special law appointing AAFS was passed in record time by the Federation of BiH Parliament in April 2026, bypassing the mandatory tender and concession-granting procedures, and allowing AAFS to use public land without paying expropriation fees. At the Dubrovnik summit, the U.S. government also announced a vaguely-defined ‘Trump peace pipelines framework’, which aims to ‘advance strategic energy infrastructure projects across Central and Eastern Europe, expanding the region's capacity to import U.S. LNG’. The U.S. has also initiated a series of agreements with Western Balkan governments, and the government’s May 2025 Report to Congress on United States Policy to Promote Regional Stability and Prosperity in the Western Balkans clearly prioritises gas infrastructure and sales.

New import infrastructure could triple the countries’ consumption – or become stranded assets

The fact that Europe is in its second oil and gas crisis this decade seems to have escaped the region’s governments, who are actively planning gas pipelines, power plants and LNG terminals that could collectively triple their 2023 gas consumption. These would either entrap the countries in costly dependence on US LNG imports, or end up as stranded assets. Albania relies on hydropower and solar for its electricity, as the two floating oil-fired units moored at Vlora since 2022 barely generate any power. The Trans Adriatic Pipeline passes through the country to Italy, but so far no exit point has been built on Albanian territory. Yet Albania plans to transition towards fossil fuels. It is planning at least two gas power plants – at Roskovec and Vlora – an LNG terminal, and a distribution system in Korca. Works started earlier this year at Roskovec despite permitting irregularities and a lack of financing. And in April, Albania signed a 20-year framework agreement to buy US LNG – worth no less than USD 6 billion – and a memorandum to develop the Vlora plant. Bosnia and Herzegovina mainly uses gas to heat Sarajevo, but in the last two years the Federation entity’s ambitions have grown. Its government is mainly concentrating on the southern gas interconnection, but has also revived plans for two more pipelines from Croatia, added 85 kilometres to the southern gas interconnection plans, and started planning three gas power plants. The Republika Srpska entity has made no secret of its plans to keep using Russian gas and building a new pipeline from Serbia. But it has recently signed an agreement for a pipeline within Republika Srpska, from Šepak to Novi Grad, that would connect to the old existing import pipeline. Kosovo is the only country in the region whose energy strategy rightly rules out building a gas pipeline. But even there, the government has left open the option of teaming up with a neighbouring country to build a gas power plant. Montenegro’s national spatial plan, after massive controversy around plans for a U.S.-backed LNG terminal at Bar, does not include the terminal or associated power plant. But after its adoption, in September 2025, the Prime Minister signed a memorandum with Japan’s JERA for a feasibility study for an LNG terminal and power plants. A planned US-Montenegro agreement has already met with strong resistance from civil society and people living near the planned LNG terminal. North Macedonia announced the start of works on the gas interconnector from Greece last year, although expropriation is not yet completed and several legal issues are outstanding. It also plans to build at least two more gas power plants, and in 2025 signed a memorandum with Turkiye’s Kazancı Holding to build unspecified gas plants and distribution grids. In April 2026, the government signed a memorandum with the U.S. for ‘improving the security’ of the gas supply, and in June, a grant agreement was signed with the World Bank to support the preparation of project documentation for the planned gas power plant at Bitola. Serbia’s difficulty in securing its gas supply has not put its government off steadily expanding the country’s gas network, and signing an agreement with Azerbaijan for a 500 megawatt gas power plant in Niš. It also plans a new plant in Novi Sad. The World Bank is also considering financing for a gas project that includes new pipelines within Serbia. In addition to long-term infrastructure lock-in and the climate impacts of gas, these plans don’t make economic sense. None of them have up-to-date, public feasibility studies, and they would end up either as stranded assets or heavily subsidised by taxpayers. Permitting, expropriation and construction could easily take a decade and the infrastructure alone would cost billions, even before the costs of gas are included. Even if some of the planned projects do not go ahead, the region does not have money, human capacity or time to waste on such costly distractions.

Will the U.S. put its money where its mouth is?

Previous U.S. efforts to push gas in southeast Europe were limited by its lack of willingness to pay for infrastructure construction. However, with the EU halting such funding, it remains to be seen whether the U.S. will use domestic sources like the Development Finance Corporation, or multilateral banks where it has strong influence, to finance gas build-out. The recent announcements of potential World Bank financing for two gas projects do not bode well, and suggest that the latter may already be happening.

The way forward

The Western Balkan countries can still avoid high levels of gas dependence if we act now. Appropriately-sited solar and wind generation, supported by existing hydropower, strong grid connections and battery storage, is much more cost-effective for electricity generation, while heat pumps, geothermal, and ambient or leftover heat avoid import dependence for heating and cooling. Instead of falling into the decades-old trap of gas dependence, Western Balkan governments finally need to increase energy efficiency and focus on electrification of the heat and transport sectors.

When citizens speak: Lessons on energy poverty from the Romanian town of Petroșani

Dora Crnčević — Wed, 03 Jun 2026 13:13:58 +0200

Last year, 28 residents of Petroșani came together to discuss something most of them experience every day but rarely raise in public: the struggle to keep their homes warm. The result was a citizens’ forum that cut through statistics and policy language to reveal something far more important: the lived reality behind energy poverty and what meaningful support could look like when shaped by those directly affected. The situation on the ground Petroșani illustrates what can happen when a regional economy built entirely around a single industry collapses. Following the insolvency of the town’s local energy conglomerate, mines began to shut down, jobs disappeared and many residents moved away. Those who stayed are now living in buildings constructed between the 1950s and 1970s, with crumbling roofs, draughty windows and heating systems that were never designed to be efficient or affordable. Energy poverty here is not an abstract policy concept. It’s a daily negotiation over which essential needs can be sacrificed. One participant described living on the top floor of a building where the ceiling freezes in winter and rainwater leaks into the apartment during heavy downpours. The home is damp and cold, the windows have never been replaced, and heating is only available when there’s enough money to buy firewood. Unfortunately, these are not isolated cases – they’re the norm. The many layers of energy poverty What made the forum particularly valuable was not just what participants shared, but how their experiences reflect the broader reality of energy poverty. It’s not simply about high energy costs; rather, it’s the result of multiple factors stacking on top of one another: low incomes, ageing buildings with poor insulation, limited job opportunities, and an administrative system that’s often difficult to navigate and slow to respond. In many households, a significant share of income goes directly towards utility bills. While heating assistance schemes exist, participants described them as either insufficient to meet their actual needs or difficult to access in practice due to bureaucratic hurdles and outdated eligibility criteria. The frustration expressed was not only about material hardship, but also about the gap between people’s needs and the institutions meant to respond to them. Barriers to collective action A key issue raised during the forum, and one well known in policy discussions, is the role of homeowners’ associations. These are a prerequisite for accessing most public funding for building renovations or energy-efficiency programmes. In Petroșani, however, very few apartment blocks have functioning associations. Participants’ experiences confirmed how complex and burdensome the process of establishing one can be, requiring time, financial resources, legal knowledge, and agreement from all residents, including those who have already left town. One resident explained that, without an association, neighbours must go door to door whenever anything needs to be done in the building, and that setting up an association took an entire year. Depopulation further complicates the situation, as vacant apartments make collective decision-making difficult, while the costs and responsibilities fall on those who remain. These barriers are not new, but the experiences of these residents make it clear how administrative requirements can become real obstacles in practice. What people actually want Despite the challenges, participants were constructive and forward-looking. They expressed strong support for solutions such as solar panels, thermal renovation and other green technologies. There was a general openness to change and a clear understanding of its benefits. At the same time, participants highlighted the need for stronger and more accessible connections with public institutions to make these solutions achievable. Their proposals were practical: a single point of contact for energy and housing matters, support in setting up and managing homeowners’ associations, neighbourhood-level renovation programmes instead of piecemeal interventions, and better public information delivered not only online but also in person for those less digitally connected. Many participants viewed renewable energy as part of the solution, arguing that solar panels could reduce both pollution and household energy costs. What clearly emerged from the discussions is that citizens are not simply passive beneficiaries of policy; they’re ready to engage if given the tools and support to do so. Lessons for Romania’s energy transition While the challenges in Petroșani are shaped by its post-industrial history, energy poverty is not limited to such communities. Across Romania, households are struggling with a similar combination of low incomes, inefficient buildings and limited access to support mechanisms. This makes energy poverty not just a local issue, but a systemic one. Addressing it requires more than financial support alone: it calls for policies that are accessible, coordinated, and grounded in peoples’ lived realities. As the experience in Petroșani shows, solutions already exist. Yet their impact depends on whether institutions can truly reach the people they’re supposed to support. Strengthening this connection will be critical, not just for addressing energy poverty, but also for shaping a transition that is fair and inclusive across Romania.

Slovakia’s billion-euro opportunity: Redirecting climate revenues and fossil-fuel subsidies to tackle energy poverty

Magda Wiejak — Wed, 20 May 2026 11:55:01 +0200

Amid this geopolitical turmoil, we at Friends of the Earth-CEPA (CEPA) have been assessing Slovakia’s potential to support long-term solutions to energy poverty through EU funding mechanisms. Our analysis reveals a staggering EUR 986 million that could be mobilised annually to finance energy poverty solutions in Slovakia.

A lifeline for vulnerable households left on the table

To reach this total, Slovakia must first address the chronic underutilisation of its existing resources. The Environmental Fund derives its revenues primarily from the EU Emissions Trading System (ETS), as well as from other environmental fees. However, its annual reports indicate a consistently low rate of expenditure, averaging only 37% annually between 2012 and 2024. In theory, this means that Slovakia should have more than EUR 2.539 billion available through the Environmental Fund to finance environmental measures, such as energy efficiency improvements for low-income households. Yet questions remain regarding the practical use of these resources. Historically, the Ministry of Finance has prioritised fiscal objectives over the climate goals of the Ministry of Environment, which has typically received insufficient support. This reflects the tendency of Slovak governments to favour the economic benefits of retaining funds in bank accounts to strengthen the country’s lending position, rather than directing them towards environmental spending.

The cost of inaction

The impact of this strategy is clear from the most recent data. In 2024, Environmental Fund revenues reached EUR 489 million, while expenditures amounted to only EUR 332 million – meaning just 68% of the available allocation was spent. Slovakia should be using 100% of these annual revenues to meet its clean energy transition needs, rather than to improve its fiscal or lending position on international financial markets. In 2024 alone, this would have made an additional EUR 156 million available for environmental spending. Looking at the broader trend, the average annual unspent amount between 2012 and 2024 was EUR 195 million – resources that could have been channelled directly into social climate solutions.

The Modernisation Fund’s untapped potential

Our calculations reveal a EUR 1.14 billion investment gap in the Modernisation Fund. Based on publicly available data, this represents a major surplus that remains unspent or unallocated compared to projected revenues. This gap is driven by different assumptions in ETS price projections over time, as well as the relatively slow pace of the Fund’s implementation – with less than one-third spenthalfway through the 2020–2030 period. The figure also represents almost 89% of Slovakia’s agreed EU contribution to the Social Climate Fund between 2028 and 2032. There is already a positive precedent. The Ministry of the Environment has approved the allocation of EUR 186 million from the Modernisation Fund to the Renovate House programme, which is the first shortlisted measure under Slovakia’s social climate plan. More energy poverty and transport poverty solutions should follow. At the same time, the Ministry of the Environment is preparing funding allocations for other areas, although these remain unclear despite our efforts to obtain further details through information requests. As a result, the final available amount could be lower. It should also be noted that the social climate plan has yet to be published. However, a study prepared by technical assistance experts has already shortlisted several measures for potential support under the Social Climate Fund.

From fossil fuel subsidies to energy efficiency and renewable support

The national energy and climate plan lists dozens of subsidies in the energy sector, including support for fossil fuels. Most of these have no defined end date. They include highly problematic exemptions from excise duty for heat production from coal, combined heat and power (CHP), and fossil gas. Other fossil fuel subsidies include support for CHP within the system operation tariff, as well as regulated prices for gas supplied to households. In its December 2024 review of expenditure and revenue in the energy sector, the Value for Money Division at the Ministry of Finance identified significant potential for savings in the energy sector, estimated to range between EUR 155.1 and 223.5 million per year. From a climate perspective, the most important measures include phasing out direct and indirect fossil fuel subsidies and aligning environmental taxes more closely with EU averages. Additionally, the current government’s approach of placing price caps on gas, electricity and district heating – costed at EUR 385 million for 2026 – contradicts EU energy and climate policy, State aid rules, and initiatives such as the Affordable Energy Action Plan and the 8th Environment Action Programme. Several aspects of this approach are problematic:

The price-cap scheme ‘targets’ around 90% of Slovak households, reflecting weak prioritisation of support.
Under the broader definition of energy poverty proposed by the Institute for Forecasting of the Slovak Academy of Sciences, around 18% of households (330,000) are energy-poor, including those without access to electricity, making them ineligible to avail of the scheme.
It undermines the ‘energy efficiency first’ principle, as it removes incentives to invest in building renovations or replace gas boilers.
It fails to prioritise the most vulnerable households, including those relying on solid fuels such as biomass.
Households are given no incentive to transition away from coal and waste-based heating to more sustainable or legally compliant solutions, despite the availability of support programmes such as Green Solidarity.

Finally, the response to the 2022–2023 energy crisis showed that windfall taxation of excess profits in the fossil fuel sector can provide an additional source of funding to absorb geopolitical shocks and protect vulnerable households.

Increasing household resilience

Rather than subsidising fossil fuel consumption, these resources could be redirected towards long-term investments in household energy resilience, including:

EUR 195 million annually through full utilisation of the Environmental Fund;

EUR 228 million annually through full utilisation of the Modernisation Fund, assuming stable ETS prices;

EUR 178 million through the abolition of indirect fossil-fuel subsidies and implementation of other recommendations from the Value for Money Division;

EUR 385 million through the removal of fossil-fuel, electricity, and district-heating price caps; and

additional income from a properly calibrated windfall tax.

Collectively, this totals an enormous EUR 986 million annually, in addition to potentially hundreds of millions from windfall taxation. This is almost four times more (386%) than Slovakia’s annual allocation under the Social Climate Fund between 2028 and 2032. In principle, ETS revenues – combined with the measures listed above – could significantly strengthen support for households, provided the Slovak government reconsiders its current ETS position. These massive annual revenues could be used to finance long-term energy efficiency and renewable energy solutions for 141,280 households. For example:

Up to 61,280 households could receive EUR 10 000 each under the Renovate House programme to replace windows and doors, and insulate roofs or ceilings;

A further 40,000 households could receive a EUR 4 380 subsidy for heat pumps through the Green to Households programme, reduce long-term heating costs;

Around 20,000 vulnerable households could receive a EUR 3 600 subsidy for solar thermal collectors under the Green Solidarity programme, cutting their hot water expenses;

And finally, 20,000 energy-poor households could receive a EUR 6 300 subsidy for rooftop solar photovoltaic systems under Green Solidarity, reducing their electricity bills.

The above examples illustrate the scale of support that could be mobilised for households if Slovakia pursued a more ambitious and socially targeted climate and energy policy. A comprehensiveenergy poverty strategy would also need to include measures related to sustainable and affordable housing, alongside other structural social and energy reforms.