07 December 2023

European countries delay coal phase-outs and gamble on fossil gas amidst push for decarbonised power

BERLIN, 7 DECEMBER 2023 – Despite EU negotiators pushing for a decarbonised global power system in the 2030s at the climate negotiations currently taking place at COP28 in Dubai, Italy, Hungary and North Macedonia have postponed their coal phase-out commitments by several years. All three countries still plan to be coal-free by 2030: the latest possible date for European countries to exit coal and be compatible with the Paris Agreement’s goal to limit increase in global temperatures to 1.5C above pre-industrial levels.

The delays stem from risky plans to replace coal power plants with gas power generation units – another fossil fuel that damages the climate. As the hottest year on record draws to a close, any delay to the energy transition threatens to accelerate climate collapse: a catastrophe UN Secretary-General António Guterres says we are now experiencing in “real time” [1].

Alexandru Mustață, campaigner at Beyond Fossil Fuels, said: “Right now, EU negotiators are at COP28 seeking to lead the world to a predominantly decarbonised global power system in the 2030s. The implications for investors in fossil gas are clear: any new European gas power plant is at enormous risk of becoming a stranded asset. Fossil gas also drives inflation, undermines energy security, and deepens the climate emergency. For all these reasons, governments, utilities, and financiers should be planning for a European fossil gas exit by 2035 at the latest.

Addressing the situation in Italy, which centres on the country’s major utility Enel, Antonio Tricarico, programs director at ReCommon, said: “Enel accepts that constructing new fossil gas plants in Italy is dependent on capacity payments. However, allocating public subsidies to fossil gas infrastructure is a huge gamble, not only because of the damage fossil gas does to the climate, but because it’s highly susceptible to becoming a stranded asset. With Italy hosting the G7 Presidency next year, the government’s focus should be on improving Italy’s national energy and climate plan so that it delivers on the group’s commitment of an ‘overwhelmingly decarbonised’ power system by the 2030s’.

Reflecting on Hungary’s decision to prolong its coal phase-out, Alexa Botar, climate and energy program director at Friends of the Earth Hungary, said: “Instead of accelerating the just transformation to a sustainable energy future, Hungary’s government is prolonging the use of lignite at its struggling Matra power coal power plant while seeking EU funds for new fossil fuel projects, including a new fossil gas unit. Investing in fossil gas not only increases emissions, but reinforces the country’s fossil-dependent, centralised power system. Redirecting EU funds and state aid to pay for a comprehensive energy savings program and small-scale renewables and storage for households and SMEs, as well as supporting community energy initiatives, would revolutionise Hungary’s power system, and drive down electricity prices and emissions.

END

Contacts:
Alastair Clewer, Senior Communications Manager, Beyond Fossil Fuels
[email protected], +49 176 433 07 185

Notes

UN Secretary-General António Guterres says we are living through climate collapse in real time 
The EU is calling for “striving for a fully or predominantly decarbonised global power system in the 2030s”, at COP28

Italy
Italian utility, Enel, confirmed in its Strategic Plan 2024-2026, that it will close all of its coal plants on the Italian mainland by 2025. The extension of the country’s coal exit centres on Sardinia, where delayed interconnections with Sicily and the mainland threaten to push back the closure of Enel’s Sulcis (590 MW) coal plant as well as EPH’s Fiumesanto (600 MW) coal plant, and as a consequence, Italy’s national coal phase-out to 2027. The threat of fossil gas looms large over Italy’s coal exit, with Enel’s Torrevaldaliga Nord (1980 MW) and Brindisi Sud (1980 MW) coal plants subject to fossil gas replacement plans should capacity payments be on offer. The conversion of Enel’s Fusina (640 MW) coal plant to burn fossil gas is scheduled to be completed by mid-2024 and the coal units authorised to be closed at the end of 2023.

Hungary
The situation in Hungary hinges on the government’s decision (resolution of 16 Nov 2023) that the country’s last operational coal power plant, Matra (884 MW), will continue to operate until a new fossil gas plant (maximum 650 MW, CCGT) is built and comes online to replace it. According to the tender for the new fossil gas project, the plant is expected to enter into operation in mid 2027, effectively pushing back the country’s coal phase-out and just transition by at least two-four years (Matra’s environmental permit is currently in the process of being extended until the end of 2029). Hungary previously announced its plan to exit coal by 2025 at the annual summit of the Powering Past Coal Alliance in 2021. The 2025 phase-out deadline in lignite-firing and mining was cemented as one of the key objectives in the Environmental and Energy Efficiency Operational Programme Plus, (which includes the EU’s Just Transition Fund), and in its Territorial Just Transition Plans, adopted by the European Commission at the end of 2022, and expected to be implemented accordingly.

North Macedonia
North Macedonia has two coal plants currently in operation: Bitola (675 MW) and Oslomej (125 MW). The country announced plans to phase-out coal by 2027 when it joined the Powering Past Coal Alliance in 2021. However, its Minister of Economy Kreshnik Bekteshi rowed back on this last month, saying North Macedonia has “set an ambitious goaI to completely reduce and exclude the use of coal for electricity production by 2030”. North Macedonia remains the country with the most ambitious coal phase-out plan in the Western Balkans, but plans for new fossil gas units in Skopje, Bitola and Negotino risk switching one fossil fuel for another, undermining efforts to drive forward the transition to renewables that will drive down energy costs and boost energy security.

About
Beyond Fossil Fuels is a collective civil society campaign committed to ensuring all of Europe’s electricity is generated from fossil-free, renewable energy by 2035. It expands and builds upon the Europe Beyond Coal campaign, and its goal of a coal-free Europe in power and heat by 2030 at the latest.

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