EU Green Agenda for Western Balkans contains risky geopolitical agenda – Carnegie Europe
In a recent Clingendael Institute Event, Stine Rasmussen, policy officer at the Directorate-General for Climate Action (DG CLIMA), said she was “not very worried about China” as a threat to the European Commission Green agenda for the Western Balkans. It should be.
Given the concentration of Chinese and Russian economic activity in energy, industry and other polluting and energy-intensive sectors in the region, the Green Agenda directly threatens the interests of China and Russia. It is unwise to expect these countries to sit idly by when their investments and strategic priorities are compromised.
It is equally unwise to simply urge governments in the Western Balkans to strengthen their “political will”, which Rasmussen has identified as the main challenge of the Green Agenda. This comment overlooks the fact that the political will of two world powers is likely to be channeled towards conflicting goals.
To analyze how the goals of China and Russia with regard to the planned green transformation might solidify, we need to examine their current interests.
In the Western Balkans, China equals coal. Today, coal provides about 70 percent of the region’s electricity. Since these economies are between two and five times more energy intensive than the EU average, the result is a region twice the size of Germany producing more coal emissions than the whole of the European Union. As a result, all Western Balkan states minus Albania at the top of IQAir’s list for the worst air quality in Europe, with Bosnia and Herzegovina (BiH) even in the top ten in the world. Coal is also the single biggest contributor anthropogenic climate change.
Beyond coal, China has targeted other strategic sectors relevant to its Belt and Road initiative, including mining, industry and transport infrastructure. These sectors are also big polluters. In addition, Chinese projects have been criticized several times for ignored environmental impact assessments and lax environmental standards.
The Serbian coal-fired power station in Kostolac B provides particularly glaring example. It unilaterally emits more sulfur dioxide than the Energy Community Treaty, which Serbia and other Western Balkan states have ratified, allocates to Serbia, Kosovo, BiH and North Macedonia reunited. Ironically, Kostolac B is also the only factory in the region recently equipped with desulphurization equipment built by the China Machinery Engineering Corporation and funded by the Exim Bank of China.
Despite all the evidence to the contrary, the Chinese Communist Party prefers to be seen as a constructive global player on climate issues. A Chinese strategic response to the Green Agenda could see a greening, or at least “greenwashing», Chinese projects and investments in strategic infrastructures.
Better still for China, in the absence of a international procurement instrument or foreign grant instrument Applied to all EU funds, its public companies can compete for green contracts funded by the EU and at national level.
In fact, this is already happening. A consortium including the Chinese company Shanghai Electric Power Company built the second largest wind farm– using Chinese turbines. A Chinese company operates the FeitianSuye plastic recycling plant in northern Serbia, although its work has been recently arrested by the local environmental inspectorate. And earlier this year, Serbia signed 3.2 billion euros ($ 3.8 billion) in contracts with the China Road and Bridge Corporation for municipal wastewater treatment and landfill projects.
Russian investment is More subtle in most of the Western Balkan countries, but it is also harmful to the environment. In much of the region, Russian oil and gas reign supreme. The Kremlin is taking advantage of these countries’ energy dependence to resist energy diversification and market liberalization. Inflexible long-term contracts and planned pipeline projects suggest this trend will continue.
Russian ownership and operation of oil refineries is also problematic. In BiH, where Russia controls the country’s only two refineries, pledged investments in plant upgrades have failed. The Bosanski Brod refinery pumped air pollution into Bosnia and neighboring Croatia for more than a decade until the plant was finally closed in 2019 for upgrades. Russian investments are also substantial in the mining, banking and real estate sectors.
Russia is often content to play spoilers and, in response to the Green Agenda, it should be expected to leverage its network in the banking and energy sectors to achieve this. Moscow’s closer ties to kleptocrats and local officials may also facilitate Russia’s involvement in what is rapidly becoming a regional trend corruption and corruption in renewable energy projects.
In short, the public and private funding mobilized by the EU for the green transformation of the Western Balkans could eventually be transferred directly into the pockets of Russian and Chinese public enterprises.
Such an outcome may improve environmental conditions, but hardly meets the EU’s broader strategic imperatives for the region, including expanding and securing its supply chains. While the strategy to fundamentally slow global warming increases pressure on the West’s two main geopolitical rivals, the European Commission would be wrong to turn a blind eye to the geopolitical implications of its Green Agenda for the Western Balkans.