Environmental groups criticise Environment Ministry over shifting carbon allowance revenues to large companies
Environmental organisations Friends of the Earth Czech Republic (Hnutí DUHA) and Greenpeace Czech Republic have criticised the Ministry of the Environment (MŽP) over a planned shift of money from emissions allowance revenues to large industrial companies. They said so in a press release and comments seen by the Czech News Agency (ČTK). According to the groups, the ministry wants to earmark 25 billion Czech crowns from the EUA programme, which is funded by revenues from emissions allowance auctions, for the largest industrial companies. Environmentalists say the ministry also intends to cut support for renewable energy sources (RES) by 15.5 billion Czech crowns. In response, the MŽP told ČTK that support for energy-intensive industry had been part of the Modernisation Fund since its inception, and that support for RES is not ending, with the fund financing both energy generation facilities and infrastructure.
The MŽP presented the proposals in a document that entered an inter-ministerial consultation process, shortened to five days, at the end of July. All consultation bodies except the Finance Ministry and the Ministry of Industry and Trade were excluded from the process. Deník N reported today that the plan was prepared by a five-member government council, on which the ministry is represented by MP Filip Turek (for the Motorists party).
"The document does not represent a change in the direction of the Modernisation Fund, but responds to changed economic realities. Forecasts indicate that future revenues from emissions allowance auctions will be lower than originally expected, and it was therefore necessary to adapt the long-term financial framework to this fact," the ministry said.
Environmentalists criticise the fact that the New Green Savings programme (NZÚ), which was previously financed through the Modernisation Fund using revenues from Czech allowance auctions, is entirely absent from the proposed use of those revenues. However, the ministry said the Modernisation Fund had never been the NZÚ's sole source of funding. "On the contrary, the MŽP has succeeded in securing its funding from other national and European sources as well. This allows the programme to continue, and the ministry's objective remains to preserve its continuity until 2029, while taking account of future developments in public finances and available resources," the ministry said.
According to environmentalists, the ministry justified earmarking money for industrial companies as a necessary step to support their competitiveness in the decarbonisation process, including compensation for indirect EU ETS costs that exceed the scope of Modernisation Fund programmes. However, they say the industrial sector already has access to several programmes worth tens of billions. For example, according to the group, 43 billion Czech crowns remains available in the Modernisation Fund, alongside more than 20 billion Czech crowns from projects that were not implemented.
In addition, the European Commission has prepared the ETS Investment Booster, with a budget of 30 billion euro by 2030, for industrial decarbonisation. It also plans to establish a financial programme with a planned budget of 100 billion euros to support the green transition of energy-intensive industry.
According to Ondřej Pašek of Friends of the Earth Czech Republic, through these steps the Motorists are failing to fulfil the government's policy statement, which is intended to support energy self-sufficiency and create conditions for the development of RES. "Nothing has been set aside from future allowance revenues for Czech households to insulate their homes, while Czech municipalities, companies and energy communities will lose 15 billion [Czech crowns] for renewable energy," he stressed.
According to Miriam Macurová, head of Greenpeace Czech Republic's climate campaign, revenues from the ETS must not become merely a mechanism for returning money to industry. "Especially at a time when new financial mechanisms worth tens of billions of euros are available to industry at the European level," she told ČTK.
Friends of the Earth Czech Republic also criticises the redistribution of money within the Modernisation Fund. According to environmentalists, the largest share will again go to large companies in the ETS system, amounting to 900 million Czech crowns. Distribution system operators will then receive one billion Czech crowns. By contrast, the RES+ programme, which financed RES at companies and in municipalities, will lose 14 billion Czech crowns. The KOMUNERG programme, intended to support community energy, will lose 74 percent of its allocation, environmentalists say, just six months after its launch.
