Central and eastern EU countries risk undermining the bloc’s climate goals as a result of their participation in the heavily pro-gas Three Seas Initiative (3SI), according to a new briefing by Global Energy Monitor (GEM). 3SI is a regional investment co-operation which is currently prioritising the development of new gas infrastructure over renewable energy projects.
GEM analysis of the publicly disclosed priority energy projects of 3SI, which has confirmed financial backing from the US government and is attracting attention from potential state backers such as Germany, Japan and the UK, shows that climate-threatening gas projects in line for financing via 3SI’s investment fund currently outnumber renewables projects by more than two to one. The 18 major, proposed gas projects include trans-border gas pipelines such as BRUA and Eastring, and two liquefied natural gas import terminals in Estonia and Latvia, all of which have failed to attract sufficient public and private financing in recent years.
The continuing 3SI emphasis on these and other ‘zombie’ gas infrastructure projects, when the EU’s Climate Law calls for an overall 55% reduction in greenhouse gas emissions by 2030, is largely being driven by outdated politics, according to GEM.
“The bias towards gas currently on display at the Three Seas Initiative derives from the initial drawing up of the project list in 2018 when the Trump administration was hyperactively pushing US LNG exports on eastern Europe while at the same time pledging $1 billion, albeit only in loans, for the fledgling initiative,” said Greig Aitken, GEM’s Finance researcher and author of the briefing. “Three years is a long time ago in the worsening climate emergency, and US financial backing for 3SI energy projects when it finally emerges under the climate-conscious Biden administration has to be earmarked for renewables investments rather than gas.”
US state financial agencies, the Export–Import Bank of the United States and the US Development Finance Corporation, have committed to provide lending to 3SI under the US’s $1 billion funding envelope but have not yet disbursed any financing.
GEM’s briefing also highlights that the tide may be starting to turn towards renewables at 3SI under the stewardship of its investment fund by London-based Amber Infrastructure Group.
In May this year, Amber organized 3SI’s first energy investment in a solar company--an Austrian company with development plans in Bulgaria, the Czech Republic, Romania, and Slovakia. In public comments about its investment role for 3SI, Amber has stressed commercial viability as its key criteria for selecting 3SI projects for financial support.
GEM’s Greig Aitken commented: “The first 3SI energy investment was very encouraging. Not only did it go to a renewable energy company but it came from left field, having never been present on the gas-centric 3SI priority project list. Amber Infrastructure Group appears to be bringing appropriate due diligence to the 3SI investment table, in terms of both climate and commercial viability.”
