EU auditors say aid for coal regions failed to spur climate transition

FILE PHOTO: Smoke and steam billows from Belchatow Power Station

By Gabriela Baczynska

BRUSSELS (Reuters) - Billions of euros in aid given to coal regions in the European Union have all but failed to spearhead an effective climate transition, EU auditors said on Wednesday, boding poorly for the future further complicated by Russia's war in Ukraine.

The European Court of Auditors (ECA) analysed the effects that expenditures of some 12.5 billion euros ($12.55 billion) in 2014-20 had for seven coal-producing regions in Germany, Poland, Romania, the Czech Republic and Spain.

"EU support for coal regions achieved little for climate transition," the ECA said in its audit. "EU financial assistance for coal regions has had a limited impact on both jobs and energy transition."

It said the funds in question were used more for related development upgrades ranging from health to transport infrastructure, among other broad quality of life projects, but provided little impetus to the transition to "green" energy.

That is worrying for the EU's new Just Transition Fund (JTF), worth more than 17 billion euros to help wean countries off fossil fuels by shielding vulnerable communities from the economic impact of transforming polluting sectors.

"In particular, the auditors stress the risk that funding could be spent without the effective transition taking place," the auditors said of the JTF, which coal-reliant countries like Poland negotiated with other members of the 27-nation bloc in exchange for agreeing to a 2050 climate neutrality target.

The auditors said the problem has since been compounded by Russia's invasion of Ukraine last February and the resulting cuts in Russian gas sales to Europe, which pushed some countries to increase coal use again to secure energy supplies.

"Russia's invasion of Ukraine in 2022, and its effects on the energy market, may also result in delays in the transition away from coal," the ECA audit said.

Even before the war, the ECA noted countries like Poland and Germany had partly replaced using domestic coal with imports or other fossils like natural gas, meaning greenhouse gas emissions have not fallen as anticipated. ($1 = 0.9961 euros)

(Reporting by Gabriela Baczynska; Editing by Mark Heinrich)