Slovakia to invest EUR3bn in shift from coal mining

The Slovak government has approved plans to invest EUR3bn in the Upper Nitra region of western Slovakia, in order to transition it away from coal mining for electricity production. “Slovakia will phase out subsidies for coal mines supplying one of the country’s most polluting power plants from 2023, sooner than expected,” Economy Minister Peter Ziga said recently.

The Slovak government subsidizes mining at the country’s only coal company, privately owned Hornonitrianske Bane Prievidza (HBP), paying around EUR100m a year, which helps maintain thousands of jobs. The company produced 1.8 million tons of brown coal last year, supplying the Novaky power plant in central Slovakia. The facility is operated by Slovenske Elektrarne, a utility co-owned by the state, Italy’s Enel and Czech energy group EPH. Slovenske Elektrarne said this year that extending the life of the 266-megawatt Novaky plant beyond 2023 would require significant investment. The Environment Ministry says the plant is the second-biggest carbon emitter in the country.

Closing the mines has long been contentious as they employ around 4,000 people directly and 11,000 indirectly. Slovakia’s car industry is booming, though, potentially giving retrained workers the chance to secure another job. “We will soon unveil an action plan and announce the year 2023 as the end of subsidies for the coal mines,” Mr. Ziga told reporters on the sidelines of an energy conference in Bratislava. “It does not mean they would have to close immediately. We have to work with the European Commission to show people alternatives,” he added.

The investment will be made as part of the Transformation Action Plan of Coal Region Upper Nitra, which was compiled by a consulting firm for the office of the Slovak deputy prime minister and was based on the input of the local community.

The money will be used to help local residents and businesses transition as coal mining activities in the region come to an end. Improvements in infrastructure, the retraining of skilled workers, business support and tourism are all included the Transformation Action Plan.

Bankwatch Network, an environmental and human rights groups network in Europe, that monitors public finance institutions around the world, said the approval of the Action Plan was a “true victory for local communities in Upper Nitra.”

Lenka Ilcikova, Bankwatch and CEPA-Friends of the Earth Just Transition campaigner, said, “The Action Plan places the public interest in protecting the environment above the private interest in extracting coal reserves – which is a major breakthrough.”

The Slovak government, which is in support of the EU’s 2050 carbon neutrality goal, agreed to end coal mining by 2023. Around 200 investment projects in the Upper Nitra region will benefit from the plan. Country’s President Zuzana Čaputová will promote a green jobs agenda against the country’s traditional backing of heavy industry. Spokesperson Martin Burgr told Climate Home News that climate policy was “one of the key issues,” for the new president.

He said: “The need is clear: to keep global warming at 1.5 degrees. And to do that we need to start green and just [transition] of not only our economy but society”  Mr. Burgr addded the new president wanted Slovakia to grasp “the opportunities presented by low carbon development and eco-innovation in terms of sustainable and quality jobs, not ‘just’ protection of the climate”.

Slovakia is one of the most energy intensive economies in Europe, with its automotive, metal, steel and chemical manufacturers having been favored over emissions cuts by Slovak governments, according to think tank E3G. Current subsidies prop up the otherwise uneconomical production of lignite, while a 2023 deadline to phase-out coal has drawn criticism for loopholes.

Mr. Burgr said Ms. Čaputová was an “outspoken critic of subsidies for coal mining” who backed an initiative calling for the swift phase out of coal mining and support for affected workers and regions.

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