Stine Rasmussen, Directorate-General for Climate Action (DG CLIMA) Policy Officer, indicated at a recent Clingendael Institute event that she is “not too worried when it comes to China” as a danger to the European Commission’s Western Balkans Green Agenda as she ought to be.
Given the region’s concentration of Chinese and Russian economic activity in the energy, industrial, and other pollution-producing and energy-intensive sectors, the Green Agenda poses a direct challenge to China and Russia’s interests. Expecting these countries to sit idly by as their investments and strategic interests are jeopardized is foolish.
It’s also risky to just advise Western Balkan countries to strengthen their “political will,” which Rasmussen highlighted as the Green Agenda’s biggest obstacle. This statement ignores the fact that two global powers’ political wills are likely to be oriented toward opposing goals.
We need to look at China and Russia’s existing priorities to see how their goals for the projected green transition might solidify.
China is synonymous with coal in the Western Balkans. Coal now produces over 70% of the region’s electricity. Because these economies are between two and five times more energy-intensive than the EU average, a territory half the size of Germany produces more coal emissions than the EU as a whole.
As a result, with the exception of Albania, all Western Balkan states topped IQAir’s list of Europe’s worst air quality, with Bosnia and Herzegovina (BiH) even cracking the global top 10. Coal is also the most significant source of anthropogenic climate change.
Other vital industries relevant to China’s Belt and Road Initiative, such as mining, industry, and transportation infrastructure, have been targeted in addition to coal. These industries are also major pollutants. Furthermore, Chinese projects have been chastised for omitting environmental impact evaluations and enforcing low environmental regulations.
The Kostolac B coal plant in Serbia is an especially extreme example. It emits more sulfur dioxide on its own than the Energy Community Treaty allows to Serbia, Kosovo, Bosnia, and Herzegovina, and North Macedonia combined (which Serbia and other Western Balkan republics have accepted). Ironically, Kostolac B is the only facility in the region that has recently been fitted with desulfurization equipment, which was built by China Machinery Engineering Corporation and financed by China’s Exim Bank.
Despite overwhelming evidence to the contrary, China’s Communist Party desires to be seen as a positive global player on climate change. Greening, or at the very least “greenwashing,” of Chinese projects and investments in vital infrastructure could be part of a strategic Chinese reaction to the Green Agenda.
Even better for China, in the absence of an international procurement instrument or a foreign subsidies mechanism that applies to all EU funds, state-owned enterprises can compete for EU and domestically-funded green contracts.
In reality, it is already taking place. The second-largest wind farm in Montenegro was built with Chinese turbines by a consortium led by China’s Shanghai Electric Power Company. The FeitianSuye plastic recycling factory in northern Serbia is run by a Chinese company, but its operations were recently halted by the local environmental inspectorate. Serbia also secured contracts for €3.2 billion ($3.8 billion) with the China Road and Bridge Corporation for municipal wastewater treatment and landfill projects earlier this year.
In most Western Balkans countries, Russian investment is more discreet, yet it is nevertheless harmful to the environment. Russian oil and gas reign supreme in much of the region. The Kremlin takes advantage of these countries’ energy dependence in order to thwart energy diversification and market liberalization. Long-term contracts that aren’t flexible and pipeline projects in the works indicate that this pattern will continue.
The ownership and operation of oil refineries by Russians is also a problem. Promised investments in facility upgrading have fallen short in BiH, where Russia controls the country’s only two refineries. For more than a decade, the Bosanski Brod refinery poured pollution into Bosnia and Herzegovina and neighboring Croatia, until it was eventually shut down in 2019 for improvements. Russian investment in the mining, banking and real estate sectors is also significant.
To summarise, the EU’s public and private money for the green transformation of the Western Balkans could end up in the wallets of Russian and Chinese state-owned firms.
While such a result may improve environmental circumstances, it falls short of the EU’s bigger strategic objectives for the region, such as enlargement and supply chain security.
The European Commission would be foolish if it turned a blind eye to the geopolitical consequences of its Green Agenda for the Western Balkans, as the plan geared primarily at slowing global warming puts up the heat on the West’s two key geopolitical opponents.