Greece’s forests threatened under new austerity law

LATEST: In response to the political outcry caused by the exception of illegal housing agglomerations from the forest maps, Alternate Environment Minister Yiannis Tsironis submited to Parliament a legal rephrasing that clearly does not allow the declassification of illegally built forests and woodlands.


CrisisWatch Newsletter issue 41

Your news on how the economic crisis affects Europe's environment
Issue 41 / March - April 2016
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All eyes are turned on the viability and the future of the European project and EU member states coming even closer together. As Britain, one of the first states to join the European Community back in 1973, is set to decide on the future of its EU membership and the fears of Brexit are now more real than ever, hard evidence on the serious impacts of a possible EU-UK divorce are compelling for both sides. In Britain most of the discussions on the June 26th Referendum have focused on politically burning issues, like immigration, trade and the economy. Yet, the Brexit environmental impact assessment published by The Wildlife Trusts, RSPB and WWF UK reveals that Britain's EU membership has delivered considerable environmental benefits that need to be brought to the political and public debate.

Deeply immersed into an existential quest dominated by the ongoing economic downturn, the fear of Brexit and the refugee crisis, Europe’s leaders downplay the environmental factor and fail to see the
green writing of the wall. Although however the continuing pressures by industry and governments to deregulate crucial green laws and policies in the name of rapid economic growth have pushed the EU to an environmentally lethargic state, evidence that environmental regulations do not harm economies is compelling: a recent report by the OECD concludes that environmental policies and laws do not harm export competitiveness. This conclusion is consistent with the findings of previous OECD studies, which prove that a stringent regulatory framework for the protection of the environment has no negative impact on productivity – instead, they can work together.

As Tony Long, then Director of WWF EU, remarked at an October 2014 conference in Athens, “…politicians are now in the unenviable position of having only a bag of growth indicators to sell to their increasingly skeptical and knowledgeable electorates who want and need to be presented with other indicators of well-being and progress”. It is high time that Europeans stand up and make their voice heard in demand for ecologically and socially sustainable ways out of the crisis.


This newsletter’s news:

  • OECD: Strict green laws do not harm export economies
  • Environmental NGOs on the refugee crisis in Greece
  • UK needs a greener Budget to face high cost of environmental loss
  • Brexit? UK's conservation groups assess environmental impact
  • EU Court of Justice rejects right to free pollution 
  • Policy highlights

OECD: Strict green laws do not harm export economies

Rapid economic growth at all costs being the dominant political mantra since the beginning of the crisis, EU environmental legislation has been the target of unrelenting pressures for easing, on allegations that it prevents businesses from growing and thus hampers economic recovery. A recent study by the OECD however adds evidence to the opposite conclusion: strict environmental regulations and policies do not harm export competitiveness. This conclusion is consistent with the findings of previous OECD studies, which prove that a stringent regulatory framework for the protection of the environment has no negative impact on productivity – instead, they can work together.

According to the working paper, “Environmental policies are not found to be a major driver of international trade patterns, but have some significant effects on specialisation. More stringent domestic policies have no significant effect on overall trade in manufactured goods, but are linked to a comparative disadvantage in "dirty" industries, and a corresponding advantage in "cleaner" industries. The effects are stronger for the domestic component of exports than for gross exports, yet notably smaller than the effects of e.g. trade liberalisation.”


WWF maps “blue Gold Rush” in the Mediterranean

The Mediterranean region is currently facing impressive growth, a real “blue Gold Rush”, which has gained speed during the ongoing economic crisis. Without a long-term vision for sustainable development, the Mediterranean Sea will not be able to sustain the region’s economies and human wellbeing.


MedTrends, an analysis recently published by WWF on the development trends in the Mediterranean, provides the first integrated picture of 10 key economic maritime activities in Croatia, Cyprus, France, Italy, Greece, Malta, Slovenia, and Spain. With a view to 2030, MedTrends illustrates and maps the current status, future development trends and the environmental impacts (to 2030) of maritime transport, tourism, oil and gas, aquaculture, fisheries, mining, coastal development, renewable energy, and land-based pollution.


WWF addresses the IMF, EU & ECB on Greece’s environmental rollback

In a letter addressed to the representatives of the creditor institutions in Greece Delia Velculescu (IMF), Declan Costello (EC) and Rasmus Rüffer (ECB), the environmental organisation WWF Greece sheds light on the environmental rollback, intransparency and bad law-making, which plague the country and have worsened during the crisis.

In the letter, which presents the English version of WWF’s 2015 environmental law review, WWF Greece’s Director Demetres Karavellas states inter alia that:

“The findings of this year’s report are indeed alarming: dramatic decline in the quality of legislation and the transparency of the law making process; torrential loss of critical environmental safeguards, particularly in the domain of forest protection and environmental impact assessment; paralysis of the national system of protected areas; threats to valuable natural habitats by unsustainable development projects; continued downgrading and undermining of the environmental inspectorate; utter contempt for EU law in the environmental licensing and the operation of lignite power plants; licencing of a new, heavily polluting lignite power plant in Ptolemaida, which will cost at least 1,4 billion euros and will be financially unsustainable in the framework of EU climate policy; increasing lack of transparency in the Green Fund; never ending legalisation of illegal buildings and land uses, at the expense of legal certainty and equality, and with a huge environmental cost and an incalculable loss of revenues from the uncollected financial penalties.”

Read the letter.

Read WWF Greece’s 2015 environmental law review, focusing on 1) Greece’s economic adjustment programmes, 2) energy and climate change, and 3) nature and biodiversity.




Two Greek governments, same disregard for the environment and sustainability

Two consecutive governments share the same disregard for Greece’s environment and the potential for the development of a sustainable economy. Dramatic increase in EU environmental law infringement cases, new rulings by the Court of Justice of the European Union, and paralysis of the national parks, are the main features of a disappointing year filled with environmental deficit.

WWF Greece’s annual review of environmental and energy law, which was publicly announced on October 1st (in Greek), analyses the state of environment and energy law, case law and policy during the period from July 2014 to July 2015. The policy fields analysed in the review include access to information, environmental impact assessment, nature conservation, energy and climate change, waste treatment, air pollution, control of environmental crime, spatial planning, water resource management, and the operation of a national Green Fund.


Will Greece ignore the economic omens and go for new coal?

by Theodota Nantsou

In the current dismal economic setting, the construction of the new lignite power plant by Greece's Public Power Corporation constitutes a completely irrational move: the public energy utility will need to disburse 400 million euros for a project that has been proven to be economically non-viable. By insisting stubbornly on the construction of Ptolemaida V, the PPC threatens to entrap Greece in an outdated energy model, at a time when technological progress renders clean energy a cost-competitive basis for the reconstruction of the country’s production model.

The construction of Ptolemaida V is currently at an advanced licensing stage. However, the start of the actual work requires a deposit of 400 million euros within 2015, which will come from PPC’s own funds, at a time when the company is in the worst possible financial state.

WWF Greece addressed the new Minister of Reconstruction of Production, Environment and Energy, Panos Skourletis, and the Executive Board of the German bank KfW, which co-finances the construction of PPC’s mega-lignite plant “Ptolemaida V”.

The decision to construct Ptolemaida V was taken several years ago, when the status of the Greek economy, as well as that of the European and global climate and energy policy, were very different. During the last year and a half though, the data have changed dramatically, and hence the decision to construct Ptolemaida V requires careful reconsideration.

If finally built, Ptolemaida V will be the country's largest lignite-fired plant, with a capacity of 660 MW and an installation cost of at least 1,4 billion euros. Approximately one half of this amount will be provided by a syndicated bond loan to PPC under the guidance of the German government-owned KfW-IPEX Bank and guaranteed by the German Export Credit Agency, Euler Hermes. This money will be used to purchase German-made equipment for the new plant. PPC has already commissioned the construction of Ptolemaida V to a consortium led by TERNA.

WWF Greece informed the Minister and the KfW board about the recent developments in European legislation, which will impose a heavy burden on the finances of Ptolemaida V, thus rendering it an economically non-viable investment. In particular, drastic changes in the modus operandi of the EU’s Emissions Trading System, will lead to a significant increase in the price of CO2 emission allowances, which will in turn cause Ptolemaida V’s operating cost to skyrocket. Moreover, the need to comply with the revised emission limit values for other gaseous pollutants* (as determined by the “Seville” process) will require new, expensive anti-pollution technology even before the new plant begins its operation.

Finally, Ptolemaida V is neither unique nor the cheapest solution in terms of covering base load needs for Greece’s electricity system. WWF Greece’s recent scientific report shows that Ptolemaida V’s base load can alternatively be covered by hybrid combinations consisting of wind, PV and Pumped Hydro Energy Storage (PHES) stations. More importantly, the levelised cost of energy (LCOE) for several of these hybrid solutions is shown to be lower than that of Ptolemaida V. It is significant to note that the study proposes the conversion of seven pairs of existing PPC-owned hydropower stations to PHES units, thus minimizing the corresponding installation cost as well as the environmental impact.  Hence, the proposed solution is realistic, economically more favourable and clearly more sustainable, compared to Ptolemaida V, while its implementation will benefit PPC as well. 

Read more:

  • WWF Greece's letter to the Greek Minister of Reconstruction of Production, Environment and Energy here (in Greek).
  • WWF Greece's letter to the Executive Board of KfW here
  • WWF Greece’s report “Clean Alternatives to Ptolemaida V” here


*nitrogen oxides (NOx), sulphur oxide (SO2), particulate matter (PM), mercury (Hg)


Crisis results in sharp reduction of energy consumption

by Michalis Prodromou - According to the IEA’s latest “Energy Balances of OECD countries” report, 2013 saw significant reductions in the total final energy consumption for three Mediterranean countries: Greece (11%), Spain (4%) and Italy (4%). Specifically for Greece, this was the fifth consecutive decrease in gross inland energy consumption.

During the reporting period (2012-2013) the aforementioned countries have also suffered major decreases in GDP levels (3,9%, 1,2%, 1,7% respectively). In order to account for this decrease, energy intensity (i.e. amount of energy consumed relative to GDP) should be used to measure the actual energy efficiency of the national economies. EUROSTAT figures show that between 2003-2013 Greece and Italy –along with the Netherlands and Estonia- have had the smallest decreases, among their EU counterparts, of energy intensity.


A sectoral analysis demonstrates the different energy reduction patterns of each country. Final energy consumption in Greece’s residential sector has fallen by 25%, while in Spain and Italy it was the services and industry sectors that featured the highest decrease percentages (4,8% and 8,15% respectively). The economic crisis has had a huge impact on these developments. A living conditions index study performed in Greece revealed that, in 2012, a 29,4% of the Greek population could not meet adequately its heating needs. It has also led to an increase of overdue bills to the Public Power Corporation, that have now reached a total of 2 billion euros- the biggest share, 1.3 billion, belonging to households. Greece’s Energy Minister (until July 17th), Panagiotis Lafazanis, has reportedly noted that when dealing with energy poverty, investments in energy efficiency “mean absolutely nothing for citizens and households being totally deprived of energy sources”. 



Policy highlights - June 2015

1.     European Commission (ECFIN), Statement by the European Commission and the ECB following the second post-programme surveillance mission to Portugal (March 2015)

Economic and financial conditions in Portugal have further improved since the conclusion of the first post-programme surveillance mission in autumn 2014. However, the economic recovery continues to be held back by the remaining macroeconomic imbalances. While the authorities reiterated their commitment to budgetary consolidation, efforts to reduce the underlying structural budget deficit need to continue. The structural reforms undertaken during the financial assistance programme are increasingly having an effect. Nevertheless, the reform agenda to further enhance medium-term growth prospects, job creation and competitiveness remains challenging.”


2.     European Commission (ECFIN), New Excessive Deficit Procedure steps published (18 May 2015)


Overview of ongoing excessive deficit procedures


Date of the Commission report (Art.104.3/126.3)

Council Decision on existence of excessive deficit Art.104.6/126.6)

Current deadline for correction


15 November 2013

21 January 2014



21 May 2013

21 June 2013



12 May 2010

13 July 2010



7 October 2009

2 December 2009



7 October 2009

2 December 2009



13 May 2009

7 July 2009



18 February 2009

27 April 2009



18 February 2009

27 April 2009



18 February 2009

27 April 2009



18 February 2009

27 April 2009



11 June 2008

8 July 2008

financial year 2014/15


3.     European Commission, Five Presidents' Report sets out plan for strengthening Europe's Economic and Monetary Union as of 1 July 2015 (22 June 2015)

What’s in the Five Presidents’ Report concretely?

1. Towards an Economic Union of convergence, growth and jobs

2. Towards Financial Union

3. Towards Fiscal Union

4. Strengthening Democratic Accountability, Legitimacy and Institutions: From Rules to Institutions

5. The Social dimension of EMU


Next Steps: This report has put forward the principal steps necessary to complete EMU at the latest by 2025. The first initiatives should be launched by the EU institutions as of 1 July 2015. To prepare the transition between Stages 1 and 2, the Commission – in consultation with the Presidents of the other EU institutions – will present a "White Paper" in Spring 2017, assessing progress made in Stage 1 and outlining next steps needed. It will discuss the legal, economic and political preconditions of the more far-reaching measures necessary to complete EMU in Stage 2, and will draw on analytical input from an expert consultation group. Translating the Five Presidents’ report into laws and institutions should begin without delay.”


Ptolemaida V: a new economic disaster in the making?

by This email address is being protected from spambots. You need JavaScript enabled to view it. - During his recent visit to the region of Western Macedonia Greece’s new minister for energy Panayiotis Lafazanis declared his support for the construction of the new lignite plant “Ptolemaida V”. He also emphasized that he will re-negotiate the construction cost in order to reduce the burden for the Public Power Corporation (PPC) and Greek citizens. According to the contract agreement, signed two years ago, the construction of the new 660 MW lignite plant will cost 1.4 billion euro. With the exception of the 739 million euro bond loan, supported by the German Export Credit Agency Euler Hermes and arranged by the KfW IPEX Bank in 2013, PPC has been unable to secure additional funding. Recent articles in the press also mention the need for payments of 400 million euro in the first 6 months after construction begins. The situation is further complicated by the decision of the new minister to freeze the privatisation of part of the PPC and the Independent Power Transmission Operator (IPTO), which would offer the PPC funds for the construction of the new plant.

In addition to financing problems, WWF Greece in its recent report, argued that the new lignite plant will see its income shrink due to the recently adopted changes in the ETS (MSR, increase in the linear reduction factor) which will greatly increase the production cost. The argument is based on the PPC’s own calculations, which show that at the CO2 prices of approximately €30/tn (predicted for 2025-2030), Ptolemaida V will be displaced in the electricity market by natural gas plants. More importantly, the new report has shown that hybrid systems consisting of RES (wind- PV) and pumped hydro energy storage (PHES) are capable of covering the same base load as Ptolemaida V while also having lower levelised cost of energy (LCOE). Key in all this is the conversion of existing PPC-owned pairs of hydropower stations into PHES.

The Ptolemaida V case bears a striking resemblance to the 600 MW TES6 unit in Sostanj Slovenia, which was also declared to be the “Slovene energy future”. The new lignite unit which started test operation in 2014, although significantly more efficient compared to Ptolemaida V (46% vs 41,5%) is expected to have €70-80m annual losses that will burden Slovenian citizens, 226 jobs less than those promised, and a total €1.4b of installation costs compared to €690 million that was initially budgeted. 

In addition to Ptolemaida V, Panagiotis Lafazanis also promised that he will re-open the old Ptolemaida III lignite unit and extend its operation beyond 2015. The 125 MW lignite unit which started its operation back in 1965 (the oldest one still not officially retired) caught fire last November. A prerequisite for issuing its environmental permit 4 years ago was that it will be retired by the end of 2015 at the latest as part of the entire thermal power station (TPS) of Ptolemaida consisting of 4 units. The “excuse” for this is that the Ptolemaida III unit will complement Kardia III and IV in providing district heating to the city of Ptolemaida. The entire TPS Kardia consisting of 4 lignite units is scheduled to enter the Limited Lifetime Derogation (LLD, article 33 of the Industrial Emissions Directive) starting 1/1/2016. Hence, the idea is for Ptolemaida III to join them in this derogation and continue to operate beyond 2015. 

However, things are not that simple. The operation cost of TPS Ptolemaida is high and it will get even higher if Ptolemaida III operates without Ptolemaida IV. More importantly, the deadline for declaring a TPS in the Limited Lifetime Derogation is surpassed by more than 16 months. Thus, the Ptolemaida III were to operate beyond 2015, it would have to comply with the stricter emission limit values of the Industrial Emissions Directive. This would in turn mean expensive and extensive retrofits, since TPS Ptolemaida as a total is in violation of its own environmental permit in terms of SO2 emissions and its dust emissions are on average more than 4 times higher than the current limit of the Large Combustion Plants Directive (2001/80/EC). Unit III in particular has exceeded the limit corresponding to it for dust emissions according to Greece’s National Emissions Reduction Plan (NERP) every year since 2009, by at least a factor of 2. 

This may be the right time for Greece's energy ministry to discover renewables-based solutions for district heating. 

Read moreWWF Greece - announcement, WWF Greece - report on Ptolemaida V, Bankwatch on Sostanj, PPC-announcement on Ptolemaida V bond loan (in Greek)


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