Hundreds of millions in taxpayer money wasted by EU on failed gas projects

22nd February 2021, London - €440m of taxpayer money, spent by the European Union, has been wasted on fossil gas projects that have either failed or are likely to fail, according to new analysis by Global Witness. Every single cent of this money has gone to projects backed by powerful fossil fuel companies with influence over how this money is spent. 

Since 2013, the European Union has spent nearly €5 billion in taxpayer funded grants and subsidised loans on 41 gas projects such as pipelines or import terminals, known as “Projects of Common Interest” (PCIs). This process is governed by the TEN-E Regulation that gifts enormous sway to a group of gas companies - ENTSOG - over which gas infrastructure are shortlisted to receive public funding. 

Of the seven projects that have failed or are likely to, every single one involves members of ENTSOG. Global Witness’ report from June of last year “Pipe Down” exposed this remarkable conflict of interest at the heart of EU gas funding, finding that the vast majority of all EU money for fossil gas projects went to ENTSOG companies. 

The European Commission has recently proposed a revision to the TEN-E regulation - but has largely left the influence of ENTSOG untouched. With a set of new PCI projects currently under review it looks likely the Commission will be repeating the same mistakes again. 

Jonathan Gant, Senior Gas Campaigner at Global Witness, said:

“It is unbelievable that the Commission thinks this is a fair process for deciding how to spend public money. When companies that stand to directly benefit are involved in the decision-making process it can come as little surprise that so much of this vital money is wasted.”

“The climate crisis, as the EU itself recognises, is both immediate and disastrous. We therefore cannot waste a single cent of already strained public funds when this money should be going to viable renewable energy projects.”

“What’s even more shocking is that the European Commission has recently passed on the opportunity to redress the imbalance of influence held by corporates. This only serves to underline just how powerful these companies are and the extent to which the EU must detangle itself from the fossil fuel industry.”

In some of these failed projects construction never even started, though the majority of the wasted money was spent on the controversial BRUA pipeline, which was supposed to transport gas from Black Sea gas fields to Bulgaria, Romania, Hungary, and Austria. TRANSGAZ, the ENTSOG member backing the pipe, declared it a success after completing a Romanian section last year. But plans to extend BRUA to Hungary have been cancelled and it is unlikely the pipe will now transport gas from the Black Sea - falling far short of the project’s ambition when it was granted PCI status. 

According to Global Witness’ analysis, the €440m of wasted funds would be enough to cover the construction of Spain’s immense Nunez de Balboa solar farm – the largest in Europe – or Denmark’s offshore Rodsand wind farm, which heats 200,000 homes.

The European Commission’s consultation on the next list of ‘PCI’ energy projects to be granted EU support  is open until early April 2021. Global Witness is calling for all fossil gas projects to be dropped and barred from receiving additional subsidies, redirecting funds to renewable energy projects. Global Witness also calls for the European Council and Parliament to revise the Commission’s TEN-E revision, to remove enormous power it gifts to ENTSOG members. 

Header photo credit: Mark Airs/ Ikon Images