Dirty deals in clean energy – the EU’s worst nightmare

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The resignation of Portuguese Prime Minister Antonio Costa last week over suspicion of corruption in the concession of lithium mining and hydrogen projects should serve a warning shot for similar projects in Europe.

Alleged government interference in plans to build four open-pit lithium mines in northern Portugal is at the centre of an investigation, which saw Costa’s chief of staff detained after nearly €76,000 in cash was found hidden in his office.

The case will be closely watched in Brussels for several reasons – chiefly because it is the first corruption scandal related to clean energies involving a European politician at the highest level, but also because lithium has become a symbol of the EU’s green transition.

Lithium is widely used in rechargeable batteries for mobile phones, laptops, and electric vehicles and is listed among the “strategic” minerals in the EU’s Critical Raw Materials Act, tabled earlier this year.

For that reason, the European Commission seeks to promote “the highest environmental and social standards” in how transition minerals are extracted in the EU, including when it comes to public participation and transparency aspects.

“Active public participation and confidence in the transition is paramount if policies are to work and be accepted,” the Commission said in its European Green Deal presented nearly four years ago, underlining the importance of ensuring public trust in clean energy projects.

Alas, the Portuguese lithium mining projects have been a fiasco from that perspective.

From the beginning, the planned mines in Portugal drew opposition from local residents, who warned about “dangerous promiscuity” between authorities and mining companies and said the process lacked transparency.

Anti-mining groups have now urged the Portuguese government to suspend and review all lithium projects while investigations are ongoing.

The case will serve as an early warning for other EU countries, like France, which recently seized its National Committee for Public Participation (CNDP) to organise a public debate about plans to reopen an abandoned mine in the Allier region, which contains significant lithium deposits.

The French lithium mining project has raised new hopes of economic development in a region ravaged by de-industrialisation but it is also facing scepticism from local residents who voiced concerns about the potential environmental impacts, including on drinking water.

Campaigners say the key to winning over the local population is to give them more say in the permitting process.

“We have to create the conditions that give people the opportunity to decide themselves on projects and also give them the power to reject them,” said Nik Völker, a campaigner at MiningWatch Portugal, who spoke to Euractiv earlier this year.

Risk of human rights abuses abroad

The Portuguese case also acts as a powerful reminder that the renewable energy sector is not immune to corruption and human rights abuses that have until now been associated with the oil and gas, as well as extractive industries.

According to a new report published today by the Business & Human Rights Resource Centre, clean energy companies are taking insufficient action to build public trust and “fall woefully short” in addressing human rights issues affecting the sector.

Although it noted “some progress” with human rights policies, the report said the sector “is far from ready to deliver a fast and fair transition that builds public support and delivers shared benefits”, pointing to shortcomings regarding Indigenous Peoples’ rights, land rights, and forced labour.

The most serious allegations relate to forced labour, an issue that gained worldwide attention two years ago when reports emerged that Chinese manufacturers were using Uyghur workers detained in re-education camps to manufacture solar panels in the country’s Xinjiang province.

“Building public support also means companies must be transparent on the toughest issues the sector is facing – including forced labour. This requires departing from business-as-usual approaches and pursuing assertive, corrective action, like solar supply chain transparency,” said Caroline Avan, author of the report.

BHRRC warned that “time is of the essence to reverse these trends if the renewable energy sector is to avoid the same risks and abuse that plagues the traditional energy industry”.

Public perception about renewables is still positive for the time being, with wind and solar power enjoying broad support in EU public opinion polls.

But for how long?

As the US, China and the EU scramble to secure their supply of minerals to power clean energy technologies, the risk is that more abuses will surface in the future, warned Global Witness, an international NGO.

“As our most recent investigation into lithium mining in Africa shows, mineral wealth that should boost the economies of Global South countries can instead become a lightning rod for corruption, human rights abuses and environmental damage, fuelled largely by consumer demand in Europe,” said Sophie Mardsen, senior communications advisor at Global Witness.

EU legislators still have an opportunity to put this right, though.

The EU is currently in the final stages of adopting a new law, the Corporate Sustainability Due Diligence Directive (CSDDD), which supporters say could go a long way to prevent abuses by companies exporting to Europe.

Suspicions of corruption and human rights abuses in the renewables sector need to be tackled forcefully, otherwise, they risk derailing the EU’s green transition.

– Frédéric Simon

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• Germany to back €20 billion bid to build hydrogen pipe network – By Nikolaus J. Kurmayer
• France to regulate nuclear electricity sales price at €70/MWh – By Paul Messad
• Siemens Energy: Germany to bail out key green transition player for €7.5bn – By Nikolaus J. Kurmayer
• Norway reluctant to ban deep sea mining in the Arctic, despite French pressure – By Paul Messad
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• Germany boosts the independence of its electricity grid regulator – By Nikolaus J. Kurmayer
• EU Parliament votes to dilute new ‘Euro 7’ vehicle pollution limits – By  Sean Goulding Carroll
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EU decarbonisation commitments could bring extra 204,000 jobs: study. A recent report by Eurofound, the EU Agency for the improvement of living and working conditions, says EU climate laws will be marginally positive for employment in the EU, with a net creation of 204,000 jobs.

However, the agency also cautions that some regions are set to be particularly negatively hit, particularly in central and eastern EU countries with a high proportion of extractive industries. By contrast, positive effects on employment are expected in southern European countries and in regions with high potential for renewable energy deployment.

Businesses likely to benefit most in terms of employment are in the construction sector, with jobs expected to be created in improving energy efficiency and developing renewable energy capacity.

John Hurley, Senior Research Manager at Eurofound, reiterated the need for a broad policy direction to reap the benefits of decarbonisation while protecting those who may lose out: “Policies to reduce greenhouse gas emissions will have different effects on employment by sector and occupation, increasing demand for some jobs and decreasing it for others.” The full report is accessible here. (Nathan Canas | EURACTIV.com)

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• Time to close the gap that allows EU companies to fuel the climate crisis – By Uku Lilleväli

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• 22-25 APRIL. Last European Parliament plenary session before the European elections
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Compiled by Nathan Canas, edited by Zoran Radosavljevic and Frédéric Simon. Interested in more energy and environment news delivered to your inbox? You can subscribe to our daily newsletter and to our comprehensive weekly update here.

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