12 years and counting: Pollution control investment at Bosnia’s Ugljevik coal plant still showing no results

Ioana Ciuta

Upgrades to the coal power plants in the Western Balkans that would bring down sulphur dioxide emissions are rare. But even where investments have been made, they have so far failed to deliver the much-needed results.

The Western Balkans’ highly polluting coal fleet needs to be phased out as soon as possible, but given coal’s high share of generation in some of the countries, interim pollution control investments are still needed in selected plants. Top of the list is the Ugljevik power plant, in Bosnia and Herzegovina, which is among the region’s most polluting plants in terms of sulphur dioxide.

Yet 12 years after the financing contract was signed, the much anticipated operation of the desulphurisation (de-SOx) equipment at the Ugljevik power plant, in Bosnia and Herzegovina, is becoming a test for everyone’s patience. It was meant to help bring the plant into compliance with the legal emission values, but it seems this is not going to happen any time soon.

Financed by a loan from the Japan International Cooperation Agency (JICA) signed as long ago as 2009, works on the de-SOx equipment started only in 2017 and test operation began in December 2019.

We hoped that in 2020 SO2 emissions would finally be significantly lower, showing good use of the EUR 85 million investment.

However, in February 2020 it was revealed that there was a technical problem. The plant’s dust filters, overhauled more than three years ago by the Czech company Termochem, at a cost of approx. EUR 10 million, were faulty, and their proper functioning is a precondition for desulphurisation. The plant operator spent some additional EUR 100,000 on a study that would show how to address the problem.

In recent weeks, local media have reported that even further delays are expected, as the plant doesn’t have an operating permit for the new installation. RiTE Ugljevik, the power plant operator, is still seeking “technical assistance” to obtain the permit. This assistance would add some extra EUR 100,000 to the costs of this project, and even in the most optimistic scenario, it is not likely to happen before the end of 2021.

In 2019, the plant’s SO2 emissions breached its individual ceiling by almost 10 times, with over 88 thousand tonnes emitted, and its dust emissions were also double the allowed ceiling.  

Modelled health impacts of Ugljevik’s emissions in 2016 – before any of the rehabilitation works had begun – showed the plant could be responsible for as many as 635 premature deaths per year and an estimated economic impact of up to EUR 1.45 billion a year. These numbers are likely similar today, considering the equipment is still not functional.

Governments in the Western Balkans have known since the signing of the Energy Community Treaty in 2005 that they need to take measures to limit pollution from their coal power plants. In 2018, the Large Combustion Plants Directive entered into force in the countries of the Energy Community, but a Bankwatch report from June 2020 showed that sulphur dioxide (SO2) emissions from coal power plants in the Western Balkans, which are included in National Emissions Reduction Plans, breached the combined national ceilings by 6 times, for the second year in a row. 

While SO2 pollution in the European Union has significantly decreased in the last two decades, thanks to the very same legislation and strict enforcement, in the Western Balkans only baby steps have been made towards compliance.

And even those are not yet delivering results. Ugljevik’s is the second costly environmental improvement that is failing to deliver results in the Western Balkans.

Serbia took out a USD 293 million loan from the China Exim Bank for a complete overhaul of the Kostolac B1 and B2 coal-fired units in December 2011. This was meant to equip the two units with de-SOx and bring the plant’s emissions in line with the legal obligations under the LCPD. The works were declared completed in 2017, but the plants’ emissions in 2019 were still at 79,113 tonnes, ten times the legal annual ceiling. It is still not clear exactly what the problem is.

Delays in desulphurisation works at the Nikola Tesla A power plant in Serbia are also unnecessarily prolonging the plant’s health impacts. A loan for a desulphurisation project was signed in 2011, but the announcement of the start of works only came in 2019 and according to the project’s financier, Japan’s Export Credit Agency, rehabilitation would only be finalised by 2022. 

Such blatant wasting of public money and disregard of laws call for decisive and immediate action. Earlier this month, the Energy Community Secretariat issued a warning to all four Western Balkan countries which operate their coal power plants under the National Emissions Reduction Plan (NERP) derogation over their failure to comply, and a formal infringement procedure is expected to be initiated soon. Those responsible for failed projects and disregard for the rule of law must be held accountable. But the pollution also needs to be cut immediately. Until the overhaul projects start delivering results, the only solution to limit these plants’ harmful health impact is to reduce working hours in order for them to remain within their annual emissions ceilings.

Ioana Ciuta is Energy coordinator at Bankwatch.