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How does a 600-year-old river project play into the Czech Republic's clean energy ambitions?

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Czech Republic's PM Andrej Babis is welcomed by European Commission President Ursula von der Leyen prior to a meeting at EU headquarters in Brussels, Thursday, Oct. 15, 2020.
Czech Republic's PM Andrej Babis is welcomed by European Commission President Ursula von der Leyen prior to a meeting at EU headquarters in Brussels, Thursday, Oct. 15, 2020.   -   Copyright  Olivier Hoslet/AP POOL
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Charles VI, the 14th century King of Bohemia and then Holy Roman Emperor, was said to have first envisaged connecting Central Europe’s three waterways – the Oder, Labe and Danube rivers – to link the North, Baltic and Black seas and allow the landlocked Czech lands access to the open waters.

Earlier this month, the first stage of this now more modest plan was approved by the Czech government, a 75km canal connecting the Oder river from the north-eastern city of Ostrava to the Polish city of Kedzierzyn-Kozle, which lies on the junction of the Oder and Klodnica.

But the centuries-old pipedream is replete with 21st-century problems.

The Czech Ministry of Commerce based its decision on a misleading financial analysis that stated the canal would be worth around €2 billion for the local economy, says Jan Skalik, of Hnutí Duha, a Czech environmental group associated with Friends of the Earth International.

Costing the Czech government nearly €550 million – and the Polish government twice this amount - the project is estimated to begin in 2030.

Yet, Europe does not have “a transport crisis” the World Wildlife Fund stated this month, “but has, above all else, a climate and biodiversity crisis”.

Its statement also argued that the Czech-Polish canal project will “not only [have] dramatic effects on the [Oder] river and its floodplain landscape but will also be of little use to inland navigation since its water level is insufficient for transporting goods.”

Indeed, environmentalists point out that much of the cargo that would be transported between Poland and the Czech Republic on the canal will be coal, an oddity since Prague has committed itself to quickly ending its reliance on coal-produced energy.

On October 15, Prime Minister Andrej Babis surprised many when he said his government will now support the European Union’s new planned target of cutting greenhouse gas emissions by 55% by 2030, against 1990 levels, which only raises the need to reduce its coal dependency.

Last year the EU agreed to cut greenhouse gas emissions by 40% by 2030, but earlier this year a number of member states, including Denmark and Sweden, petitioned for the emission-reduction targets to be increased.

Currently, half of the Czech Republic’s energy supply comes from coal and 34% from nuclear power, according to the OECD. Only 10% came from renewables in 2018. That year, the country was ranked 20th worst in the world for CO2 emissions.

'Climate heretic'

But there are sizeable obstacles in the way of change, however. Czech President Milos Zeman, an influential backer of the canal project, is also a proud climate change sceptic.

In his Christmas message to the nation last year, he described himself as a “climate heretic” and claimed that “climate change is becoming a new religion”.

His opinions put him at odds with the Czech public. Some 84% of Czechs agree that man-made climate change poses a significant threat to the future of mankind, and 90% reckon reducing greenhouse gas emissions is the only way to stop climate destruction, according to a survey released in March by STEM, a local pollster.

However, only a quarter of respondents thought it was economically profitable to reduce emissions. Prime Minister Babis, a billionaire populist, falls into this camp. He has not gone as far as Zeman in climate scepticism but instead calls for a “realistic” approach to environmental policy so as not to affect economic growth.

In March, amid the COVID-19 pandemic, Babis asserted that “Europe should forget about the Green Deal now and focus on coronavirus instead”. He was also initially sceptical of the new emission targets when they were raised earlier this year.

His concerns, however, now appear to have eased as the EU has shown flexibility.

The only way is nuclear

According to Babis’ government, the only way for the Czech Republic to meet the EU’s emission-reductions targets is if Brussels acquiesces to its plan for nuclear power expansion, as Prague argues it cannot end its reliance on coal through renewable energy.

“The Czech Republic doesn’t have any other path than the nuclear path toward non-emission sources,” Minister of Industry and Trade Karel Havlicek asserted in July.

The government’s current National Climate and Energy Plan predicts only a 20.8% share for renewable energy by 2030, slightly more than double its share today. Deloitte, a global consulting firm, published a study in September 2019 that argued renewable energy’s share could be increased to 23.8% by 2030 without any major additional burden on public resources. However, this won’t be enough to replace the Czech Republic’s dependency on coal.

The Czech Ministry of Environment did not provide comments after repeated requests.

The Czech Republic’s long-term state energy policy, issued in 2014, calls for four new nuclear reactors to be built by 2040, the first of which is expected to see construction start in 2029 before operators begin eight years later, the government said earlier this year.

Babis extracted a concession from the European Commission last December so that expanding nuclear energy production will be acceptable in order to replace the country’s reliance on coal as part of the “Green Deal”.

But Brussels will need to give greater leeway if it wants to keep the Czech Republic’s support when it resumes discussions, likely in December, about the new 55% emissions target.

Huge state-subsidy bill

In July, the Czech government agreed on a fixed-price purchasing contract with state-controlled energy group CEZ for energy produced at the planned new reactor at Dukovany, one of the two Czech nuclear plants. The government also agreed to an interest-free loan for the duration of the construction between 2029 and 2036. It is estimated to cost about $7 billion, but Bloomberg reported in July that this cost estimate is likely to rise and even minority investors in CEZ are wary of the project.

However, this deal first needs EU approval as it could potentially violate the bloc’s state-subsidy rules. The European Commission is expected to concede on the issue later this year in return for the Czech Republic agreeing to the higher emission-reduction target

Is a 55% reduction target feasible?

Whether these concessions from the EU will allow the Czech Republic to meet its emission-reduction targets by 2030 remains in doubt, even in Prague.

“The Czech Republic understands that the majority of EU states are ready to back a 55% target,” Milena Hrdinkova, Czech State Secretary for European Affairs, was quoted as saying this month. “However, it is unrealistic for the Czech Republic itself.”

But even some environmentalists are more optimistic than government officials.

It is “very probably” that the Czech government’s uncertainty over the EU’s emission-reduction targets is because of a “misunderstanding between key people in Czech government [who] didn't know that 55% reduction is related to 1990,” said Karel Polanecky, an energy expert at Hnuti Duha, the Czech environmental group.

Indeed, if the EU’s increased targets are accepted, it would be a 55% reduction based against 1990, not from now until 2030.

According to Polanecky, there is a good chance that the Czech Republic could achieve the 55% reduction of greenhouse gas emissions by 2030. Between 1990 and 2020 there has been roughly a 35% reduction of greenhouse gas emissions, chiefly because of the decline of heavy industry in the 1990s, he said, and another 10% could be cut by energy efficiency improvements in buildings.

However, Polanecky noted, “the most important greenhouse-gas reduction potential is in the phase-out of the coal power sector”.

At the moment, the Czech government is insistent that this can only be achieved through a greater reliance on nuclear energy. But for that to happen, the EU will need to make more compromises in December.