China funds Serbian coal boom

Concerns are increasing about the international role of China in creating air pollution as it backs a major coal project in Serbia. 

An hour east of Belgrade, in the coal-rich Danube valley, the Kostolac B3 station is supplied by the open-cast mine at Drmno (pictured).

Coal is the most damaging fossil fuel because of the large quantity of carbon dioxide it releases when burned.

A US$715-million agreement is adding a 350-megawatt plant with 1,500 Chinese staff expected at Kostolac by next year, increasing the total output capacity of EPS by 5 per cent. 

One of Serbia’s largest coal-fuelled power plants is being expanded with an Export-Import Bank of China (Exim) loan with the construction work conducted by the China Machinery Engineering Corporation.

Serbia’s electricity provider EPS, which provides about 70 per cent of national power needs from coal and the rest from hydropower, runs the power station.

Serbia has already completed the first phase of a US$300-million Kostolac upgrade. 

The second phase of the project is expected to be completed by 2020 and 85 per cent of the financing is provided through the Exim loan. It is due to be repaid in 20 years.

The EPS manager at Kostolac, Zeljko Lazovic, told the BBC: “In the next few months, a lot of Chinese will come here and this will be a big challenge. 

“With Chinese workers and Serbian workers, at the beginning, we had some cultural problems but we have overcome them and there is now very good cooperation.”

Lazovic said the development would meet European Union air-quality standards on dust, nitrogen dioxide and sulphur pollution.

But the new development will not be fitted with any carbon-capture devices. 

The concentration of carbon dioxide in the atmosphere last year reached its highest level for 3-5 million years, according to the World Meteorological Organisation (WMO).

Chinese contracts and financing are opaque but the activist agency Bankwatch says it has been following the money.

The group’s energy specialist Ioana Ciuta said efforts to tackle Chinese air pollution had led many energy companies to limit their domestic ambitions and target technology and labour overseas instead.

“By having China invest in over 60 countries along the Belt and Road Initiative, it’s perpetuating a source of pollution that has been demonstrated to be harmful not just to the climate but also to economies,” Ciuta told the media.

 

 

Drmno. Picture credit: Wikimedia