Along with Greece, Serbia is the main destination for Chinese investments in the countries of Central and Eastern Europe.
What is more important for a citizen in Serbia, to have a secure income or to live in a healthy environment? This question is often asked at a time when there is negative talk about dirty investments that have created major environmental problems in Serbia in recent years. And while on the one hand these investments mean new jobs, income for the state and local self-governments, on the other hand the consequences of the work of these industries are visible even to the naked eye.
The People’s Republic of China has become a major investor in the Republic of Serbia. This is reflected in several domains, with the most prominent investments in industry, energy and the construction of new highways and other road facilities. In addition to investments from China, a large part of the work is carried out with the help of loans that the countries of our region take from Chinese banks. Starting in 2014, Serbia, along with Greece, stood out as the main address of China’s foreign direct investment in the region. In the period 2010–2019. According to the data from the National Bank of Serbia, direct foreign investments from China to Serbia amounted to over 1.6 billion euros.
Serbia and new thermal power plant units
Although it has committed itself to switching to higher production and consumption of energy from renewable sources in the coming years and decades, it seems that Serbia is nowhere near consistent with that plan.
In the previous period, intensive work has been done on the completion of works on the construction of block B3 at the Kostolac B thermal power plant, which is already very late.
This block is one of the largest construction sites and its construction is being realized from a loan mostly provided by the Export-Import Bank of China. The capacity of Block B3 is 350 MW and as EPS representatives have repeatedly pointed out, it is extremely important for the energy system of Serbia.
And while work is underway on the construction of block B3 in Kostolac, the Chinese company Power Construction Corporation of China agreed a deal with EPS in early 2020.
Namely, another Chinese investment will be based on the construction of Block B within TPP Kolubara. This project is worth about 385 million euros, and aims to put the plant into operation during 2024, whose total capacity will be 350 MW. In that way, the two largest TPP complexes in Serbia will be renovated with new production blocks.
With these two investments, Serbia will continue with the exploitation of low-calorie lignite coal, which is necessary for the operation of these plants, and which greatly affects the environmental pollution in our country.
In Serbia, the number of newly opened wind farms has increased in recent years, especially in South Banat. In addition, Serbia is rich in potentials when it comes to other renewable sources, and it remains questionable why Chinese investors do not turn completely to them, but their coal burning is still in focus.
Serbia has more reasons for problems with energy production from lignite due to persistent non-compliance with the provisions of the NERP (National Emission Reduction Plan). During March 2021, the Secretariat of the Energy Community re-initiated the procedure, considering that in the case of Serbia, the upper limit was again disregarded when it comes to sulfur dioxide emissions.
Chinese investment in other branches of “dirty industry”
In addition to investments in new TPP units in Serbia, Chinese investments, as stated, have been widespread for several years, primarily in road construction, but also investments in the development of mostly heavy industry. The most famous examples of realized investments are certainly the investments in the Ironworks in Smederevo and the former Mining and Smelting Basin Bor.
These two plants have been emitters of harmful substances for decades, however, with new investments, this trend has only further increased.
Despite the announcements from the HBIS group, which is majority owned by Zelezara, that they will invest around 120 million euros in a new plant that will be far more environmentally friendly, from 2019 until today, this promise has remained unfulfilled. The citizens of Smederevo and its surroundings have been affected by high concentrations of pollutants in the air for most of the year, and the potential realization of such a project would be of great importance for solving that problem.
The situation is no better or further south, towards Bor. In previous years, citizens in this city often took to the streets demanding reactions from the authorities due to air quality problems.
As in the previous example, here is part of the investment from China, where the pool is majority owned by Zijin Copper.
Despite all the efforts, it all came down to a few financial penalties for this company. In addition to air pollution, the operation of the copper mine in Majdanpek, which also became the property of the mentioned company, has again caused pollution of the Pek River in recent weeks, and the river has changed color for the umpteenth time.
In recent months, the construction of the LingLong tire factory on the territory of the municipality of Zrenjanin has become more and more in the center of attention. This investment immediately alerted the representatives of the civil society and the professional public, who pointed out the damage to the environment in case this factory starts working.
In addition, the problem is the threat to the special nature reserve Carska bara, which is located only 2 km away from this plant. Despite the case study, which shows a potentially large negative impact on the environment, the construction of this factory began in 2020 without public discussions.
The main characteristic of all three mentioned cases is that they are plants that have a very large negative impact on the health and safety of citizens. As examples of dirty industry, these plants deviate when it comes to Chinese policy, where the authorities there want to influence the creation of more environmentally friendly business with zero emissions of harmful substances.
The importance of Chinese investments for economic growth in Serbia is undoubtedly important, especially since they start industry and employ unemployed citizens. However, the quality of these investments remains highly questionable, especially if we consider their negative impact on the environment.
China’s plans for a clean and green future
And while investments in dirty industry in Serbia continue, on the other hand, China has the idea of becoming carbon neutral by 2060.
The news encouraged many supporters of the fight against climate change when it was made public by Chinese President Xi Jinping during the previous year.
In this way, China has supported the efforts of other countries that are major emitters of CO2 in the fight against climate change.
The first opportunity to assess how this announcement by the Chinese authorities will be reflected in concrete measures “on the ground” was at the beginning of March, when the 14th Chinese five-year development plan covering the period from 2021 to 2025 was adopted.
After the announcement of the plan, many analysts were disappointed and assessed that the presented measures were not ambitious enough and did not fully correspond to the new declarative aspirations that China would reduce carbon dioxide emissions to zero.
However, shortly after the five-year plan was adopted, there was an unexpected turnaround when the Communist Party’s Central Environmental Inspection Team sharply criticized the Chinese government’s main energy body for planning a major expansion in coal consumption.
This inspection team was created on the initiative of Xi Jinping personally, and it is led by the top of the Communist Party, which is why some analysts believe that there may be a certain revision of the existing plan.
What the end result will be remains to be seen, but it should be borne in mind that the Chinese economy is very large, and in addition, the territory of China covers vast areas.
At the same time, the complex system and procedures that go through many decisions should be pointed out. Therefore, there are doubts about the overall success when it comes to the realization of ideas for reducing CO2 emissions. This is especially true for certain regions, ie provinces that are far from the very centers of economic and political developments in China.
What exactly are investments outside of China?
In an effort to spread around the world, China has flooded a good part of the globe with its investments during the 21st century. As a fast-growing economy in certain regions, it has also positioned itself as a large investor, thus making itself a new economic giant. As a result, the Belt and Road 17 + 1 initiative was created, by which the Chinese authorities decided to invest in the countries of Central and Eastern Europe.
Through investments, grants, development loans and the like, China plans to strengthen its position, and it is estimated that it will invest over 13 billion euros in this region, which will enable it to continue its business in this region as an important economic and trade partner.
What still creates a problem from the environmental aspect, is the “purity” of these investments. If you look again at the chart with the realized projects in which the investments went, you will notice a problem. Of the total number of realized investments, a third are investments in the production of energy from coal, gas and gas infrastructure, mining development, oil production and steel production.
Although the planned investments are reduced in the areas that create pollution, there is still a high percentage of planned investments in coal energy production – 13%.
Accordingly, but also to everything that is presented on the example of Serbia when investments in industry are in question and against what China wants to achieve, one question arises: Can China’s intentions to fight climate change be considered serious if investments continue in dirty technologies around the world, Danas reports.
