Follow The Money: CE Oltenia's false reporting saves the company 250 million euros

The Oltenia Energy Complex, which represents 20% of national energy production, would have reported extremely low CO2 levels for years, exactly when the price of ETS certificates was increasing, an artifice that would have brought the company in our country savings of over 250 million euros, according to a journalistic investigation published Thursday evening by the Follow The Money website, carried out in partnership with the Organized Crime and Corruption Reporting Project (OCCRP). The cited source claims that the data validated by CE Oltenia's own laboratory are contradicted by experts in the field, who state that the data in question is unreal, as long as the Romanian company's reports show that lignite is an almost premium fuel, "cleaner" than the standard values established by the UN. Thus, CE Oltenia's coal-fired power plants have become the most efficient in Europe, which would not correspond to reality, OCCRP experts say.

The journalistic investigation also mentions the point of view of the representatives of the Oltenia Energy Complex, who state that the data in the reports are so good because of the low quality of the lignite used in the production process of electricity and thermal energy. CE Oltenia claims that the OCCRP data "may contain an error”, acknowledged that the reported emission factors have decreased in the last seven years, but said that the lower quality lignite used burns inefficiently and releases less CO2.

Several independent experts have stated for the cited source that poor quality lignite should produce higher, not lower, emissions per unit of electricity, because more fuel must be burned to generate the same energy.

"From my office in Berlin, I don't believe these figures (ed. - figures from the Oltenia Energy Complex reports). I recommend that you call an independent laboratory to check them and I am 99% sure that they would find an underestimate,” Hauke Hermann, an energy expert and senior scientist at the Öko-Institut in Germany, told Follow The Money.

Sam Van den Plas, policy director at Carbon Market Watch, warns that the Oltenia CE reporting raises serious questions about the "potential lack of verification” and "integrity gaps at the core of the ETS system.” And Brice Böhmer, climate and environment specialist at Transparency International, stresses that the fact that the laboratory belongs to the company represents a "potential conflict of interest” that exposes how "the entire ETS system has integrity gaps.”

The OCCRP analysis, carried out by "reverse engineering” based on public data sent by Romania to the EU, shows that the "implicit” emission factors of the Oltenia CE are even "up to 18% below the IPCC implicit values” for lignite, which would transform, on paper, the dirtiest fuel into an almost miraculous one. And Euracoal confirms that "there were no changes in the composition of Romanian lignite between 2015 and 2022”, which weakens the explanation offered by the Oltenia CE representatives for the cited source. The OCCRP also shows that between 2016 and 2023 the emission factors calculated for the Rovinari and Turceni power plants decreased by "15%”, precisely during the period in which the price of ETS certificates skyrocketed, and in 2010, when certificates cost only "14 euros per ton”, the same plants reported much higher emission factors, perfectly in line with the European average.

Faced with these discrepancies, experts are categorical: "It is inconceivable that more than 10% of the carbon contained in the fuel would come out of the chimney unburned,” says Hauke Hermann from the Öko-Institut.

However, neither the European Commission nor the Romanian authorities seem to have checked the suspicions in time. The National Agency for Environmental Protection (ANPM) told the cited source that it "is not responsible” for verifying the individual data because they have already been revised and refuses to provide the figures reported by CE Oltenia on the grounds that it would involve "a lot of physical and mental work” and would require the company's permission. The independent verifier hired by the company in our country states that it can check the "accuracy and completeness” of the reports, but "does not have the capacity to carry out laboratory analyses” or request others. And CE Oltenia states that ANPM "did not carry out inspections because it had no reason to.”

The cynicism of these justifications becomes even harder to digest when compared to the real impact of pollution: between 2012 and 2021, industrial pollution cost the European Union "over 2.7 trillion euros", and in 2021 alone, Oltenia's power plants generated "over 1.4 billion euros" in health, environmental and infrastructure damage, according to OCCRP analysis based on data from the European Environment Agency.

The head of the National Environmental Guard in Gorj, Gheorghe Sanda, stated, according to the journalistic investigation, that in the last ten years the CE Oltenia power plants have been fined "over 30 times” for exceeding pollution limits and illegal waste disposal, adding: "We cannot demand perfectly clean air, but we expect demonstrable efforts that they are doing everything in their power to solve the problem”.

In reality, efforts are lagging, and political decision-makers are constantly postponing the closure of the power plants, although Romania has received "hundreds of millions of euros” in European funds to give up lignite. Energy Minister Bogdan Ivan admitted in September that our country "cannot close its coal-fired power plants by the end of the year”, although this had been assumed in Brussels. Corina Murafa, a former energy expert at the World Bank, states that this delay is not technical, but political: "The problem is that subsidies are granted during the implementation period of the restructuring plan. With the continuous extension and renegotiation of this plan, theoretically, the extension of subsidies is also sought”.

Beyond all calculations, what remains is the image of a suffocated community and a state that, instead of protecting its citizens, defends a polluting industry with data that is out of touch with reality. While Europe talks about green transition, Romania seems stuck in a gray area: ash falls from the chimneys of CE Oltenia thermal power plants, and the authorities feign control.