The European Commission has approved the Czech Republic's request for payment of approximately CZK 26 billion from the National Recovery Plan. Now it is up to the Economic and Financial Committee to officially endorse the European Commission's position. The approval of the request was conditional on meeting thirty-one milestones and six goals related to issues such as real ownership, building law, court and judge law, or conflict of interest prevention. In the field of climate and environment, the milestones concerned railway electrification and reducing energy consumption in buildings.

 

Projects can only be reimbursed until the end of 2026, so the priority remains efficient and timely disbursement of available funds. The second payment request, which the Czech Republic will submit this autumn, is also conditional on meeting additional goals and milestones. However, some ministries are already warning that certain milestones will be difficult to achieve, putting the successful approval of the second request at risk. Alongside the disbursement of the first installment under the National Recovery Plan, negotiations are underway to update it. The original CZK 179 billion has been increased by CZK 14 billion due to high inflation and a slowdown in the economy.

 

The Czech Republic can also take advantage of favorable loans within the REPower EU initiative, up to a maximum of CZK 350 billion, and obtain an additional CZK 16 billion from its grant component. These funds are intended for projects in the energy sector and addressing the immediate consequences of the war in Ukraine and the related energy crisis. However, the Czech government would also like to finance fossil projects, such as the plan to increase the capacity of the TAL oil pipeline, with the aim of reducing the Czech Republic's dependence on fossil fuels from Russia. This particular project is problematic because it does not offer a solution to energy independence but merely shifts the issue geographically to other often politically unstable countries. At the same time, the Czech Republic has not presented a realistic model of oil consumption development. To meet the ambitious goals arising from the Green Deal, consumption should start to decline, but increasing the capacity of the TAL pipeline will not contribute to a decrease in consumption; on the contrary. Instead of supporting such projects, the Czech government should focus on implementing comprehensive measures aimed at decarbonization and reducing fossil fuel consumption in transport, which is currently lacking.

 

If the Czech Republic ultimately decides to use the REPower EU loan, the funds should be used to maximize support for energy communities and measures aimed at energy savings. The National Recovery Plan should continue to specifically support low-income households, for example, through the expansion of the New Green Savings Light program, which would enable applicants to obtain funds for comprehensive renovations in the field of energy savings and the installation of renewable sources.

 

Author: Eva Mariničová