Environmentalists accuse Czech Environment Ministry of diverting carbon quota revenue to big companies

The Czech Ministry of the Environment has revised how it plans to spend revenue from CO2 emission allowance auctions, redirecting a significant share of the funds to large industrial enterprises. The decision has drawn sharp criticism from environmental groups Hnutí DUHA and Greenpeace ČR.

According to the ministry, the changes don't alter the overall direction of the Modernisation Fund but simply reflect a new economic reality: forecasts show that future revenue from emission allowance auctions will be lower than expected, forcing officials to adjust the long-term financial plan.

Home insulation programme left without funding

Environmentalists point out that the new funding allocation makes no mention whatsoever of the "New Green Savings" programme (NZÚ), which had previously been partly financed by the Modernisation Fund. The ministry counters that the fund was never the programme's sole source of financing, and that it continues to be backed by other national and European sources — officials say the programme will remain in place at least until 2029.

Ondřej Pašek, an activist with Hnutí DUHA, argues that these moves show the Motoristé party is failing to deliver on the government's own programme, which pledged support for energy independence and the growth of renewable sources. "There's nothing set aside from future quota revenue to help Czech households insulate their homes, and Czech municipalities, businesses and energy communities stand to lose 15 billion crowns earmarked for renewables," he said.

Environmentalists: industry already has enough money

Ministry officials say the funds allocated to industrial enterprises are needed to keep them competitive through the decarbonisation process, including compensation for indirect costs stemming from the EU Emissions Trading System (EU ETS) — costs that exceed what Modernisation Fund programmes alone can cover.

Environmental groups disagree, noting that industry already has access to several funding schemes worth tens of billions of crowns. According to their figures, the Modernisation Fund still holds 43 billion crowns, plus more than 20 billion crowns freed up from projects that were never carried out. On top of that, the European Commission is preparing an ETS Investment Booster for industrial decarbonisation with a budget of €30 billion through 2030, and is also planning a separate €100 billion financial programme to support the "green" transformation of energy-intensive companies.

Miriam Macurová, head of Greenpeace ČR's climate campaign, said ETS revenue shouldn't simply become a mechanism for handing money back to industry, "especially at a time when new financial mechanisms worth tens of billions of euros are already available to industry at the European level."

Where exactly the money is going

Hnutí DUHA has laid out details of how funds are being reshuffled within the Modernisation Fund. The biggest share — 900 million crowns — will once again go to large enterprises participating in the ETS system. Distribution network operators will receive another 1 billion crowns.

Meanwhile, the RES+ programme, which has financed renewable energy at companies and municipalities, will lose 14 billion crowns. And KOMUNERG, a programme supporting municipal energy projects, will reportedly lose 74% of its budget — just six months after launching.

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Around Prague, based on reporting by ekolist.cz