WEBVTT 1 00:00:00.028 --> 00:00:01.149 The Modernization Fund, 2 00:00:01.289 --> 00:00:03.771 I think of it as the biggest fund no one's ever heard of. 3 00:00:03.991 --> 00:00:04.971 It's financed from the 4 00:00:05.512 --> 00:00:06.352 ETS revenues, 5 00:00:06.552 --> 00:00:06.773 ETS1. 6 00:00:07.413 --> 00:00:12.657 It should probably come out to around 57 billion euros. 7 00:00:12.837 --> 00:00:15.078 Once you start looking at the actual numbers, 8 00:00:15.178 --> 00:00:16.399 especially with the public finance, 9 00:00:16.459 --> 00:00:17.600 you see there's a lot of money. 10 00:00:17.880 --> 00:00:19.601 It's just not necessarily being spent that well. 11 00:00:19.681 --> 00:00:24.765 A growing share of this Modernization Fund money has gone to gas, 12 00:00:25.005 --> 00:00:26.186 waste incineration, 13 00:00:26.386 --> 00:00:27.106 and biomass. 14 00:00:27.447 --> 00:00:29.308 this raises a fundamental 15 00:00:29.528 --> 00:00:30.609 governance question. 16 00:00:30.909 --> 00:00:38.554 Are we using public funds to prepare people and systems for carbon pricing or to postpone the hard choices? 17 00:00:41.696 --> 00:00:43.278 If you're familiar with this podcast, 18 00:00:43.378 --> 00:00:47.100 you know we see the energy transition as more than a question of technology, 19 00:00:47.340 --> 00:00:47.801 heat pumps, 20 00:00:47.841 --> 00:00:49.042 network renewables. 21 00:00:49.202 --> 00:00:50.362 It's a human story. 22 00:00:50.663 --> 00:00:53.184 We've been talking about social and human factors, 23 00:00:53.185 --> 00:00:53.645 of course, 24 00:00:53.705 --> 00:00:55.546 but now it's time to follow the money. 25 00:00:56.086 --> 00:00:57.928 Across Central and Eastern Europe, 26 00:00:58.088 --> 00:00:58.228 one 27 00:00:58.468 --> 00:01:06.094 EU funding instrument plays a decisive role in what kind of heating systems will exist for the next 30 years or more. 28 00:01:06.835 --> 00:01:08.276 The Modernization Fund, 29 00:01:08.476 --> 00:01:10.378 which channels revenue from the EU 30 00:01:10.738 --> 00:01:12.379 Emission Trading System, 31 00:01:12.740 --> 00:01:13.300 ETS, 32 00:01:14.001 --> 00:01:15.602 into national investments. 33 00:01:16.243 --> 00:01:20.626 It sits alongside other pillars of the Fit for 55 architecture, 34 00:01:21.167 --> 00:01:22.868 including the Innovation Fund, 35 00:01:23.068 --> 00:01:24.309 the Social Climate Fund, 36 00:01:24.589 --> 00:01:25.690 and the upcoming 37 00:01:26.211 --> 00:01:26.911 ETS2. 38 00:01:27.892 --> 00:01:33.857 which will put a carbon price on fuels used in buildings and transport from 2027. 39 00:01:34.458 --> 00:01:34.978 On paper, 40 00:01:35.339 --> 00:01:38.081 this architecture makes a lot of sense. 41 00:01:38.401 --> 00:01:40.783 ETS revenues fund the transition. 42 00:01:41.184 --> 00:01:43.806 Investments modernize energy systems. 43 00:01:44.247 --> 00:01:46.188 Social tools protect households. 44 00:01:46.789 --> 00:01:47.549 In practice, 45 00:01:47.930 --> 00:01:50.592 the picture is sometimes messier. 46 00:01:51.253 --> 00:01:54.556 A growing share of this modernization fund money 47 00:01:55.056 --> 00:01:56.296 has gone to gas, 48 00:01:56.557 --> 00:01:58.677 waste incineration and biomass, 49 00:01:59.357 --> 00:02:06.820 even as ETS2 is delayed because governments fear the social backlash of higher heating costs. 50 00:02:07.760 --> 00:02:10.961 This raises a fundamental governance question. 51 00:02:11.521 --> 00:02:19.284 Are we using public funds to prepare people and systems for carbon pricing or to postpone the hard choices? 52 00:02:20.060 --> 00:02:23.321 This matters because heating is where climate policy, 53 00:02:23.581 --> 00:02:26.042 household bills and social trusts collide. 54 00:02:26.542 --> 00:02:31.363 It also matters because tens of billions of euros are still unallocated. 55 00:02:31.923 --> 00:02:40.466 And the decision taken now will shape whether ETS2 becomes socially manageable or politically explosive. 56 00:02:41.006 --> 00:02:41.666 To unpack this, 57 00:02:42.046 --> 00:02:44.647 I'm joined by Morgan Henley from CEE Bankwatch. 58 00:02:45.147 --> 00:02:48.868 Morgan has been closely tracking how the modernization fund is... 59 00:02:49.108 --> 00:02:49.868 actually used, 60 00:02:49.988 --> 00:02:50.709 who decides, 61 00:02:51.109 --> 00:02:54.190 and what still can change while there is time. 62 00:02:54.970 --> 00:02:59.552 This conversation is really about why funding design is political, 63 00:03:00.092 --> 00:03:02.853 why district heating is a justice issue, 64 00:03:03.313 --> 00:03:10.076 and why the credibility of Europe's climate policy depends on how these instruments interact. 65 00:03:10.880 --> 00:03:16.625 The analysis discussed draws back on BankWatch 2025 assessment of the modernization funds, 66 00:03:16.725 --> 00:03:19.767 allocation and impact that will be linked in the show notes. 67 00:03:21.489 --> 00:03:22.049 So Morgan, 68 00:03:22.470 --> 00:03:23.370 welcome to the show. 69 00:03:24.311 --> 00:03:24.611 Hi, 70 00:03:24.772 --> 00:03:25.472 thanks for having me. 71 00:03:25.532 --> 00:03:26.213 It's great to be here. 72 00:03:27.294 --> 00:03:28.014 So Morgan, 73 00:03:28.274 --> 00:03:33.078 you work on funding instruments that most people never hear about. 74 00:03:33.679 --> 00:03:39.604 What drew you personally to district heating and EU climate finance as a place where the transition can... 75 00:03:40.024 --> 00:03:41.825 either succeed or fail? 76 00:03:42.686 --> 00:03:42.966 Well, 77 00:03:43.466 --> 00:03:44.947 I'm originally from Florida, 78 00:03:45.347 --> 00:03:45.967 from the U.S., 79 00:03:46.408 --> 00:03:49.049 so public EU fund for heating. 80 00:03:49.930 --> 00:03:50.170 Yeah, 81 00:03:50.310 --> 00:03:57.674 especially public finance from the EU for district heating wasn't exactly my childhood dream job, 82 00:03:58.274 --> 00:03:58.554 but 83 00:03:59.395 --> 00:04:01.376 I've been here now for 15 years. 84 00:04:01.696 --> 00:04:06.859 I worked on the coal phase out in the Czech Republic for quite some time before my current role at Bankwatch, 85 00:04:06.999 --> 00:04:08.480 so it was sort of a 86 00:04:09.000 --> 00:04:12.822 a natural transition because when we're working on the coal phase out, 87 00:04:12.922 --> 00:04:15.703 heating was always the kind of untouchable issue like, 88 00:04:15.863 --> 00:04:16.063 oh, 89 00:04:16.064 --> 00:04:16.924 it's too complicated. 90 00:04:17.024 --> 00:04:17.724 It's too hard. 91 00:04:18.444 --> 00:04:19.205 And well, 92 00:04:19.245 --> 00:04:20.405 I guess I like a challenge, 93 00:04:20.665 --> 00:04:21.666 but it's actually, 94 00:04:21.906 --> 00:04:24.107 I think the district heating and heating side of things, 95 00:04:24.147 --> 00:04:25.167 it's really fascinating. 96 00:04:25.747 --> 00:04:28.469 It's a question of technologies. 97 00:04:28.649 --> 00:04:30.329 It's a question of financing, 98 00:04:30.950 --> 00:04:32.030 but it's also really personal. 99 00:04:32.330 --> 00:04:34.371 Everyone has a heating system at home pretty much. 100 00:04:34.471 --> 00:04:36.112 So people I don't know. 101 00:04:37.009 --> 00:04:38.632 And I think it's much closer to them than, 102 00:04:38.692 --> 00:04:39.113 let's say, 103 00:04:39.193 --> 00:04:39.674 electricity. 104 00:04:40.455 --> 00:04:40.575 So 105 00:04:41.316 --> 00:04:43.880 I like that it kind of intersects with all of those things. 106 00:04:43.940 --> 00:04:45.843 And in the public finance side of it, 107 00:04:46.304 --> 00:04:46.584 you know, 108 00:04:47.045 --> 00:04:48.487 there's always this debate, 109 00:04:48.548 --> 00:04:48.788 like, 110 00:04:48.888 --> 00:04:51.212 is there enough money for the transition? 111 00:04:51.958 --> 00:04:54.700 And once you start looking at the actual numbers, 112 00:04:54.800 --> 00:04:56.040 especially with the public finance, 113 00:04:56.080 --> 00:04:57.221 you see there's a lot of money. 114 00:04:58.002 --> 00:05:00.003 It's just not necessarily being spent that well. 115 00:05:00.163 --> 00:05:02.564 So it's not a low hanging fruit. 116 00:05:02.604 --> 00:05:04.425 I wouldn't say that it's quite difficult. 117 00:05:04.605 --> 00:05:07.647 But once you see and get into it, 118 00:05:07.907 --> 00:05:10.709 it's quite clear that a lot more could be done. 119 00:05:11.429 --> 00:05:11.549 So, 120 00:05:12.089 --> 00:05:12.690 so interesting. 121 00:05:12.730 --> 00:05:15.171 So let's start with the basics. 122 00:05:15.671 --> 00:05:18.033 What is the modernization fund? 123 00:05:18.573 --> 00:05:19.694 Who is eligible? 124 00:05:19.695 --> 00:05:20.234 And what is the budget? 125 00:05:20.414 --> 00:05:25.938 why does it matter so much for energy systems in Central and Eastern Europe compared to other 126 00:05:26.339 --> 00:05:26.839 EU funds? 127 00:05:27.780 --> 00:05:27.900 So, 128 00:05:28.240 --> 00:05:28.360 yeah, 129 00:05:28.420 --> 00:05:29.581 the modernization fund, 130 00:05:30.081 --> 00:05:32.583 I think of it as the biggest fund no one's ever heard of. 131 00:05:34.064 --> 00:05:35.045 It's financed from the 132 00:05:35.565 --> 00:05:36.426 ETS revenues, 133 00:05:36.987 --> 00:05:37.227 ETS1. 134 00:05:37.967 --> 00:05:42.050 So it's been operational since already 2021. 135 00:05:42.751 --> 00:05:46.414 And because it depends on the price of the ETS. 136 00:05:46.974 --> 00:05:50.037 So it should probably come out to around 137 00:05:50.557 --> 00:05:53.119 57 billion euros. 138 00:05:53.800 --> 00:05:56.062 And it's only 13 member states that are eligible. 139 00:05:56.422 --> 00:06:03.208 So it's all of the Central and Eastern European member states and now additionally Greece and Portugal. 140 00:06:04.029 --> 00:06:07.592 So why is it reserved for these countries? 141 00:06:08.653 --> 00:06:13.657 So these are the lowest income member states and kind of thinking behind it is in the name, 142 00:06:13.737 --> 00:06:14.858 the modernization fund. 143 00:06:15.178 --> 00:06:20.420 So it's supposed to be a little helper to help these countries modernize their energy systems. 144 00:06:20.921 --> 00:06:21.041 It's, 145 00:06:21.341 --> 00:06:21.621 I think, 146 00:06:21.701 --> 00:06:24.662 one of the only funds that's specifically for energy only. 147 00:06:25.342 --> 00:06:27.123 That also includes transport as well. 148 00:06:27.723 --> 00:06:28.084 But 149 00:06:28.964 --> 00:06:31.125 I don't think there's any other like cohesion. 150 00:06:32.165 --> 00:06:35.967 It can be used for many more purposes or the resilience recovery, 151 00:06:36.567 --> 00:06:37.108 that as well. 152 00:06:37.188 --> 00:06:41.289 But something of this size and that's so singularly purposed, 153 00:06:41.650 --> 00:06:42.670 I think this is unique. 154 00:06:43.742 --> 00:06:43.902 Yeah, 155 00:06:44.102 --> 00:06:44.622 that's very, 156 00:06:45.083 --> 00:06:45.683 very interesting. 157 00:06:45.703 --> 00:06:46.103 As you said, 158 00:06:46.143 --> 00:06:52.306 it's about modernizing their energy system and it's financed through EU 159 00:06:52.686 --> 00:07:03.650 ETS, which would be like the kind of tax importers would have to pay to be able to play on the European markets. 160 00:07:04.071 --> 00:07:08.152 It's the carbon tax for an audience that wouldn't know it so well, 161 00:07:08.172 --> 00:07:11.034 but maybe you have a better way of framing what ETS is. 162 00:07:12.530 --> 00:07:12.710 Yeah, 163 00:07:12.810 --> 00:07:13.231 so I mean, 164 00:07:13.251 --> 00:07:17.474 I think carbon tax is probably shorthand that many people understand, 165 00:07:17.514 --> 00:07:23.918 but it's essentially what so far industries have had to pay if they're still producing a lot of CO2. 166 00:07:24.679 --> 00:07:25.819 So that's mostly just CO2. 167 00:07:26.940 --> 00:07:31.984 It doesn't include methane or other kind of byproducts as much. 168 00:07:32.024 --> 00:07:33.244 It's not taxed as heavily. 169 00:07:33.745 --> 00:07:36.867 So it's mostly these really CO2 intensive industries. 170 00:07:37.367 --> 00:07:41.170 And so things like big power plants have been paying into it for quite some time. 171 00:07:41.630 --> 00:07:44.372 There are some other industries which have had free allowances, 172 00:07:44.452 --> 00:07:46.653 which are only now beginning to have to pay into it. 173 00:07:47.333 --> 00:07:49.274 So that will also change the dynamics a bit. 174 00:07:49.855 --> 00:07:52.376 And then this is where it led us to ETS2, 175 00:07:53.076 --> 00:07:55.518 which I think we will get into later or now, 176 00:07:55.638 --> 00:07:56.038 if you want. 177 00:07:56.058 --> 00:07:57.339 Yeah, 178 00:07:57.379 --> 00:07:57.559 yeah, 179 00:07:57.579 --> 00:07:58.719 yeah. 180 00:07:58.739 --> 00:08:03.822 Now I would like to get into why the fund is financed through EU ETS, 181 00:08:04.643 --> 00:08:05.563 this kind of revenue. 182 00:08:06.284 --> 00:08:10.506 Why does it come from this pocket rather than the EU budget? 183 00:08:10.906 --> 00:08:11.906 In many ways, 184 00:08:12.707 --> 00:08:14.948 it does affect the political attention, 185 00:08:15.108 --> 00:08:15.388 right? 186 00:08:15.588 --> 00:08:16.849 Or even the accountability. 187 00:08:17.489 --> 00:08:21.151 But even the way decisions are taken at the national level, 188 00:08:21.791 --> 00:08:24.652 the national governments have a lot to say about this fund, 189 00:08:24.692 --> 00:08:24.892 right? 190 00:08:25.693 --> 00:08:25.813 Yeah, 191 00:08:25.873 --> 00:08:26.273 so I mean, 192 00:08:26.513 --> 00:08:29.114 the concept behind the whole carbon tax was that we, 193 00:08:29.174 --> 00:08:29.754 you know, 194 00:08:30.235 --> 00:08:36.197 ideally prevent and push forward the transition from CO2-intensive industries. 195 00:08:36.377 --> 00:08:37.138 And with that money, 196 00:08:37.658 --> 00:08:37.878 help. 197 00:08:38.638 --> 00:08:39.999 bring that transition about. 198 00:08:40.119 --> 00:08:41.881 So using the money that, 199 00:08:43.022 --> 00:08:43.262 you know, 200 00:08:43.282 --> 00:08:44.483 to help get a jumpstart. 201 00:08:44.903 --> 00:08:49.227 So it could have been some of this money that the ETS revenues goes to national budgets already. 202 00:08:49.767 --> 00:08:51.348 So that's happening across the EU. 203 00:08:51.989 --> 00:08:54.931 And then some of it is going to this modernization fund. 204 00:08:55.312 --> 00:08:58.054 Also the innovation fund as well. 205 00:08:58.755 --> 00:09:04.379 Just so it's not all the revenue from the ETS that goes into this modernization fund. 206 00:09:04.639 --> 00:09:04.820 Yeah, 207 00:09:04.821 --> 00:09:04.940 no, 208 00:09:05.180 --> 00:09:06.421 it's just a small percentage, 209 00:09:06.422 --> 00:09:06.741 actually. 210 00:09:07.302 --> 00:09:07.502 Okay. 211 00:09:07.982 --> 00:09:08.342 How much? 212 00:09:11.664 --> 00:09:13.485 I don't have enough at the tip of my tongue, 213 00:09:13.486 --> 00:09:14.546 but I believe it's under 5%. 214 00:09:16.387 --> 00:09:24.071 But then some of the member states can even reallocate their own emission revenues to the modernization fund. 215 00:09:24.371 --> 00:09:28.513 So they can even top up their own modernization fund that they get from the EU. 216 00:09:29.434 --> 00:09:33.816 Because every member state has a set amount of money in the modernization fund. 217 00:09:34.296 --> 00:09:36.878 So it's like their little pocket of money. 218 00:09:37.118 --> 00:09:39.221 but then they need to request it even. 219 00:09:39.941 --> 00:09:42.565 So it's not as if the countries have to compete amongst each other. 220 00:09:43.245 --> 00:09:43.486 Okay. 221 00:09:44.110 --> 00:09:50.952 So the countries have kind of decided where the priority investments were to go. 222 00:09:51.692 --> 00:09:51.932 I mean, 223 00:09:52.092 --> 00:09:52.532 in theory, 224 00:09:52.812 --> 00:09:55.453 it should go to support renewables, 225 00:09:55.593 --> 00:09:56.473 energy efficiency, 226 00:09:56.754 --> 00:09:57.234 grids, 227 00:09:57.454 --> 00:09:58.954 district heating modernization, 228 00:09:59.714 --> 00:10:00.975 and overall the just transition, 229 00:10:01.095 --> 00:10:01.315 right? 230 00:10:02.195 --> 00:10:06.096 Yet a large share of funding has gone to gas, 231 00:10:06.276 --> 00:10:07.297 waste incineration, 232 00:10:07.537 --> 00:10:08.217 and biomass. 233 00:10:09.097 --> 00:10:12.178 How did this happen within the existing rules? 234 00:10:12.982 --> 00:10:16.845 So within the rules of the modernization fund, 235 00:10:17.145 --> 00:10:19.947 there's two different kind of piles, 236 00:10:20.087 --> 00:10:20.447 let's say. 237 00:10:20.747 --> 00:10:23.289 There's the priority funding and the non-priority funding. 238 00:10:24.050 --> 00:10:25.311 The non-priority funding, 239 00:10:26.471 --> 00:10:29.073 it doesn't have as good of a status within there. 240 00:10:29.153 --> 00:10:29.814 So it can only, 241 00:10:29.834 --> 00:10:30.094 I think, 242 00:10:30.134 --> 00:10:30.534 fund 30% 243 00:10:31.295 --> 00:10:32.095 of the investment, 244 00:10:32.195 --> 00:10:33.636 of a total project's investment. 245 00:10:34.317 --> 00:10:36.999 And that can be used for almost anything. 246 00:10:37.499 --> 00:10:38.880 Whereas the priority, 247 00:10:39.000 --> 00:10:41.202 it should be really things for climate action. 248 00:10:41.706 --> 00:10:42.006 However, 249 00:10:42.026 --> 00:10:44.128 that's based on the current EU legislation. 250 00:10:44.669 --> 00:10:48.752 And now that can include the conversion from coal to gas CHPs, 251 00:10:49.653 --> 00:10:50.734 combined heat and power plants. 252 00:10:51.254 --> 00:10:53.236 Because any time you're phasing out of coal, 253 00:10:53.516 --> 00:10:54.938 you will get an emissions reduction. 254 00:10:55.438 --> 00:10:56.599 It's the worst of the worst. 255 00:10:56.739 --> 00:10:57.640 So it's, 256 00:10:57.660 --> 00:10:58.100 you know, 257 00:10:58.841 --> 00:11:02.044 if you stop eating McDonald's and still are eating frozen pizza, 258 00:11:02.164 --> 00:11:03.845 it's still better than the McDonald's. 259 00:11:03.885 --> 00:11:04.005 So, 260 00:11:04.406 --> 00:11:04.526 OK. 261 00:11:05.646 --> 00:11:07.027 No offense against McDonald's. 262 00:11:07.167 --> 00:11:07.567 Yeah, 263 00:11:07.627 --> 00:11:09.587 yeah. 264 00:11:09.607 --> 00:11:11.268 I'll have them at cafe when needed. 265 00:11:11.328 --> 00:11:16.089 But because there's this kind of need for speed to decarbonize, 266 00:11:16.869 --> 00:11:18.810 even if it's converting coal to gas, 267 00:11:19.690 --> 00:11:22.931 it's within the current legislation. 268 00:11:23.111 --> 00:11:24.151 Okay. 269 00:11:24.512 --> 00:11:28.653 Even though eventually gas will also have to be gas CHPs, 270 00:11:28.733 --> 00:11:30.893 gas power plants will have to pay into the ETS. 271 00:11:31.313 --> 00:11:33.374 So it's a bit like... 272 00:11:33.474 --> 00:11:58.085 the snake eating its own tail that the whole idea is to transition away that you wouldn't have to pay ets revenues but yeah so it's in this kind of stranded investments right they are investing in something that is locking uh they will have to pay for it in uh in a few years time so that's uh quite not to mention the price of gas i mean fluctuating and i mean all of that that we've lived through so uh it's 273 00:11:58.105 --> 00:11:59.346 a really short-sighted 274 00:11:59.726 --> 00:12:04.409 technological switch from coal to gas isn't as complicated as going to renewables. 275 00:12:05.069 --> 00:12:07.531 So I think that's what's driving a lot of it, 276 00:12:07.651 --> 00:12:11.393 but it's really short-sighted and a missed opportunity. 277 00:12:12.093 --> 00:12:12.253 Yeah, 278 00:12:12.473 --> 00:12:14.795 so there's a big governance issue. 279 00:12:15.435 --> 00:12:18.997 So member states design and propose projects, 280 00:12:19.177 --> 00:12:22.839 and the Commission and the European Investment Bank assess them. 281 00:12:24.060 --> 00:12:27.442 There are clearly some accountability gap. 282 00:12:27.922 --> 00:12:31.964 in this process since they've been validating some stranded investments. 283 00:12:32.485 --> 00:12:35.186 Is it because they are based on what you said, 284 00:12:35.226 --> 00:12:38.908 the current legal framework that allows it to happen, 285 00:12:39.028 --> 00:12:39.348 right? 286 00:12:39.469 --> 00:12:41.250 Or what are the issues, 287 00:12:41.310 --> 00:12:41.510 right? 288 00:12:42.350 --> 00:12:44.311 So there's many diagnoses, 289 00:12:44.331 --> 00:12:44.811 I think, 290 00:12:44.852 --> 00:12:46.332 that can be made of this issue. 291 00:12:46.412 --> 00:12:56.298 I think one that's quite clear is that this is the last EU fund that can fund a lot of these fossil-based power plants. 292 00:12:58.339 --> 00:13:09.949 And we even see that some of the projects that are proposed are ones that were rejected by the cohesion fund or residential recovery funds because they have stricter criteria. 293 00:13:10.450 --> 00:13:12.131 It's much more of a back and forth process, 294 00:13:12.591 --> 00:13:14.093 whereas the modernization fund, 295 00:13:14.613 --> 00:13:15.093 it's quicker. 296 00:13:15.854 --> 00:13:20.238 So what will usually happen is the national government will 297 00:13:20.994 --> 00:13:25.037 proposed to the to DG Klima either schemes or projects. 298 00:13:25.038 --> 00:13:29.321 So schemes can be for many different projects or just single singular projects. 299 00:13:29.902 --> 00:13:30.762 And from there, 300 00:13:31.443 --> 00:13:32.023 then they go back, 301 00:13:32.103 --> 00:13:32.384 let's say, 302 00:13:32.484 --> 00:13:33.324 so if it's a scheme, 303 00:13:33.425 --> 00:13:38.489 then they'll do an open call for then plans to or whomever, 304 00:13:38.629 --> 00:13:40.751 whatever the scheme is for to apply. 305 00:13:41.411 --> 00:13:41.852 However, 306 00:13:42.132 --> 00:13:45.074 in the designing of these schemes and projects, 307 00:13:45.435 --> 00:13:45.575 it's, 308 00:13:46.155 --> 00:13:46.476 I think, 309 00:13:46.896 --> 00:13:47.537 What we've heard, 310 00:13:47.697 --> 00:13:48.838 it's only anecdotally, 311 00:13:48.918 --> 00:13:49.098 but... 312 00:13:49.318 --> 00:13:50.439 quite systematically, 313 00:13:50.499 --> 00:13:51.079 it seems, 314 00:13:51.519 --> 00:13:55.081 is that they're being built with these major utilities, 315 00:13:55.702 --> 00:13:58.443 like really discussing it before they even go to Brussels. 316 00:13:59.244 --> 00:14:01.745 So because these are major utilities, 317 00:14:02.425 --> 00:14:04.467 then smaller renewable operators, 318 00:14:04.567 --> 00:14:07.328 they're not in the discussion at all and be excluded. 319 00:14:08.849 --> 00:14:12.451 And so this is definitely a transparency governance issue. 320 00:14:12.851 --> 00:14:13.131 And then, 321 00:14:13.211 --> 00:14:13.351 yeah, 322 00:14:13.772 --> 00:14:17.734 we see also the architecture in every member state is very different. 323 00:14:17.894 --> 00:14:20.101 There's no systematic kind of. 324 00:14:20.557 --> 00:14:24.380 baseline of what needs to be done in terms of if there's monitoring committees, 325 00:14:24.861 --> 00:14:26.663 how civil society can be involved, 326 00:14:26.664 --> 00:14:29.285 how renewables or SMEs can be involved. 327 00:14:29.845 --> 00:14:32.488 So it's really just done on an ad hoc basis. 328 00:14:32.848 --> 00:14:35.110 You have some monitoring committees in some countries, 329 00:14:35.210 --> 00:14:37.712 but a lot of times it's really just like a fig leaf. 330 00:14:38.393 --> 00:14:43.878 So they're going to have been really able to play a really impactful role. 331 00:14:44.378 --> 00:14:45.219 And we've heard from, 332 00:14:45.279 --> 00:14:45.399 yeah, 333 00:14:45.520 --> 00:14:47.101 many renewable operators that 334 00:14:47.301 --> 00:14:52.666 that they're excluded completely or it's too complicated or they apply and they were rejected. 335 00:14:53.306 --> 00:14:53.666 Wow. 336 00:14:54.727 --> 00:14:54.847 Oh, 337 00:14:54.887 --> 00:14:55.047 yeah. 338 00:14:55.808 --> 00:14:56.088 I mean, 339 00:14:56.429 --> 00:15:04.395 I totally understand why you work on this issue and try to bring attention to this huge problem. 340 00:15:05.276 --> 00:15:05.496 I mean, 341 00:15:05.556 --> 00:15:11.421 it's not only a financial problem and the problem of public finance and how the public money is spent, 342 00:15:11.521 --> 00:15:14.724 but it's also a question of something, 343 00:15:15.865 --> 00:15:16.045 yeah. 344 00:15:16.325 --> 00:15:16.865 powers, 345 00:15:17.486 --> 00:15:18.126 pun intended, 346 00:15:18.226 --> 00:15:18.727 at place. 347 00:15:19.287 --> 00:15:20.248 So yeah, 348 00:15:20.368 --> 00:15:22.109 the fact that there is little, 349 00:15:23.150 --> 00:15:23.971 in certain cases, 350 00:15:24.011 --> 00:15:31.236 that there is little public oversight or that's extremely worrying is not playing in favor of, 351 00:15:31.616 --> 00:15:31.857 you know, 352 00:15:32.137 --> 00:15:37.461 the EU and how the EU's image as a champion for climate and clean energy development. 353 00:15:38.149 --> 00:15:38.569 For sure. 354 00:15:38.750 --> 00:15:39.470 And I mean, 355 00:15:39.830 --> 00:15:42.233 it's how some of the rules are applied. 356 00:15:42.273 --> 00:15:43.754 It's even a bit scattered. 357 00:15:43.894 --> 00:15:44.534 And like, 358 00:15:44.935 --> 00:15:45.375 for instance, 359 00:15:45.376 --> 00:15:46.876 like the do no significant harm principle, 360 00:15:47.457 --> 00:15:48.178 which is supposed to, 361 00:15:48.179 --> 00:15:48.438 you know, 362 00:15:48.558 --> 00:15:51.620 help improve projects that the EU is funding. 363 00:15:52.181 --> 00:15:52.461 And so, 364 00:15:52.781 --> 00:15:53.402 for instance, 365 00:15:53.403 --> 00:15:57.165 do no significant harm is very clear that it shouldn't fund waste incineration. 366 00:15:58.006 --> 00:16:01.209 And so the application of it is from this year, 367 00:16:01.869 --> 00:16:02.129 or sorry, 368 00:16:02.189 --> 00:16:02.550 last year, 369 00:16:02.890 --> 00:16:04.011 from 2025, 370 00:16:04.012 --> 00:16:06.173 but we still waste incineration. 371 00:16:07.173 --> 00:16:10.734 it's still at least being proposed to the Modernization Fund. 372 00:16:11.534 --> 00:16:13.735 Whether it will be completely excluded, 373 00:16:13.835 --> 00:16:14.215 we'll see. 374 00:16:14.815 --> 00:16:15.055 But, 375 00:16:15.456 --> 00:16:15.736 I mean, 376 00:16:16.556 --> 00:16:18.296 the European Commission was quite clear about it. 377 00:16:18.336 --> 00:16:21.997 It cited waste incineration as an exact example of the do no, 378 00:16:22.037 --> 00:16:23.098 it's a given and harm principle. 379 00:16:25.278 --> 00:16:25.418 Yeah, 380 00:16:25.859 --> 00:16:26.079 and, 381 00:16:26.459 --> 00:16:26.699 you know, 382 00:16:26.700 --> 00:16:27.339 I live in Italy, 383 00:16:27.479 --> 00:16:29.220 and a few years ago, 384 00:16:29.480 --> 00:16:33.661 there was this enormous scandal because there was to be built a... 385 00:16:34.261 --> 00:16:40.865 an incident like wasting an insulator close to Rome and that made the government fall. 386 00:16:40.985 --> 00:16:43.626 So there was a lot of scrutiny over something. 387 00:16:44.407 --> 00:16:44.787 Sincerely, 388 00:16:44.807 --> 00:16:48.789 I don't know anything about waste but whenever I was reading the news, 389 00:16:49.409 --> 00:16:53.192 it was very clear that there was a either or discussion. 390 00:16:53.232 --> 00:17:02.417 It was extremely polarized and now you tell us that is a kind of thing that shouldn't be funded at all. 391 00:17:03.237 --> 00:17:05.679 That makes it even scarier. 392 00:17:06.219 --> 00:17:06.699 For sure. 393 00:17:06.819 --> 00:17:07.120 I mean, 394 00:17:07.180 --> 00:17:08.520 waste is one of these things. 395 00:17:08.540 --> 00:17:08.881 I mean, 396 00:17:08.901 --> 00:17:10.081 it's that, 397 00:17:10.502 --> 00:17:10.742 you know, 398 00:17:11.162 --> 00:17:13.824 if people are relying on this for their heat source, 399 00:17:14.324 --> 00:17:15.905 you will always need waste. 400 00:17:16.345 --> 00:17:20.788 And so you have many waste incineration facilities that have to import their waste. 401 00:17:20.789 --> 00:17:20.948 I mean, 402 00:17:20.988 --> 00:17:22.489 this is clearly unsustainable. 403 00:17:22.950 --> 00:17:27.052 You have to be bringing trucks of waste from even other countries. 404 00:17:28.473 --> 00:17:29.333 How it's managed, 405 00:17:29.334 --> 00:17:32.654 it's very complicated and you need to have eyes on the ground. 406 00:17:32.754 --> 00:17:32.874 So 407 00:17:34.075 --> 00:17:39.116 I don't really think the EU is also ready for such a level of bureaucratic oversight. 408 00:17:39.837 --> 00:17:39.977 Yeah, 409 00:17:40.257 --> 00:17:40.397 yeah, 410 00:17:40.577 --> 00:17:40.697 yeah. 411 00:17:41.077 --> 00:17:41.237 Well, 412 00:17:41.297 --> 00:17:42.177 among our listeners, 413 00:17:42.297 --> 00:17:45.018 if you are specialized in waste and waste treatment, 414 00:17:45.058 --> 00:17:49.800 I would love to hear from you because that's definitely a blind spot in this podcast. 415 00:17:49.820 --> 00:17:50.940 So yeah, 416 00:17:51.300 --> 00:17:52.701 please contact me. 417 00:17:53.741 --> 00:17:54.962 I've got some people for you, 418 00:17:55.042 --> 00:17:55.262 Marie. 419 00:17:55.263 --> 00:17:55.802 Don't worry. 420 00:17:56.283 --> 00:17:56.623 Okay. 421 00:17:57.243 --> 00:17:58.444 Please put me in touch with them. 422 00:17:58.484 --> 00:17:59.204 That will be lovely. 423 00:17:59.324 --> 00:17:59.945 Thank you so much. 424 00:17:59.985 --> 00:18:01.686 But if you work on waste, 425 00:18:01.746 --> 00:18:02.686 please contact me anyway. 426 00:18:03.046 --> 00:18:05.908 I would love to hear from the listeners. 427 00:18:06.468 --> 00:18:06.948 Don't be shy. 428 00:18:07.409 --> 00:18:07.569 Okay. 429 00:18:07.729 --> 00:18:10.230 So now let's move on to 430 00:18:10.991 --> 00:18:11.511 ETS2. 431 00:18:12.592 --> 00:18:12.992 ETS2, 432 00:18:13.632 --> 00:18:15.513 Emission Trading System 2. 433 00:18:16.414 --> 00:18:21.937 It will put a carbon price on fuels used in buildings and transport. 434 00:18:22.841 --> 00:18:28.565 But its start has been delayed due to social concerns, 435 00:18:28.725 --> 00:18:29.666 quote unquote. 436 00:18:30.386 --> 00:18:31.968 From your perspective, 437 00:18:32.388 --> 00:18:39.953 how should the modernization fund be used now to prepare systems and households for ETS2? 438 00:18:40.714 --> 00:18:43.876 Or if you want to clarify ETS2 first, 439 00:18:44.336 --> 00:18:45.697 you can go in that direction. 440 00:18:47.138 --> 00:18:47.299 Yeah, 441 00:18:47.459 --> 00:18:47.999 so I mean, 442 00:18:48.039 --> 00:18:49.320 I think you did a good setup, 443 00:18:49.560 --> 00:18:50.381 but just to... 444 00:18:50.861 --> 00:18:57.069 It's just now extending the sort of carbon tax to also include homes and transport. 445 00:18:57.209 --> 00:19:00.714 And so in the heating side of things to also include gas boilers. 446 00:19:01.495 --> 00:19:01.936 Because, 447 00:19:02.356 --> 00:19:02.576 I mean, 448 00:19:02.596 --> 00:19:03.438 the reality is, 449 00:19:03.538 --> 00:19:08.805 is if you are a district heating consumer and your district heating comes from. 450 00:19:09.664 --> 00:19:13.625 power plant that is using coal and even gas, 451 00:19:14.045 --> 00:19:16.026 you're paying ETS1 already, 452 00:19:16.406 --> 00:19:19.987 depending on how your district heating company allocates the cost. 453 00:19:20.467 --> 00:19:23.348 But a lot of times that cost is being passed on to the consumer. 454 00:19:24.708 --> 00:19:28.129 And a lot of times you can't choose if you're on district heating or not, 455 00:19:28.209 --> 00:19:30.370 and you can disconnect if you want or not. 456 00:19:31.170 --> 00:19:32.711 So the idea is to make it fair. 457 00:19:32.811 --> 00:19:33.991 And if you have a gas boiler, 458 00:19:34.071 --> 00:19:35.412 you should also be contributing. 459 00:19:36.072 --> 00:19:36.512 However, 460 00:19:38.036 --> 00:19:38.957 As you mentioned already, 461 00:19:39.157 --> 00:19:48.380 it was delayed because it became quite a political hot potato that no one wanted to have in their hands. 462 00:19:48.941 --> 00:19:49.441 And yeah, 463 00:19:49.601 --> 00:19:50.341 it became very, 464 00:19:50.421 --> 00:19:51.542 very politically toxic, 465 00:19:51.682 --> 00:19:53.763 especially the country I live in, 466 00:19:53.764 --> 00:19:54.483 the Czech Republic. 467 00:19:55.443 --> 00:20:02.546 It was a very strong message from the current prime minister during his election campaign last year that it won't happen. 468 00:20:03.807 --> 00:20:05.788 And it's not just the Czech Republic, 469 00:20:05.828 --> 00:20:06.148 I think. 470 00:20:06.188 --> 00:20:06.508 it was 471 00:20:06.940 --> 00:20:09.902 Quite similar across the sea region. 472 00:20:10.663 --> 00:20:10.783 So, 473 00:20:12.224 --> 00:20:12.585 yeah, 474 00:20:12.665 --> 00:20:13.365 it became, 475 00:20:14.046 --> 00:20:16.348 I don't want higher bills for my heating. 476 00:20:16.928 --> 00:20:17.088 Yeah. 477 00:20:17.789 --> 00:20:17.909 Yeah, 478 00:20:17.969 --> 00:20:24.114 and this kind of concerns also were also very much in the making during the yellow vest, 479 00:20:24.694 --> 00:20:24.975 let's say, 480 00:20:25.035 --> 00:20:28.217 campaigns in France a few years ago as well. 481 00:20:28.337 --> 00:20:29.118 So there, 482 00:20:29.458 --> 00:20:29.879 as you said, 483 00:20:29.880 --> 00:20:31.160 a lot of hot potatoes. 484 00:20:31.920 --> 00:20:33.601 But as we also mentioned, 485 00:20:33.761 --> 00:20:45.564 they are hot potatoes because the modernization fund has been financing things that will be accountable and under ETS too, 486 00:20:45.984 --> 00:20:46.204 right? 487 00:20:47.205 --> 00:20:47.865 So now, 488 00:20:48.305 --> 00:20:52.686 how should this fund be used to better prepare for ETS? 489 00:20:52.746 --> 00:20:53.046 Yes. 490 00:20:53.786 --> 00:20:53.907 So, 491 00:20:53.987 --> 00:20:54.267 I mean, 492 00:20:54.487 --> 00:20:55.887 there's also what we said. 493 00:20:55.888 --> 00:20:56.127 I mean, 494 00:20:56.187 --> 00:20:57.087 there has been part of, 495 00:20:57.488 --> 00:20:58.848 so back to the modernization fund. 496 00:20:59.068 --> 00:21:04.911 Parts of it have been going to energy efficiency and to electrifying transport. 497 00:21:05.511 --> 00:21:06.912 Very little has gone to electrifying heat, 498 00:21:07.052 --> 00:21:08.013 but transport, 499 00:21:08.073 --> 00:21:08.293 yes. 500 00:21:08.953 --> 00:21:10.694 So those are the good things. 501 00:21:11.255 --> 00:21:11.475 I mean, 502 00:21:11.515 --> 00:21:12.395 building renovation, 503 00:21:14.036 --> 00:21:14.556 it's the hungry, 504 00:21:14.616 --> 00:21:15.097 hungry hippo. 505 00:21:15.437 --> 00:21:17.338 It will eat everything around it. 506 00:21:17.778 --> 00:21:18.478 So there's, 507 00:21:18.759 --> 00:21:19.119 I think, 508 00:21:19.459 --> 00:21:21.700 no limit to how much you can invest in that. 509 00:21:22.421 --> 00:21:23.441 But still, 510 00:21:23.481 --> 00:21:28.484 we don't see the projects really expediting the building renovation wave. 511 00:21:28.804 --> 00:21:29.805 the level it needs to be, 512 00:21:29.925 --> 00:21:31.385 especially for deep renovations, 513 00:21:31.886 --> 00:21:33.807 which is really what's necessary if you want to, 514 00:21:34.047 --> 00:21:34.407 I don't know, 515 00:21:34.787 --> 00:21:41.131 switch your gas boiler to a heat pump or to prepare a building for low temperature district heating, 516 00:21:41.331 --> 00:21:43.052 which can be based off of renewables. 517 00:21:43.732 --> 00:21:46.594 So what we would really encourage member states, 518 00:21:46.614 --> 00:21:49.075 especially those that are receiving the modernization fund, 519 00:21:49.535 --> 00:21:57.760 is to be applying for these kind of energy efficiency projects and to really get the ground running on that. 520 00:21:58.140 --> 00:21:59.861 Because also the modernization fund, 521 00:22:00.021 --> 00:22:02.022 it's really been underspent so far. 522 00:22:02.462 --> 00:22:04.684 The absorption rate hasn't been very high. 523 00:22:04.784 --> 00:22:05.664 In some countries, 524 00:22:06.785 --> 00:22:09.286 the checks have been quite quick, 525 00:22:09.967 --> 00:22:10.867 but many of the rest, 526 00:22:10.947 --> 00:22:11.908 it's really behind. 527 00:22:12.028 --> 00:22:13.349 And you see like Hungary, 528 00:22:13.629 --> 00:22:14.129 Latvia, 529 00:22:15.210 --> 00:22:16.911 some countries have barely even touched it. 530 00:22:17.131 --> 00:22:19.972 So there's still lots of money available. 531 00:22:20.913 --> 00:22:25.816 And this seems especially given that the member states decided they need one more year. 532 00:22:26.416 --> 00:22:26.676 well, 533 00:22:27.017 --> 00:22:38.388 have some energy efficiency schemes in place to help these households prepare for this new tax and hopefully avoid the worst of it. 534 00:22:39.088 --> 00:22:39.208 Yeah. 535 00:22:39.409 --> 00:22:42.652 Why has it been underspent so far? 536 00:22:43.432 --> 00:22:44.994 What kind of bottlenecks are there? 537 00:22:45.554 --> 00:22:45.835 I mean, 538 00:22:45.895 --> 00:22:51.180 what we hear over and over again from the different managing authorities is a lack of capacity. 539 00:22:52.324 --> 00:23:01.287 is that it's a big fund and they just don't have enough people in the ministries to help disperse it or apply for it. 540 00:23:01.387 --> 00:23:04.808 And they don't have this infrastructure to, 541 00:23:04.809 --> 00:23:05.108 I think, 542 00:23:05.208 --> 00:23:08.349 also run the calls that would make it very easy. 543 00:23:08.469 --> 00:23:10.649 Because we also hear that a lot of projects are rejected. 544 00:23:12.330 --> 00:23:12.870 And we don't know. 545 00:23:13.130 --> 00:23:15.410 So we also don't know what the applications are. 546 00:23:15.671 --> 00:23:16.731 We just know what's awarded. 547 00:23:18.471 --> 00:23:18.891 But if, 548 00:23:19.312 --> 00:23:19.552 you know, 549 00:23:19.612 --> 00:23:20.412 renewable... 550 00:23:21.096 --> 00:23:22.717 producers are being excluded, 551 00:23:23.037 --> 00:23:25.639 those are the kind of projects that would probably be easily approved. 552 00:23:26.660 --> 00:23:28.501 But if a lot of these countries don't have, 553 00:23:28.761 --> 00:23:29.021 you know, 554 00:23:29.141 --> 00:23:31.223 good examples and have, 555 00:23:31.783 --> 00:23:32.043 you know, 556 00:23:32.504 --> 00:23:38.688 already schemes or projects in place that can just be replicated, 557 00:23:38.968 --> 00:23:40.449 then it's starting from scratch. 558 00:23:41.270 --> 00:23:43.771 So it's a whole new ballgame for them. 559 00:23:44.512 --> 00:23:44.652 Yeah, 560 00:23:44.752 --> 00:23:50.096 it seems like the kind of playbook where you have a tool that has been designed for... 561 00:23:50.752 --> 00:24:09.342 ease of use it's still too complicated for the organization the let's say the local governance and the administration that don't know how to apply for it so some businesses are coming in maybe some incumbent businesses some fossil businesses and saying we're going to do the application for you and 562 00:24:09.422 --> 00:24:13.024 that manage they manage to unlock everything and that they get it approved 563 00:24:13.966 --> 00:24:14.126 Yeah, 564 00:24:14.146 --> 00:24:18.368 a lot of these are projects they've had in their files for a while. 565 00:24:18.888 --> 00:24:19.568 Now they're just like, 566 00:24:19.608 --> 00:24:19.928 okay, 567 00:24:20.309 --> 00:24:23.650 here's the pot of money we've been looking for. 568 00:24:24.670 --> 00:24:25.051 So yeah, 569 00:24:25.111 --> 00:24:25.431 I mean, 570 00:24:25.471 --> 00:24:27.652 it's definitely a question of capacity. 571 00:24:28.352 --> 00:24:29.593 The open mouths get fed. 572 00:24:30.313 --> 00:24:30.433 Yeah, 573 00:24:30.753 --> 00:24:30.873 yeah. 574 00:24:31.333 --> 00:24:33.974 So what needs changing? 575 00:24:34.415 --> 00:24:34.675 I mean, 576 00:24:34.815 --> 00:24:41.678 you've been saying that there have been so many wrong solutions that have been validated. 577 00:24:41.818 --> 00:24:41.938 So... 578 00:24:43.102 --> 00:24:44.543 carbon pricing is expanding, 579 00:24:44.843 --> 00:24:45.983 what needs changing? 580 00:24:46.544 --> 00:24:49.145 And is there a timeline for things to change? 581 00:24:49.765 --> 00:24:50.245 ASAP, 582 00:24:50.565 --> 00:24:51.065 of course. 583 00:24:52.086 --> 00:24:53.507 But I think on all levels, 584 00:24:53.607 --> 00:25:03.791 but even just the kind of stuff we can do tomorrow is capacity building on the national levels of how to build like schemes for geothermal, 585 00:25:03.851 --> 00:25:04.671 for instance, 586 00:25:04.892 --> 00:25:06.352 or heat pumps. 587 00:25:06.952 --> 00:25:10.294 These are things that we have examples from other countries. 588 00:25:11.026 --> 00:25:12.107 Whether it be France, 589 00:25:12.147 --> 00:25:12.267 the 590 00:25:12.987 --> 00:25:13.668 Fond Chaleur, 591 00:25:13.928 --> 00:25:16.029 which is often cited as a good example, 592 00:25:16.609 --> 00:25:17.330 taking some, 593 00:25:17.370 --> 00:25:17.610 you know, 594 00:25:17.630 --> 00:25:18.450 pieces of that. 595 00:25:18.971 --> 00:25:19.171 Also, 596 00:25:19.371 --> 00:25:19.491 yeah, 597 00:25:19.551 --> 00:25:20.532 something like geothermal, 598 00:25:20.592 --> 00:25:23.834 which is also a big regulatory change that's needed. 599 00:25:24.154 --> 00:25:24.274 So, 600 00:25:24.334 --> 00:25:24.454 yeah, 601 00:25:24.534 --> 00:25:26.815 capacity on how to change that to, 602 00:25:27.476 --> 00:25:27.716 you know, 603 00:25:27.776 --> 00:25:34.219 make sure the mining and the water codes are not being prohibitive for exploration of this technology. 604 00:25:35.060 --> 00:25:35.440 And, 605 00:25:35.620 --> 00:25:35.740 yeah, 606 00:25:35.780 --> 00:25:36.041 I mean, 607 00:25:36.581 --> 00:25:38.262 it would be great to have some earmarking. 608 00:25:39.102 --> 00:25:47.226 or whether it's minimums for energy efficiency or some really regret-free technologies like heat storage. 609 00:25:47.626 --> 00:25:47.906 I mean, 610 00:25:47.946 --> 00:25:48.487 heat storage, 611 00:25:48.507 --> 00:25:50.588 it's something that's kind of plug and play, 612 00:25:51.108 --> 00:25:54.249 and it's usually pretty regretless, 613 00:25:55.630 --> 00:26:01.292 and it can be done even without a whole overhaul of a new energy system for heating. 614 00:26:02.113 --> 00:26:04.174 You are giving me some very good ideas for... 615 00:26:04.654 --> 00:26:10.078 organization and people who could really talk about this different geothermal. 616 00:26:10.819 --> 00:26:12.881 We never had geothermal on the barge. 617 00:26:13.041 --> 00:26:13.902 And yeah, 618 00:26:14.062 --> 00:26:14.662 heat storage, 619 00:26:14.762 --> 00:26:15.863 that would be really interesting. 620 00:26:16.243 --> 00:26:17.084 If you know some people, 621 00:26:17.124 --> 00:26:17.745 that would be nice. 622 00:26:18.125 --> 00:26:20.227 Who should be providing this capacity building, 623 00:26:20.267 --> 00:26:20.547 Morgan? 624 00:26:21.127 --> 00:26:22.048 Anyone who will. 625 00:26:22.428 --> 00:26:23.009 I've been, 626 00:26:23.249 --> 00:26:23.589 I think, 627 00:26:23.629 --> 00:26:26.251 on a tour of institutions asking, 628 00:26:26.872 --> 00:26:27.192 you know, 629 00:26:27.693 --> 00:26:28.673 and it's, 630 00:26:29.154 --> 00:26:29.454 I think, 631 00:26:29.514 --> 00:26:29.654 yeah, 632 00:26:29.894 --> 00:26:30.475 DG Klima, 633 00:26:30.815 --> 00:26:31.396 DG Inner, 634 00:26:31.716 --> 00:26:31.996 you know, 635 00:26:32.577 --> 00:26:33.998 if they want to help with these kinds of 636 00:26:34.398 --> 00:26:35.839 technical assistance things. 637 00:26:36.419 --> 00:26:38.261 They already have programs in place. 638 00:26:38.821 --> 00:26:39.261 The EIB, 639 00:26:40.062 --> 00:26:41.403 they also have programs. 640 00:26:41.404 --> 00:26:42.904 I have experience with this. 641 00:26:43.244 --> 00:26:43.804 JASPRs, 642 00:26:43.884 --> 00:26:44.165 ELENA, 643 00:26:44.305 --> 00:26:44.785 et cetera. 644 00:26:45.906 --> 00:26:47.067 So they have it. 645 00:26:47.227 --> 00:26:47.667 It's just, 646 00:26:47.707 --> 00:26:52.570 these are not sitting within the modernization fund territory, 647 00:26:52.810 --> 00:26:54.051 but it exists. 648 00:26:54.131 --> 00:26:55.712 And yeah, 649 00:26:55.752 --> 00:26:55.993 I mean, 650 00:26:56.013 --> 00:27:03.718 I think that's also one thing we hear from on the ground is that they have to be very careful about not double dipping into any EU. 651 00:27:04.238 --> 00:27:04.598 funds. 652 00:27:04.658 --> 00:27:07.359 So if you get something from just transition fund, 653 00:27:07.559 --> 00:27:12.862 then you don't try to match it with the modernization fund because Brussels doesn't like that. 654 00:27:13.182 --> 00:27:14.902 Maybe what is being said, 655 00:27:15.423 --> 00:27:16.283 being complimentary. 656 00:27:16.643 --> 00:27:18.144 So making sure that 657 00:27:18.764 --> 00:27:24.186 I think municipalities and companies can do that in a way that's a little easier, 658 00:27:24.206 --> 00:27:27.627 I think would probably be helpful for upping up the spending level, 659 00:27:27.668 --> 00:27:28.108 at least, 660 00:27:28.768 --> 00:27:29.128 of course, 661 00:27:29.168 --> 00:27:29.928 with protections. 662 00:27:30.249 --> 00:27:31.189 But then something like that, 663 00:27:31.190 --> 00:27:32.950 if you're getting technical assistance from. 664 00:27:33.450 --> 00:27:33.610 Yeah. 665 00:27:34.350 --> 00:27:53.661 the commission or eib then it shouldn't be complementary not instead of yeah no but uh you know i've been working on the new european the house facility oh yes yeah which is also something that aims to build on other initiatives and i 666 00:27:53.662 --> 00:28:02.906 mean the modernization is of course about energy but i really see some some connections that could be made there towards like you know 667 00:28:03.826 --> 00:28:05.227 Whenever we talk infrastructure, 668 00:28:05.327 --> 00:28:06.929 whenever we talk housing, 669 00:28:07.049 --> 00:28:07.289 I mean, 670 00:28:07.329 --> 00:28:14.055 there is a strong emphasis on people who are facing energy hardship or energy vulnerable and so on. 671 00:28:14.056 --> 00:28:17.097 So there could be discussions out there as well, 672 00:28:17.598 --> 00:28:17.778 right? 673 00:28:19.019 --> 00:28:19.439 For sure. 674 00:28:19.479 --> 00:28:19.759 I mean, 675 00:28:19.799 --> 00:28:22.762 and we have quite a serious housing crisis in Europe. 676 00:28:22.862 --> 00:28:23.683 So also 677 00:28:24.283 --> 00:28:24.964 I see that, 678 00:28:25.004 --> 00:28:25.224 you know, 679 00:28:25.324 --> 00:28:26.325 building new housing, 680 00:28:26.705 --> 00:28:31.069 it can also be sort of a sandbox playground for innovative heating solutions. 681 00:28:32.150 --> 00:28:32.290 that. 682 00:28:32.370 --> 00:28:33.150 But these can be, 683 00:28:33.210 --> 00:28:33.450 I mean, 684 00:28:33.451 --> 00:28:35.231 these technologies are there, 685 00:28:35.291 --> 00:28:35.771 they're out there, 686 00:28:35.791 --> 00:28:37.712 they exist in Europe. 687 00:28:37.912 --> 00:28:38.232 I mean, 688 00:28:38.553 --> 00:28:39.373 in Denmark, 689 00:28:39.433 --> 00:28:40.573 it's probably leading it, 690 00:28:40.713 --> 00:28:41.974 but across Scandinavia. 691 00:28:42.674 --> 00:28:43.835 But it's not just, 692 00:28:43.875 --> 00:28:44.195 you know, 693 00:28:44.815 --> 00:28:46.036 a Danish fairy tale. 694 00:28:46.536 --> 00:28:48.076 It can be done elsewhere. 695 00:28:48.697 --> 00:28:48.977 Like, 696 00:28:49.657 --> 00:28:52.958 I have a favorite example from Estonia where they, 697 00:28:53.319 --> 00:28:53.439 so, 698 00:28:53.579 --> 00:28:53.799 you know, 699 00:28:53.800 --> 00:28:57.180 they have many of these prefabricated buildings from the Soviet era. 700 00:28:57.840 --> 00:29:01.362 And so to help insulate these buildings and modernize them. 701 00:29:01.758 --> 00:29:04.206 They started making prefabricated parts. 702 00:29:04.727 --> 00:29:08.218 So it's kind of like Lego pieces they just like put on the buildings. 703 00:29:08.679 --> 00:29:09.020 Okay. 704 00:29:09.040 --> 00:29:09.441 And yeah. 705 00:29:10.226 --> 00:29:12.007 And they use local manufacturers. 706 00:29:12.268 --> 00:29:16.110 And it's a really kind of plug-and-play solution. 707 00:29:16.731 --> 00:29:19.252 And there's lots of pre-complicated buildings across 708 00:29:19.773 --> 00:29:26.197 Europe. So this can be replicated and done in a way that can be... 709 00:29:26.638 --> 00:29:28.739 Because I think also with building renovation, 710 00:29:29.279 --> 00:29:30.360 we miss a lot of big, 711 00:29:30.480 --> 00:29:32.602 sexy ideas that are really exciting. 712 00:29:33.126 --> 00:29:33.306 Yeah, 713 00:29:33.486 --> 00:29:34.066 it's just like, 714 00:29:34.166 --> 00:29:34.286 oh, 715 00:29:34.386 --> 00:29:35.327 construction work. 716 00:29:35.407 --> 00:29:36.587 I don't want construction work. 717 00:29:36.627 --> 00:29:36.747 Yeah, 718 00:29:36.787 --> 00:29:37.167 exactly. 719 00:29:37.308 --> 00:29:37.928 But if you're like, 720 00:29:37.929 --> 00:29:40.389 you get excited by a new kitchen or a new bathroom, 721 00:29:40.449 --> 00:29:42.990 but you never get excited by insulation work, 722 00:29:43.090 --> 00:29:43.730 right? 723 00:29:43.790 --> 00:29:43.910 No. 724 00:29:44.490 --> 00:29:44.950 And I mean, 725 00:29:45.030 --> 00:29:45.210 yeah, 726 00:29:45.290 --> 00:29:46.671 when you see construction work, 727 00:29:46.672 --> 00:29:47.351 be excited. 728 00:29:47.391 --> 00:29:48.912 It can be energy efficiency. 729 00:29:49.812 --> 00:29:50.232 Yeah, 730 00:29:50.692 --> 00:29:50.832 yeah. 731 00:29:50.852 --> 00:29:51.132 I think, 732 00:29:51.393 --> 00:29:51.653 you know, 733 00:29:51.933 --> 00:29:53.413 my dream would be to see, 734 00:29:53.873 --> 00:29:54.113 yeah, 735 00:29:54.173 --> 00:29:55.154 participate in a... 736 00:29:55.674 --> 00:30:00.338 a TV show where it's not only about choosing the color of the tiles, 737 00:30:00.438 --> 00:30:07.544 but really about making the home as efficient as possible and something like a competition between different families, 738 00:30:07.584 --> 00:30:08.365 different countries, 739 00:30:08.385 --> 00:30:09.085 different whatever, 740 00:30:09.806 --> 00:30:12.428 to get the more energy-efficient home. 741 00:30:12.608 --> 00:30:14.550 And over years, 742 00:30:14.670 --> 00:30:19.174 we've found out how people actually live in their home streets. 743 00:30:19.730 --> 00:30:21.111 And even a very efficient one, 744 00:30:21.171 --> 00:30:21.971 but sometimes, 745 00:30:21.972 --> 00:30:22.231 you know, 746 00:30:22.232 --> 00:30:24.032 it doesn't live up to the expectation. 747 00:30:24.132 --> 00:30:28.215 So I think we also need some accountability as well. 748 00:30:28.295 --> 00:30:28.415 So, 749 00:30:29.075 --> 00:30:29.235 yeah, 750 00:30:29.676 --> 00:30:32.817 maybe the EU would be interested in financing this kind of things. 751 00:30:33.538 --> 00:30:33.718 Yeah, 752 00:30:33.738 --> 00:30:34.458 and it can also, 753 00:30:34.558 --> 00:30:34.878 I mean, 754 00:30:35.819 --> 00:30:36.459 like households, 755 00:30:36.499 --> 00:30:37.840 but also schools. 756 00:30:38.440 --> 00:30:38.701 I mean, 757 00:30:38.781 --> 00:30:39.381 things where, 758 00:30:39.382 --> 00:30:39.621 you know, 759 00:30:39.641 --> 00:30:43.883 you have schools that are probably sitting empty for at least one month a year, 760 00:30:44.124 --> 00:30:45.044 maybe two months. 761 00:30:45.264 --> 00:30:45.724 I don't know, 762 00:30:45.865 --> 00:30:48.086 and the teachers come back and do their planning or whatever. 763 00:30:48.722 --> 00:30:50.583 But these kinds of things, 764 00:30:50.623 --> 00:30:52.144 which can be done in mass, 765 00:30:52.464 --> 00:30:55.026 and it is coming from the state, 766 00:30:55.046 --> 00:30:55.186 etc. 767 00:30:55.606 --> 00:30:57.407 So there's public buildings. 768 00:30:58.748 --> 00:30:59.008 I mean, 769 00:30:59.108 --> 00:30:59.408 homes, 770 00:31:00.589 --> 00:31:02.110 this is the hardest thing to touch. 771 00:31:02.290 --> 00:31:04.051 But there's other things as well. 772 00:31:04.611 --> 00:31:04.911 And I mean, 773 00:31:04.992 --> 00:31:10.955 schools is also great because then you can get the students involved and show them why it's important. 774 00:31:11.095 --> 00:31:11.876 And yeah, 775 00:31:11.956 --> 00:31:14.137 there's lots of nice little examples and stories of that, 776 00:31:14.197 --> 00:31:15.678 which are good. 777 00:31:17.054 --> 00:31:19.395 Little kids with solar panels and heat pumps, 778 00:31:19.915 --> 00:31:22.256 it's always a good image. 779 00:31:22.916 --> 00:31:27.197 The good thing with the heat pumps is that they may also be reversible and work in the summer. 780 00:31:27.377 --> 00:31:30.438 So summer energy parity is a topic 781 00:31:30.958 --> 00:31:32.198 I focus a lot on. 782 00:31:32.859 --> 00:31:33.179 And 783 00:31:33.939 --> 00:31:43.001 I think the examples you gave about systems that only heat and don't really think about cooling, 784 00:31:43.262 --> 00:31:44.422 I think there are also 785 00:31:45.286 --> 00:31:46.848 mistaken because they don't, 786 00:31:48.009 --> 00:31:49.570 they are not kind of future-proof. 787 00:31:50.110 --> 00:31:55.195 And there are now more and more examples of district heating and cooling systems. 788 00:31:56.056 --> 00:32:01.461 And that would probably be some avenues for development and funding. 789 00:32:02.562 --> 00:32:03.062 For sure. 790 00:32:03.242 --> 00:32:04.083 And district cooling, 791 00:32:04.103 --> 00:32:04.383 I mean, 792 00:32:04.503 --> 00:32:07.206 this reaches out to my Florida girl heart. 793 00:32:08.527 --> 00:32:08.687 Yeah. 794 00:32:08.947 --> 00:32:11.189 Air conditioning is something that is a... 795 00:32:11.966 --> 00:32:12.706 health necessity. 796 00:32:13.347 --> 00:32:16.309 And it's getting to be more and more in Europe as well. 797 00:32:16.449 --> 00:32:16.949 But I mean, 798 00:32:17.029 --> 00:32:18.610 also one thing about district cooling, 799 00:32:18.710 --> 00:32:22.172 there's a lot of great examples and it's also in unexpected places. 800 00:32:22.452 --> 00:32:22.712 I mean, 801 00:32:22.752 --> 00:32:24.433 Paris is famous for it. 802 00:32:24.453 --> 00:32:24.873 And I mean, 803 00:32:25.154 --> 00:32:26.815 it's done in really historic buildings. 804 00:32:27.335 --> 00:32:28.155 It's in the Louvre, 805 00:32:28.175 --> 00:32:29.876 it's in the 806 00:32:30.337 --> 00:32:30.897 City Hall, 807 00:32:31.117 --> 00:32:31.297 it's 808 00:32:31.677 --> 00:32:32.418 Galerie Lafayette. 809 00:32:33.118 --> 00:32:33.799 But that's it. 810 00:32:33.919 --> 00:32:35.299 So something like Galerie Lafayette, 811 00:32:35.420 --> 00:32:36.460 that's a commercial property. 812 00:32:36.840 --> 00:32:38.201 There are lots of hotels. 813 00:32:38.341 --> 00:32:39.122 So it's also 814 00:32:39.766 --> 00:32:46.048 I think it can also be financially interesting for a lot of companies because once you're selling to business, 815 00:32:46.248 --> 00:32:49.869 it's also a different ballgame and can be more profitable. 816 00:32:51.509 --> 00:32:59.111 But a lot of times they need these commercial properties first and then they can do the residential because it's quite expensive to do the residential. 817 00:32:59.251 --> 00:32:59.491 But 818 00:33:01.052 --> 00:33:02.692 I think it's also just something that, 819 00:33:03.372 --> 00:33:03.612 I mean, 820 00:33:03.692 --> 00:33:06.773 once you think about not having air finishers everywhere, 821 00:33:07.113 --> 00:33:08.034 what a great thing. 822 00:33:08.114 --> 00:33:08.734 They're noisy. 823 00:33:08.934 --> 00:33:09.354 They're a little... 824 00:33:10.254 --> 00:33:10.594 big, 825 00:33:10.815 --> 00:33:11.395 they're ugly. 826 00:33:11.875 --> 00:33:12.215 I mean, 827 00:33:12.475 --> 00:33:15.276 to have no rooftops covered in air conditioners, 828 00:33:15.997 --> 00:33:16.417 great. 829 00:33:17.898 --> 00:33:18.018 Yeah, 830 00:33:18.098 --> 00:33:18.818 as an American, 831 00:33:18.898 --> 00:33:21.939 that's a very encouraging thinking. 832 00:33:22.019 --> 00:33:22.199 Oh, 833 00:33:22.219 --> 00:33:22.399 yeah. 834 00:33:24.220 --> 00:33:24.340 So, 835 00:33:24.840 --> 00:33:25.221 Morgan, 836 00:33:25.701 --> 00:33:27.221 one very final last question. 837 00:33:27.622 --> 00:33:28.782 If you had, 838 00:33:29.562 --> 00:33:29.722 say, 839 00:33:30.043 --> 00:33:37.065 one suggestion for organizations who would like to get money from this modernization fund, 840 00:33:37.346 --> 00:33:38.306 what would that tip be? 841 00:33:39.078 --> 00:33:39.278 Well, 842 00:33:39.438 --> 00:33:45.264 I think it's as simple as finding out who is administrator of the funds and start a conversation with them. 843 00:33:46.065 --> 00:33:47.386 And if it doesn't go anywhere, 844 00:33:47.606 --> 00:33:47.887 well, 845 00:33:48.067 --> 00:33:51.790 you can give BankWatch a call and we can see what else is happening. 846 00:33:52.511 --> 00:33:59.478 I think it's just also about keeping your eyes open and making these kind of discussions because it's usually it's not. 847 00:34:00.083 --> 00:34:02.405 big giant teams working with these funds usually. 848 00:34:03.086 --> 00:34:07.449 So I think it can be a lot more personable than maybe it seems from the get-go, 849 00:34:08.390 --> 00:34:09.431 especially on the national level. 850 00:34:10.051 --> 00:34:17.077 But I think also the fact that it's not a very well-known fund isn't helping expand the interest and transparency. 851 00:34:17.297 --> 00:34:17.417 So 852 00:34:18.138 --> 00:34:18.398 I mean, 853 00:34:18.538 --> 00:34:22.302 as the ETS-1 will be under review this year, 854 00:34:22.562 --> 00:34:28.387 I hope also the modernization fund will get a bit more light shined on it 855 00:34:29.095 --> 00:34:31.297 And also with the discussions ongoing about the ETS2. 856 00:34:31.337 --> 00:34:33.039 So yeah, 857 00:34:33.179 --> 00:34:37.643 but it's not a very crowded field of, 858 00:34:38.183 --> 00:34:38.664 let's say, 859 00:34:39.745 --> 00:34:42.187 practitioners looking into the modernization funds. 860 00:34:42.267 --> 00:34:49.954 So any interest is very welcome and happy to continue the conversation and hopefully do things like capacity building. 861 00:34:50.614 --> 00:34:51.055 Excellent. 862 00:34:51.235 --> 00:34:51.976 Thank you so much, 863 00:34:52.016 --> 00:34:52.356 Borgen. 864 00:34:52.656 --> 00:34:53.457 I learned a lot. 865 00:34:53.837 --> 00:34:55.018 That was really great. 866 00:34:55.198 --> 00:34:55.499 you 867 00:34:55.879 --> 00:34:56.619 Thank you so much. 868 00:34:56.839 --> 00:35:00.541 And I will put your contact in the show notes as well so that people, 869 00:35:00.701 --> 00:35:03.202 if they want to contact you and know more about this, 870 00:35:03.643 --> 00:35:08.945 how to use this money for smart investments and not surrendered investments, 871 00:35:09.405 --> 00:35:09.565 yeah, 872 00:35:09.645 --> 00:35:11.526 that will be the way to go. 873 00:35:11.986 --> 00:35:14.728 I love when our little podcast can have an impact. 874 00:35:15.528 --> 00:35:15.948 Great. 875 00:35:16.028 --> 00:35:16.188 Yeah. 876 00:35:16.328 --> 00:35:17.389 Thanks so much for having me. 877 00:35:19.370 --> 00:35:22.311 Thank you for tuning in to another episode of Energetic. 878 00:35:22.591 --> 00:35:30.456 It's been a pleasure diving deep into the world of sustainability and the just energy transition with some of the most forward-thinking mouths out there. 879 00:35:31.096 --> 00:35:31.977 I'm Maureen Cornelis, 880 00:35:32.097 --> 00:35:34.878 your host from Policy Consultancy and X-Energy Consumer. 881 00:35:35.259 --> 00:35:38.721 And it's been an incredible journey growing this podcast together with you, 882 00:35:39.101 --> 00:35:41.242 our knowledgeable and passionate listeners. 883 00:35:41.923 --> 00:35:43.184 Since 2021, 884 00:35:43.364 --> 00:35:44.825 we've shared countless stories, 885 00:35:44.985 --> 00:35:45.485 insights, 886 00:35:45.505 --> 00:35:48.647 and ideas over more than 40 episodes. 887 00:35:49.027 --> 00:35:52.189 And it's all thanks to your support and enthusiasm. 888 00:35:52.889 --> 00:35:57.172 If you enjoyed our journey so far and want to help us keep 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00:36:39.211 make sure to subscribe to Energetic on your favorite podcast platform. 901 00:36:39.671 --> 00:36:43.174 And if you think a friend or a colleague could benefit from our episode, 902 00:36:43.554 --> 00:36:45.155 we'd love for you to spread the word. 903 00:36:45.587 --> 00:36:49.791 It helps us grow and keep the energy transition conversation alive. 904 00:36:50.311 --> 00:36:51.612 Sharing is caring. 905 00:36:52.173 --> 00:36:57.317 Follow us on Twitter and LinkedIn to stay engaged and update on all things energetic. 906 00:36:57.637 --> 00:36:59.519 Thanks once again for lending your ears. 907 00:36:59.659 --> 00:37:00.420 Until next time. 908 00:37:14.111 --> 00:37:15.512 I need you. 909 00:37:15.532 --> 00:37:16.653 I need you. 910 00:37:16.773 --> 00:37:17.554 I need you. 911 00:37:17.614 --> 00:37:18.435 I'm not gonna. 912 00:37:23.119 --> 00:37:25.321 I'm taking your attention. 913 00:37:25.361 --> 00:37:27.383 I'm not gonna leave you.