COMMENT: Energy lobby dominates Czech climate change debate

COMMENT: Energy lobby dominates Czech climate change debate
Jezeri castle, perched on the edge of the Krusne Hory mountains, overlooks the North Bohemian opencast brown coal mines.
By Albin Sybera October 8, 2021

The Czech election campaign, which climaxes this week, has largely ignored vital issues such as how the heavily industrial Central European country will cope with climate change, instead focusing on phantom threats such as an Afghan refugee influx.

Prime Minister Andrej Babis has set this agenda, in a successful drive to mobilise his supporters and steal votes from the far-right SPD party. Opposition parties have been forced into a defensive posture, sidelining key issues such as climate change or the European Commission’s criticism of the billionaire populist’s conflicts of interest in handling EU funds.

When Babis has raised climate change in the election campaign, it has been only to criticise the EU’s “green madness”, which he argues is "imposed" on the country. Both climate scepticism and euroscepticism are hot button topics for rightwing and extremist voters, and a potential point of agreement between the premier’s ANO party and the rightwing opposition Civic Democrats (ODS) in a future coalition.

Babis, who had tried to block the EU’s target of going carbon-neutral by 2050, has pledged to return to fight against it all over again after the election.

The neglect of the vital topic of Czechia’s need to step up its measures to ameliorate climate change and to reorientate its industry towards a carbon-neutral future is very handy for the majority state-owned energy utility CEZ – which some Czech journalists describe as more powerful than the government – along with the EPH and Sev.en Energy companies, owned respectively by two of the country's wealthiest tycoons, Daniel Kretinsky (No.4 on the Forbes ranking) and Pavel Tykac (ranked 9th). Both private energy companies have a record of doing deals with CEZ, usually ones in which the dominant state-owned utility seems to benefit least.

CEZ, EPH and Sev-en Energy want a slow transition to a carbon-neutral future, with CEZ and EPH setting a company target of as late as 2050 for going carbon-neutral, while Sev-en Energy has yet to set a date.

In fact Sev-en Energy's and EPH’s business model of buying coal mines and coal-burning power stations in fire sales by other energy companies is based on a slow shift to renewable energy; a quick switch through more expensive carbon credits could render many of their investments unviable.

The ignoring of the climate change issue in the election campaign reflects the dominance of this energy lobby in the country’s meagre debate on these future challenges, and in particular this industry‘s close links with the dominant political parties and its control of influential media.

If Babis wins re-election this weekend, the risk is that this energy lobby will continue to dominate the climate change debate in the country, slowing down the necessary readjustment to a carbon-neutral future.

"Yellow Baron"

Czechia is one of the worst greenhouse gas polluters per capita in the EU, with some 40% of its energy coming from coal, plus an industrial sector that is very energy-intensive. Babis’ outgoing cabinet plans extensive investments into the enhancement of the country’s nuclear facilities as the country’s path to decarbonisation, rather than promoting renewable energy (though it has recently improved legislation that had held the sector back).  The government’s targets for renewable energy and reducing greenhouse gases have been regularly criticised by the EU for lacking ambition.

The one area of green energy where incentives are particularly generous is in biofuels, where the premier’s agro-chemical conglomerate Agrofert is the biggest player.

Agrofert’s subsidiary Preol is the country’s key supplier of biofuel ingredients used by the state-run oil utility CEPRO, and effectively the only domestic producer, according to an analysis by news website Hlídacípes.org.

In 2019 Babis’ government passed legislation supporting the production of biofuels, leading to Denik Referendum christening him the “Yellow Baron” because of his ownership of many of the country’s ubiquitous fields of rape, used as a biofuel input. 

The huge and blatant conflicts of interest between Babis’s political power and his business empire (he ranks 6th on the Forbes ranking) have drawn criticism from the EU, which has halted project payments to Agrofert until the government tackles the problem.

Agrofert’s ownership of the Mafra publishing house has also been criticized for effectively serving as an extended media platform for Babis and his ANO party. During the current election, Lidove noviny, the country’s oldest daily, now owned by Babis, has provided loyal coverage of ANO’s campaign, even headlining its front page with Andrej Babis' election promises. Babis denies any conflict of interest or using his media to help his political party.

The energy lobby also has great influence in both politics and the media. State-owed CEZ, headed by Daniel Benes for the past decade, has always had the ear of governments, whether of the left or right, and has also been a big player through advertising in the country’s media. In the past, it was also accused of being a source of corrupt payments to political parties and politicians, allegations it has always denied.

Benes, who is close to President Milos Zeman, is so powerful he was even able to dictate to Babis that the state must fund CEZ’s investment in its nuclear programme, despite the premier’s initial refusal to do so.

"Greenpiss"

But CEZ has now been superseded by the EPH conglomerate of companies, owned by Daniel Kretinsky and his old-new Slovak business partner Patrik Tkac, as the country’s no. 1 energy business, after its 2020 turnover outsized CEZ for the first time since the formation of EPH in 2009. EPH owns extensive gas infrastructure in the CEE region and has invested widely in coal mines and power plants in Germany and the UK.

The other big Czech player is Pavel Tykac and Jan Dienstl’s Sev.en Energy, which controls one of the country’s largest portfolio of assets in lignite and coal mining and carbon-based power plants, with a strong presence in traditional mining regions in Northern Bohemia.

EPH and Sev.en Energy also have the ear of government, and EPH in particular can influence public opinion through its media holdings.

Kretinsky’s Czech News Center can match or even surpass the media influence of the prime minister’s Mafra. CNC boasts one of the largest collection of media outlets and its outlet Info.cz’s narratives are frequently echoed by its tabloid Blesk, the country’s best selling daily.

Daniel Kretinsky and Patrik Tkac have always denied that they try to influence CNC's editorial line, a spokesman telling me this summer: "I can assure you that shareholders of EPH and CNC do not find it appropriate to recommend journalists what themes to focus on."

But according to environmental campaigner Josef Patocka, “the methods of both conglomerates are extremely unscrupulous” in pursuing their business goals and they engage in “manipulating public opinion so that it does not endanger the interests of fossil companies”.   

He highlights Aktualne.cz’s investigations into the administration of online environmental parody websites “Greenpiss” and “Hnutí DUCHA” [the Ghost Movement”], which smear the country’s environmental NGOs.

Aktualne.cz claims “Greenpiss” website was linked to Sev.en Energy companies through a PR company. Sev.en Energy told bne IntelliNews in an emailed answer that it was not involved with the administration of the sites and did not try to manipulate public opinion against decarbonisation.

Patocka also argues that Czech News Center and its outlet Info.cz operate by “disseminating disinformation about climate or renewable resources”.   

Info.cz certainly has a record of questionable reporting. It published a story about a Swedish teenager allegedly bullied into joining climate strikes against his will.  The story turned out to be disinformation, as an investigation into its sources showed.

Vojtech Bohac, author of the investigation and currently the chief editor at Voxpot, told bne Intellinews that “the problem with Info.cz is that for a long time it has effectively functioned also as a PR agency”.

Bohac thinks that the story “can be a case of a sloppy journalism looking for sensational headline or it can be a case of an editorial room tacitly letting its reporters do such sloppy journalism”. It is difficult to prove orchestrated manipulation, he admits, but he says such reporting is “an enormous problem for Czech journalism as a whole”.

“We know that Kretinsky wants a conservative editorial room [at Info.cz], but we do not know whether this is also in pursuit of further political goals”, says Bohac.

Info.cz’s then editor Tomas Jirsa was one of the key figures involved in the nationwide PR push in favour of China, covertly financed by Home Credit of the late oligarch Petr Kellner’s PPF Group, one of the largest providers of small consumer loans in China. PPF representatives maintained the goal of these activities was to “rationalise” public debate about China. 

The 2019 investigation by Aktualne.cz established the involvement of payments from Home Credit in the PR push, but as Lukas Valasek, lead author of the investigation and editor with Aktualne.cz, pointed out to bne Intellinews, “Info.cz regularly published unmarked PR articles”. The extent of political goals behind this is difficult to measure.  

Kretinsky’s remarkable rise has occurred against the backdrop of ODS-led cabinets. One of Info.cz’s podcasts is hosted by Mirek Topolanek, a former ODS prime minister brought down by a corruption scandal who then served subsequently in EPH’s management. He frequently targets the EU and its green policies, referring to the EU as the "green Taliban" in one of his latest episodes.

Depiction of the EU as having unrealistic green policies or even totalitarian tendencies is where the Eurosceptic narratives popularised by Info.cz conflate with the more aggressive statements towards the EU made by Andrej Babis or his populist ally, President  Zeman.

“It comes as no surprise that Topolanek now works for Kretinsky – I call it the syndrome of revolving doors”, says Patocka, pointing to the days when CEZ management, lobbyist Vladimir Johanes and Topolanek vacationed together in Tuscany.

Kiss the ring

The ODS – whose last three governments all collapsed in corruption scandals – is now under the leadership of Petr Fiala, who has pledged to drive the shadowy lobbyists out of the party. The ODS is part of the centre-right SPOLU formation, bringing together Christian Democrats and TOP09 as one of the main challengers to the ANO-led hegemony of Czech politics.

Though the ODS remains hostile to green ideas, TOP09 as well as the Pirate party have moved to embrace them. The Pirates are leaders of the second opposition coalition, and they sit with the Green group in the European Parliament and have a big following among young people.

If the two opposition coalitions – which have pledged to govern together – win this weekend’s election, there is a chance that this cosy consensus between politicians and the energy lobby will end.

However, politicians such as Radek Vondracek (ANO) and Alexandr Vondra (ODS) have publicly raised the prospect of post-election arrangements between ANO and SPOLU. It is also rumored in the circles close to SPOLU that informal talks with ANO have already taken place, something which leaders of SPOLU and ANO deny.

Such an arrangement would not only suit President Zeman’s long-term stance of supporting ANO, but it would effectively marry ANO’s open anti-EU populism with the ODS’s more subtle Euroscepticism.

An ANO-ODS configuration has already been evident in they way the two parties voted together on some key legislation in the past year. These include tax cuts last December and the blocking of more substantial reforms to the insolvency system.

It is also rumoured that Kretinsky’s media has been backing Babis as part of a behind-the-scenes deal between the two oligarchs. Babis reputedly enjoys making his fellow oligarchs come on bended knee to “kiss the ring”. As revealed when news website Seznam Zpravy got hold of his diary, Babis’ consigliere Jaroslav Faltynek – former Agrofert CEO and currently leader of the ANO party in the lower house  – is kept very busy holding secret meetings with businessmen.

Opposition parties and NGOs have criticised Babis for allegedly permitting the creeping "oligarchisation" of the state, a process they argue will only accelerate if he is re-elected.

ANO-led state institutions such as the Ministry of Finance and the Ministry of Environment have been lenient, to say the least, in collecting pollution fees from EP Industries’ waste management business AVE.

Caslav municipality took AVE to court for allegedly providing false data about the landfill AVE operates near Caslav, which it claimed caused the municipality a loss of nearly CZK1bn in pollution fees, and a further CZK4 billion CZK for the State Environmental Fund. Currently police are investigating AVE CZ in connection with these claims.

This case allegedly prompted legislative amendments that absolve landfill operators of similar claims. Kretinsky is reported to have lobbied to make the waste collection bill weaker and ANO and CSSD MPs then helped push the changes through. bne IntelliNews approached EPH for a comment on this article but received no response by deadline time.

Coincidentally, Kretinsky’s media has swung behind Babis. On the Monday before the election Blesk released a major interview with Babis that gave him a chance to praise his government and avoided any criticism of its mismanagement of the COVID-19 pandemic. The soft interview also allowed the prime minister to present an unchallenged account of why he failed to declare his property acquisitions on the French Riviera through offshore structures, as the Pandora Papers revealed.

With the prime minister’s Mafra media loudly backing him, and the quiet support of Kretinsky’s CNC media, it is not surprising that Babis has been able to dominate this election campaign. Whether the energy lobby will continue to dominate the country’s climate policy will only be seen after the post-election negotiations have been completed.

 Albin Sybera is a Czech freelance journalist based in Slovenia specialising in Czech media discourse, business and politics.

Opinion

Dismiss