Report on the environment in Slovakia from the perspective of the budget 2022. What is the environmental sustainability of Slovakia? How much will go to green building renovation? – Martin Gregus
The Ministry of the Environment of the Slovak Republic has budgeted expenditures for 2022, which are 35% higher than the approved budget for 2021. a high increase is the allocation of expenditures from the Recovery and Resilience Plan 213 mil. of the Modernization Fund (EUR 100 million budgeted in the Environmental Fund) intended for the state aid scheme for the district heating company.
The four largest programs together account for 80% of the expenditure budgeted for 2022.
Allocation of funds in individual areas in 2021 and 2022 (source: NKU)
The largest volume of expenditures is budgeted in the area of Administration and others. This is to support an increase in expenditure on institutional support (financing of activities from the Recovery Plan for the SAŽP (EUR 83.6 million), which will be aimed mainly at improving the energy efficiency of family houses and finances from the Environmental Fund.
In the area of Water Management, expenditures will decrease by more than 35% compared to 2021.
The Slovak Republic has long lagged behind the average of EU countries in the area of connection to wastewater treatment. Despite the government’s commitment in the government’s program statement to address the situation in the area of investment in sewerage, they remain largely reserved in terms of budgetary resources.
Problems also persist in connection with the public water supply, as 477 municipalities are still without a public water supply. The Development Plans show that the projected unsecured funds in the years 2021 – 2027, needed for development amount to approximately 747.51 mil. EUR for public sewers and 369.20 mil. EUR for public water supply (at the level of 91.5% of supply).
Despite the lagging behind of the Slovak Republic in international comparison in air protection, the costs of achieving the set goals in this area are not quantified. The Ministry also addressed the situation of the achieved set goals of the subsidy program, but in the course of 2020 not a single application was approved.
The low economy will reach the level of expenditures in 2019 and 2020 next year. The abolition of the exemption from excise duties (coal, electricity, gas) did not materialize in 2020 due to a political decision and planned savings 65 mil. EUR per year has not been reached.
Nature and landscape protection are among the least budgeted, however, it should be borne in mind that investments in the amount of 1 to 1.4 billion will be needed only for a high-priority burden. and their solution took more than 30 years.
In the area of Waste Management, expenditures in the Environmental Fund in the amount of 28 mil. eur. The income of the Environmental Fund from landfill fees in 2020 reached 25.6 mil. EUR (95% of the estimate according to the implementation plan).
Green renovation of buildings
The recovery and resilience plan of the Slovak Republic also contains the chapter “Green renovation of buildings”. The basic goal of this program is to improve the energy efficiency of family houses and public buildings, including listed buildings. Buildings account for 37% of greenhouse gas emissions and 40% of energy consumption. Investments should be made to improve the energy efficiency of single-family homes and public buildings.
A total of € 700 million is to be spent on renovating the buildings according to the renovation plan. There will be support Slovak Environment Agency (SAŽP) and should improve the energy efficiency of family houses and introduce selected green elements in the renovation process.
Given the amount of investment expected in the “Green renovation of buildings” will be crucial pay attention also to the execution and quality of construction work in the renovation of buildings under this plan in order to meet the energy efficiency targets of buildings.
Renovation of buildings is no longer just about thermal insulation of the perimeter, roofs or replacement of opening structures, but as the owners currently approach predominantly to overall renovation of buildings as well as in the “Green Building Renewal” plan their overall recovery will be approached.
Already in practice in the case of funding other than the State Fund for Housing Development They also provide the contractors with an accreditation inspection for the overall renovation of buildings, not only thermal insulation licenses as SFRB does.
Thus, the owners or housing cooperatives make sure that the construction company has the prerequisites and ability to perform the overall renovation of the building and not only individually for individual stages of renewal, such as e.g. insulation of cladding, roof or opening structures.
This situation, which in practice in the renovation of buildings is due to the fact that the overall renovation of buildings requires quality assurance of the work significantly higher assumptions at the contractor than in the partial renovation, e.g. thermal insulation of the perimeter cladding, or when renewing the roof cladding or replacing opening structures (windows).
Most contractors, insulation of the perimeter of buildings, do not have in their condition implementers for the replacement of opening structures or. for the renovation of the technical equipment of the building, which is required for the overall renovation of the building. Companies that focus only on cleanliness only have experience with overall renovation, which also includes all building renovation options that SAŽP will support under the “Green Building Renovation” program.
The Environmental Fund and its functioning so far
The main goal of the environmental fund is to carry out activities aimed at achieving the goals of the environmental policy of the Slovak Republic. In its program statement, the government has committed itself to implementing it “A comprehensive reform of the functioning of the Environmental Fund with an emphasis on transparency, objectively measurable criteria and the four-eyes rule”.
Revenues * and expenditures of the Environmental Fund in the period 2007 – 2024 (in thousands of euros) (source: NKU)
The SAO SR identified that the financial potential of the fund is not sufficiently used, but at the same time prices for issues and income from their sale are constantly rising. Thus, the management of changed years grows every year, which consists mainly of revenues from the sale of emission allowances.
However, the Slovak Republic does not have a mechanism in place to use this balance. Over the next five years, this balance could translate into an increase in funding for the relevant subsidy mechanisms on the expenditure side of the budget.
Open questions and budget risks for Slovakia’s environmental sustainability
So what are the most significant risks to environmental sustainability and the budget for this area for 2022?
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for the area of waste management, the amount of allocated funds is not available, which is missing in the implementation of obligations arising from international agreements and treaties,
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missing Envirostrategy implementation plan together with the missing annual deduction of individual measurable indicators of its fulfillment,
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The obligations of the Slovak Republic in the field of water also appear to be a long-term risk (drinking water supply, drainage and waste water treatment, ensuring good water status, water protection, etc.),
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the prioritization of flood protection projects is not applied as would be necessary. They are implemented e.g. smaller projects with high priority (only because they are ready for implementation), but often with sufficient potential to prevent damage in relation to the total cost (costs should be at least equal to the amount of damage prevented). However, according to the Flood Risk Management Plan for 2016 – 202144), only the costs of projects in the first priority group amount to 263 mil. eur,
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the state as the investor represented Slovak Environment Agency has not yet defined the quality criteria for the renovation of houses and buildings from the program “Green renovation of buildings” in terms of their implementation. To ensure this, it would be appropriate in the case of applications for support (subsidy) for the renovation of buildings from the “Green Building Renovation” program, where a significant resp. total recovery buildings introduce min. obligation to apply from contractors – construction companies inspection resp. implementation for the overall renovation of buildings, or any other criterion guaranteeing the quality of to guarantee the expected targets for improving the energy efficiency of refurbished houses and buildings,
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fulfillment of reform problems from the government’s program statement (especially in the area of streamlining public administration, reform of key companies and departmental institutions, reform of national parks, etc.),
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absence of methodology for implementation of investment plans, as well as the unprocessed revision of investment debt in the sector,
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Environmental fund and its strategic focus following the system of grant allocation and loan approval, including the lack of a mechanism for exploiting growing economic balances.
Sources and citations: Budget SR 2022 – https://rokovania.gov.sk/RVL/Material/26512/1, https://www.mfsr.sk/sk/media/tlacove-spravy/vlada-schvalila-rozpocet-rok-2022.html, MŽP SR: Flood risk management. [on-line]. Department of Strategy and Analysis, SAO SR. Possible savings on flood protection measures, December 2020. [on-line]. BCG Audit, 2017. [on-line]. MF SR, 2021. Summary Implementation Report 2020. [on-line]., Ministry of the Environment of the Slovak Republic, 2021: Development plan of public sewers and water supply systems for the territory of the Slovak Republic for the years 2021 – 2027. [on-line], NKU: Opinion on the draft state budget 2022, Council for Budget Responsibility: Introductory opinion on the draft budget