The Greek Way to De-Carbonisation: a Success Law Story

Dr. Ioannis N. Tzortzis President of JTDP Legal Experts Committee, Ministry of Environment and Energy Attorney at Law at the Supreme Court, Regulatory Authority for Energy (RAE) The Greek way to de-carbonisation: A success law story

How to create major investment opportunities by drafting law out of the box

23 MARCH 2021 The main goal of Greece

As a key part of the National Energy & Climate Plan, the Greek government is clearly committed to decommission all lignite power plants by 2028, with the majority expected to take place by 2023

The goal is to support the transition of local economies and employment and minimize the associated social and environmental impact during this process

2 Greece with local (captive) mines is more depended per capita on lignite & affected by the transition than any other EU country

Coal mining is concentrated in just a few areas of the EU Possible negative impact on EU local employment

53 thous. employment positions in coal power plants Mostly affected countries (of which 1.1 thous. in Italy & 1.4 thous. in Spain) Germany 450 118 thous. employment positions in coal mines thous. (of which 3.4 thous. in Spain) The Czech Republic 215 thous. indirect EU employment positions Poland related to coal (of which 2.2 thous. in Italy & 5.2 thous. in Spain) Romania Possible negative impact on EU local communities Bulgaria The coal areas are already lagging behind compared to the rest, with regard to GDP per capita Greece • -2% GDP1 areas with coal power plants • -8% GDP1 areas with coal mines

1. GDP per capita per area / GDP per capita per country. Note: The unemployment figures include workforce who are employed in mines or power plants, but indirectly depend on them. Source: European Commission 2018, JTDP Technical Secretariat 3 Five basic principles underline the In accordance with Greek vision for the next day EU policy objectives

• A smarter Europe Focusing on labor-intensive industries to create new job 1 opportunities for local communities

• A greener Europe 2 Leveraging the innate advantages of the affected regions

Ensuring a speedy transition with a focus on quick wins 3 • A more connected Europe via a short sharp shock strategy

4 Promoting social and environmental sustainability • A more social Europe

Integrating modern technology and promoting an 5 entrepreneurial spirit throughout all new activities • A Europe closer to its citizens

Source: Europe 2020 Strategy, Analysis by JDTP Team 4 Vision & Investments

The Greek Master Plan The Greek Master Plan vision for the "next day" vision for the "next day" Sustainable socio-economic development leveraging region's competitive is designed as the advantages to drive economic growth & improve quality of life for its citizens

New Greek Parthenon 1 2 3 4 5 with 5 growth pillars founded upon 4 key enablers.

Clean Smart Sustainable Industry and Technology & Energy agricultural Tourism trade Education Put on Public production consultation for 39 days Physical and digital infrastructure and presented to the Reskilling of human capital

Hellenic Parliament. Guidance for entrepreneurship & Incentives

Land repurposing

Source: Analysis of JDTP Team 5 Vision & Investments The vision for the “next day” will be promoted with public, private and PPP investments

Public-Private Private Investments Public Investments partnership

6 Deep-dive: Western Macedonia

W. Macedonia

7 Vision & Investments Our vision for Western Macedonia: Center for production and research in clean energy with a diversified economic model

Current situation in Western Macedonia in 2020 Our vision for Western Macedonia in 2028

From: To:

Clean energy Modern industry and Lignite based energy Limited industrial production and transit center in the production activity research center Balkans (~ 2.5GW PV)

Under-utilized perspective Focused production of Specialized tourist Dynamic crops of of tourist activity PDO products destination exportable products

8 Copyright ©by 2020 BostonConsulting Group. rightsAll reserved. Vision & Investments W. Macedonia: Expressed interest in 11 major projects estimated to mobilize over € 2 billion in new investments in the region

Large investments under consideration Estimated Investment Photovoltaic parks (~ 2GW) Clean Green hydrogen production unit ~€1.5Β Energy Energy storage facilities Field of energy research and technology1 with PPP Industrial park with emphasis on the manufacture of electric Industry, products (lithium batteries, etc.) by a nationwide group handicrafts Establishment of a waste management unit ~€200Μ and trade Biomass processing center

Smart Smart agricultural production units of the latest technology agricultural (hydroponics) from an international company in the food industry ~€100Μ production

Sustainable Wine tourism ecosystem to the standards of Northern Italy tourism (interest from a leading company in winemaking) ~€25Μ

Other State-of-the-art physical rehabilitation clinic with PPP from Investments public entities ~€60Μ

1. Indicative: electric propulsion, hydrogen and alternative fuels, storage technologies P-P 2. University of Western Macedonia Source: PPC, ELPE, Investment plans, Proposals of institutions, Private entity Public entity Analysis of SDAM Team Partnership 9 Deep-dive: Arcadia-Megalopolis

Arcadia

Μεγαλόπολη

10 Vision & Investments Our vision for Megalopolis: Sustainable development with emphasis on industrial profile and natural advantages of the region

Current situation in Megalopolis in 2020 Our vision for Megalopolis in 2028

From: To:

Restart industry in Coal-based energy Limited industrial Diversified and competitive sectors of the network, but also a production robust green energy natural gas unit profile (~ 1GW PV) economy

Unknown tourist Small agricultural Ideal destination for Cultivation of exportable destination production of specific those looking for products and development products adventure in nature of feed and livestock production

Large investments under consideration Estimated Investment

Clean Photovoltaic Parks (~550MW) ~€250Μ Energy

Industry, handicrafts Standard pharmaceutical industry ~€90Μ and trade

Smart Intelligent livestock and animal feed unit agricultural Smart agricultural units for the production of ~€40Μ production exportable products1

Sustainable Original adventure, entertainment and education ~€40Μ tourism theme park

Other ~€30Μ Investments Other public investments

P-P Private entity Public entity 1. It has been covered in the chapter of W. Macedonia for which the investment interest has been expressed Partnership 12 2. Source: Investment plans, Proposals of institutions, Analysis of SDAM Team Jobs & reskilling Investments can create employment for the directly affected and locally unemployed workforce

Considering the estimated vacancies created from the other planned investments, it is expected that more vacancies will eventually be created than those affected by the decommissioning plan.

Initial estimation – W. Macedonia and Megalopolis Estimated up to ~ 8,000 total vacancies from …which can mitigate the expected jobs loss the most mature projects… from the decommissioning of the plants & mines Total vacancies1 Total vacancies1 ~8,000 ~8,100 8,100 1,710 4,959

1,431

Construction Phase Operation Phase New jobs Direct job loss2 Indirect Surplus 1. Includes direct employment (estimated per emblematic investment) and indirect and induced employment (estimated on the basis of TEE / job loss JTM closed type multipliers by industry) 2. Includes the short-term unemployed (<12 months) in Western Macedonia, but for Megalopolis is included in total unemployment Source: PPC, OAED, TEE. JTM Investment plans, Analysis of SDAM Team 13 Source: SDAM Team analysis Jobs & reskilling Workforce Redeployment: The need for reskilling is identified in 3 main sectors of specialization

Initial estimation – W.Macedonia

Horticulturists, Farmers, stockbreeders Catering-tourism Other administrative agronomists, winemakers professionals staff

Catering & Sectors: Agricultural Production Administrative tourism Services Positions1 : ~420 (~16%) ~520 (~20%) ~1,615 (~64%) Need and Type of Reskilling Low(<1 month intra-corporate) Medium (1-3 months in competent entity) High (3+ months in competent entity)

Source: Analysis of SDAM Team 14 Rapid implementation via the Prerequisites drafting of out of the box legislation by the JTDP Legal Experts Committee

Institutionalisation of incentives

Special Urban Plans (SUP)

Project financing

Land restoration

Public Investment

Fast Track Licensing process

15 Incentives Defining incentives: Type of incentives and targeting

Prediction of 15 specialized incentives divided into 3 groups ▪ Incentives to attract a new production process: Provision of a grant for a new investment, Tax exemption, Tax relief, Subsidy for insurance contributions, Exemption of fees, Loan on favorable terms, Guarantees ▪ Incentives to maintain the existing operation: Provision of a grant for reform/modernization of a productive operation, Subsidy of loan obligations, Subsidy of wage costs, Participation in Equity, Loan on favorable terms ▪ Incentives to support individuals: Income tax deduction, Mortgage subsidy, Enhancement of projected benefits and training programs

The way of defying incentives and targeting ▪ The determination of the incentives took into account all the communication that has preceded with local entities, potential investors, executives of the involved services, etc. ▪ The main goal is to make the most of all available sources of funding, including the 3 pillars of the Just Transition Mechanism as well as the other National and European sources. ▪ Incentives will mobilize and activate specific investment projects, which will allow the mobilization and leverage of additional financial resources, which otherwise would remain dormant.

Source: Analysis of SDAM Team 16 JTDP

RRF

JTF JTDP Funding INVESTEU EIB Pyramid

ERDF/CF ESF+

NATIONAL EAFRD PRIVATE EQUITY RESOURCES

RRF: Recovery and Resilience Facility, JTF: Just Transition Fund, ΕΙΒ: European Investment Bank, ERDF/CF: European Regional Development Fund/Cohesion Fund, 17 EAFRD: European Agricultural Fund for Rural Development, ESF+: European Social Fund plus, National resources exclusively Lignite Fee and Emission Rights Auction Revenue Funding by priority and source Funding

Priorities JTF INVESTEU EIB RRF ERDF/CF ESF+ NATIONAL EAFRD RESOURCES Fostering and promoting entrepreneurship ○ ◙ ● ● ○ Energy transition– climate ◙ ● ● neutrality ○ ◙ ○

Agricultural sector development and agrifood ○ ● Repurposing land uses – circular economy ○ ◙ ◙ ● ● ○ Just labor transition and empowerment of human ○ ◙ ◙ ● ● ● ○ capital (resources) Transport infrastructure development for entrepreneurship and sustainable urban mobility ○ ◙ ◙ ● ● ○ support and Digital Interconnectivity Integrated Territorial

Investments — Smart Cities ○ ◙ ◙ ● ● ○ ● Indirectly related to the JTD – Just Essential to the JTD, with the possibility of locating interventions in Exclusive targeting of decarbonization Transition Development (may concern the ◙ the wider geographical area of the ‘most negatively affected ○ zones of Florina, Kozani, Megalopoli, whole Region of Western Macedonia) territories’ for the purposes of JTD 18 Funding

Funding by area and source

3 +

AREAS /

EIB

JTF

RRF

ESF

EAFRD

National

InvestEU

ERDF resources

Kozani Decarbonization Zone (D.Z.) ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

Florina Decarbonization Zone (D.Z.) ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

Kastoria Regional Unit ✓ ✓ ✓ ✓ ✓ ✓ ✓

Grevena Regional Unit ✓ ✓ ✓ ✓ ✓ ✓ ✓

Megalopoli Decarbonization Zone (D.Z.) ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

Tripoli Municipality ✓ ✓ ✓ ✓ ✓ ✓ ✓**

Gortynia Municipality ✓ ✓ ✓ ✓ ✓ ✓ ✓**

Oichalia Municipality ✓ ✓ ✓ ✓ ✓ ✓ ✓**

1: Just Transition Fund, 2: Invest in European Union, 3: ΕΙΒ - Public Sector Loan Facility, 4: Recovery and Resilience Facility, 5: European Regional Development Fund/Cohesion Fund, 6: European Agricultural Fund for Rural Development, 7: European Social Fund, 8: National resources exclusively Lignite Fee and Emission Rights Auction Revenue 19 Financing Initial investments’ financial plan: Full utilization of all available sources of funding

Initial Estimation €M ~500 ~2.000 ~400 ~400 ~700

Commercial Loans Equity Subsidies Loans on Total favorable terms % distribution 35% 20% 20% 25% 100%

• The financial scheme shows the fact that a significant part of the investments will be made through the leverage of commercial (bank) loans and equity, as significant investments that are launched do not need any further support. • At the same time, the utilization of the Just Transition Mechanism with the aim of not the immediate exhaustion of subsidies (Just Transition Fund) but the more complete use/utilization of all its 3 pillars, enables the integration and implementation of an increasing number of investments.

20 1. Includes initial assessment of investments in other development actions Source: SDAM Team Analysis Spatial plans The 3 stages of the EU Just Transition Regulation’s 3 Territorial Plans of Western Macedonia, Megalopolis and the Aegean Islands and Crete

Transition process Transition challenges Governance

Outline of the transition process and Assessment of transition challenges, -Public consultation identification of the most negatively for each of the identified territory -Monitoring and evaluation measures affected territories planned -Bodies responsible for coordinating and legislating the implementation of JTTP

Source: Technical Secretariat of JTP 21 Section 1: Transition process

Transition process Transition challenges Governance

Source: Technical Secretariat of JTP 22 Transition steps and actions

Forward-looking strategy National Energy and Climate Plan Practically eliminating the share of lignite in electricity production by 2028

• Limitation of activities, withdrawal of lignite plants, closure of mines Decommissioning of lignite plants and closure • Monitor the evolution of lignite plant withdrawal/mine of mines closure procedures • Informing local communities and stakeholders Allocation of lands to be transferred to • Preparation of required Legal Acts the Greek State • Initiation of Administrative Decisions and procedures • Identification of required interventions/works Procedure for the restoration of areas • Estimate of rehabilitation costs within the Decarbonization Zones (D.Z.) • Restoration and preparation of lands for new uses

• Design and establishment of incentives Supporting actions • Attracting and implementing investments

23 Key legal acts introduced by the • Special Purpose Vehicle (SPV) of the Greek State to which JTDP Legal Experts Committee PPC’s assets to be rehabilitated and repurposed will be transferred in order to proceed rapidly with the remediation procedures and adjustments to their use

• New Spatial Planning is required to repurpose land uses and spatial scenarios

• Law 4759/2020 (Article 155) provides for 2 Framework Program Contracts between PPC S.A. and the Greek State

• RRF funds of 300 mil. € allocated for land restoration Restoration of areas within the /rehabilitation Decarbonization Zones (D.Z.) • Prioritisation of the lands to be rehabilitated, using the criteria of feasibility and maturity

• PPC S.A. could be the intermediary body utilising the specialties from its subcontracting mechanism

fast completion

24 Transition Roadmap (Western Macedonia - Megalopolis)

Stages and Specific Actions 2020 2021 2022 2023 2024 2025 2026 2027 2028 Decommissioning of lignite plants and closure of mines Limitation of activities, withdrawal of lignite plants, closure of mines Monitor the evolution of lignite plant withdrawal/mine closure procedures Informing local communities and stakeholders Allocation of lands Preparation of required administrative acts Initiation of administrative decisions and procedures Procedure for the restoration of areas within the D.Z. Identification of required interventions/works Estimate of remediation costs Restoration and preparation of land for new land use Supporting actions Design and establishment of incentives Attracting and implementing investments

25 Section 2: Transition challenges

Transition process Transition challenges Governance

Source: Technical Secretariat of JTP 26 Identification of the overall transition …took under consideration, the expected results impact, as a consequence in the local that will be reflected at the regional economic economy… parameters

Economic and business activity Declining sectors • Gross Value Added (GVA) reduction • basic and supporting lignite mining activities • conventional electricity generation activities as well as • Turnover and number of enterprises declining activities of collection, treatment and management of extractive waste and remediation. Population and employment • Decrease in employment Transformative sectors • Social cohesion disorder • electricity distribution and trading activities • Depopulation • supporting activities for the production and supply of raw materials and machinery related to lignite-fired activity; • manufacturing and marketing of metal products, machinery and equipment • activities in the transport sector. Environment and health • Degradation of natural environment • Negative impacts at social infrastructure and services

Source: Ανάλυση Ομάδας ΣΔΑΜ 27 Section 3: Governance

Transition process Transition challenges Governance

Source: Technical Secretariat of JTP 28 Basic pillars of the governance ...basic parameters of implementation model… Members of PA • Competent Local Authorities: Regional Authorities, Municipal Authorities, etc. • Chambers: Chambers of Commerce, Chambers of Partnership Agreement Economics • Clubs/Federations: Labor Centers, Trade Associations • Scientific Centers: Educational Institutions, Technological Development and Financial Research Centers, etc. Indicators Monitoring and evaluation • Output Indicators (RCOs) • Result Indicators (RCR) Organisation Structure • Government Committee • Steering Committee Coordinating and legislating • Legal Experts Committee • Technical Committee and Enterprise Greece Task bodies Force • 2021-2027 Program Monitoring Committee and Sub- Committees • State owned Special Purpose Vehicle (SPV) S.A. 29 Organisational Structure The Greek JTDP Governance Ecosystem

JTDP Government Committee

JTDP Steering Committee General Secretariat of JTD Program JTDP Observatory under the Presidency of Public Investments & Monitoring Committee Committee1 ex. Minister Partnership Agreement (PA) 2021-2027 Kostis Moussouroulis JTDP Legal Experts Committee

JTD Special Co-ordination 2 JT Territorial Plans Sub- JTDP Working Groups3 JTDP Executive Body Service (JT SCS 2021-27) Committees

JTDP Fast Track Licensing Satellite structures in State SPV SA West. Megalo Islands Committee W. Macedonia and Megalopolis for a better observation of the (Land Owner & Developer) Maced. polis Programme implementation, Task Force within the Territorial Programmes Egnatia Odos SA Subsidiary Enterprise Greece4 (Beneficiary)

Council of Ministers Partnership Agreement Decisions by the JT Steering Par. 5 Article 104 Law 4685/2020 New Structures Act 49/2020 2021-27 Committee President

Note: 1. During implementation JT OC could be assisted by an Independent Audit Committee. 2. JT SCS will act as Managing Authority of the Ministry of Environment and Energy. 3. a) Fossils Raw Material Committee, b) Spatial Planning Committee, c) Digital Transformation Working Group, d) State Aid Working Group, e) Technical Committee. 4. TF EG will deal with attracting and assisting investors. 30 Rapid law Digital maps of the Cores (Lignite mines) of the De-Lignification Areas enactment of New Land Uses of the De-Lignification Areas

31 MASTER PLAN Προτάσεις Χωροθέτησης Proposed New Land Uses

Amyntaio lignite area

Photovoltaic Parks’ zone: 21,018 km2 Industrial/Enterprise zone: 6,182 km2 Ash deposition area: 155 km2 Lake/Reservoir: 7,137 Km2 Recreation, Sport, Park area: 4,651 km2 Rural zone: 14,105 km2 Forest – Agroforest – Pastures: 8,568 km2 32 MASTER PLAN Προτάσεις Χωροθέτησης Proposed New Land Uses

Ptolemaida lignite area

Photovoltaic Parks’ zone: 30,397 km2 Industrial/Enterprise zone: 23,303 km2 Lake/Reservoir: 9,728 Km2 Recreation, Sport, Park area: 15,023 km2 Rural zone: 38,284 km2 33 Forest – Agroforest – Pastures: 31,313km2 MASTER PLAN Προτάσεις Χωροθέτησης Proposed New Land Uses

Megalopolis lignite area

Photovoltaic Parks’ zone: 16,370 km2 Industrial – Enterprise zone: 3,255 km2 Lake: 5,698 Km2 Recreation, Sport, Park area: 4,155 km2 Rural zone: 2,705 km2 Forest – Agroforest – Pastures:21,428 km2 34 De-commissioned thermoelectric power plant transformed into an art space as a symbol of the fall of the apartheid, in Soweto Johannesburg, South Africa

www.green-project.org

35 An open call for investors’ proposals: I. By the special JTDP Task Force II. By the JTDP within Enterprise Greece Steering Committee

Enterprise Greece is supervised by the Greek Ministry The JTDP Technical of Foreign Affairs and bears the responsibility for the Committee pre-screens promotion, the attraction and the support of private investment proposals and 1 investments in Greece, while it promotes the exports development plans and of Greek products and services through international provides opinions and marketing actions and events. recommendations.

The Enterprise Greece JTDP Task Force welcomes, Proposals and plans may be informs and supports investors for projects planned in submitted to the electronic 2 the regions of Western Macedonia and the account: [email protected] Municipality of Megalopolis. Information available at:

3 Investors are welcome to use the special electronic https://www.sdam.gr/index. account: [email protected] php/el/anoikti-prosklisi

36 Many thanks for your interest. We are happy to assist you 24/7.

Dr. Ioannis N. Tzortzis 4, Korai Street, Athens 10564, Greece tel.: +30 210 3278072, mob.: +30 6974 796797 [email protected]; [email protected] www.sdam.gr