Good afternoon, dear viewers. Welcome to the sixth episode
of the New Magazine podcast entitled Coal phase out in the
Western Balkans. I will host today Stefan Vladisavljev, Program
Director of the Foundation BFPE for a Responsible Society, who has
been dealing with international relations for years, especially
China and its role in global businesses.
Our today's topic will be the challenges that await us in
terms of energy transition, especially in the light of geopolitical turmoil
and context. We will also touch upon the issue of critical raw materials,
as well as the impact of Western Balkans with this regard, especially
when it comes to energy transition within the EU.
The podcast realization has been supported by the Open Society
Foundations for Western Balkans, you can follow it on our YouTube Channel.
Additionally, those podcasts are available on other podcast platforms
such as Spotify, Deezer and Apple Podcast.
I'm using this opportunity to urge you to follow us on Instagram and TikTok.
I hope that you will enjoy today's episode.
Good afternoon, Stefan. -Good afternoon.
Thank you for responding positively to my invitation to host you here.
Please, introduce yourself to the audience first, and tell us
something about yourself. -Damir, thank you for having me.
My name is Stefan Vladisavljev, Program Director of the Foundation
BFPE for a Responsible Society, it's an NGO with 20 years of
experience in working in civil sector, with a wide portfolio of activities.
The viewers of New Magazine channels might recognize me
as a host of the podcast entitled Understanding Steel Friendship,
that is still available on YouTube Channel of New Magazine,
so please follow YouTube Channel of New Magazine,
as well as Instagram and Spotify, where you can find audio files.
It is a great pleasure to join you today and discuss a topic that
I regard highly interesting and relevant issue.
Thank you. In this podcast, in general, we deal with decarbonization
and coal phase-out on the Western Balkans.
However, we cannot discuss this issue without wider geopolitical
dimension. Simply, our strategic interest, as we defined it within
Western Balkans, in Serbia, but also in other countries and economies,
we have agreed that EU integration path is our right path that we took.
In view of geopolitical turmoil, the war in Ukraine and Middle East,
the cases of civil wars and protests worldwide...
EU tries to position itself towards it in a way...
In all this crisis, they stick to their development strategy,
i.e. the Green Deal. It's questionable whether they will succed in it.
Can you tell us something more on general geopolitical circumstances
on the international level, pertaining to energy and energy security that
had become top priority on the political agenda
of practically every state in the world.
Geopolitics is often a good litmus test for the various policies
that major world powers are trying to implement.
We have all of it defined within diverse strategic and action plans.
Very slight geopolitical shifts can cause major political strikes,
that is, they can be caused by things that are not necessarily foreseen,
as you might develop a strategy during peaceful period, and now
we witness that there are several focal points, that
have been going on all over the world.
The fact is that security issue is under direct influence of geopolitical
circumstances, and nowadays security cannot be perceived
without the aspect of energy security. Can we call it energy transition in
time of crisis, or should we talk about some kind of protectionism...
We have to look at it through the prism of the most important partners
and their conflicts, whether through direct conflicts or through different
implementation of politics on the geopolitical agenda.
All of this brings us to the almost concrete answer to your question.
The postulates of energy transition, postulates of reducing negative aspects
of the energy sector for each state remain the principle by which states
are guided, but given geopolitical turmoil, to the increase in the
presence of certain actors on the global market, those postulates
are subject to being adapted within present geopolitical context.
Great. Can you tell us more on the attitude and strategies of the
actors. There's Russia that uses natural gas as political weapon,
China has been financing diverse projects, primarily fossil fuels in
worldwide, but renewable energy projects are slowly making their way.
USA has its one agenda, and European Union has its own.
Can you give us a short comment on every acter involved in this?
What I find interesting in this context, about strategic action
at the global level, as we observed Russia diametrically opposite,
despite all criticism directed towards democracy and authoritarian actions
even prior to the conflicts or Russian aggression in Ukraine.
Simply, no major differences took place, apart from the fact that
Russia had conveyed aggression. So, this brings us to the high level
of dependence primarily between EU states and Russia...
And we regard it through the prism of conflict, so at some point,
so European countries were ready to shoot themselves in the foot
as they politicaly decided to help Ukraine, condemning Russia.
We are talking in the context of Russian gas and Russian oil...
While the states who continue cooperating with Russia found
themselves under criticism, here I primarily refer to the European
states and the states on the verge of Europe.
It is also interesting what you mentioned pertaining to China.
I would like to give an example referring to the Republic of Serbia.
Namely, back in 2018, it might be 2019, I'm confident that five years
had gone by, Chinese Communist Party made a decision that projects
that pertain to the dirty energy sources will not be financed with
Chinese money. Coal thermal power plants will no longer be modernized
or build with Chinese funds, outside of Chinese borders.
Moreover, they say, sorry for interrupting, that if some countries
in the case of lower standards, Chinese standards will be applied.
It is certainly something that changes the prism of perceiving China
on a geopolitical level, and this is particularly interesting
for the context of Serbia. Namely, even before that decision, as the
contract was signed prior to that, modernization and construction of
new capacities in the thermal power plant Kostolac, but at the moment
when the decision was made, all negotiations on modernization
and construction of new capacities of power plant Kolubara were terminated.
It indicates that even the partners that we observe with concern
in view of their growth, and the specific political system,
internally have a kind of responsibility towards global trends.
The United States of America acts at the global level with a lot of
protectionism, something that is in line with their policies,
and it's expected that this level of protectionism will be even higher.
After Donald Trump coming to power, it will be officially in January 2025,
but even prior to that, the USA strives to be self-sustainable
and self-sufficient in the field of energy,
so we are left with European Union, which took the most progressive
positions on the value level, but certainly due to the challenges
it faces, primarily due to the high level of dependence on Russian gas,
until 2022, energy transition and green policy remains a top priority.
Each of these countries has a specific position on the global level,
I'm certain that we will discuss it further in this episode,
but it is very important for me to mention that that everything must be
viewed through one complex system and standards,
and different events must be taken into account that
are not necessarily related only to energy, but are certainly related to
and affect this area as well, even though they are not directly related.
Whether to renewable energy sources, or strategies in this field,
due to political consequences they're included in this policy as an addition.
The complexity of the international system is really huge, so we cannot
reduce everything to one point, and as for EU, what is your comment
on the competitiveness of their industry, especially in renewable
energy sources, they are facing a crisis, as the report
on competitiveness was submitted by Mario Draghi recently to the EC.
Although it is a leader in the fight against climate change,
the European Union is losing its technological superiority.
We witness that China is becoming and has already become a leading country
in the sale of electric vehicles. Serious tariffs and bans on
the import of electric vehicles from China have been mentioned,
in order to protect the industry. What is your comment to this?
The same goes for the Americans, who subsidize their manufacturers...
The same goes for the Chinese. Europe is trying to limit subsidies,
trying to solve the problem through The Net-Zero Industry Act (NZIA).
There we see a clear lack of competitiveness for a couple of years,
and after the 2022 crisis, it is an even steeper decline.
In what way they could defend themselves? Are those measures
are good or not, what would be the consequences?
EU acts from a rather unfavorable starting position, why is that so?
Now, we are coming to the argument of strategic autonomy.
This is a consequence of the fact that European union had established
its position in the way of creating economic interdependence,
in various fields, but it's primarily economic interdependence,
with all relevant partners on the global level.
I would like to shed light on foreign policy, at this point.
It is important in order to understand relations you've already mentioned.
With the coming to power of Ursula von der Leyen in 2019 within EC,
EU has slightly changed its principle of relations and developing
cooperation with the People's Republic of China.
There was more and more talk about certain rivalries in the area
values, in the area of politics, however, when it comes to the
field of economics, China was still referred to as partner.
In the broader context, I will include energy in economy at this moment.
With an economic boom, especially in the automobile industries of
the People's Republic of China, in the field of electric cars, taking
over the primacy on the global market, that partnership was
increasingly burdened by taxes. I want to mention Serbia briefly,
Serbia as a candidate country for EU accession, should harmonize
its economic policies with the European Union.
While the EU is introducing taxes and customs duties to China,
Serbia is signing a free trade agreement with China.
What EU is doing right now may be referred to as risk reduction policy.
Although such policy is primarily linked to China, I would like to
say that we can refer to risk reduction policy as a way that
EU uses to position itself and distance itself from status quo,
in which it is highly dependent on the Chinese market, in many fields,
the same goes with the raw materials from other countries.
By creating its own supply chains and by establishing certain set of
norms, in order to protect the economies of member states.
This strengthened the position of those who advocate so-called
strategic autonomy, to the detriment of those who believe that strategic
autonomy is a potential danger to the transatlantic partnership.
It will be very interesting to observe this strategic autonomy in context of
Donald Trump's coming to power in 2025, it is geopolitical moment
of utmost importance for all those who observe system of international
relations, claiming that they have evidence that in the period from
2016 to 2020 Trump's decisions harmed transatlantic partnership.
Now, considering the strengthening of the movement of those who advocate
strategic autonomy within the EU, we can see more and more people
in future advocating the principle of strategic autonomy,
and the actions of both the EU and some member states.
Just one more sentence on this, I believe you mentioned it in
posing the question, namely, large automotive companies that do business
on the territory of EU, those based in EU originally, primarily
from Germany, to some extent, from France as well,
are placed in extremely unfavorable position. On the one hand, we have
American Tesla, on the other, several Chinese companies,
BYD being most popular, most famous and the largest.
BYD is the largest manufacturer and the biggest seller of electric
vehicles on the global level, and relatively recently they announced
plant construction in Hungary. So, the Chinese are already
entering Chinese market, while Europe is trying to define its
policies towards previous partners and potential market competitors.
Do you think that this would get them closer to American strategy,
as the Americans are simply looking for the allies, which correspond
to them in terms of values. I mean friendly countries,
such as Japan, Australia, etc. Sometimes, Brazil is also among them.
Do you think that the concept of strategic autonomy is compatible
with that principle? -Coalitions already exist.
We tend to divide them, rather simplistically, into Western liberal
democracies, meaning by that Japan, Australia, even in some cases,
South Korea, if someone's prone to exaggeration, India finds itself
there, too, and on the other hand, we have states of different social
systems, I wouldn't call them authoritarian, but different
systems, partially authoritarian.
Somehow, the economy transcended those divisions.
The biggest partner of the United States of America, apart from
Europe, has been China. I mean, when it comes to foreign trade.
For the last two years, EU has been trading more with China,
than with the United States. This is status quo we refer to,
it is about the fact that we are on the threshold of technological
development, that would define new directions in building relations.
Diverse levels of cooperation within different countries.
The question is to what extent political postulates based on values
will be able to harmonize with the needs of the economy.
I believe that Germany is very good example in this sense.
Critics who, due to the lack of democratic practices, dispute
the development of cooperation, for example, with the People's Republic
of China, are often drowned out by strong messages coming from
the industry, because somehow, how shall I put it, in order to demean
those decisions, sending pictorial message that decisions
which the chancellor makes are checked with party members,
with members of the Bundestag, but also with members of business
associations, which are extremely important stakeholders in Germany.
That is more than obvious that they are facing with problems...
You've mentioned at one point raw materials, materials and
economic interests, and for the last couple of years,
the term critical raw materials is getting more popular in all countries.
EU responded with their strategy of critical and strategic minerals,
where they defined 34 elements, or metals, critical raw materials,
along with 16 strategic raw materials, highly important for energy transition
and green industry, for electrification and transport,
but also for solar panels, and primarily for wind generators
and wind turbines. They are usually defined according to the criteria of
geographical location as they are located on the same spot,
exactly according to the importance for the energy transition
and according to the price and rarity of those raw materials.
Majority of those raw materials is located in South America, many of
them in Africa, such as cobalt, while some are located in China.
In what way can this issue be resolved, to put it that way...
How do you predict the future of those relations will be or what can
be done with those raw materials? -It is a potential mine for the
development of geopolitical events because in order to obtain vital
critical raw materials, you have to secure supply chains.
If you have them on your territory, that's perfect, but if those are on
some neutral territory, if we have in mind EU and China as illustrative
example, while critical raw materials are situated in Africa,
who will be the first to plant the flag?
Who will be the first to ensure the flow and influx of these raw
materials and supply chains, all that affects better positioning.
The one who has all this is by no means in the lead.
The problem that arises is what if someone else might gain access to it
and potentially open the possibility for actions
that make such areas unstable. If we want to look at it in
the context of EU strategic thinking, EU had clearly defined its priorities
at this point, but I would say that those priorities, with illustrative
examples, would be to the detriment to something that EU strives to be,
a lighthouse of democratic values, and the rule of law.
It is a question of the moment and a question of the threshold that
won't be crossed in order to ensure the stability of the industry
through securing supply chains and the flow of critical and important raw
materials by cooperating with individual leaders or
certain decision makers which may not be fully in line with the values
advocated by the European Union. It is rather simple for China.
China is communist regime which clearly defines its priorities and
the way in which those priorities has been realized.
This is the moment when China has been regarded as desirable partner
for many authoritarian regimes, as partnership with China comes
without too many political and value preconditions...
So, if you have a dominant Chinese presence in the field of metallurgy,
or in the field of mining, and the extraction of natural raw materials
in percentages that often exceed 80, 90 percent, of all quantities on
an annual level in a particular country,
and is exported only and exclusively to the Chinese market, then we can't
really say that the partnership comes without any preconditions and cost,
because China is actually buying its priority, or its priority partnership.
European Union tends to do this in a more just way, so to say,
but it is ready to turn a blind eye at some moment in order to provide
presence in some markets, where critical raw materials are identified.
EU wants to provide dominance in order to meet the needs of its own industry.
We just witness that here. -Well, it's an illustrative example.
Serbia can be such an example. It is important to mention that
we need to understand why some agreements have been signed and
why certain decisions have been made. When EU defined its own strategy on
critical important raw materials, Western Balkan was mentioned
only as a potential source of such raw materials, in order to provide
stability and security of the EU needs. It is a very clear intention
which is of transitional nature, it seems to be the guiding star
in that relations and in the context of the strategy adopted by the EU.
According to your opinion, can China or Russia monopolize or
politicize precisely these critical raw materials?
For example China has over 90 percent of all those heavy metals, that is
earth metals, almost all of them originate in China...
Do you think that China can politicize this impact as Russia did with its
natural gas in relations with EU? Do you think that in that context,
as well, energy transition as a concept in EU and in broader
sense, if we consider it to be guiding star and leader in the world,
do you think that energy transition is in crisis, due to critical raw
materials, not to mention the areas that can be faced with instability,
or proxy wars, God forbid... We talk about the ownership of Russia
and China over the largest part of critical raw materials,
including uranium for nuclear reactors in the European Union,
coming exactly from Russia. It is still the case, even now.
We can and we have to look back in history.
Throughout history, dominant powers were those which had access to
raw materials. Access to raw materials has always defined
leading actors in the field of international relations.
In this context, the politicization of natural resources would be entirely
in line with what has been historically demonstrated,
ultimately through the presence of the British Empire on a global scale.
The British Empire was the greatest power in the world at a time when
it had the greatest access to raw materials, in its colonies,
and when it actually exploited its colonies, for the sake of its growth.
Many would claim that USA built their dominance in foreign relations
through close cooperation with Middle Eastern countries,
but also through exploiting other minerals, in Latin America, as well
as in a longer period of time throughout Africa.
Also, it is not necessarily directly related to raw materials, but it is
vital for understanding the context, the existence of a monopoly in what
will be a critically important raw material, and this is information,
and certain technologies, puts China in a favorable position
because of semiconductors, and everything that is discussed
in the context of microchips, if we want to raise it
to a higher level of technological development.
In this context, I will make a digression here...
It's illustrative description of the argument that confirms your question.
I've been told at some point that if I think that Russia made a mess,
to avoid some other qualifications, by its monopoly over gas and oil,
just wait and see what will China do in the field of infrastructure for
renewable energy sources... You might have an exact number.
85 or 90 percent of overall solar panels worldwide is made in China.
Around 80 percent... -Around 80 percent made in China.
In fact, there are no wind turbine in the world that doesn't contain
a part of Chinese technology. -Those minerals have been
dug there, so we cannot do without them...
So, there has to be a part of it that originates from China.
If we want to respond to the issue of energy transition crisis,
I would rather refer to it as great challenges it faces due to the fact
that at this point, crisis did not take effect in its full capacity,
as we don't have direct conflict between most important stakeholders.
In this particular case, between EU and People's Republic of China.
Now, we return to the field of geopolitics, as long as we have
partner relations, burdened with challenges, but still partner,
energy transition will go on, without any interruption.
If we face with an escalation, which would lead to a diplomatic,
commercial or, God forbid, armed conflict, which I really
consider almost impossible, at that moment we can talk
about the suspension of the energy transition.
But it is a question for decision makers and ordinary citizens,
to what extent would energy transition be priority then, if you're faced with
situation that you cannot provide normal living conditions.
I would like to know what is the role of Western Balkans,
in the strategy of critical raw materials, they start with recycling,
with a reduction in the use of those minerals, with the search for
an alternative, for example when it comes to lithium,
sodium batteries are mentioned, although the latest research shows
that demand for lithium will increase by 500 percent by the year 2050.
Great demand... Secondly, mining domestic resources that Europe
simply doesn't have, and mining in friendly countries.
Serbia, and Balkans as a whole is rich in those vital minerals,
there is nickel in Albania, lithium in Bosnia and Herzegovina,
so what is the role of Western Balkans in all of this?
Pertaining to EU, but also to China and Russian Federation,
having in mind that Western Balkans, and primarily Serbia, is dependant
on Russian gas. So, we have three very serious stakeholder, but also
United States of America, which also has serious investment projects.
I would start with something that I could more easily explain.
I would like to present my own opinion.
Western Balkans, or to narrow it, Serbia, in the context of Russia's
aggression to Ukraine, has made all possible efforts to provide
relative stability of its oil and gas supply market,
but to start the process of diversification in parallel with it,
which should not be over-promoted in accordance with the narratives
that dominate among the general population, and that is distancing
from Russia... -You mean interconnector with Bulgaria?
Among other things, but also other projects, I come from Banat,
and we already have several wind farms, with a new one
being built as we speak... So, there are trends that
indicate that diversification of energy sources is being
considered at a strategic level perhaps not in a quantity that would
ensure some long-term stability and full separation from Russia,
but I also think that strategic thinking of our decision makers
indicates that they hope that this would somehow pass,
so that we could again rely on Russia, but on a smaller scale.
So, principle if it passes, fine. -It will surely pass, but it is
a question how long we could endure with the current position.
In other context, China defined its position in the Western Balkans
as relations with Serbia as dominant partner, and with
all other partners who are present, but none of them are as important
as Serbia, and if we look at this extractive industry, meaning
the industry of extracting natural resources, certain projects
regarding oil in Albania, some hydro projects in a private capacity,
based on commercial contracts in Bosnia and Herzegovina,
often disputed due to certain controversial individuals,
failed project of modernization of thermal power plant in Tuzla, and
somewhat successful project of wind farm Bozur in Montenegro
are those projects worth mentioning, outside of Serbia, while we can talk
all day long about projects in Serbia in the field of extractive industry,
be it mining, or other kind of usage of natural resources
of the Republic of Serbia, or impact on the energy sector
where almost every solar panel you see in Serbia and even
wind farms are rather interesting examples as you can see there
joint consortiums of German and Chinese companies,
or the company from United Arab Emirates.
This all puts us in rather anecdotal positions and situations...
This is not strategically crucial except for being dependant on
Russia. Where does Europe fit? When we talk about Europe,
we can consider positive aspects and those aspects that pertain to
some aspects indicating danger. If something doesn't change,
we will be forced, not exactly, as we all know that it is regular
procedure, but Serbia would be forced to introduce CBAM,
which will have serious economic consequences
for the Republic of Serbia, including energy security.
Having in mind that our industry heavily depends on coal and
including other related aspects. I'm talking about potential dangers.
If we consider opportunities, economic benefit that Serbia
would gain if it provides European companies with the opportunity
of lithium mining, was on several occasions praised by authorities.
Now, we are facing with strategic decision making process...
It is strategic decision whether we will become a state that would
provide a significant resource for European industry,
and what cost we would have to pay for that?
Will economic benefit exceed negative consequences of the
given project? I will respond very clearly that I don't have a clue.
I don't have a clue as we can consider it through political prism,
for people who support EU integration, who would like to see Serbia as
close partner to EU, if we consider that criterium only, someone should
start digging as soon as of tomorrow. To start exploiting resource that is
of utmost importance for European industry, due to which EU signs
strategically significant contracts with the Republic of Serbia.
If we consider this issue from the perspective of strategic thinking
on exploiting our natural resources, we talk about the region where
nobody digged deeper than a plow, or a spade, if someone digged
septic tanks or wells, maybe they dugged a little bit deeper...
I would like to make a comparison...
We record this on Friday, I visited Bor on Thursday,
all the residents of Bor were born after the mine becoming fully
functional. We talk about the region where the mining was never practised.
This is a strategic decision and someone must bear responsibility
both for the benefits and negative consequences of this project and
make decision accordingly. Finally, all those scientific
discussions and a series of experts who have arguments in favor of
the project, pros and cons, affect additional complexity of thinking
this decision through, and because of all of the above, I say that
I don't have a clue, and thank God that I don't have to make decision.
At this point, I wouldn't be able to do that, but in the context of
European market being dependent on Western Balkans,
I believe that Western Balkans would have a vital role,
the only issue is at what cost. Is it worth it paying that cost,
and in the end, this would be a political decision as we
currently lack an open, public debate based on expert opinion, objective
discussion where we could consider all the aspects of this issue and
based on thinking about it rationally, but at the moment, there's so many
voices and different opinions without being able to reach decision
and position our own opinion based on open and relevant data.
You are absolutely right, I fully agree with you.
I would only add that while calculating all the data,
and economic cost, we should also take into account, as I call it,
the price of doing nothing. Damage that must be repaired
also present economic cost. This is not just negative consequence
but the price has to be paid. The price of missed opportunity
is also a kind of cost to be paid.
Opportunity or expense around that project, be it realized or not,
will be huge, without any doubt, or let's say, it won't be small.
If it is not implemented, we will tighten relations with the EU...
It's political cost... -I wouldn't imply that we made
any promises, as I am not familiar with that, and I cannot claim that.
But given the agreements that we've signed, there are certain expectations
that if lithium would be digged in Serbia, then European market
and EU companies would have priority when exporting it.
As one of the arguments in favor of this project is a spillover effect
that would help the companies that would further process lithium or
maybe even production of batteries, to position themselves in Serbia...
We can spread the story further referring to the labor shortage,
lack of energy sources, that would allow stable distribution network,
I repeat what I've learned from you. So, we again think about the costs
that we could face with only when the decision is made,
that we cannot be aware of now, as we have never been in such
situation, the mine of that size was never present in Serbia,
not even in the lifetime of our parents. Perhaps not spatially,
but of such economic importance, it has never happened before.
Finally, I believe that it will come down to political decision,
and the one who will have to make this political decision will also
have to bear responsibility for both positive and negative consequences.
What we should not allow is treat so important issue as a metaphor
for our internal political discontents as such vital decisions have to be
made by using common sense, but I question our maturity and
readiness to treat such important subject in this way...
We can come to the situation to part with big European companies,
and then someone from China came and say that they want that project,
and that we have to give it to them, making such a pressure that we won't
be able to say no. I don't want to claim that something similar
will happen, but I give only some of potential scenarios of future moves.
Thank you, I fully agree with you. You've mentioned the role of China
in energy sector. You said that they do not have a problem to establish
consortium with European companies. It is clear that Europe perceives
Russian influence as negative, above all, in Serbia and Western Balkans,
but also the influence of China, to some extent, in Serbia.
I was wondering how European Union perceives the impact of China in
energy project. How much do the Chinese participate in
financing renewable sources, and how it is being perceived
by the EU? Does it present a risk to align with the appropriate political
measures from Copenhagen, with joint foreign and internal relations
or is it all in terms of general strength, i.e. decarbonization,
reaching the goal of coal phase out until 2050.
Now I'm going to knock you down a bit and ask our audience to watch
Understanding the Steel Friendship, as we treat the issue of China,
it lasted for ten epizodes, as a matter of fact, there were 12 episodes.
European Union when it comes to Serbia and China does not
officially have negative standpoint. This is starting point from which
we must start. Criticisms of some of the leaders coming from EU,
or concern of some organizations, also coming from European Union,
are one thing. Official position of European Union has to be regarded
in the context of Progress Report of the Commission.
China has been mentioned numerous times, but it is quite neutral.
It is pointed out when something important happens.
In the field of energetics, Chinese presence is seen on several levels.
First and foremost, it's infrastructure development, we have Kostolac,
we have hot water pipe from Obrenovac to New Belgrade,
that Serbia are indebted in Chinese banks, it hired Chinese companies
to work on infrastructure projects that will remain under the auspices
of the Republic of Serbia. But given the critical importance
of such projects, those are being perceived as potential impact of
Chinese influence which for the moment, except for wider context
of Chinese presence in infrastructural development,
cannot be regarded as actually happened, that China significantly
improved its position, as Chinese company built heathing system
from Obrenovac to New Belgrade. The next aspect represents
financing into renewable energy sources, and mainly it is private
capital, if we can call Chinese capital private in the first place.
I would say that Chinese have certain priority here.
I would like to return to another issue that we discussed earlier.
You cannot find a German company to install solar panel for you without
using Chinese infrastructure. Therefore, it often happens
that they find it easier to enter into partnership with German company
from the start, and to make things functional in that way.
As well as in the wider context of political observation of Chinese
influence, within the field of energy, we have mild vocabulary and
rather neutral public standpoint, along with frequent criticisms
coming from individual leaders or from organizations that monitor
Chinese leadership on the Western Balkans.
As I deal with this issue a bit more, I would like to add that the necessity
of investment in the field of infrastructure, the necessity of
modernizing certain aspects of our energy system is unquestionable.
We intend to show through our research that it is not necessarily important
that the company is Chinese, if the projects are being conducted
in a transparent way, going through all the necessary procedures,
envisaged by the laws of the Republic of Serbia
and in accordance with norms and standards that should be fulfilled,
upon completion of works, and this aspect is often being called into
question, transparency in the first place, as those projects are often
unknown, those are commercial contracts between Republic of Serbia
and the Chinese companies that implement those projects.
This is the standpoint of some of European actors, and I regard
that problem as the burning issue, the level of transparency is something
that we will always point to, when something bad happens,
as in order to find out why something bad happened,
we need to know who is responsible for that,
and if we don't have insight into documentation, we don't know
who should bear responsibility for the things that happened.
Then, we return to the field of political action and the field
of political decision-making process. -After mentioning all of the above,
I could say that China and Chinese companies, along with fulfilling
certain conditions and respecting our legal procedures and legal acts,
can be a good partner to Serbia in the process of energy transition,
as it is a good partner of EU in some other fields. -You're absolutely right.
Not only that. No one will prevent European company to be our partner.
If we want preferences, they are expressed in the form of values,
so we choose companies from Europe or companies from China.
One is coming from Europe, the other from China.
Focal point and main actor in all this is actually Republic of Serbia.
If we talk in our national context. The way in which we will implement
those projects, under what conditions, under what principles,
that depends on us, so it's on us whether we will do things in
the right way, so the company from whatever country it might be,
should be placed in our normative framework, under our auspices,
by pulling out the best from it, or we will let someone do us
harm and cause damage in the short or long run,
in a way that is immeasurable. -You presented the competiton
in the right way, the rivalry of great great powers in the Western Balkans.
You have greatly presented the ways in which geopolitics has an impact
not only on the global level on EU, but also on Serbia and its EU path.
For the final part of this podcast, I would like to touch upon the future
of energy transition on the global level, in the context of armament.
We realize that military budgets are growing worldwide, in Russia,
China, USA, Germany will set aside additional 100 billions of euros for
military budget, NATO, led by USA, tightens again GDP by 2 percent,
as far as NATO's budget is concerned, so what will be the future of energy
transition, simply will there be money set aside for it?
Second, it's mainly energy-intensive industry that requires energy sources
of exceptional density, whereas wind and solar are variable sources
they simply will not be able to meet those demands if
they start with the re-strengthening of the military industry.
Third, these are mostly dirtier industries requesting exceptionally
high energy intensity, starting from steel, aluminum, diverse composite
materials, so how the two stories fit together, I regard them as
diametrically opposed stories. There are certain attempts in
the form of fuels, for aircraft and motor vehicles, both
Americans and Europeans perform experiments with biofuels and other
diverse substances, there are some indications that military vehicles
will go electric, but I doubt it will ever come to that...
It seems a little crazy to me, to be honest...
So, is energy transition even possible in this context, is it compatible, or
we will come up with some third enegry source to be used?
I would actually like to discuss this issue as I am mainly concerned
what will the future of warfare look like...
And if there is a war in the future, what will it be fought with?
The conflicts we are currently witnessing are rather conventional.
These are hand-to-hand clashes, moving the front 10 km to and fro,
you still have people on the field, machines in the field, so...
There are some drones, as well... -In fact, a component that belongs
to modern times is a component of drones.
That is what we are witnessing today, nowadays conflicts...
How will warfare look like in a decade or in 15 years?
Are we going to send terminators at each other or are we still going
to have some kind of human staff in terms that someone has to sit
behind the tank and drive it? There's also a question as to
what kind of fuel will that tank use and what will trigger the terminator.
I have to agree with you here that on the global level
we have not reached the level that during the war we cannot include
the dirtiest possible source of energy we currently dispose of.
Military economy, war economy is completely different from animals,
from economy and industry in peacetime. Moreover, and I would
like to hear your opinion on this, namely, the biggest technological
advances and developments always took place during the wars.
So, my question for you would be, as we agreed that today's time
cannot meet the demands of war industry with renewable energy sources,
what kind of potential technological leap, we can focus on the field of
energy sources, as a source of energy, could happen if we entered into
a major global conflict now? This is now a mental game,
we don't hope for it and we don't want that to happen.
My question is actually that we have always witnessed a big technological
breakthrougs in wars, what kind of technological breakthrough could
happen where we could say this is some legacy that would potentially
benefit humanity afterwards? -This is a good question.
I will respond to that with a mocking question that I used to raise here:
Do you think that drones are climate friendly?
Is this a kind of energy transition and decarbonization process?
I'm kidding, as far as techological breakthroughs are concerned,
I think it should go in two directions, we should make
those industries greener, as best as we could.
If we are going to fight, let's fight green...
Exactly. We have major initiative to use green steel and other
composite materials, we should use biofuels, to decarbonize military
industry as well, in a way. -So, we can expect an increase
in agriculture if we would like to meet demands of military industry?
Through the use of biofuels, for instance? -Of course.
Military industry is the main driving force.
I'm kidding, but foremost, I think it should come from energy sector.
We have to find an alternative, those are key and main energy
sources, so we can't deprive them of energy, at least they should be
in the context of decarbonization, but we must provide this
energy base that will ensure security of supply to end
consumers, that is, end customers. So, we need to find a balanse,
if we are going in this direction. -I have two additional questions.
Are you finished? -Yes, I am.
So, two additional questions. First, I hoped that you'll mention
it but maybe it still remains in the domain of science fiction,
and comics that I like to read, speaking of technological leaps,
will we come to the situation where we can shrink a nuclear reactor
to the size of a fist, so we can power battle suits,
making a kind of ironman, this is my first question.
My second question is not necessary linked with this, if you mention green
military industry, that reminded me of something people call green mines,
so, I would appreciate if you could explain what these green mines are?
Let's begin with the frist question. Technology and technological
progress is a kind of miracle, we have already put small
nuclear reactors into the aircraft carrier and in submarines, so
this is hard to do in technological and technical sense, but it is not
impossible. I don't think it's possible to do it with uranium,
but maybe with some other materials such as thorium, maybe we could
expect to turn into ironmen in the war which I hope would never come.
As for the green mines, there isn't such a thing as green mines,
just as there is no green military industry.
We can only make effort to reduce its ecological, carbon footprint.
But it could never be thoroughly eliminated, it's insane and no country
would opt for that, if nothing else, it will raise the price,
it will not be competitive in the warfare circumstances.
As for green mines, there're non either. Every mine causes some
ecological consequences and ecological damage.
There are certain standards which are defined on a global level,
from UN and other international mining organizations,
and we should adhere fully to those standards.
If any other mine is going to be open in Serbia, like this with lithium,
simply there are standards we need to adhere to, in order
to minimize this damage, but there will always be harmful
consequences and we should try to make amends with this regard.
In the end, what really matters, it is purely economic calculation,
and we should take it into account. If we harm groundwater,
we should see how many people we had endangered.
How much does their treatment cost? How much we should invest in repair?
All of this should be a part of this complex calculation
of the economic benefits within a single project.
So, this is the point of green mining. This is so-called greenwashing...
Or sustainable mining, a form of mining that minimizes damages
to the greatest extent of one mining project.
So, the chances for Ironman are slim. It exists, but it is rather small.
We just have cute name for something that is minimal damage
related to green mines. This is your answer to my question?
Yes, that would be it. Just one more question finally.
Do you think that it is possible that we conduct decarbonization process
until 2050, not necessarily until that particular year...
A tough question. Do you think we face the crisis, or do you
think that Serbia, EU and the world in general will aim at drastic reduction
of CO2 emissions? -Drastic reduction of CO2 emissions
yes, but full decarbonization until 2050, absolutely not.
It is in domain of science fiction. Norms and standards are being
prescribed by the states that are far ahead of Serbia in development,
while we have billions of people in the south that don't consider
this an issue at all. At least not priority issues.
I think it's good that mankind should always strive to something
better, it is one of the paths to progress,
and I would like to go back to the very beginning of our
conversation, strategy, action plan, desires are one thing, reality and
global circumstances are the other. It's good to strive for something.
It's good to define policies and actions in a way that the goals are achieved,
we should not grieve if decarbonization doesn't happen until 2050.
But we should feel sorry if we won't be in better position than
at this moment. De facto, this is something that should take place.
But it shouldn't happen overnight, as we have to do it rightfully,
so that could be sustainable. If it's not sustainable, every
crisis period would take us two steps backwards,
just like when you try to lose weight, practising strict diet,
losing ten kilograms in a month, and you feel content, and
you start eating and you gain 13 kilograms.
This is the effect that we should try to avoid, so it's good to go in that
direction, take it as final value that we aim to reach and make
efforts to gradually achieving it, until 2050 or on some later occasion,
this is not important, as long as we take the right steps forward.
Thank you, I would like to conclude our episode with this.
So, it's possible, we will probably be in a much better position,
and reduce emissions of CO2, but current geopolitical situation
indicates a threat, pressing us to really do all that is necessary.
Will you agree with me? -This is a very good conclusion
of our today's discussion. -Thank you very much.
Thank you on your invitation.
Produced by: New Magazine
Supported by: Open Society Foundations Western Balkans