Portuguese Prime Minister Antonio Costa

Portuguese Prime Minister Antonio Costa addresses the nation at Sao Bento Palace in Lisbon on November 7, 2023 as he announced his resignation.


How Green Capitalism Blocked a Just Transition and Crashed the Government in Portugal

The power of false renewable energy promises to bring down a government.

Many were caught by surprise in the blitz of raids, arrests, and resignations that stormed Portugal on November 7th. In a few hours, one of the longest-lasting leaderships in Europe fell under the weight of its political contradictions, its tight connections to big oil, gas, and energy companies and the subservient politicians.

Just a few weeks ago, the establishment and media in Portugal decried Fridays for Future Lisbon activists for targeting the minister of climate action with green paint in an “energy transition” event sponsored by oil, gas, and coal giants Galp and EDP. The activists accused the minister of being in collusion with big companies that are extending their fossil business while taking over investment in renewables. Less than a month after that, the minister would become one of the suspects (together with the previous minister of the environment, the current minister of infrastructures, the chief of staff and the main advisor of the Prime Minister, the head of the environmental protection agency, the mayor of the Sines municipality, a former director from Galp, heads of private companies, among others) of a corruption case involving lithium mines, hydrogen projects, and data centers. The consequences are not just legal. António Costa, Portuguese prime minister since 2015, resigned this week after he was announced as a suspect in the same investigation.

The case for official corruption will now have to be proven in the courts, the corruption of a new energy model that is actually off the hands of those who created the climate crisis seems to be untouched.

The Portuguese government had been selling itself as a “climate action” champion for years now. Yet, like all other European countries, it has no plan for actually fulfilling its commitment of the necessary cuts of emissions under the Paris Agreement, that is, it plans an increase of temperature well above 1.5ºC. That doesn’t mean that the Portuguese capitalist establishment hasn’t been reaping the profits of the European and international focus on new extractivism, energy forms and technologies—the bulk of green capitalism. The promise of European funds, in particular for energy connections, for critical materials’ extraction, and hydrogen as a way to counterbalance Chinese battery development, has been massively profitable for the companies that most contributed to the climate crisis in the country. In 2022, Galp, EDP, and REN have all had the biggest profits in their history, and 2023 promises to go the same way. REN was also one of the places visited by the police during investigative searches.

Climate activists have long decried the Portuguese energy transition policy as both unjust and no transition at all. EDP shut down its coal power plants without any plans for its workers, who simply became unemployed. Galp shut down its Matosinhos refinery and simply transferred its production to another refinery in Sines, with no impact on emissions and the destruction of over 100 jobs in the northern city. Some of these actions were actually funded by the “Fund for Just Transition” that never reached the workers who were supposed to be the object of said transition. The only groups of people benefiting from these funds were the shareholders of big companies. EDP and Galp have kept on investing in fossil energy in Portugal and abroad. They have further positioned themselves as frontrunners in renewable auctions, whether in wind, solar, hydrogen, or lithium projects around the country.

The government’s choice to reproduce the fossil model with renewable energy, with massive areas of production and massive distribution circuits and losses, has been a gift that derives from the direct contact of the companies with the decision-makers. The hydrogen strategy came out only after dozens of meetings between the government and the companies that would benefit from them. Spinoffs from the main energy companies, such as EDP Renováveis, Galp New Energy, or TrustWind are the frequent bidders of new energy auctions. The centralized, monopolized, and gigantic nature of these projects is leading to growing objection by local populations due to their negative environmental impacts, namely the need to remove tens of thousands of protected trees. The idea of decentralized small-scale production of electricity is directly opposed by the big companies as it would render them close to useless.

A huge amount of public money being overtly offered to big companies could hardly have been a better scenario for mass-scale corruption. In the wake of the austerity years, when large patches of the country were offered for oil and gas exploration, other areas were offered for mining concessions, and the lithium projects in protected areas have been scandalous since the beginning (Galp, the oil and gas company, was also involved in the lithium projects). On the other hand, the “green hydrogen” frenzy, largely pushed by German interests to replace Russian gas reduced since the invasion of the Ukraine, has proven to be little more than a cover for gas expansion, through European and other public funding.

The leadership of the Socialist Party in Portugal (a regular liberal party, despite the name) has long been on the corrupting renewables’ bandwagon. For years now, they have made an uncontroversial alliance of interests with the big oil, gas, and coal companies, even if they're also investing in other areas. This alliance began well before any talks of renewables and also expanded to other political parties in the country, with permanent revolving doors between industry and governments since the 1980’s. Although the case for official corruption will now have to be proven in the courts, the corruption of a new energy model that is actually off the hands of those who created the climate crisis seems to be untouched.

With the exit of the Socialist Party, it is now quite conceivable that the right and the far-right will campaign on dismantling renewables. They will certainly not promote a democratic and decentralized energy model, but either insist on this corrupt model or push for a return to full fossil energy, as the climate crisis is turned into a cultural issue that will reap discontentment votes. The green capitalist model of energy is nothing but a fraud on just transition, and only a public and democratic energy system can deliver both the emission cuts and the just transitions we all need.

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