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Energy Firms Are Going ‘Green’ by Offloading Dirty Coal Plants

In April 2021 Anna Borg, the CEO of energy giant Vattenfall, addressed a virtual crowd of business leaders and politicians at US president Joe Biden’s Leaders Summit on Climate. She proudly proclaimed that the company was “phasing out” its emissions and helping customers do the same. “This is not our sustainability strategy,” Borg said. “It's our business strategy. And it is sustainable.”But there is a catch. Vattenfall has not actually phased out the vast majority of its emissions—it simply paid someone else to take them. Under its then-CEO Magnus Hall, the company struck a deal in 2016 to offload four of its most polluting power plants and several coal mines to Energetický a průmyslový holding (EPH), a private company controlled by Czech billionaire Daniel Křetínský, who partnered with private equity firm PPF Investments to acquire the assets. Křetínský, known as the “Czech Sphinx” for his inscrutable business practices, has long been buying up fossil fuel businesses for public companies looking to meet ambitious climate targets.The deal made sense for Vattenfall. The state-owned company had been under pressure from the Swedish government to lower its carbon footprint by getting rid of the power plants and their coal pits, which sprawl across a vast stretch of eastern Germany close to the Polish border. Plus, low power prices and Germany’s decision to gradually cut its emissions had worsened the outlook for the plants. They had cost Vattenfall around $1.7 billion in losses in 2015 alone.Thanks to the deal, the company cut its carbon emissions by 70 percent in one fell swoop. But offloading the plants did little to lessen the climate crisis: All of them are still running today and releasing close to the same amount of carbon dioxide. They produced 235 million tonnes in the four years following the sale, compared to 263 million between 2012 and 2015, when they were still owned by Vattenfall, according to EU data collected by the Europe Beyond Coal campaign. On a yearly basis, the plants make up roughly 8 percent of the entire emissions produced by Germany, Europe’s largest economy.In a statement to WIRED, Vattenfall’s head of sustainability, Annika Ramsköld, defended the sale as a strategic decision to shift Vattenfall’s business to renewables and lower its carbon exposure.Vattenfall is far from the only company that has ditched polluting assets to boast about green credentials. Major utilities, including Engie, E.ON, and AES, have also sold some of their most polluting power plants—in some cases to EPH, Křetínský’s company. Big oil companies have also been getting rid of oil and gas fields to reach emissions targets. The five largest Western oil firms have divested more than $28 billion in assets since 2018, according to consultancy Wood Mackenzie. Even Ørsted, the ultimate clean energy success story, in 2016 sold its fossil fuel business to Ineos Group, the chemicals giant owned by British billionaire Jim Ratcliffe, to help its much-lauded transformation into a wind power juggernaut.