How Greece’s Coal-Mining Heartland Won A Brief Reprieve After the War in Ukraine

When I was growing up, my mother would recall childhood visits to the family coalmine – a grey field, as she described it, crawling with workmen and trucks. It was in the town of Achlada, a couple of hundred kilometres west of our home in Thessaloniki, and last year I went to see it for myself, driving past the sunflower fields and forested mountains along the border with North Macedonia. The mine had been established in 1936 by a distant relative – my grandmother’s uncle – and it was now managed by his grand-daughter, Valina Roza. She had a brisk, cheery manner and a loud laugh, and she received me in an office adorned with black-and-white portraits of family members. “My father used to tell me that as long as we have coal, we will have a job,” she said. “I cannot say the same to my children. They know the mine won’t be here forever.”

Achlada is in Western Macedonia, a region that has been the heartland of Greece’s coal industry for the best part of a century, and is now the test-bed for its stop-start experiment in de-carbonisation. In September 2019, Greek Prime Minister Kyriakos Mitsotakis told the UN Climate Action Summit that his country would speed up its efforts to quit coal. Within the next decade, he declared, Greece would shut down all its coal mines and coal-fired power stations. 

Greece’s reserves of lignite – a low-grade, high-emission form of coal – have underpinned its energy independence for the best part of a century. At the time of Mitsotakis’ speech, Greece was the fourth-largest coal producer in the EU.  If it could quit coal within a decade, it would complete the quickest transition of any major EU coal producer – the decarbonisation equivalent of going cold turkey. The EU endorsed Mitsotakis’ plan as being in line with its own commitment to attaining carbon neutrality, or “net zero”, by 2050. It gave Greece 1.63 billion euros from a new fund designed to cushion the socio-economic impact of de-carbonisation. 

In Western Macedonia, the decline of the coal sector had long been recognised as inevitable, if not quite imminent. Lignite was becoming less and less viable, its price inflated by EU emissions levies and undercut by cheap natural gas imports. The timetable outlined by Mitsotakis brought the end abruptly into view. 

As the CEO of a privately owned mine, Roza lost sleep trying to figure out how to keep her business going in the knowledge that it would soon have to be wound down. Over the last five years, her mine has halved its workforce, from 700 people in 2018 to barely 350 today. “I don’t want these people to lose their jobs,” Roza said. “Nothing is impersonal in this place. The human relations, whether good or bad, are all personal.”

A small, family-run business, the Achlada mine is the exception in a region where most of the coal comes from sprawling, open-cast sites operated by Greece’s recently privatised energy utility, the Public Power Corporation. Caught in the headlights of a race to decarbonisation, the miners would ruefully ponder their future. “We used to say that only a war could save us,” said Yannis Fasidis, a heavy equipment operator at Ptolemaida-Florina, the largest coal-mine in the Balkans. 

The miners’ instincts were correct. The Russian assault on Ukraine last year saved mining jobs across Europe, making domestically sourced coal a secure alternative to imported natural gas. “We will work a while longer,” Fasidis said. “The war gave us an extension.” 

Seventy years ago, six Western European countries battered by World War Two came together to regulate the trade in coal and steel, two commodities the post-war recovery could not do without. The supra-national body that they created, the European Coal and Steel Community, would evolve into the European Union.

Today, the EU’s plan to quit coal has run into another war, and producers from Germany to Greece have revised their decarbonisation targets. Like the tattoos that they resemble from above, the open-cast coal mines of Western Macedonia remain, for now, an indelible feature of its economy. This is the story of how Russia’s war in Ukraine pulled Greece’s coal-mining country back from the precipice.

The original decarbonisation plan had been “suicidal”, according to Ioannis Mitliagas, the president of the Chamber of Commerce and Industry in Kozani, the regional capital. He said the local economy would have required at least four to five years to develop employment opportunities to compensate for the loss of coal – “it’s simple maths.” Moreover, he said, the government would have missed its targets for quitting coal “even without the war”.

Yannis Fasidis began working in the coal mines when he was a teenager. Photo: Alexandros Avramidis

I began reporting this story six months before Russia launched its all-out invasion of Ukraine. The government in Athens had promised a post-carbon economy that was going to make up for the jobs sacrificed in the transition. Hardly anyone I met in Western Macedonia believed this promise. They were also sceptical about Greece’s capacity to quit coal according to Mitsotakis’ deadline. I wondered at the time if they were in denial about the end of coal because their livelihoods depended on the industry. “Imagining that Greece can quit functioning coal plants in 2023 is like believing that an 80-year-old woman can get a heart transplant and win a race at the Olympics,” said Kleanthis Aktenizoglou, the head of Decarbonisation Watch, a pressure group formed by business owners opposed to the pace of de-carbonisation.

Greece’s plans to phase out coal were being tweaked prior to the invasion of Ukraine, and had to be revised heavily after it. Nonetheless, energy experts believe that the system could have weaned itself off coal according to Mitsotakis’ timetable, and would have done so if it had not been for the invasion. While the war in Ukraine may not have bought time for the electrical grid, it has postponed a moment of reckoning for the economy in Western Macedonia – dominated by coal and ill-prepared for the transition. The mayor of Kozani, Lazaros Maloutas, told BIRN that the war had offered some “breathing space” to Western Macedonia. “[Now] we have a few years to get prepared, adapt to decarbonisation.”

A senior government official in Athens offered a more candid assessment. In comments relayed by local media last September, the Minister of Development and Investment, Adonis Georgiadis, said Greece had managed to secure the best of all worlds. It had received money from the EU and accomplished “a high degree” of decarbonisation – all while managing to keep the mines open. “In reality, nothing could have gone better for Western Macedonia,” he said.

The opposition, however, has accused the government of “violent decarbonisation” – seeking to phase out coal at the expense of jobs and energy security. With an election looming, Mitsotakis visited the region last week. He announced that funds worth 4 billion euros, including money from the EU, would be allocated to projects that would generate jobs. “No other periphery in Greece is as attractive to investors as Western Macedonia,” he said. “We have problems with other [peripheral regions] that claim we have made Western Macedonia too attractive.”

Vast, open-cast mines scar the landscape around Kozani in Western Macedonia. Photo: Alexandros Avramidis

‘What will I do when the mines close?’

Coal came to Western Macedonia as a disruptor, swallowing up villages and farmland in the middle of the last century. The lignite sector provided steady incomes for tens of thousands of families in exchange for dirty, hazardous work. The Public Power Corporation bequeathed polluting coal-fired power stations to the region, along with job security and decent wages. Locals would speak of its employees as ideal marriage material. “Not everyone wanted to work in the mines in the beginning,” said Georgios Sismalidis, the mayor of Agioi Anargyroi, a village that was partly destroyed by the collapse of a neighbouring mine in 2017. “But after the Public Power Corporation started expropriating our lands to expand the mines, working for them was the only solution. There was no land left for agriculture.”

Today, agriculture is returning to Western Macedonia – with the help of the start-up sector. Tech-savvy farming has been identified as a potential growth industry that could help offset the loss of mining. “In my village, at least 60 people are working in the coal sector,” said Stathis Paschalidis, an entrepreneur from Western Macedonia whose Proud Farm start-up aims to support new agricultural businesses with funding and livestock. “I hope creating the incubator will help some of them, and keep the village alive.”

Last June, Greece received 1.63 billion euros from the Just Transition Fund, an EU instrument that offers grants and loans to help member states manage the socio-economic fallout of decarbonisation. Greece’s application to the Fund listed “smart agriculture” as one of the sectors that could help offset the loss of coal in Western Macedonia. The Proud Farm initiative ticks many boxes for EU funding and would welcome the aid. Established four years ago, it has relied on money from the central government and EU programmes that are “available to any region in the country”, according to Paschalidis’ co-founder, Nikos Koltsidas. “We have seen nothing tangible, no decarbonisation plan that is related to what we’re doing,” he said. 

Businesses directly affected by the phase-out of coal have been eligible for funding from a government scheme dedicated to the green transition. Ioannis Mitliagas, head of the Chamber of Commerce and Industry in Kozani, said the “intermediary programme had offered some mobility – but fell short of what we wanted”.

The Proud Farm initiative aims to bring mining communities the benefits of ‘smart agriculture’. Photo: Alexandros Avramidis

Within the sector itself, there is little faith in the government’s job-creation schemes. “I used to have 30 to 40 trucks coming to the garage every day,” said Marios Papadopoulos, the owner of a garage that services industrial vehicles in the mining town of Akrini. “Now I get two-three trucks a day.” He is in his early fifties and doubts he will find another job after the mines shut down. “I am looking for ways to leave the region,” he said. “I think our business is dying.” 

Papadoulous said he had appointed an accountant early last year under a government programme to compensate businesses hit by the transition. However, the programme only paid out his compensation a few weeks ago. For the past year, he said, he had been paying the accountant out of his own pocket.

The compensation programme was overseen by the regional branch of the Greek employment agency. Its director, Dimitris Kanellidis, told BIRN that the programme’s IT system had “needed some improvements”. He said such delays were not widespread and the programme had sufficient funds to make the payouts.

Yannis Fasidis, the heavy equipment operator from Ptolemaida-Florina, has been in the coal industry since he was 16 years old. “We grew up knowing that our job will be with the Public Power Corporation or in another business linked to coal,” he said. Now in his early forties, Fasidis said he recognised the need to quit coal, but the mines must be maintained until the post-carbon economy could support the workers. “I don’t want my children doing this job,” he said, “but for me, the mines are like home. Extracting coal safely is the only thing I know. What will I do when the mines close?” 

BIRN has repeatedly approached the government for comment. However, spokespersons from the Ministry of Environment and Energy, as well as the Ministry for Development, have yet to provide a response.

Experts and officials involved in the green transition said it was too early to expect results from the investment in a post-carbon economy. Western Macedonia is “around five years away” from having a start-up eco-system, said Michalis Dritsas, the CEO of Elevate Greece, a state-owned organisation tracking the start-up sector, and a former head of cabinet for the Deputy Minister for Development, Investment, Research and Innovation.

Marios Papadopoulos says he receives fewer mining vehicles for servicing at his garage. Photo: Alexandros Avramidis

According to Kostis Mousouroulis, the chairman of the committee that drafted the application to the Just Transition Fund, Greece was having to play catch up because previous governments had delayed addressing the socio-economic fallout from quitting coal. “Nobody had thought of creating an emergency plan for helping the businesses affected by decarbonisation, or for solving problems such as unemployment,” he said. “There was no plan. The aeroplane had to be constructed in mid-flight.”

New Democracy was preceded in government by the leftist Syriza party. A former Alternate Minister for Environment and Energy under Syriza, Sokratis Famellos, dismissed the claim that his party had neglected the victims of decarbonisation. Syriza, he said, had put together its own proposal for funding the transition in 2018. “This money for new businesses and jobs was left untouched by the Mitsotakis government for two or three years.”

‘Two steps forwards, one step back’

Prime Minister Mitsotakis is an alumnus of Harvard and McKinsey, and the scion of a political dynasty embedded in the centre-right New Democracy party. Currently embroiled in a wire-tapping scandal, his election in 2019 was welcomed by Greece’s international creditors. Back then, he was seen as a technocratic, reformist figure with big ideas for modernising the country. His original de-carbonisation plan, announced in his first year in office, would have required rapid action on two fronts. Greece would have had to develop alternatives to coal to power its electrical grid. At the same time, in Western Macedonia, Greece would have had to develop alternatives to coal as the engine of the regional economy. 

Until last year, the EU was relying on cheap Russian gas as an alternative to coal – a stop-gap fuel to see it through the transition between highly polluting lignite and clean, renewable energy. The spectacle of Russian tanks rolling into Ukraine demonstrated the folly of that policy, and the domestic production of lignite once again became viable, making up for the loss of imported gas. The responsibility for that U-turn lies overwhelmingly with the EU rather than any national government, said Michalis Mathioulakis, academic director at the Greek Energy Forum think tank. The bloc had quite simply failed to anticipate the rise in demand for natural gas as domestic coal production was wound down, and it had moreover failed to “secure a supply so as not to be dependent on Russia”, he said.

Georgios Sismalidis is the mayor of Agioi Anargyroi, a village that was partly destroyed by the collapse of an old coal mine. Photo: Alexandros Avramidis

According to the decarbonisation timetable set out by Greece in 2019, all the coal-fired power plants that were in use at the time would be closed down by the end of 2023. An additional power plant that was then under construction, Ptolemaida 5, would burn coal until 2028, before switching to natural gas as a fuel. The Public Power Corporation later revised this schedule, announcing that the new plant would quit coal even sooner – in 2025.

These deadlines would not survive the outbreak of a major war in Europe. Six weeks after the Russian invasion, Mitsotakis announced that Greece would ramp up the extraction of coal by 50 per cent. “It makes sense to increase the production of energy from lignite for the next two years in order to reduce our dependence on Russian gas,” he said, on April 6, 2022. He also confirmed that the government was prepared to postpone the planned closure of existing coal-fired power plants – due to have been completed in 2023.

Mitsotakis added that the new Ptolemaida 5 plant would continue burning coal until 2028, revising the Public Power Corporation’s plan to quit the fuel by 2025. The great leap forwards of the original decarbonisation plan had seemingly been recalibrated in favour of a “two steps forward, one step back” approach. Only the overarching deadline, of quitting coal altogether by 2028, appeared to have survived.

Mitsotakis’ speech would nonetheless emphasise that Greece remained committed to its long-term decarbonisation goals, albeit under a revised timetable that prolonged its reliance on coal. The speech was delivered at the inauguration of a massive solar plant in Kozani. The location was symbolic. The plant had been conceived as a flagship project that would highlight Greece’s embrace of renewable energy.

‘I didn’t expect the plant to close’

For now, coal mines and coal-fired power stations remain a mainstay of the economy in Western Macedonia. One in 10 jobs in the region are directly or indirectly related to lignite production, according to a June 2021 paper in the scientific journal, Climate. For every euro produced in the region, the paper’s authors said, 40 cents come from lignite. Recent upheaval in the coal industry has, however, also given Western Macedonia the highest unemployment rate in Greece, with one in five of the workforce out of a job. The youth unemployment rate is meanwhile the third highest among European regions. 

Western Macedonia is home to huge reserves of lignite, a particularly polluting form of coal. Photo: Alexandros Avramidis

Over the last decade, the production of lignite in Greece has become increasingly expensive as a result of the EU’s Emissions Trading System, the bloc’s mechanism for taxing industries according to their carbon emissions. From 2013-18, the cost of producing Greece’s high-emission lignite nearly doubled, according to official figures. Unable to compete with cheap natural gas imports, the coal sector has been withering away. During the final years of the last decade, the share of lignite within Greece’s energy mix shrank by half. In 2018, the fuel provided 29 per cent of the country’s energy, while in 2020, its share was down to 12.4 per cent.

Across Western Macedonia, incomes have tumbled and workers have been leaving in search of better prospects. Census data from 2021 shows that the region experienced the steepest fall in population in any Greek region. Since 2019, according to Giorgos Adamidis, the head of the PPC trade union, the region’s coal industry alone has lost some 4,500 workers – or nearly 60 per cent of the workforce.

Costas Fasidis is among them. He used to work as a contractor for the Public Power Corporation, driving his own truck. But as the work dried up, he struggled to make ends meet. In 2019, he left his hometown, Kozani, and moved to Thessaloniki. He found a job in a petrol station, earning 800 euros a month. His truck, which had cost him 80,000 euros, was sold for 10,000 euros. He regularly returns to the region to visit his family, including his brother, Yannis, who still has a job in mining. “Every time I come back, I feel depressed,” he said. “It’s like a graveyard. Everything is closed.”

One of the longest serving coal-fired power stations in the region, Kardia, was decommissioned in May 2021. “I didn’t expect the plant to close – nobody did,” said Achilleas Maniakas, a former employee who worked shifts in the Kardia control room for 28 years. “The mood was terrible on our last day here.” Two of his three children have left the region in search of work. On a visit to the abandoned plant last year, the inactive chimneys still towered over the horizon. In the control room where Maniakas had spent the best part of his career, the only sign of activity was an eerie beeping sound, ringing out over the darkened panels of instruments.

Achilleas Maniakas spent most of his working life in the control room at Kardia power station, which has now been decommissioned. Photo: Alexandros Avramidis

‘A blessing and a curse’

Greece’s application to the EU’s Just Transition Fund had highlighted renewable energy as one of five sectors worthy of development in Western Macedonia, along with clean energy, trade and industry, smart agriculture, sustainable tourism and finally, technology and education. Out of these five, the renewables sector has seen the most growth so far. Across the region, the sites of old open-cast coal mines are being carpeted with solar farms, with funding from private companies including the Public Power Corporation.

However, the renewables sector is expected to do more for the electrical grid than for the regional economy: operating a solar farm requires far fewer workers than digging for lignite. The top official overseeing the green transition in Western Macedonia, Vice Governor Stergios Kianas, warned that the solar farms would not provide much employment beyond the current construction boom. “Right now, all mechanical engineers are employed because they are working in renewables all over Western Macedonia, but what will happen in four or five years, after [these jobs] have finished? What is missing from the region is a big investment – one that will bring many jobs,” he said. “This is how we can solve unemployment.”

The White Dragon is meant to be just such an investment. The eight-billion-euro project intends to use the region’s growing solar power capacity to produce “green” hydrogen, the so-called fuel of the future. It has been heavily promoted by the regional government as a panacea for the post-carbon economy, bringing jobs and revenue. However, experts have questioned the viability of hydrogen fuel cell technology, which is still in its infancy, and White Dragon has yet to secure the critical backing of a European Commission scheme for major energy projects.

The disused relics of the carbon economy still dominate the skyline in Western Macedonia. Photo: Alexandros Avramidis

So far, only a slimmed-down version of the project, with a significantly lower budget of 780 million euros, has secured the go ahead. Ambitious hydrogen fuel projects can theoretically generate employment, according to Andrzej Ancygier, a senior analyst at Berlin-based think tank, Climate Analytics, but the government ought to complement them with simpler schemes, such as installing solar panels on rooftops. “I wouldn’t put all my eggs in one basket,” he said.

While Europe’s phase-out of coal has slowed because of the war in Ukraine, energy experts say it is misleading to speak of the fuel making a comeback when overall trends show an irreversible decline. Nikos Mantzaris, a senior analyst at Green Tank, an Athens-based environmental think tank, said the share of coal in Greece’s energy mix had only risen slightly in 2022 – and that too from a historically low base. The share of coal in the previous year had been the lowest ever recorded. 

Michalis Mathioulakis, academic director at the Greek Energy Forum think tank, emphasises that any assessment of the economic benefits from the coal industry must also take account of the associated cost to public health. “I would never say that it is a good thing that people are dying from pollution caused by inhaling lignite particles, so that some others will have work,” he said.

The trade-off is a familiar one. Efstathios Poutoglidis, an employee in Marios Papadopoulos’ garage in Akrini, lost his father in a mining accident. Now, he faces the prospect of migrating for work when the mines finally close. “Coal is both a blessing and a curse,” he said. “A blessing for the previous generation, and a curse for mine.”

Alexia Kalaitzi is a Thessaloniki-based journalist covering social and political issues for the Greek Public Broadcaster, ERT, and the Kathimerini newspaper. This story was produced as part of the Fellowship for Journalistic Excellence, supported by the ERSTE Foundation, in cooperation with the Balkan Investigative Reporting Network. Editing by Neil Arun.