Credit: © EBRD
The Luxembourg-based European Investment Bank (EIB) yesterday announced its plans to end financing for fossil fuel energy projects from the end of 2021.
On Thursday 14 November 2019, the board of the EIB agreed a new energy lending policy, which foresees the phasing out of fossil fuel funding over the next two years.
According to the EIB, this new policy outlines five main principles that will determine the bank's future role in the energy sector: prioritising energy efficiency with a view to supporting the new EU target under the EU Energy Efficiency Directive; enabling energy decarbonisation through increased support for low or zero carbon technology, aiming to meet a 32% renewable energy share throughout the EU by 2030; increasing financing for decentralised energy production, innovative energy storage and e-mobility; ensuring grid investment essential for new, intermittent energy sources like wind and solar as well as strengthening cross-border interconnections; increasing the impact of investment to support energy transformation outside the EU.
EIB President Werner Hoyer commented: “Climate is the top issue on the political agenda of our time. [...] The EU bank has been Europe’s climate bank for many years. Today it has decided to make a quantum leap in its ambition. We will stop financing fossil fuels and we will launch the most ambitious climate investment strategy of any public financial institution anywhere”. Mr. Hoyer also stressed the need for cooperation "to support a climate neutral European economy by 2050”.
Following the approval of the revised energy lending policy, the EIB has confirmed that it will no longer consider new financing for fossil fuel energy projects from the end of 2021 onwards. In addition, the bank has set a new Emissions Performance Standard of 250g of CO2 per Kilowatt/hour (KwH) to replace the current 550gCO2/KwH standard.
Whilst some climate campaigners welcomed this decision, Greenpeace has lamented that "some gas infrastructure will continue to be eligible, following pressure from Germany, Italy, from Poland and the European Commission". In a statement issued earlier today, Martina Holbach, climate justice and finance campaigner at Greenpeace Luxembourg, stated: "As the climate emergency continues to worsen, Europe can not afford to waste another day or euro on fossil fuels. Any financing in fossil fuels should be banned, including fossil fuels".
Martina Holbach added: "Nevertheless, the bank's new energy lending policy sends a signal to the energy sector and the global financial community that the fossil fuel era is nearing its end. We call on other public and commercial banks to follow the example of the EIB and go further by ending the financing of fossil fuels immediately and without exception".
