Funding feud amid EU’s plans to phase out fossil fuel investment
EIB promises to continue supporting polluting countries
The European Union faces a funding battle after the European Investment Bank’s announcement that it will phase out fossil fuel funding by 2012.
Poland, Romania and Hungary have refused to back the decision, saying they need more time – or money – to make the transition to less polluting fuels, due to their dependence on coal.
The call for increased EU funding clashes with the demands of the so-called ‘frugal five’:
Germany, The Netherlands, Denmark, Sweden and Finland want to limit Brussels’ next long-term budget to one per cent of EU gross national income.
In an interview with the Financial Times, Werner Hoyer, president of the European Investment Bank, said the banks would still offer financial support to polluting countries.
“We are going to certainly not reduce our lending to these countries only because we don’t finance fossil fuel projects any more after 2021. Probably the opposite will be true.”
“What can we offer the member states in order to support growth and jobs in these regions, [the] most affected regions – that’s the challenge we are facing.”
As well as rejecting phasing out fossil fuel funding, Poland, Hungary and the Czech Republic have opposed the EU’s aim to become climate neutral by 2050.
The final decision is pending President-elect Ursula von der Leyen’s new Green New Deal next month, which will include a Just Transition Fund. This €4.8bn (£4.1bn, $5.3bn) pot would come from the EU’s new long-term budget and help poorer nations decarbonise.