European Investment Bank to phase out fossil fuel investment
EIB new lending policy raises concerns for $200bn billion gas projects
The European Investment Bank (EIB) will stop financing fossil fuel energy projects from the end of 2021.
The bank’s new energy lending policy aligns its funding decisions with the goal of the Paris Agreement. As such it will no longer finance unabated fossil fuel projects.
Since 2013 the EU’s lending arm has funded $15bn (£11.6bn, €13.6bn) of fossil fuel projects, and last year it spent about $2.2bn.
EIB vice-president Emma Navarro, in charge of climate action and environment, said: “To meet the Paris climate goals we urgently need to raise our level of ambition and this is precisely what we have done today”.
Under the new policy, energy projects applying for EU funding need to show they can produce one kilowatt hour of energy while emitting less than 250 grams of carbon dioxide.
This excludes traditional gas-burning power plants, and raises concerns for the gas industry, which has received more than $200bn in investment for liquefied natural gas projects over the next five years.
Gas projects are still possible, but they need to use "new technologies", including carbon capture and storage, combining heat and power generation, or mixing in renewable gases with fossil natural gas.
Under the new strategy the EIB aims to:
- Support €1 trillion of investments in climate action and environmental sustainability from 2021 to 2030
- Increase the share of its financing dedicated to environmental sustainability to 50% by 2025
- Align all its financing activities with the goals of the Paris agreement by the end of 2020
According to EIB president Werner Hoyer, it is the most “ambitious climate investment strategy of any public financial institution anywhere”.
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