EIB Won’t Finance Oil, Gas, Coal Projects After 2021
By Jack Burke15 November 2019
The board of the European Investment Bank (EIB) agreed to a new energy lending policy that ends the financing of oil, gas and coal projects after 2021.
Under the new policy, the EIB will no longer consider new financing for unabated, fossil fuel energy projects, including gas, starting at the end of 2021. In addition, the bank set a new Emissions Performance Standard of 250 g of CO2 per Kilowatt/hour (KwH). This will replace the current 550 g CO2/KwH standard.
The EIB is considered the world’s largest multilateral financial institution. The organization loaned €13.5 billion to the fossil fuel sector between 2013-18, according to NGO Bankwatch.
“Climate is the top issue on the political agenda of our time,” said EIB President Werner Hoyer. “Scientists estimate that we are currently heading for 3-4°C of temperature increase by the end of the century. If that happens, large portions of our planet will become uninhabitable, with disastrous consequences for people around the world. 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.” Stressing the need for cooperation, he added: “I would like to thank the shareholders of the bank, the EU Member States, for their cooperation over the past months. We look forward to working closely with them and with the EU Council of Ministers, with the European Commission, the European Parliament, international and financial institutions and, crucially, with the private sector, to support a climate-neutral European economy by 2050.”
A previous review of energy lending in 2013 had already enabled the EIB to be the first international financial institution to effectively end financing for coal and lignite power generation through adoption of a strict Emissions Performance Standard.
Ten EU countries face specific energy investment challenges. The EIB will work closely with the European Commission to support investment by a Just Transition Fund. The EIB will be able to finance up to 75% of the eligible project cost for new energy investment in these countries. These projects will also benefit from both advisory and financial support from the EIB.
Andrew McDowell, EIB Vice-President in charge of energy said: “Carbon emissions from the global energy industry reached a new record high in 2018. We must act urgently to counter this trend. The EIB’s ambitious energy lending policy adopted today is a crucial milestone in the fight against global warming. Following a long discussion we have reached a compromise to end the financing by the EU Bank of unabated fossil fuel projects, including gas, from the end of 2021. I am grateful for all those who have contributed to the largest ever public consultation on EIB lending in recent months and energy expert colleagues who have outlined how the EU bank can drive global efforts to decarbonize energy.”