The adoption of conclusions on climate finance, scheduled for Friday 8 November, unanimously supported by the Ecofin Council, was still hampered on Thursday 7 November by the language to be adopted on phasing out EIB loans for fossil fuel projects.
Faced with Hungary's blockage, in particular, the issue, which could not be resolved at the level of the Member States' ambassadors to the European Union (Coreper) after two discussion sessions, including one on Wednesday 6 November, should be sent up to the Finance Ministers.
The crux of the problem is the level of ambition of the Twenty-Eight with regard to the phasing out of EIB loans for fossil fuels. Some countries dependent on these fuels are slowing down, while others fear a weakening of the EU's climate ambition, while the EU Bank is set to become the European Climate Bank.
“We must not give the impression of diluting the phasing out” of fossil fuels, said a diplomat on Thursday, referring to the opposition of “two Member States” to the text of the draft conclusions presented. “No one is in a position to ‘plant’ the EU's position before going to COP25. But we need a text that matches the ambitions of the Twenty-Eight”, he added.
The tension observed is linked to the adoption by the EIB, expected on 14 November, of its future lending policy, which could put an end to financing of fossil fuels, after a first postponement in October (see EUROPE 12349/22). The European Finance Ministers sit on the Board of Directors of the Bank of the EU.
According to a version of the draft conclusions dated late October, the EU Council urges multilateral development banks - such as the EIB - to align their investment portfolios with the objectives of the Paris Agreement. And it encourages these banks to adopt responsible investment policies and to phase out financing of fossil fuel projects, taking into account the sustainable development and energy needs of partner countries. A version of the text dated 5 November as seen by EUROPE asks multilateral banks to specify the measures they are taking to align their portfolios with the Paris Agreement. As for the phasing out of fossil fuels, they should focus on solid fossil fuels, specifies this more recent version of the text.
The conclusions will note that in 2018, the EU maintained its position as the largest public donor to support climate action in developing countries with 21.7 billion euros (see EUROPE 12362/14).
See draft conclusions: http://bit.ly/33s0DYM (Original version in French by Mathieu Bion)