Several political groups in the European Parliament and leading civil society organisations on climate issues welcomed the new strategy for lending to the energy sector unveiled by the European Investment Bank (EIB) on Thursday evening, 14 November, even though they would have liked even more radical decisions (see EUROPE 12368/22).
In particular, the EIB is the first multilateral bank to formally decide to cancel financing for new fossil energy projects, including gas, from the end of 2021. It will align all its activities with the objectives of the Paris Climate Agreement from the end of 2020, with total climate activities expected to reach 50% by 2025. It is committed to contribute to the target of 1,000 billion euros in investments qualified as sustainable by 2030.
“This is really a step in the right direction and a milestone for the path of eliminating investment in fossil fuels”, said Bas Eickhout (Greens/EFA, the Netherlands). But as long as the EIB finances new gas infrastructure, the EU will be locked into a logic that jeopardises compliance with the Paris Agreement, he said. He added that, contrary to the claims of EIB President Werner Hoyer and Pascal Canfin (Renew Europe, France), who Chairs the European Parliament's Environment Committee, the EU Bank could not yet be considered the Climate Bank.
French ecologist Marie Toussaint described the EIB's decision as a “victory” for citizen mobilisations, even if, in her opinion, this “essential first step” remains “insufficient in view of the climate emergency”.
Environmentalists want a comprehensive strategy that would require, for example, an immediate end to all financing of fossil fuels and nuclear energy, the removal of tax exemptions for polluting energy, an appropriate taxonomy to determine which financial investments can be considered sustainable and a review of the EBRD's and the ECB's investment policies.
Some civil society organisations, such as Bankwatch, went so far as to describe the EIB's decision shortly before the opening of the UN COP25 conference in Madrid as “historic”, hoping that it would have a ripple effect on other international financial organisations. All noted the real progress made all while providing perspective by highlighting the remaining areas where progress is needed.
For Greenpeace, the possibility of financing new gas pipelines until the end of 2021, as well as the modernisation of existing energy infrastructures based on fossil fuels (provided that these infrastructures emit on average less than 250g of CO2 per kWh of electricity produced), constitute a threat to the achievement of the ambition set by the European Commission and most Member States in favour of carbon neutrality by 2050.
Just transition. The EIB also acknowledges that “ten Member States face specific challenges in energy investment” and promises to work closely with the European Commission on the establishment of the Just Transition Fund, which President-elect Ursula von der Leyen has announced in her work programme. The EIB estimates that it is able to finance up to 75% of the eligible costs of new sustainable investment projects and provide them with technical assistance.
Support for projects promoting energy efficiency and renewable energy should not only take place in the richest countries, “but also in the regions of Central and Eastern Europe”, say Bankwatch and Counter Balance. The European Trade Union Confederation also stressed the importance of supporting the EIB's new climate strategy with “European solidarity mechanisms”.
In response to the EIB's new policy, the Eurogas organization, which represents the major gas players in Europe, welcomed the decision to support the deployment of carbon capture and storage infrastructure, involving hydrogen and biogas with a lower environmental impact, as well as small gas boilers.
The EU Bank has also identified the need to complete gas infrastructure with many Projects of Common Interest focusing on natural gas, the organization noted (see EUROPE 12361/12). And to advocate a binding European objective for renewable and carbon-free gas, as is the case in France (10% in 2030).
See the EIB's new strategy: http://bit.ly/37cVupU (Original version in French by Mathieu Bion with Damien Genicot)