No fossil fuel projects would be financed by the European Investment Bank by the end of next year, the lender has said. It said that all such multibillion euro project funding would be stopped to align its business strategy with that of the targets of climate change prevention.
Support for energy infrastructure projects that are based on oil, gas or coal as source of power generation would no longer be funded by the European Union’s lending arm and plans to not allow companies undertaking such projects to apply for loans after the end of 2020 have already been drafted, according to reports.
Aligning with the Paris Climate Agreement that has set an aim to keep the global heating at 1.5C above 1990 levels by cutting greenhouse gas emissions is the focus strategy of the lender and for its on long-term investments, the EIB said.
“This transition will be profound. Solidarity is required to ensure that potentially vulnerable groups or regions are supported,” the EIB report said.
Projects that would help EU member states to transition to a cleaner economy would be supported by the EIB through the setting up of an energy transitions fund, the lender said. Fossil fuel projects including the Trans Adriatic gas pipeline and oil storage facilities in Cyprus have been funded by the EIB in the past.
There is growing pressure on financial institutions to reduce their portfolios of high-carbon projects and this latest measure of the EIB is also a result of that, say analysts. The EIB was called on last month to end its fossil fuel financing, which topped €2.4bn in 2018, through a open letter published by a group comprising of 80 civil society organisations and academics.
The bank was accused of “lagging behind the science” underpinning the climate crisis in the open letter, the signing and publishing of which was coordinated by the campaign group Counter-Balance.
There is also criticism of the United Kingdom, one of the largest economies of Europe for enhancing financing of fossil fuel projects by 11-fold to almost £2bn last year and the agency UK Export Finance was used to finance those projects. However at the same time, funding for renewable energy developers was also done by the agency.
“The EIB’s proposal to end financing for fossil fuels by 2020 is a massive step forward in climate leadership. With this move, the world’s largest multilateral lender is now poised to leave oil, gas and coal in the past. The EU member states who control the bank must now stand behind the EIB’s ambitious climate vision, and other financial institutions should quickly follow suit to stop funding fossils,” said Alex Doukas, from environmental campaigner Oil Change International.
The proposal is “a crack of light in the darkness”, said Colin Roche, a campaigner at Friends of the Earth Europe. “While the EU and national governments are floundering as the planet burns, the EU’s public bank has made the brave, correct and just proposal to stop funding fossil fuel projects. We are now urging the European Investment Bank’s board to endorse this step forward, and ensure there are no loopholes for fossil fuel funding.”
(Source:www.theguardian.com)
Support for energy infrastructure projects that are based on oil, gas or coal as source of power generation would no longer be funded by the European Union’s lending arm and plans to not allow companies undertaking such projects to apply for loans after the end of 2020 have already been drafted, according to reports.
Aligning with the Paris Climate Agreement that has set an aim to keep the global heating at 1.5C above 1990 levels by cutting greenhouse gas emissions is the focus strategy of the lender and for its on long-term investments, the EIB said.
“This transition will be profound. Solidarity is required to ensure that potentially vulnerable groups or regions are supported,” the EIB report said.
Projects that would help EU member states to transition to a cleaner economy would be supported by the EIB through the setting up of an energy transitions fund, the lender said. Fossil fuel projects including the Trans Adriatic gas pipeline and oil storage facilities in Cyprus have been funded by the EIB in the past.
There is growing pressure on financial institutions to reduce their portfolios of high-carbon projects and this latest measure of the EIB is also a result of that, say analysts. The EIB was called on last month to end its fossil fuel financing, which topped €2.4bn in 2018, through a open letter published by a group comprising of 80 civil society organisations and academics.
The bank was accused of “lagging behind the science” underpinning the climate crisis in the open letter, the signing and publishing of which was coordinated by the campaign group Counter-Balance.
There is also criticism of the United Kingdom, one of the largest economies of Europe for enhancing financing of fossil fuel projects by 11-fold to almost £2bn last year and the agency UK Export Finance was used to finance those projects. However at the same time, funding for renewable energy developers was also done by the agency.
“The EIB’s proposal to end financing for fossil fuels by 2020 is a massive step forward in climate leadership. With this move, the world’s largest multilateral lender is now poised to leave oil, gas and coal in the past. The EU member states who control the bank must now stand behind the EIB’s ambitious climate vision, and other financial institutions should quickly follow suit to stop funding fossils,” said Alex Doukas, from environmental campaigner Oil Change International.
The proposal is “a crack of light in the darkness”, said Colin Roche, a campaigner at Friends of the Earth Europe. “While the EU and national governments are floundering as the planet burns, the EU’s public bank has made the brave, correct and just proposal to stop funding fossil fuel projects. We are now urging the European Investment Bank’s board to endorse this step forward, and ensure there are no loopholes for fossil fuel funding.”
(Source:www.theguardian.com)
