EU Bank launches new energy lending policy to end financing of new fossil energy projects as of 2021
Post date: 18/11/2019 - 12:53
The European Investment Bank (EIB) is ending the financing of projects using fossil fuels without reducing CO2 emissions. This also applies to natural gas. However, the timetable does not provide for a stop until the end of 2021.
According to a decision of the Board of Directors, the Bank of the EU »will work closely with the Member States, the EU Council of Ministers, 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,« said EIB President Werner Hoyer.
The new energy lending policy details five principles that will govern future EIB engagement in the energy sector: prioritising energy efficiency with a view to supporting the new EU target under the EU Energy Efficiency Directive; enabling energy decarbonisation through increased support for low or zero carbon technology, aiming to meet a 32 percent renewable energy share throughout the EU by 2030; increasing financing for decentralised energy production, innovative energy storage and e-mobility; ensuring grid investment essential for new, intermittent energy sources like wind and solar as well as strengthening cross-border interconnections; increasing the impact of investment to support energy transformation outside the EU.
A new strategy for climate protection and ecological sustainability includes three key elements: The EIB Group will aim to support €1 trillion of investments in climate action and environmental sustainability in the critical decade from 2021 to 2030; will gradually increase the share of its financing dedicated to climate action and environmental sustainability to reach 50 percent of its operations in 2025 and from then on; will align all its financing activities with the principles and goals of the Paris agreement by the end of 2020. In the near future this will be complemented by measures to ensure EIB financing contributes to a just transition for those regions or countries more affected so that no one is left behind.
The decision marks the end of a review process in which industry, institutions and the public have been able to participate. Since January 2019, the Bank has received more than 149 written contributions from organisations and individuals, as well as petitions with more than 30,000 signatures.
Over the past five years, the European Investment Bank has provided more than €65 billion for investments in renewable energy, energy efficiency and energy distribution. The EIB had already revised its financing policy in the energy sector in 2013 and adopted a stricter emission standard to stop promoting coal and lignite-fired power generation projects.