Pressure grows on fossil fuel use as bank axes European funding

The bank further announced a plan to allocate one trillion euros towards climate action and environmental sustainable investments between 2020 and 2030, thought to be the key timeframe in averting climate disaster.

“We will launch the most ambitious climate investment strategy of any public financial institution anywhere,” the EIB’s president, Werner Hoyer, said in a statement.

It means a new energy lending policy, which will effectively bar most fossil fuel projects including traditional use of gas, is likely to cause huge disruption to a market that has an estimated £156 billion in projects lined up across the bloc. It is seen as a huge development.

Andrew McDowell, EIB vice-president for 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.”

Colin Roche, of Friends of the Earth Europe, called the decision “a significant victory” for the climate movement. He added: “Finally, the world’s largest public bank has bowed to public pressure and recognised that funding for all fossil fuels must end – and now all other banks, public and private, must follow their lead.”

“Today’s decision is a significant victory for the climate movement. Finally, the world’s largest public bank has bowed to public pressure and recognised that funding for all fossil fuels must end – and now all other banks, public and private, must follow their lead.

“But 2021 is still too late if we are to avoid the worst effects of climate breakdown, the EIB needs to reject all fossil fuel projects and close its loopholes for gas, and not wait till 2021.”

Greenpeace, in a tweet to its 1.8 million followers, added: “The EIB takes a step in the right direction by cutting back most fossil fuel funding. There’s still work to do to solve the #ClimateCrisis as #gas infrastructure remains eligible for funding. But the signal is clear: the age of fossil fuels is coming to an end.”

More than 30,000 people had signed a petition expressing their concerns over support for fossil fuels, with more than a hundred written submissions also taken into account.

Environmental campaigners had previously estimated that the bank was funding fossil fuel companies to the tune of 6.2 million euros each day between 2013 and last year.

Now energy projects that are applying for EIB funding will need to show clearly that they can produce one kilowatt hour of energy while emitting less than 250 grams of carbon dioxide, a move which bans traditional gas-burning power plants.

Responding to the news, Scottish Green environment spokesperson Mark Ruskell said:

“This decision by the European Investment Bank is to be welcomed, and follows great work by Greens across the EU, but it is just the beginning of what is needed.

“This recognition of a need to phase out fossil fuel at a European level is sadly lacking when it comes to the UK and Scottish Governments.

“If we are to build a future for our communities the transition needs to start now.

“Brexit promises to be an unacceptable step away from this kind of European cooperation, so it’s important we use the General Election to demand climate action.”

Ross Greer, Green MSP for West of Scotland, who has been campaigning against the Church of Scotland’s link to fossil fuel investments, tweeted: Time for Scotland’s public pension funds to follow suit and divest the £2bn currently invested in fossil fuels.

Earlier this month Alison Rose, the first female chief executive of a major British bank after taking over at RBS, also pledged to make the climate crisis a priority.

She said it would become a “pillar” of her strategy.