The board of the European Investment Bank (EIB) has agreed on a new energy lending policy and confirmed the EIB’s increased ambition in climate action and environmental sustainability.
Following the approval of the revised energy lending policy, the EIB will no longer consider new financing for unabated, fossil fuel energy projects, including gas, from the end of 2021 onwards.
In addition, the bank set a new Emissions Performance Standard of 250g of CO2 per Kilowatt/hour (KwH). This will replace the current 550gCO2/KwH standard.
A previous review of energy lending in 2013 had already enabled the EIB to be the first international finance institution to effectively end financing for coal and lignite power generation through adoption of a strict Emissions Performance Standard.
“Climate is the top issue on the political agenda of our time,” said EIB President Werner Hoyer.
Hoyer continued: “Scientists estimate that we are currently heading for 3-4°C of temperature increase by the end of the century. If that happens, large portions of our planet will become uninhabitable, with disastrous consequences for people around the world. The EU bank has been Europe’s climate bank for many years. Today it has decided to make a quantum leap in its ambition.
“We will stop financing fossil fuels and we will launch the most ambitious climate investment strategy of any public financial institution anywhere.”
Stressing the need for cooperation, he added: “I would like to thank the shareholders of the bank, the EU Member States, for their cooperation over the past months. We look forward to working closely with them and with the EU Council of Ministers, with 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.”
Strengthening support for clean energy
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% 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.
Andrew McDowell, EIB Vice-President in 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.”