A new analysis highlights how European Investment Bank (EIB) financing of fossil fuel projects – in particular, gas pipelines and LNG terminals – is not compatible with EU climate commitments or the aims of the Paris Agreement.
The report Gas and the European Investment Bank: Why new gas infrastructure investment is incompatible with climate goals comes as the EIB is considering new limits to fossil fuel finance in its energy lending policy.
As the world’s largest multilateral lender, the EIB has faced growing pressure from civil society to end their financing of fossil fuels, which averaged more than €2 billion ($2.2 billion) per year between 2013 and 2018.
Their fossil fuel finance topped €2.5 billion in 2018, the bulk of which supported parts of the controversial Southern Gas Corridor, including the Trans Adriatic Pipeline (TAP) and the Trans-Anatolian Pipeline (TANAP).
The new report, published by Oil Change International, debunks a key argument some of the Bank’s shareholders and the gas industry have used to justify continued finance for gas: that new gas infrastructure can be made climate compatible by converting it to carry so-called non-fossil gas in the future.
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The report shows this argument goes against all eight of the climate action scenarios in the European Commission’s long-term vision on climate, which would see the future role of gas shrink considerably, and underscores the serious limitations to non-fossil gas technologies.
Calling gas a ‘bridge fuel’
The report also analyses the EU’s priority gas projects – in the list of Projects of Common Interest (PCIs) – and determines that a substantial majority of the money being spent on them (72%) is for projects that are inextricably linked to fossil gas sources, and thus exceedingly unlikely to be converted to carry sources of non-fossil gas.
“The EIB and its Member State shareholders are coming up with creative excuses to keep calling gas a ‘bridge fuel’. But the science is crystal clear that we need to leave all fossil fuels in the ground and get on with a just transition to 100% renewable energy,” said Bronwen Tucker, report co-author and analyst at Oil Change International.
The report is being released in conjunction with an open letter calling for a fossil free EIB signed by more than 70 civil society organizations and academics.
Both have come out just as the EIB’s Board of Governors – comprised of the Ministers of Finance of its EU Member State shareholders – gather on June 14th in Luxembourg for their annual meeting.
The open letter and the report both call on the EIB’s management to rule out all fossil fuel finance in their new energy lending policy.
“The last time the EIB did this review, in 2013, people all over Europe demands a safe climate future were able to convince the Bank to end direct finance for coal and increase their funding for renewables and energy efficiency,” said Tucker.
“Looking back, it’s clear that we were right then, and we’re right today. It’s 2019 and the EIB is lagging behind the science and its public finance peers like the World Bank Group. Public pressure is stronger than ever because we are in the midst of a climate emergency, and we know the EIB must finally stop funding all fossil fuels,” Tucker added.
The full report can be downloaded here
The open letter can be read here