Yesterday, the European Investment Bank (EIB) agreed to phase out its multibillion euro support for fossil fuels over the next two years. As well as dropping coal and oil, the EIB has recognised that it can no longer justify financing fossil gas projects that are fuelling the climate crisis.Now that the EU’s bank has agreed to drop gas, it’s time for the EU to remove the rest of its support for this dangerous fossil fuel.
The EIB will (nearly) stop funding fossils, but it must go further and faster
The EIB’s new energy lending policy will see it end the vast majority of its financing of coal, oil and gas projects after 2021. This will cut off a significant source of funds to the industry, with the EIB having handed out €6.2m every day to fossil fuel companies between 2013 and 2018.
The decision to include gas in the ban is crucial, as the gas industry has consistently lobbied for continued support as they claim that gas is a lower carbon form of energy than coal and is needed to supplement renewable energy like wind and solar. Yet the latest climate science shows that avoiding climate breakdown and limiting warming to 1.5°C requires a rapid and immediate transition off gas. Even the head of the International Energy Agency has said “we have no room to build anything that emits CO2.”
While the EIB’s new policy is a huge and welcome step forwards, the bank must go further and faster if it is to deliver on the ambition of the Paris climate change agreement. Waiting until 2021 is simply too late to stop funding these projects, and the bank should steer away from financing any new fossil fuel projects immediately.
The EIB should also go further and close the loopholes in its policy that were added as a concession to pressure from pro-gas countries, reportedly including Germany, Italy, Poland and Latvia. These loopholes would allow the bank to continue to fund ill-defined “low-carbon gas” projects, which while ruling out regular gas-fired power stations could still support new carbon-emitting technologies in future.
Time for EU policy to follow suit
Despite these flaws in the EIB’s new policy, it highlights the glaring gap in the EU’s outdated policies that still support the gas industry. While this latest move will cut off funding from the EU’s bank, gas pipelines and terminals can still access funding from the EU’s own central budget.
The EU’s support for gas projects goes beyond funding. EU-backed gas projects get fast-tracked approval, are treated as ‘necessary’ for the process of permitting and ‘of overriding public interest’ in environmental impact assessments. This political status flies in the face of the science but makes these projects nearly unstoppable, never mind the impacts on local communities or the environment.
Next year the European Commission is due to review the regulation that governs the EU’s support for energy infrastructure projects, the Trans-European Networks - Energy (TEN-E) Regulation. This is a vital opportunity for the EU to follow the EIB’s lead and rule out support for gas altogether.
In the face of the escalating climate crisis it’s simply unjustifiable for the EU to continue to support new fossil fuel projects.
Preview image credit: 350.org