European Investment Bank to cease fossil fuel funding


November 15th, 2019

The European Investment Bank (EIB) will cease to fund
fossil fuel projects from 2021. 

The bloc’s lending body made the landmark announcement following
a colossal
11-hour meeting
yesterday to bang out the finer details of its new energy
lending policy. 

In the future, the bank will focus on accelerating “clean energy innovation, energy efficiency and renewables” and plans to allocate €1 trillion to climate action and environmental sustainable investment between 2020 and 2030. 

EIB President Werner Hoyer said the new policy marked a “quantum leap in its ambition” in addressing climate change.  “We will stop financing fossil fuels and we will launch the most ambitious climate investment strategy of any public financial institution anywhere.”

Andrew McDowell, the EIB’s vice-president and former chief
economic adviser to the Taoiseach during Enda Kenny’s reign, said on Twitter
yesterday evening that it was a “privilege” to help steer the policy through
the “most extensive consultation and negotiation in the Bank’s history”.

In July,
the EIB put forward a draft of the energy lending policy that would phase out
the majority of fossil fuel financing by the end of 2020 that it said reflected
a decision to refocus the Bank’s resources on investments to meet the EU’s
climate targets up to 2050. 

Following the publication of the first draft, the EIB
delayed its decision on backing the policy. The policy was expected to be
voted on at the meeting of the Bank’s board in September, but the decision way
delayed to October and then postponed once more to this

‘A first step’ 

Colin Roche of Friends of the Earth Europe, who has
monitored the situation closely over the past months, said that the 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,” he
said. “Now all other banks, public and private, must follow their lead.”

Mr Roche warned, however, that the 2021 starting point is
“still too late” to avoid the worst effects of climate breakdown, calling on
the EIB to reject any fossil fuel projects and close existing loopholes which
could allow for the continued funding of gas projects.

Mark Trilling of Climate Action Network Europe (CAN) said
the bank’s announcement was a “first step” toward becoming the EU’s climate
bank as promised by the European Commission’s president-elect Ursula von der

In order for the EIB to truly become the bloc’s climate
bank, Mr Trilling said that it will need to “look beyond energy and soon adopt a
climate strategy which puts climate neutrality at the heart of all its

Green Party MEP Ciaran Cuffe welcomed the decision as a
“really strong statement from a key EU institution” but noted that the 2021 starting
point is “disappointing” given the urgency of the climate crisis.

“In the window between now and 2022, there is scope for
many large scale fossil fuel projects to be funded, which will continue to
cause huge environmental damage and contribute to the very crisis we are trying
to avert,” Mr Cuffe said. 

His party colleague MEP Grace O’Sullivan echoed a desire for fossil fuel funding to end sooner but did see domestic potential in the decision. 

“I hope that on the home front it will put a halt to the
Shannon LNG project, which has to be seen for what it is – dirty and
unsustainable,” Ms O’Sullivan said. 

Critics argue that the gas terminal would see the importation of fracked gas into Ireland from the US despite our own domestic ban on fracking due to health, water contamination, and environmental concerns.

“This is about a very important acknowledgement that climate is the top issue on the political agenda of our time. But it’s more than that. Putting money into action is hugely significant. Today I feel a sense of hope,” Ms O’Sullivan added. 

About the Author

Kayle Crosson

Kayle is a multimedia journalist focused on climate and environmental issues and contributes to The Irish Times and The Green News.

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