EIB votes on funding fossil fuel projects
LONDON: Europe’s climate change credentials face an acid test this week when the bloc’s lending arm, the European Investment Bank, decides whether to stop funding fossil fuel projects beyond next year.
The decision is due to be made today by EU finance ministers and other top officials after an intense few months of discussion in European capitals and within the region’s energy industry.
The EIB’s draft proposal in
July to end oil, coal and gas financing was widely praised by environmental groups and politicians alike as a strong signal from the world’s largest multilateral lender, but has since seen some pushback.
The European Commission plus Germany, Italy, Poland, Latvia and potentially Spain would like the bank to keep funding some types of gas projects to help the move away from coal or nuclear power, or for energy security reasons.
Some key wording on how emissions targets will be measured has also been loosened, which critics of the changes argue will make it difficult to reliably monitor their impact.
‘‘I think this is going to be the litmus test’’ Green EU MP Bas Eckhout said. ‘‘For a climateneutral economy by 2050 you need to make sure your energy infrastructure is zerocarbon.’’
EIB figures show it funded almost ¤2 billion ($NZ3.5 billion) worth of fossil fuel projects last year and ¤13.4 billion worth since 2013.
A complete stop would be seen as a statement of Europe’s intent at minimising global warming and aligning with the Paris Agreement which aims to cap global warming at 1.5degC above 1990 levels.
An Intergovernmental Panel on Climate Change (IPCC) report last month delivered a stark warning to the world: slash emissions or watch cities vanish under rising seas, rivers run dry and marine life collapse.
The incoming president of the European Commission, Ursula Gertrud von der Leyen, has called for the EIB to invest half of the ¤60 billion¤80 billion it lends a year on ‘‘green’’ projects and evolve into a ‘‘Climate Bank’’.
All this sets the stakes high for today’s decision at the EIB’s Luxembourg headquarters. Multilateral institutions generally try to avoid knifeedge votes that could divide their ranks, though in this case EIB chief Werner Hoyer may be prepared to call one.
If that did happen the proposals would require what is known as an ‘‘ordinary majority’’ where at least one third of the bank’s members representing at least 50% of its subscribed capital give their support.
‘‘We have listened to the very vocal international calls for action. EIB is expected to be ambitious,’’ Hoyer said in a speech last week. ‘‘I do not believe we should disappoint.’’