No more cash for fossil fuels, says EU bank

The European Investment Bank says it will stop financing fossil fuel energy projects from the end of next year as part of an effort to fight climate change.

The decision, which ends fossil fuel funding a year later than initially proposed, follows lengthy negotiations among EU member states, the bank’s shareholders.

Calling climate “the top issue on the political agenda of our time,” bank president Werner Hoyer noted scientists’ warnings that the planet is heading for a 3C-4C increase in global average temperature 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,” he said.

The policy change — which will also involve the bank giving priority to lending for energy efficiency, low carbon technology and grid improvements — comes as the EU tries to increase its climate efforts.

Earlier on Thursday, German Foreign Minister Heiko Maas told diplomats and scientists in Berlin that “Europe must lead, because only then other countries such as China or India will stay the course too”.

He backed a proposal by the incoming European Commission for the 28-nation bloc to agree a Green New Deal that would see economic programmes linked to efforts to reduce carbon emissions.

German Environment Minister Svenja Schulze said the EU should aim to reduce greenhouse gas emissions by up to 55 per cent by 2030 compared with 1990 levels. The current EU goal is for a 40 per cent cut.

Environmental groups cautiously welcomed the bank’s decision but warned that it had loopholes for some gas projects.