(Bloomberg) — The European Investment Bank is poised to limit funding for fossil fuels as the continent ups its fight against climate change.
The board of the Luxembourg-based lending arm of the European Union is meeting on Tuesday to discuss a new strategy that includes increased support for clean-energy projects.
The boost for the EIB’s support for renewables bolsters the Green Deal being pushed by Ursula von der Leyen, the incoming president of the European Commission. She wants the institution to become a climate bank and help unlock 1 trillion euros ($1.1 trillion) to shift the economy toward cleaner forms of energy.
“With a very strong focus on energy efficiency, renewable energy, power grids and research and development, the EIB believes the proposed Energy Lending Policy is well aligned with EU priorities and funding,” EIB President Werner Hoyer told the European Parliament on Oct. 9. “Science tells us that transitioning to a carbon-neutral economy entails ending the use of fossil fuel as soon as possible.”
The EIB’s draft strategy has come under fire from green lobby groups after it was softened last month to allow funding for certain natural gas projects, a move sought by Germany and some central European nations concerned about their reliance on Russian supplies. Germany may still require more concessions, posing a risk for adoption of the new policy rules, which need endorsement from EU member states to be approved.
“Governments should support the economy of the future and not the economy of the past,” said Sebastien Godinot, an economist at WWF’s European unit in Brussels. “Germany risks becoming a climate laggard. If it doesn’t endorse the EIB strategy it will be a missed opportunity.”
The EIB, which last year invested more than 16 billion euros in climate-action projects, is preparing to play a larger role in spurring low-carbon technologies because the EU is weighing whether to declare itself the first climate-neutral continent by the middle of this century.
The 28-nation bloc wants to step up its ambition in sync with the landmark 2015 United Nations agreement to fight global warming, after the U.S. turned its back on the accord.
Von der Leyen, who is due to assume her new job on Nov. 1, also wants the EU to deepen its current target to cut emissions by at least 40 percent by 2030 from 1990 levels. That may involve a reduction of 50% or even 55% to counter the more frequent heat waves, storms and floods tied to global warming. Fossil fuels such as coal, oil and natural gas are leading contributors to climate change.
To contact the reporter on this story: Ewa Krukowska in Brussels at [email protected]
To contact the editors responsible for this story: Reed Landberg at [email protected], James Herron
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