EU lending arm proposes fossil fuel phase-out

Environmental activists on Friday urged EU member states to back a plan by the bloc's public bank to end new funding of fossil fuels by the end of next year. 

The European Investment Bank (EIB), the EU's lending arm, has proposed to boost support for clean-energy projects as a way to fight climate change and the associated increase in heat waves, flooding and storms. 

The policy change, part of the bank's renewed energy plans, will be put to EU ministers at an EIB board meeting on September 9 and 10. 

"The main proposals are clear: we want to increase our support for the energy transition in Europe," Andrew McDowell, an EIB vice president said in statement. 

"In addition to identifying the areas of priority for additional energy lending and support by the EIB, we have also proposed that we stop financing new fossil fuel based energy projects by the end of 2020," he said. 

File photo of the logo of the European Investment Bank. /Reuters Photo

File photo of the logo of the European Investment Bank. /Reuters Photo

The proposed turnaround comes as the EIB, the world's largest multilateral lender, provided 2.5 billion euros (2.8 billion U.S. dollars) for fossil fuel projects in 2018, the bulk of which went towards gas pipelines. 

The policy, if confirmed, is in line with the 2015 Paris climate deal that saw the EU join world nations in committing to limit global temperature rises to "well below" 2 degrees Celsius and to a 1.5°C cap if possible.  

The UN's Intergovernmental Panel on Climate Change (IPCC) says the safest way to hit the 1.5°C target would involve a rapid and deep drawdown in fossil fuel emissions.  

"This is a crack of light in the darkness," said Colin Roche, fossil free campaigner at Friends of the Earth Europe. 

"While the EU and national governments are floundering as the planet burns, the EU's public bank has made the brave, correct and just proposal to stop funding fossil fuel projects," he said. 

"We are now urging the European Investment Bank's board to endorse this step forward, and ensure there are no loopholes for fossil fuel funding," he said. 

The EIB plan comes as Ursula von der Leyen, the incoming president of the European Commission, has vowed to turn parts of the EIB into a "Climate Bank," in line with proposals by the Greens party. 

The bank's previous energy policy from 2013 specified a continued and "critical" role for gas network investments. 

According to Alex Doukas, lead analyst at Oil Change International, "The EU member states who control the bank must now stand behind the EIB's ambitious climate vision, and other financial institutions should quickly follow suit to stop funding fossils."

Source(s): AFP