Despite its announced climate commitment, the EIB still largely finances fossil fuel projects, thus contributing to the irreversible warming of our planet. It is high time for the bank to align with the Paris Agreement and stop these climate-wrecking investments.
A burning issue
The implementation of the Paris Agreement requires ambitious plans “to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels”. Keeping alive polluting energy supply chains and building new fossil fuel projects is certainly not in line with a 1.5°C future.
That is why the EIB should reduce the risk of locking us into a fossil fuel future by committing to end any kind of finance to fossil fuel energy projects.
We need a 100% Fossil-Free EIB!
The EIB’s fossil fuels support
Can we call a bank that in four years has lent more than € 12 billion to fossil fuels a “climate leader”?
Here’s a glimpse of the kind of fossil fuels projects financed by the EIB between 2013 and 2017:
And that’s not all of it: the EIB also financed climate-wrecking projects indirectly, with almost EUR 4 billion of loans to coal-dependent corporations.
We believe the EIB needs to stop all fossil fuel support!
In depth: Excluding companies without a Climate Transition Plan
As the biggest world lender, the EIB has the power to pick who is fit for its lending. A recent report revealed that, while virtually halting their direct investments in coal in the last five years, the EIB has provided corporate level financing to fossil-fuel dependent companies.
If the bank wants its responsible climate action to resonate further than its direct loans, it should commit to immediately stop any support for energy companies that plan fossil fuels power, mining or infrastructure expansion or whose business is in any way reliant on fossil fuels (coal, gas and oil), and to support exclusively companies which have developed a Climate Transition Plan.
Read more in the “Long and Winding Road” report by CEE Bankwatch Network
Locked-in by gas infrastructure
The biggest share of the EIB money to fossil fuels has recently gone to gas infrastructure projects. The EU has indeed made it a priority to guarantee the Union’s “energy security”, by building pipelines that would help diversify the sources of energy – promoting gas as a “cleaner, transition fuel”.
BUT… is gas really clean and do we really need all these new pipelines?
Gas contributes significantly to climate change. Not only does it emit CO2 when it’s burned, but it also inevitably leaks in the form of methane into the atmosphere. Methane is a dangerous greenhouse gas, 34 to 86 times more potent than CO2. Therefore, gas is nothing like a clean fuel. It is rather a polluting, climate-wrecking fossil fuel.
Plus, the demand for gas is set to decline as the EU moves to decarbonise its economy.
This means that – given the long average lifetime of 30-50 years for gas infrastructure assets – building new gas pipelines not only risks locking in fossil fuels by tying the EU to obsolete, climate-wrecking energy sources, but also squandering large sums of public money on expensive infrastructure that will end up as stranded assets.
In depth: How will decarbonisation affect the future demand for gas?
Already the newly adopted 2030 energy targets, with an energy efficiency target of 32.5%, and a renewable energy target of 32%, would result in a reduction of EU gas demand of 30% over the next decade.
Further decarbonisation efforts in line with the EU’s Paris commitment towards 2050 will result in a de-facto end to the use of fossil gas. According to the European Commission’s own calculations, consumption of fossil gas in the EU would plummet to below 50 Mtoe (Million Tonnes of Oil Equivalent) in 2050 in a decarbonisation context, from over 350 Mtoe today, and EU gas imports would therefore be reduced by up to 92%.
The EIB has so far funded extremely expensive mega-projects such as the Southern Gas Corridor, and considers support for other unnecessary gas projects across Europe like MidCat and LNG terminals in Ireland, Croatia, Estonia, which will just slow down the changes we need and are doomed to end up as a debt burden for all of us.
Most of these gas projects make it onto the EU list of Projects of Common Interest (PCI) – a list of projects which get privileged access to EU, and often EIB’s, funding, but are based on a skewed process dominated by the interests of the gas lobby.
The recent report by the IPCC tells us the pace and significance of the transformation of our energy system needs to accelerate if we want to avoid disastrous consequences for our planet, therefore we can’t keep building new fossil gas infrastructure.
There is no space for gas-related investments in the EU bank we want!
The most recent figures on EIB lending to fossil fuels, and in particular to gas infrastructure, got a considerable boost in early 2018, when the bank decided to channel more than € 2.4 billion into one of the most expensive (and controversial) infrastructure projects of all times: the Southern Gas Corridor.
Amid civil society’s dismay, the bank decided on a € 1.5 billion loan to the Trans Adriatic Pipeline (TAP) – the western leg of the corridor passing through Greece and Albania and landing on southern Italian shores – and a € 932 million loan to the Trans Anatolian Pipeline (TANAP) – TAP’s eastern “sister” crossing Turkey.
The climate consequences of these investments will be disastrous. A recent report by Oxfam and Stockholm Environment Institute showed that for each dollar invested by the Asian Infrastructure Investment Bank (AIIB) in TANAP there will be a global climate damage of up to 13 dollars.
But to the corruption, human rights, and above all climate-impact concerns brought up by civil society on the project, the EIB decided to turn a deaf ear and hide behind the political decisions of the European Commission and the External Action Service.
Watch the VIDEO: This is not a pipe – The “treachery” of the EU gas plans.