Briefing

European Investment Bank will phase out fossil-fuel financing

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One of the world’s biggest lenders, the EIB has committed to end its multibillion-euro lending to fossil-fuel energy projects, including natural gas, by 2022 and align all financing decisions with the Paris Agreement—a move that it claims makes it the planet’s first “climate bank.” The new policy, which the bank called a “quantum leap,” will unlock €1 trillion in financing for climate action and sustainable investment in the next decade. (Forbes, The Guardian)

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Talking point: This was a major policy promise of incoming EU Commission President Ursula von der Leyen, whose first act in office was to charge her second-in-command with executing a European Green Deal and achieving climate neutrality by mid-century. Since 2013—when the bank stopped backing coal projects—the EIB has provided €13.4 billion in financing to fossil-fuel ventures, about €2 billion just last year. The new policy will only see the bank lend to projects that produce less than 250 grams of carbon dioxide per kilowatt hour. Gas-based enterprises would qualify if their plans include “increasing shares of low-carbon gas over the economic lifetime of the project.”