The European Investment Bank (EIB) is planning to support EUR 1 trillion of investments in climate action and environmental sustainability from 2021 to 2030 as part of a new energy lending policy.
Following the approval of the revised energy lending policy, the EIB stated it will no longer consider new financing for unabated, fossil fuel energy projects, including gas, from the end of 2021 onwards.
The bank has also set a new Emissions Performance Standard of 250g of CO2/KwH, which is replacing the current 550gCO2/KwH standard.
The new strategy will see EIB gradually increase the share of its financing dedicated to climate action and environmental sustainability to reach 50% of its operations in 2025 and from then on.
Additionally, the bank said it will align all its financing activities with the principles and goals of the Paris agreement by the end of 2020. In the near future, this will be complemented by measures to ensure EIB financing contributes to a just transition for those regions or countries more affected so that no one is left behind.
As part of the plans, EIB aims to enable energy decarbonization through increased support for low or zero-carbon technology, aiming to meet a 32% renewable energy share throughout the EU by 2030.
It also revealed it will work towards ensuring grid investment essential for new, intermittent energy sources like wind and solar as well as strengthening cross-border interconnections and increasing the impact of investment to support energy transformation outside the EU.
According to EIB, ten EU countries face specific energy investment challenges and EIB will work with the European Commission to support investment by a Just Transition Fund and will be able to finance up to 75% of the eligible project cost for new energy investment.
“Carbon emissions from the global energy industry reached a new record high in 2018. We must act urgently to counter this trend. The EIB’s ambitious energy lending policy adopted today is a crucial milestone in the fight against global warming,” said Andrew McDowell, EIB Vice-President in charge of energy.
“Following a long discussion we have reached a compromise to end the financing by the EU Bank of unabated fossil fuel projects, including gas, from the end of 2021. I am grateful for all those who have contributed to the largest ever public consultation on EIB lending in recent months and energy expert colleagues who have outlined how the EU bank can drive global efforts to decarbonise energy.”