EIB Climate Action undermined by bank's fossil fuel lending

February 11, 2015

Brussels -- Ahead of a public consultation on the European Investment Bank’s Climate Action Programme tomorrow in Brussels [1], Bankwatch insists that, if the bank’s pro-climate efforts are to be effective, the EIB must give up its loans to fossil fuels and other climate-damaging sectors.

“Via Climate Action, the EIB dedicates about a quarter of its lending to climate-friendly projects, which is commendable,” says Bankwatch’s EIB coordinator Anna Roggenbuck. “But the irony is that what the EIB gives with one hand, it takes away with another: the bank is pouring billions into oil and gas infrastructure, polluting airports and highways and other carbon-intensive projects, all of which effectively undermine the achievements of the EIB’s Climate Action Programme.”

Just this month, the EIB announced that the Trans-Adriatic Pipeline (TAP) is one of its priority projects for 2015. [2] TAP is one of the pipelines in the so-called Southern Gas Corridor, a series of mega-pipelines meant to bring gas from Azerbaijan into Europe, and which the EU is pushing in spite of its own estimates that domestic gas demand does not warrant it. [3]

“In its paper on Climate Action that is the basis for public comments, the bank says that ‘overall GHG footprint of EIB-supported investment projects is assessed to be negative’, which is a highly misleading claim, only made possible by the use of a biased methodology,” says Bankwatch MENA coordinator Kuba Gogolewski. “What this means is that the bank is not counting a baseline scenario with low- or zero-emissions but rather compares the impacts of GHG emissions only to dirtier options.”

According to Bankwatch, the EIB needs to resolve this major inconsistency by proposing a comprehensive Climate Policy to guide all of its lending. Such a policy would:

ensure that the entire EIB lending portfolio (not just the Climate Action part) is in line with the EU 2050 decarbonisation objective, an objective that the EIB must adhere to as the house bank of the EU;
assess the climate impact of all of the bank’s lending, including financial intermediary lending, and include an annual decreasing cap on absolute GHG emissions from all the EIB’s projects;
propose a clear plan to phase out fossil fuel lending by 2020 and plan for the phase out of other carbon-intensive lending;
actively seek out opportunities to invest in renewables and energy efficiency, especially in central and eastern Europe and other regions where energy intensity is high.

“The EIB says that the current review of its Climate Action Programme is happening in preparation for this year’s Paris climate change conference,” says Roggenbuck. “But we’d be fools to believe that Paris will be a success with such patchy solutions as increasing climate friendly lending here and there. We must reduce emissions drastically and the most common sense first step in this direction is to end public support for fossil fuels now.”