Today, the European Investment Bank (EIB) published a draft of its new Energy Policy which proposes to end support to all fossil fuels beyond 2020. The draft policy is now to be approved by the bank’s shareholders, the EU Member States.

The EIB, the financial arm of the European Union, is the first multilateral lender to propose an end to fossil fuels finance beyond 2020. In doing so, the bank takes a significant step in honoring its commitment to align all the EIB’s operations with the objectives of the Paris Agreement by 2020. It would now focus on investments with a long-term vision to contribute to the EU decarbonisation plans at the horizon 2050.

The draft Energy Lending Policy published today states that “the Bank will phase out support to energy projects reliant on fossil fuels: oil and gas production, infrastructure primarily dedicated to natural gas, power generation or heat based on fossil fuels. These types of projects will not be presented for approval to the EIB Board beyond the end of 2020”.

This proposal largely reflects civil society’s demands under the Fossil Free EIB campaign and messages sent by thousands of citizens who called on the Bank to get out of fossil fuels’ business and shift its investments towards renewable energy and energy efficiency[1].

Xavier Sol, Director of Counter Balance, said:

“The EIB’s proposed new policy to stop funding all fossil fuel projects is timely and welcome. It’s long past time to end support to fossil fuels. This is a concrete step forward to align the financial arm of the EU with the objectives of the Paris agreement and adopt an overarching ambitious climate strategy. The EIB’s move should provide leadership to other multilateral lenders. The EIB shareholders should now endorse this proposal and concentrate the bank’s resources on the urgent climate challenges already with us.”

“The bank must also ensure that there are no significant loopholes to ensure that it does not continue to fund fossil fuels by the back door – for example through financial intermediaries like commercial banks and investment funds or through support to fossil fuel heavy companies. Another risk lies with the room left for the EIB to support the production of ‘low carbon gases’. This should not become a disguised subsidy for the fossil gas industry, and support to new forms of gas must be based on a realistic assessment of their potential contribution to the energy system and of their climate benefit.”

To learn more on the Fossil Free EIB campaign, click here.

[1] See the citizens’ signatures collected through a petition