European Parliament takes incoherent steps on climate in future EU investments

As governments discuss how to implement the Paris Climate Agreement at the COP24 in Katowice, today the Budget and Economic Affairs committees of the European Parliament failed to prevent further public investments in fossil fuels under InvestEU, the EU’s financing tool to attract private investments – say NGOs group CEE Bankwatch Network, Climate Action Network (CAN) Europe and Counter Balance.

Today the Budget and Economic Affairs of the European Parliament were called to vote on InvestEU, the successor of the ‘Juncker Investment Plan’ for the next EU budget post-2020 [1]. The new tool proposed by the Commission is set to leverage up to €650 billion of private investments around Europe [2],

The Parliament adopted a 40% climate target for climate-friendly investments under this programme, which represents a key step to point EU finance towards the right path to align with the Paris Agreement [3].

The regulation also sets a positive trend extending climate, environmental and social sustainability proofing to all projects under Invest EU. If well implemented, this measure has the potential to minimise detrimental impacts and maximise benefits on climate, environment and social dimension.

And yet, the vote by the two Parliament committees proves incoherent with the EU climate commitments touted at COP24, as it falls short of providing concrete measures to ensure genuine alignment with the Paris Agreement.

Under the approved regulation fossil fuel investments still remain eligible, and in particular support to gas infrastructure – warn CEE Bankwatch Network, Climate Action Network (CAN) Europe and Counter Balance. In addition, the text fails to prioritise energy efficiency projects and contribution to a fair energy transition in Europe.

Xavier Sol, Director at Counter Balance, said:

“Today’s vote goes in contradiction with the stated climate objectives of the EU. While claiming to be a climate champion, the EU still gives a blank check to future fossil fuels subsidies, which means that European public money could still be invested in dirty projects in 2026 or 2027. Discussions over InvestEU have so far mainly focused on governance issues, but we hope the Parliament will pay more attention to the climate in its vote in Plenary”.

Markus Trilling, Finance and Subsidies Policy Coordinatorat Climate Action Network Europe, said:

“The Commission recently published proposals to achieve zero-net greenhouse gas emissions by 2050. That requires ending support for fossil fuels and high-carbon infrastructure today. Pouring taxpayers’ money into fossil gas all the way till 2027 would dramatically lock Europe in climate-harmful developments for many decades and beyond 2050, which is unacceptable and incompatible with staying below 1.5°C.”

Anna Roggenbuck, EIB Policy Officer at CEE Bankwatch Network, said:

“The EU public finance doors have to be shut for fossil fuels once and for all. The European Investment Bank, who will be the main direct beneficiary of guarantees from the InvestEU, in the last 6 months only has been considering 9 new gas transmission and distribution projects. Instead of enabling such climate offense InvestEU should mobilise energy efficiency and renewables for energy transformation.”

Notes to editors:

[1] The text adopted today by the European Parliament’s Committees on Budget and Economic and Monetary Affairs is expected to go for a vote in plenary session on 15 January 2019.

[2] InvestEU will be equipped with a €15.2 billion guarantee fund, expected to leverage forty-times this amount in private investments via the European Investment Bank (EIB) and national promotional banks.

[3] InvestEU will have a target of 40% for climate investments, which does not go further than the current climate target under the European Fund for Sustainable Investments, but still represents a step forward compared to the 30% target proposed by the Commission.