While depicting itself as a pioneer in the global fight against climate change, the European Investment Bank (EIB) still massively endorses fossil fuel projects, dooming the EU to fail the Paris agreement commitments.
The EU’s bank irresponsible climate conduct figures among the conclusions of a new report by the Overseas Development Institute and Climate Action Network (CAN) Europe, which gathered data on the support provided to fossil fuels such as oil, gas and coal from 11 European countries and the EU between 2014 and 2016.
The report finds that the European governments and the EU are handing out more than €112 billion each year to prop up the production and consumption of fossil fuels, despite a pledge to phase out harmful subsidies by 2020.
“This study shows how governments in Europe and the EU continue to subsidise and finance a reliance on oil, gas and coal, fueling dangerous climate change and air pollution with tax-payers’ money”, said the lead author of the report Shelagh Whitley, Head of Climate and Energy at ODI.
Analysing all the sources of the EU subsidies to fossil fuels, the report reveals that every year between 2014-2016, the EU provided an annual average of €4bn in fossil fuel subsidies through its budget and a set of funds, development and investment banks its own.
The growing support for gas and the continued provision of support for coal-fired power are particularly concerning. Over the 2014-2016 period, the EIB alone provided loans for € 5.3 billion to two oil projects, one coal project and 27 gas projects in twelve EU Member States.
Wendel Trio, director of CAN Europe, said: “The €4bn spent by the EU on fossil fuels, most of which goes to gas infrastructure, locks Europe into fossil fuel dependency for the decades to come. This violates the Paris Agreement’s requirement to make finances work for the climate”.
When it comes to the Investment Plan for Europe, the picture is not reassuring either: between 2015 and 2016, eight gas distribution projects received a €1.2 billion support through the European Fund for Strategic Investment (EFSI), a supposedly 'forward looking' investment initiative launched jointly by the EC and the EIB group. This on top of the other fossil fuel projects already financed through the EIB’s regular activities.
Xavier Sol, Director of Counter Balance and co-author of the report, claimed: “This new report shows the urgency to get European public investment banks out of fossil fuels. We need the EIB to take full responsibility for the climate consequences of its investments and take immediate action about it. The upcoming 2018 Energy Policy review is the next opportunity for the bank to commit to a complete phase out of fossil fuel investments and to show it takes the future of our planet seriously, as European citizens expect it to”.
Notes to editors:
- The report tracks fossil fuel production and consumption subsidies referencing the World Trade Organization’s (WTO) definition of a subsidy which includes: fiscal support, such as direct spending by governments, tax breaks and income or price support; domestic, regional (EU) and international public finance through grants, loans, equity and guarantees; and investment by state-owned enterprises.
- The report looks at support to the consumption and production of fossil fuels by 11 countries – Czech Republic, France, Germany, Greece, Hungary, Italy, Netherlands, Poland, Spain, Sweden and the UK – and by the EU itself including the EU budget, the European Investment Bank (EIB), the European Fund for Strategic Investments (EFSI), the European Bank for Reconstruction and Development (EBRD), per year in between 2014 and 2016.