EIB to halt funding for coal-fired power plants
The European Investment Bank is to stop lending to power plants that use fossil fuels as it bids to help Europe reduce emissions and meet key climate change targets
The Bank stated this week that new and refurbished coal-fired power plants will not be eligible for financing options unless they reduce their emissions to below a 550 grams of carbon dioxide per kilowatt-hour (gCO2/kW) threshold and they are actively encouraging the use of biomass in power generation.
Mihai Tanasescu, EIB vice president, said: "Adoption of the new lending criteria represents an important step forward in the European Investment Bank's commitment to energy investment that supports EU policy and reflects the urgent investment challenges currently facing the energy sector,"
The Bank also addressed the possibility of tightening emissions standard in the future to ensure its criteria are consistent and in line with EU climate policy.
The decision follows moves by other key financial institutions such as the World Bank to fund coal-fired power stations only in exceptional circumstances.
Since the start of 2007, the Bank has loaned approximately €11 billion to fossil fuel-fired plants out of its total lending for power of €83 billion.
An emissions cap of 450g/kW would mean that older, inefficient gas plants would also not be eligible for funding. The cap would have to be 150g/kW to force all gas plants to deploy largely unproven carbon capture and storage technology.
Berber Verpoest, co-ordinator of EIB pressure group Counter Balance said: "Despite the introduction of stronger emissions standards, the EIB keeps the door open to all fossil fuels including the possible financing of shale gas and also makes it easier to lend to large dams with negative social and environmental effects. More can and should be expected from a self-declared climate champion."
According to some observers at the meeting, Germany's director on the EIB board, which is made up representatives of EU member states and the European commission, had urged that the bank should continue to finance coal-fired projects but was outnumbered.
Germany relies on coal and lignite for around 45 per cent of its power generation as it speeds up the shutdown of its nuclear power stations by early in the 2020s in the aftermath of 2011 Fukushima nuclear disaster in Japan.