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UPDATE 1-Worried by climate change, EU moves to end fossil fuel funding

Reuters | Updated: 08-11-2019 21:38 IST | Created: 08-11-2019 21:29 IST
UPDATE 1-Worried by climate change, EU moves to end fossil fuel funding

The European Union should phase out its funding of oil, gas and coal projects, EU finance ministers said in a joint statement on Friday, in a move that could mark a major shift in the bloc's efforts to combat climate change. It is the first time EU finance ministers have backed a declaration urging an end to fossil fuels funding altogether, having called previously only for an end to funding for coal power plants.

An outright phase-out could halt multi-billion-euro financing of fossil fuel projects by the European Investment Bank (EIB), the EU's financial arm. Last year, the EIB funded nearly 2 billion euros ($2.10 billion) of fossil fuel projects. Since 2013, such funding has amounted to 13.4 billion euros, EIB data show.

However, gas projects in Ukraine, Croatia, and other EU partners might still be funded after Hungary pushed for a waiver, fearing those countries would otherwise need to rely on Russia, confidential documents seen by Reuters show.

EU FUNDING

Despite being a top financier of worldwide projects aimed at tackling global warming, the EU is ironically also funding fossil fuels, as many of its 28 member states back gas projects to reduce their reliance on nuclear energy or coal. But EU ministers on Friday in a joint statement called on the EIB and other global financial bodies, such as the World Bank, "to phase out financing of fossil fuel projects, in particular those using solid fossil fuels, taking into account the sustainable development, and energy needs, including energy security, of partner countries."

The political declaration needs to be backed up by a formal decision by the EIB board, which is composed of representatives of the 28 EU states. An EIB decision on stopping fossil fuels funding from beyond next year was expected last month but was postponed due to divisions within the bloc as some countries, including Germany, Italy, and Poland, wanted gas funding to continue.

The EIB board will hold a meeting on November 14 where its policy on fossil fuels is on the agenda, EU officials said.

Also Read: Chile's Pinera fires interior, finance ministers amid unrest


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