After seeing a massive boost for climate action and sustainability from the world’s finance sector during this year’s UN Climate Summit, the EU’s financing department has recently taken it one step further by adopting a new, game-changing energy lending policy.
The European Investment Bank (EIB) – the world’s development bank – has recently announced that it will stop funding fossil fuel energy projects by the end of 2021, representing a major shift of public finance towards clean energy projects.
The bank’s new energy lending policy was approved with “overwhelming” support and will bar most fossil fuel projects, including those that employ the traditional use of natural gas. Under the new policy, energy projects applying for EIB funding will need to show they can produce one kilowatt-hour of energy while emitting less than 250g of carbon dioxide, a move that bans traditional gas-burning power plants.
The new policy represents a major win in the fight against climate change and sets a new bar for what it means for a multilateral bank to be aligned with the Paris Agreement.
