In a game changing development, the world's largest financial lending institutions are saying "no" to coal. Coming on the heels of the World Bank's decision to end funding for coal projects except in rare circumstances, and President Obama's commitment to end financing for oversees coal projects with public funds, the European Investment Bank (EIB) announced it will end virtually all funding for new and refurbished coal plants. EIB is setting a high bar by implementing the first Emissions Performance Standard at a public bank, which will be set at 550gCO2/kWh -- a standard carbon intensive coal plants cannot meet.
EIB's decision puts further pressure on the European Bank for Reconstruction Development (EBRD) to follow the World Bank and EIB's lead and end funding for coal projects in its new energy strategy. Together, the World Bank, EIB and EBRD can send a strong message to the world that dirty coal technology is outdated and it is time to protect the health of communities by moving beyond coal. What’s more, their support for the booming clean energy sector has the potential to reduce energy poverty in areas large fossil fuel projects have failed to reach.
By "prioritizing lending to energy efficiency, renewable energy, energy networks and energy RDI projects," EIB will "help EU to meet its energy and climate objectives and create local employment across Europe," explains EIB Vice President Mihai Tanasescu.
Yet while there is much to celebrate in EIB's announcement, only the implementation of the new policy will truly determine its effectiveness. We remain concerned that some language, such as provisions for the "security of (energy) supply" in the EU, could be exploited to channel funding towards unnecessary coal projects. Moreover, the EPS leaves the door wide open for dangerous gas development. While we will continue to work with EIB to ensure that its Emissions Performance Standard lives up to its historic potential to help us move beyond dirty coal, the decision is yet another clear signal that public financial institutions are finally shutting the door on coal.
- Chris Chaulk, Sierra Club International Campaign Intern