Despite strong support from European Union finance ministers, it is too early to say whether the European Investment Bank (EIB) won its battle to end funding of fossil fuel projects, the bank’s president, Werner Hoyer, said on Monday. Hoyer said EU governments remained divided on the issue and a final decision was still to be made.
On Friday, EU finance ministers backed the EIB’s call to phase out its funding of gas, oil and coal projects to help combat climate change.
The EIB has sought approval to end its financing of fossil fuel projects starting in 2021. The annual costs of those projects have amounted since 2013 to about two billion euros ($2.2bn) – mostly spent on gas infrastructure.
At Friday’s meeting, discussions on climate finance were “very, very short”, Hoyer told a news conference in Luxembourg. “Everybody is waiting for how things are going to move on at the board of directors of the EIB this week.”
The board, comprised of officials from the 28 EU governments, is due to meet on Thursday.
A decision on the EIB’s funding of fossil fuels was expected last month but was postponed due to divisions within the bloc. Some countries, including Germany, Italy and Poland, want gas funding to continue.
Hoyer acknowledged that some EU countries were cautious about the plan because they want to protect jobs and energy security. He said the bank would focus on helping regions most hit by the transition.
He described the decision by EU finance ministers as “very encouraging and motivating”, but said the final decision was difficult to predict.
One possible compromise could be to extend the period during which some projects could be financed by the EIB after it stops funding fossil fuels, officials said.
The waiver could, for instance, be applied to cross-border gas pipelines, interconnectors and other energy projects the EU labels as priorities, they said.
Hoyer warned, however, that the bank was responsible to its investors. Putting money into fossil fuel projects that in a few years might be considered obsolete “makes no sense”, he said.
Regardless of the decision on fossil fuels, the EIB wants to increase the share of its lending to projects aimed at combating climate change, such as renewable energy. Currently, that share is 28 percent, which the bank hopes to increase it to about 50 percent.
That would equate to funding worth $1.1 trillion between 2021 and 2030, Hoyer said.