The European Union’s investment arm said Thursday it will stop funding fossil fuel projects from 2022 as part of a new strategy aimed at fighting climate change, in a decision environmental campaigners hailed as a “significant victory”.
The European Investment Bank, the world’s largest multilateral lender, had been criticised by climate groups for funding gas projects that potentially threatened the EU’s commitment to the Paris climate goals.
But despite gas proving a potential sticking point, the EIB’s board of directors -- composed of state representatives and the European Commission -- approved the new energy policy on Thursday.
“We will stop financing fossil fuels, and we will launch the most ambitious climate investment strategy of any public financial institution anywhere,” EIB President Werner Hoyer said in a statement.
The EIB said the new energy plan would also “unlock” one trillion euros ($1.1 trillion) of climate action and environmentally sustainable investment over the next decade.
The decision comes after European Commission president-elect Ursula von der Leyen called for the EIB to turn into a “Climate Bank”.
French Economy Minister Bruno Le Maire said it was “a landmark decision” that confirmed the EU had “financial means to match its climate ambitions”.
Many environmental activists welcomed the bank’s move.
“Today’s decision is a significant victory for the climate movement,” Colin Roche, fossil-free campaigner at Friends of the Earth Europe.
“Finally, the world’s largest public bank has bowed to public pressure and recognised that funding for all fossil fuels must end -- and now all other banks, public and private must follow their lead.” Markus Trilling of the Climate Action Network said it was “a clear call for all EU funds to follow suit and rule out all activities that worsen climate change from funding possibilities”.
The EIB has been criticised for dragging its feet on gas investments, after providing 2.5 billion euros for fossil fuel projects last year, the bulk of which went towards gas pipelines.
Andrew McDowell, EIB vice president in charge of energy, said that the decision came after the lender’s “largest ever public consultation”.
“This is aligning our energy-lending strategy with the EU policy ambitions, the EU climate and energy targets by 2030 as well as the requirement of the Paris accord,” he said in a conference call.
The 2015 Paris climate deal saw the EU join world nations in committing to limit global temperature rises to “well below” two degrees Celsius and to a 1.5C cap if possible.