FOR IMMEDIATE RELEASE
December 12, 2018
Alex Doukas, alex [at] priceofoil.org
Oil Change International Responds to Approval of the EBRD’s New Energy Sector Strategy
Today, the European Bank for Reconstruction and Development (EBRD) Board of Directors approved a new energy sector strategy. The new strategy has bearing on billions of dollars in public finance for energy.
In response to the new energy strategy, Alex Doukas, Program Director at Oil Change International, issued the following statement:
“Exactly one year ago today, the World Bank Group promised to stop financing oil and gas extraction. Unfortunately, the EBRD’s new energy sector strategy falls short of this minimum standard set by the World Bank. The Bank has instead embraced fossil gas, even though gas is much too polluting to help in the fight against climate change. Science tells us we must act urgently and with boldness, yet the EBRD’s new strategy is a timid effort in the face of rapidly mounting climate impacts.
“This is a real missed opportunity, especially since even the financial sector sees which way the wind is blowing on energy investments. Just last week, investors with over $32 trillion in assets called for an end to public finance and subsidies for fossil fuels.
“The strategy does end the EBRD’s involvement in upstream oil, and will completely end the EBRD’s direct finance for coal-fired power projects. But the EBRD hasn’t directly financed a new coal plant since its previous energy strategy in 2013, and most of the EBRD’s recent fossil fuel finance is for fossil gas – which makes the new commitments ring hollow.
“Today’s new strategy also doesn’t commit the EBRD to moving away from indirect financing of coal, even though the private sector arm of the World Bank, the IFC, has moved in this direction. This means that even on coal, the EBRD is lagging behind some standards set by the World Bank.
“The new energy sector strategy comes the week after the multilateral development banks (MDBs) – including the EBRD – made a joint commitment to align their finance with the climate change mitigation goals of the Paris Agreement on climate change, in a process that will culminate at the end of 2019. If MDBs follow through on this commitment, we would expect the EBRD’s brand-new strategy to be obsolete within a year, given what will be required to truly align with the Paris Agreement ambition to limit warming to 1.5°C.”
Notes to Editors:
- The EBRD’s new energy sector strategy can be found here.
- On September 26, 2018, civil society released a letter signed by 65 organizations calling on the EBRD to end its financing for oil, gas, and coal, and to increase its ambition.
- In December 2017 at the One Planet Summit in Paris and again at COP24 in Katowice, the EBRD committed to aligning its finance with the aims of the Paris Agreement on climate change, in joint commitments with other multilateral development banks.
- Also at the One Planet Summit in December 2017, the World Bank Group committed to end financing for upstream oil and gas. And in October 2018, the head of the World Bank’s Group’s private sector arm, the International Finance Corporation, announced the IFC’s intention to push its financial intermediary partners away from coal in order to reduce indirect exposure to coal projects.
- Analysis indicates that expansion of fossil fuel production, including gas – and therefore public finance supporting the expansion of fossil fuel infrastructure that enables additional production – is incompatible with the aims of the Paris Agreement.