Published by Oil Change International
The European Investment Bank (EIB), the world’s largest multilateral lender, is currently reviewing its Energy Lending Policy. As the financial arm of the EU, the EIB has a mandate to act in the public interest. Despite this, the EIB continues to invest heavily in gas infrastructure.
Building new, long-lived fossil gas infrastructure that will expand or lock in extraction is inconsistent with the climate goals in the Paris Agreement: Just the oil, gas, and coal reserves in already-operating fields and mines would exceed the Paris Agreement’s limits. Put another way, even optimistic scenarios for a 1.5°C-compatible pathway show there is no room for gas to grow if we are to have a safe climate future.
The EIB and industry actors have used many arguments to justify continued fossil gas finance in the EU, all of which run counter to the well-established research on fossil and non-fossil gas that we review in this briefing.
This briefing finds:
- Fossil gas cannot act as a “bridge” fuel because further development of gas reserves is incompatible with carbon budget limits and more effective and affordable renewable alternatives already exist.
- The various kinds of non-fossil gas are limited in their potential to be fully decarbonised, technologically feasible, and cost-effective. This means they are suited to play a limited, medium-term role in decarbonising hard-to-electrify sectors like heavy industry, as opposed to being deployed for mass distribution.
- Carbon capture and storage (CCS) technologies that the arguments for fossil and non-fossil gas expansion rely on remain unproven at scale and prohibitively costly.
- None of the European Commission’s climate action scenarios anticipate an expanded role for gaseous energy carriers.
- The vast majority of investment associated with the EU Projects of Common Interest (PCI) list is for projects directly tied to upstream fossil gas sources, making PCIs exceedingly unlikely to be usable as non-fossil gas carriers in future.
There is no room for further financing of fossil gas or any other fossil fuel projects by the EIB. This briefing calls for the new Energy Lending Policy to reflect this reality. The EIB cannot claim to uphold its commitment to align its finance with the Paris Agreement if it continues to finance fossil gas projects.