The European Investment Bank (EIB) has announced it will stop financing for fossil fuel energy projects, after its board reached agreement on a new energy lending policy following a meeting on Thursday.
"Climate is the top issue on the political agenda of our time," Werner Hoyer, the EIB's president, said in a statement. "Scientists estimate that we are currently heading for 3-4°C of temperature increase by the end of the century," he added. "If that happens, large portions of our planet will become uninhabitable, with disastrous consequences for people around the world."
The European Union's (EU) lending arm, the EIB describes itself as the world's "biggest multilateral financial institution." Its shareholders are the EU's 28 member states, and its headquarters are in Luxembourg.
"Following a long discussion we have reached a compromise to end the financing by the EU Bank of unabated fossil fuel projects, including gas, from the end of 2021," Andrew McDowell, the EIB's vice-president in charge of energy, said.
According to EIB figures, funding for fossil fuel projects amounts to 13.4 billion euros ($14.78 billion) since 2013. Almost 2 billion euros of fossil fuel projects were funded by the EIB in 2018.
Under draft plans released in July, the EIB had proposed phasing out support for fossil fuel projects "by the end of 2020." According to Reuters, a decision regarding fossil fuels and funding had been slated for October, but was put back due to a number of countries wanting funding for gas to carry on.
The EIB said Thursday that it was also setting a new emissions performance standard for projects. This will be 250 grams of carbon dioxide per kilowatt hour. It will replace the 550 grams of carbon dioxide per kilowatt hour that is currently being used.