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In July, as she was struggling to gain confirmation from the European Parliament, Ursula Von Der Leyen made a series of green promises to win over the votes of green and socialist lawmakers. One of those promises was to embrace an idea first floated by French president Emmanuel Macron to launch a vehicle for dedicated lending for the fight against climate change.
But two months on, the incoming EU Commission President has yet to start her job. Though she was meant to be taking office on 1 November, difficulties in getting her cabinet of 26 commissioners confirmed means that her start date will be delayed until December at the earliest, and possibly longer.
In the mean time, Jean-Claude Juncker will remain president - and he seems far less enthusiastic about the green bank idea.
Von Der Leyen’s idea is to turn the European Investment Bank, the EU’s lending arm and the world’s largest multilateral development bank, into a “climate bank” to fund projects designed to get the EU to its goal of decabonizing by 2050.
Shortly after Von der Leyen’s promise, the EU lending bank proposed to end all its funding for fossil fuels by 2021. However, the proposal for a full fossil fuel phase-out has not been backed by the Juncker administration. “It was undermined by parts of the Juncker Commission and countries like Germany and Hungary,” said Sébastien Godinot, an economist at the WWF European policy office.
“They wanted gas power – a fossil fuel which is incompatible with a net zero emissions future – to remain eligible for EU public money,” he wrote on the Brussels website Euractiv. “So the EIB issued a new energy lending proposal. This one contains a list of gas projects for funding. It also contains loopholes for other gas projects to carry on being financed.”
The EIB’s board was due to vote on the new proposal today, but this has been postponed, an official said. The board is made up mostly of national finance ministers from EU countries - including countries heavily dependent on coal and has such as Germany. Other countries pushing for the bank to continue investing in gas include Poland and Italy.
Energy companies say gas, a fuel with far lower carbon emissions than coal and oil, will have an essential role to play in Europe’s energy mix as the bloc transitions towards renewable energy - acting as a “bridge fuel” to guarantee power amid intermittent renewables supply.
It is unclear when the EIB board will revisit the proposal.
Climate activists worry that the delay to Von Der Leyen taking office will mean a loss of political pressure on the bank to adopt a full fossil fuel phase out as she promised. The Juncker administration lacks the political capital to push the plan through, they say, and in any event seem uninterested in doing so.
“The new proposal is an attempt by the gas lobbies, via the European Commission, to syphon money away from the renewable technologies which threaten their future,” said Godinot. “If it is adopted, the gas lobby will have succeeded in slowing the EU’s progress towards a sustainable, climate neutral future.”
In 2018 President Juncker unveiled a new “green label” for energy investment, which would certify that they are part of a transition to green energy.
