Last month, the European Investment Bank (EIB) presented its climate strategy and energy lending policy update, outlining concrete steps to achieve a financing culture that supports the transition to a low-carbon economy. Mainly focusing on climate, by 2021 the EIB will open finance streams directed at energy efficiency, decarbonization and divestment from unabated fossil fuels including gas. Investments allowing for clean technology in energy production and distribution are also part of EIB’s recently launched strategy, which aims to attract EUR 1 trillion of investment in environmentally sustainable activities between 2021 and 2030.
The EIB sets its standard for investments in low-carbon energy production at 250 g CO2e/kWh compared to the previous standard of 550g CO2e/kWh. In comparison, the EU technical expert group on sustainable finance set the threshold to classify energy production as green at 100g CO2e/kWh.
In recognition of the specific challenges faced by some countries, the EIB has committed a "Just Transition Fund" that will provide additional advisory and financial support and facilitate the transition to a new energy future for those with additional needs.
Meanwhile, the European Green Deal that was recently presented has a clear role for the EIB to provide support in spending the EU budget in a sufficiently green manner. The green financing strategy announced by the European Commission (planned for 2020) is expected to provide more clarity on how the EU budget will contribute to climate objectives and environmentally green investment.