A new report from CEE Bankwatch Network has found that the energy sector lending of the European Union's bank, the European Investment Bank (EIB), is not contributing to EU efforts to pledge a credible 20 percent cut in greenhouse gas emissions at the upcoming UN climate conference in Copenhagen. [1]

The report - 'Change the lending, not the climate' - reveals that between 2002 and 2008 the EIB loaned EUR 18 billion in support of oil, gas and coal projects. It also identifies that the small rise in the EIB's renewable energy investments since 2006 has been largely nullified in climate terms by a sharper rise since 2006 in the bank's loans for gas power plants, pipelines and liquified natural gas terminals.

While the EIB’s still incomplete energy lending record in 2009 is shaping up to be more favourable for renewable investments, the carbon footprint of past and current EIB loans persists in undermining EU climate and energy targets, according to the public funder watchdog group.

Katerina Husova, Climate coordinator at Bankwatch and co-author of the report, said: “Our analysis presents a stark picture of EIB energy lending from 2002 up to the end of last year. On average since 2002, for every million spent on renewables, the EIB has provided 3.3 million to oil, gas, coal, nuclear or large hydro.

“This massive ongoing support for fossil fuels and unsustainable energy sources from the pockets of EU taxpayers seriously hampers EU efforts at the global climate negotiations in Copenhagen next week. While the EU attempts to position itself as a climate leader, it has not yet been able to present a credible position on taking sharp and rapid domestic cuts in GHG emissions. The 20 percent target, potentially increased to 30 percent under unclear conditions, is still well short of the scientific requirements and assumes a heavy supply of credits coming from reductions to be achieved in developing countries.

“The EU is asking developing countries to show their mitigation plans, but is still unable to get its own backyard clean. Yet the EU has at its disposal the lending power of the EIB. There has never been a more opportune moment to move the EIB onto a renewables and energy efficiency only path."

Drawing on analysis of all the publicly available data on the EIB's energy lending for 2002-2008, the report also describes the difficulties involved in analysing the EIB's lending for energy efficiency measures. The EIB does not provide solid data on its energy efficiency lending even though it is widely recognised as the prime economic, anti-crisis and energy security measure, especially in the central and eastern European region where the potential for reducing energy wastage is the highest in the EU.

Katerina Husova said: “The bulk of the EIB's climate-friendly energy lending tends to concentrate on the EU's core old member states, while so far we have seen only small amounts going to renewable and efficiency loans in the new member states and even smaller, if any, climate-proof investments as part of EIB lending outside the EU.