The European Investment Bank won’t fund any gasoline tasks despite intense stress from African and different growing nations to reclassify gasoline to attract funding, the multilateral lender’s president has mentioned.
“We as a European public institution should not invest in assets that one day will be seen as stranded assets,” Werner Hoyer advised the Financial Times.
Gas is comprised primarily of methane that may leak throughout distribution, and traps extra warmth within the environment over a shorter interval than carbon from burning coal.
Instead of backing the concept of gasoline as a so-called transition gas from coal, which is the sturdy place of most African nations, the financial institution ought to take “the energy transition seriously and move to renewables”, mentioned Hoyer.
The EU’s lending arm, and the most important multilateral financial institution by property, pledged in 2019 to section out lending for all fossil gas tasks, together with mainstream gas-fired energy vegetation, by the top of 2021. The financial institution chief declared final 12 months that “gas is over” in presenting the EIB’s outcomes.
The EIB’s resolute anti-gas stance will most likely inflame tensions with African nations over what constitutes a “just” vitality transition.
Pravin Gordhan, South Africa’s minister of public enterprises, mentioned the hypocrisy of Europe’s place had been uncovered by its scramble for vitality after Russia lower off gasoline provides.
“Europe, which took the hardest line in terms of emissions, is now in trouble. It is keeping coal-fired power stations going and importing coal,” Gordhan mentioned. “How does the EIB reconcile its views with what European governments are doing?”
In July, European lawmakers authorised a legislation designating each gasoline and nuclear as sustainable vitality sources for funding functions. That designation is now being challenged by environmental marketing campaign teams, in addition to dealing with threats of authorized motion from nations led by Austria.
Hoyer acknowledged the hole between the European and African positions had widened, with what he described as doubtlessly “explosive” penalties. He mentioned the reply lay in additional fast expertise switch and funding for renewable vitality sources and biofuels, fairly than financing gasoline tasks.
New fossil gas tasks had been introduced as transitional, he mentioned, however had been usually “a perpetuation exercise for gas”.
The EIB president additionally mentioned “blue” hydrogen tasks — utilizing gas-fired vitality to provide hydrogen, paired with carbon seize expertise to entice emissions — wanted to be “scrutinised.” While some is perhaps a part of a “credible transition effort”. others could also be a strategy to lengthen the usage of fossil fuels.
Hoyer accused some nations of “hiding behind the war in Ukraine . . . because they do not seriously want to go into the energy transition and into renewables.”
Much of the fault lay with western nations, he conceded, as they’d didn’t “walk the talk” when it got here to serving to poorer nations. “When I hear heartwarming pledges towards a partnership-based approach between the north and the south . . . we must bring more substance to that.”
The EIB chief mentioned he had been disillusioned to see so few European representatives attend a summit of African leaders in Rotterdam this month to debate local weather change adaptation.
Felix Tshisekedi, president of the Democratic Republic of Congo, who attended the summit, mentioned: “I deplore the absence of the leaders of the industrialised nations and the private sector who are, as we know, the greatest polluters.”
Africa’s 54 nations have been answerable for solely about 2-3 per cent of cumulative carbon emissions from vitality and business, however are among the many worst affected by local weather change.
“On a per capita basis, Europe’s electricity consumption from fossil fuel is at least 25 times Nigeria’s consumption from all energy sources,” mentioned Aliyu Suleiman, chief of technique at Dangote Group, Nigeria’s largest conglomerate, who mentioned he was talking in a private capability.
“Pragmatically, some of this will have to come from natural gas,” he added. “Denying such funding for Africa is denying Africa the opportunity to grow its economy and improve standards of living for its citizens.”
Hoyer’s feedback got here as world leaders gathered in New York for the UN General Assembly, and weeks forward of November’s COP27 local weather summit in Egypt. Leaders of growing nations are anticipated to press wealthy nations at each conferences for monetary help for climate-related destruction, or “loss and damage” financing.
Western nations have traditionally been reluctant to debate the problem owing to considerations that it might be seen as compensation. But progress is predicted to be important to the success of COP27 and to restoring belief within the multilateral course of after wealthy nations didn’t ship on their promise to mobilise $100bn a 12 months in assist of growing nations by 2020.
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