The European Investment Bank has been accused of funding the fossil fuel industry with €16 billion of loans since 2007, more than that stumped up for any other energy source.
According to numbers crunched by the environmental pressure group Bankwatch in a report published today (8 December), in the same period, renewables received €13 billion of funding, and transmission lines €12.6 billion.
“Such considerable support for fossil fuels undermines the EU climate goals which the EIB is supposed to promote, according to its mission,” Piotr Trzaskowski, one of the report's authors, told EURACTIV.
The EIB has a mandate to fund coal and gas projects – specifically where an emissions reduction additional to that which would have happened anyway can be demonstrated – but Bankwatch says the bank has interpreted this imperative increasingly liberally.
Between 2007 and 2011, the Bankwatch report found that the EIB’s energy investments in fossil fuels actually increased from €2.8 billion to €5 billion.
The EIB replied saying it does not understand how how Bankwatch came to that conclusion. "We’re not quite sure how they arrived at these figures," EIB spokesman Nicholas Antonovics told EURACTIV.
“When Bankwatch talk about ‘fossil fuels’ they are mainly referring to EIB support for gas infrastructure and power stations,” he said.
It would have been more “illustrative” to look at the number of EIB projects financed, he argued, as they demonstrated a greater allocation of staff resources to renewables and electricity projects.
Slimmer support for alternative energy
But while the EIB figures he provided disputed the specific Bankwatch numbers, they also confirmed the group's core finding: that since a new energy policy was adopted in 2007, more EIB lending had gone to gas, oil and coal than to renewables, albeit with slimmer margins.
Fossil fuel fields, power stations and infrastructure received €15 billion compared to €14.8 billion for renewables, the EIB figures show.
Trzaskowski acknowledged that EIB lending for renewables had increased but “the positive impact of renewables loans is largely jeopardised by the massive – and growing – investments in fossil fuels made by the bank in the same period,” he said.
The €1.8 billion the EIB says it lent to coal and lignite power stations represented one of the lowest sectoral figures, but included controversial projects such as the Sostanj plant in Slovenia.
Auto industry investments are another contested lending area singled out by Bankwatch in their report.
Almost three quarters of the EIB’s €9.4 billion research funds between 2008 and 2010 were “consumed” by grants to help the car industry meet mandatory EU targets – rather than innovative clean technology investments, according to the Prague-based organisation's report, ‘Carbon Rising’.
The EIB maintains that all car finance under the ECTF (European Climate Transport Facility) had “an element of electric mobility” involved.
But according to the Bankwatch database, which EURACTIV has seen, €450 million in EIB loans went to electric car development in 2010, compared with €2.99 billion of loans to the automobile sector as a whole.
In 2008 and 2009, the figures were equally stark with €800 million in loans for electric car development, compared to €3.9 billion for the automotive sector.
“The degree to which one can call a project truly innovative is subjective,” Antonovics said. “We are confident at least a quarter of ECTF projects can be classified in this way.”
The ECTF mission statement says that its money should be targeted on “innovation in the areas of emissions reduction and energy efficiency in the European transport industry.”
It forms the pool from which the bank’s research and development funds are drawn.
But the €9.4 billion figure represents 20% of the bank’s overall €47 billion budget and the investments were “the equivalent of the US bailout for the American car industry at the time of its breakdown in 2008,” the report claims.
The only difference was that “in Europe it was dressed up in a ‘green’ suit,” it says.
The EIB denies the “bail-out” charge, claiming lending was linked to emissions reductions by car manufacturers. These are mandated under EU fuel efficiency legislation.
But Antonovics conceded that the car industry had warned that their research budgets would have been cut without the monies.
“This would have meant Europe lost highly skilled jobs in the middle of a recession and the new more efficient engine technologies now being brought to market would have arrived later, with a corresponding negative knock-on effect on emissions,” he said.
Bankwatch, though, argues that the EIB has departed from its mandate in being ‘demand’ rather than ‘policy’-driven.
“The EIB is an EU institution whose mission is to further the long-term objectives of the European Union,” Anna Roggenbuck, the EIB coordinator for Bankwatch, said. “It is indeed an EU policy goal to lower engine emissions but these loans were merely for complying with current legislation.”