The European Investment Bank (EIB) has adopted new lending guidelines to prevent it financing carbon intensive coal- and gas-fired electricity plants
Following a review of its lending criteria, the EIB has introduced an emissions performance standard for all fossil-fuelled generation projects applying for funding.
Under the new standard the EIB will not provide loans to coal- or gas-powered stations that produce more than 550g of carbon dioxide per kWh of electricity.
With unabated coal-fired plants generating about 850gCO2/kWh, the change in rules will effectively rule out EIB funding for coal generation projects, unless plants co-fire with biomass or adopt emissions reduction technologies, such as combined power and heat or carbon capture and storage.
The EIB’s 550gCO2/kWh limit is 100gCO2/kWh more than the emissions performance standard for UK fossil-fuelled stations proposed in the government’s Energy Bill. However, the EIB confirms that its standard could be tightened in future and will be reviewed in 2014.
The emissions performance standard was adopted this week as a part of the EIB’s new lending criteria for energy projects, which are aimed at ensuring the bank is supporting EU policies on low-carbon energy and climate change.
Changes to the bank’s lending critieria include simpler guidelines on lending for energy efficiency projects to enhance co-financing of national energy efficiency programmes, such as the green deal, and increased funding for “near-zero energy” buildings.
The EIB, which last year lent €4 billion to the energy sector, confirmed it will prioritise financing energy efficiency, renewable technologies and energy network projects in future.
“The new lending criteria represent an important step forward in the EIB’s commitment to energy investment that supports EU policy and reflects the urgent investment challenges,” confirmed Mihai Tanasescu, EIB vice-president responsible for energy lending. “The new emissions performance standard will ensure that the bank’s energy lending makes a sustainable and positive contribution to economic growth.”
