Tuesday, 26 February 2019
Department of Finance
European Investment Bank Loans
112. To ask the Minister for Finance if Ireland, through its appointed director to the European Investment Bank, will support the cessation of lending to fossil fuel projects through the new energy lending policy of the bank in 2019 in view of commitments (details supplied); and if he will make a statement on the matter. [9151/19]
On 10 January of 2019, the European Investment Bank launched a three-month public consultation to develop a new Energy Lending Policy that supports EU 2030 energy policy and climate targets. During this consultation period, the EIB will engage with a wide range of stakeholders, including shareholders, industry associations, civil society and the private sector. The EIB held a consultation meeting yesterday (25 February) in Brussels to engage directly with all stakeholders interested in a direct exchange with the Bank about the review. I understand that written contributions on the consultation document can be sent to the Bank before a deadline of 29 March.
The new Energy Lending Policy is expected to come before the EIB Board of Directors for approval during this coming Autumn. In advance of this, it is not possible to pre-empt the outcome of the consultation process or Board discussions with regard to the Bank’s stance on funding fossil fuel projects under its new Energy Lending Policy.
The Bank’s existing approach towards supporting the energy sector is set out in its Energy Lending Criteria (ELC) which was adopted in 2013. As part of the ELC, the Bank introduced an Emissions Performance Standard (EPS) – a safeguard designed to ensure that the Bank only supports plants that contribute to reducing average emission levels. While the ELC notes that “the current and, in all likelihood, future EU energy policy does not prohibit the construction of any new fossil fuel fired power stations”, the Bank’s use of the EPS effectively rules out the possibility of financing of new coal or lignite fired power stations and potentially other fossil fuel power stations. A recent evaluation of the current policy therefore concluded that the ELC and, particularly, the application of the EIB EPS, has resulted in the Lending Criteria being more stringent than wider EU Energy Policy.
Under the ELC, fossil fuel related projects are only considered by the EIB in exceptional circumstances. Projects which contribute to the security of supply of isolated energy systems such as small islands with no feasible mainland energy connection and only where there is no economically viable alternative, or in the poorest countries outside the EU where it can be demonstrated that projects with carbon emissions above the threshold will have a significant and material positive impact on poverty alleviation and economic development would define such rare cases.
Ireland’s position on the new energy lending policy in the EIB will be guided by Government policy in relation to climate change and energy.