EIB to stop financing coal-fired generation

• 10 years ago (2013-07-24)
• Junior Isles

Europe 1061 Renewables 752

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The EU's main lending arm, the European Investment Bank (EIB), has said it will cease financing coal-fired power generation in order to help the EU reduce pollution and meet its climate targets.

The EIB’s decision comes in the wake of the World Bank previously announcing it will fund coal-fired power stations only in "rare circumstances".

Only plants that emit less than 550 grams of carbon dioxide per kilowatt-hour (gCO2/kWh) will be eligible for funding, the EIB has said. This essentially excludes all coal fired generation other than biomass co-firing and combined heat and power plants.

An emissions cap of 450g/kWh would have blocked funding for older natural gas plants, and a 150g/kWh cap would have scuppered gas entirely, unless carbon capture and storage technology could be successfully commercialised.

The EIB has also indicated future tightening of emission standards was possible if changes were needed to keep consistent with EU climate and job creation policy.

"Adoption of the new lending criteria represents an important step forward in the European Investment Bank's commitment to energy investment that supports EU policy and reflects the urgent investment challenges currently facing the energy sector," Mihai Tanasescu, EIB vice president responsible for energy lending, said in a statement.

Since the start of 2007, the EIB has loaned around €11 billion ($14.5 billion), out of its total power lending of €83 billion, to fossil fuel-fired plants; most of which went to gas-fired generation.