The European Investment Bank should withdraw from gas investments

The countries of the European Union will soon be taking a decision on the EIB's energy policy. Banks often see the creation of money by providing credit as a politically neutral instrument to serve and support the economy, and therefore it would normally not be a logical step for the EIB itself to be at the center of a political debate on energy policy. But the bank has an important role to play in the European solutions to the climate crisis. The EIB's energy strategy does in fact matter in achieving the climate targets agreed upon internationally in Paris.

Gas is fossil too

After years of political and public pressure, the EIB has already largely stopped investing in coal and oil, and that is an important step. But from 2013 onwards, the EIB still invested EUR 14.2 billion in gas projects. The majority of this money was allocated to the construction of pipelines. Gas is often seen as a renewable energy source, while it is by no means. Although burning gas produces fewer emissions than burning coal, the EU will certainly not achieve its climate goals within the agreed time if it keeps focusing on gas.

For the climate it is crucial that the use of gas as an energy source stops completely and as soon as possible and therefore Both ENDS believes that the EIB should no longer invest in gas projects. Even EIB's Vice President Andrew McDowell recently told Radio Luxembourg that the story of gas as a "clean transition energy source" needs further consideration.

The Netherlands must convince other countries

This is the first time that someone from the Bank - which was financing a gas pipeline just two years ago to bring gas from Azerbaijan to the EU – dares to make such a statement. Based on the talks that are being held this month by the European countries within the EIB about the Bank's new energy strategy, the Netherlands seems to be taking this position too. Our country could urge other EU-countries to take the same position, although the question is how. 

The European Investment Bank is a European institution, but the individual countries are shareholders. Until now, the countries are rather divided among themselves about the use of fossil energy as an energy source and about the period within which this should be phased out. Some countries want to keep access to EIB financing for gas and a country like Poland is not even ready to phase out coal extraction and use.

The most virtuous boy in the classroom

The position of the Netherlands is, however, rather surprising because in a recent past our country made eager use of EIB money to become the 'gas roundabout' of Europe, to enable trade and storage of foreign gas. For example, the EIB has invested in the LNG terminal on Rotterdam's Maasvlakte and in the Gasunie distribution network. This fact may make it more difficult for the Netherlands to convince other countries that the EIB should stop investing in gas, because it could seem opportunistic. After all, the Netherlands already has what it wanted, and would now suddenly pretend to be the most virtuous boy in the classroom. 

From an environmental point of view, it is of course good to support the Netherlands in its position that the bank should no longer invest in gas, regardless of the underlying motives. In this process, it is important to interact diplomatically with other countries and to work together with other progressive countries such as Sweden.

European Commission has a role to play

In addition, the new European Commission might play a key role. The Commission itself is on the Bank's board and works with a list of possible energy projects to be subsidized, helping Europe to be sustainable. The Commission therefore has the power to exclude gas projects from this list. It can also exclude gas projects for EU guarantees on EIB loans and monitor EIB compliance with the Paris agreement.
The European Parliament also has a role to play, because the investments that the EIB makes outside Europe fall under the EU's foreign policy, in which the European Parliament has a say. In that role, the European Parliament can also address and question the European Commission about EIB investments. 

Decision making within the EIB is a public matter

Yet decision-making could be even more democratic. Topics such as the EIB's energy and climate strategy have been closed behind closed doors, while it concerns public money for projects that are directly related to European policy. It would therefore be logical to make these negotiations transparent and to move them to the democratic domain of the European Parliament.