The European Parliament Committees have approved a 40 per cent target for climate-based projects seeking support from the European Fund for Strategic Investments
The European Parliament Committees on Budgets and on Economic and Monetary Affairs have thrown their support behind climate action. The committees voted on a proposed extension of the European Fund for Strategic Investments (EFSI), as well as the opening of inter-institutional negotiations.
The vote, which took place on 15 May in Strasbourg, saw the committees endorse a 40 per cent target on climate action. Furthermore the EFSI steering board was given the power to develop a climate test. Climate Action Network (CAN) Europe said this would require eligible projects and the overall EFSI portfolio to pass.
The extension of the EFSI until 2020 was suggested in September 2016. It would see the fund run two and a half years beyond the initial term set out and would aim to leverage €500bn in additional investments. Within the proposal were some positive provisions for climate action. This included a 40 per cent target for climate-based projects. However, it still allows for the financing of fossil fuel infrastructure.
CAN Europe Finance and Subsidies Policy Coordinator Markus Trilling said: “By introducing a climate proofing tool for the entire EFSI the European Parliament finally acknowledges the obligations stemming from the Paris Climate Agreement, namely to shift financial flows and investments in order limit climate change to 1.5C.
“However, the European Parliament missed out on the most straightforward way to achieve compliance with the climate protection requirements, namely to ban fossil fuel subsidies.
“Now it is on the Steering Board to develop and, even more important, to enforce climate impact assessment tools which guarantee the EFSI is fit for future and contributes to catalyse the low-carbon and clean energy transition.”
Anna Roggenbuck, Policy Officer at CEE Bankwatch Network said the EFSI had a disappointing record when it came to climate action in 2016 and said the 40 per cent target was a necessary step.
“Perhaps this will finally give the Fund a boost to direct financial guarantees towards this type of investments. We hope that this will also be an incentive for financing renewables and energy efficiency projects in countries where so far EFSI has not been utilized,” she said.
However, senior economist at WWF European Policy Office Sébastien Godinot said MEPs had not gone far enough.
In a press release he said: “The Juncker plan should be used for climate action, not for climate destruction. With [the] vote, the European Parliament has proved useless on climate change: they rejected a target for energy efficiency projects while maintaining support for fossil fuel projects incompatible with the Paris climate agreement they loudly supported.
“EU institutions must wake up to the new reality of the Paris Agreement, and understand that it means putting an end to fossil fuel support. Haemorrhaging piles of public cash in unsustainable projects like gas infrastructure while the EU gas consumption is going down is absolutely nonsense,” he added.