The European Investment Bank wants to stop funding new fossil fuel-reliant projects by the end of 2020, a draft of the EU lending arm’s new energy strategy showed on Friday.
The development bank proposed phasing out support to energy projects that were “reliant on fossil fuels: oil and gas production, infrastructure primarily dedicated to natural gas, power generation or heat-based on fossil fuels.”
“These types of projects will not be presented for approval to the EIB Board beyond the end of 2020,” the proposals said.
The EIB board, which is made up mostly of EU finance ministers, is expected to discuss the proposals at a meeting in September, though a final decision could take longer.
Resistance could potentially come from coal-reliant eastern European Union members or countries such as Italy where the EIB is helping fund the Trans-Adriatic Pipeline for gas.
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“This long-term transition (to greener energy sources) is profound. Solidarity is required to ensure that potentially vulnerable groups or regions are supported,” the EIB proposal document said.
The bank said it would provide extra support to those member states or regions with “a more challenging transition path”.
Incoming President the European Commission, Ursula Gertrud von der Leyen, has called for the EIB to spend half of the roughly 70-80 billion euros-a-year it invests on green projects, suggesting turning parts of it into a “climate bank”.
The EIB estimates that under 5% of its lending currently goes on fossil fuel projects. According to non-governmental group CEE Bankwatch Network it spent 12 billion euros ($13 billion) in the area between 2013 and 2017.
“The bank’s board must now approve the plan without delay,” Greenpeace EU tweeted.
Xavier Sol, Director of NGO Counter Balance which campaigned for the move with 70 NGOs, think tanks and academics at an EIB meeting at its Luxembourg headquarters in June added it was “very good news.”