BankWatch urges ERBD to stop investing in fossil fuels – Released
BankWatch, a network of organizations that monitors international public finances in Central and Eastern Europe, released a report urging the European Bank for Reconstruction and Development (ERBD) to divest from fossil fuel projects, including natural gas and oil.
According to BankWatch, the ERBD, which aims to support the private sector in the region covered by BankWatch, has the potential to promote investments in sustainable and renewable energy, while supporting the economies of countries in transition and setting the standard. on how public financial institutions should support decarburization towards a zero carbon economy.
The BankWatch Report analysis how the EBRD’s energy-related projects from 2014 to 2020 failed to send a clear message to the countries it supports that their own initiatives should aim to align with the energy sector strategy of the Bank of the Paris Agreement (2019-2023). Instead, the ERBD is repeating its past irreversible mistakes, allowing fossil gas investments to continue, the report says.
While BankWatch points out that the EBRD has steadily increased its investments in renewable energy sources in recent years, it also notes that their efforts so far are not sufficient to make a significant contribution to mitigating change. climate. Neither do they lead to the long-lasting and sustainable adaptation of these green investments in its countries of operation.
Over the past six years, the EBRD has invested more in fossil fuels than in renewables. In 2020, more than 70% of fossil fuel funding went to large national coal and gas companies.
The report is firm in its recommendation that the EBRD stop funding new oil and gas projects; divest companies that hold coal, oil or gas assets; demand decarburization plans as a condition of investing in companies that depend on fossil fuels; and exclude support for large-scale forest biomass.
In addition, BankWatch also calls on the EBRD to focus on the economic stability and environmental health of the communities it supports, ensuring that projects comply with EBRD environmental and social policy and EU law. EU.
Mentioning Albania, the Bankwatch report noted that there are entire regions like the “Western Balkans where traditionally gas has not been used much – Albania, Kosovo and Montenegro currently have no access or limited access to gas ”.
Pushing investment in gas means investing in extremely expensive infrastructure, in some cases starting from scratch, all along the demand chain (transnational transport and distribution pipelines, gas boiler installations), resulting in the blocking of assets that would lock these countries into another dependence on fossil fuels, as well as dependence on imports.
The lifespan of these projects is at least 30 years, and on top of that there are usually delays in planning and construction (on average five to ten years at EU level). This would delay the transition to a zero carbon economy, as investing in gas slows the uptake of renewables, once again demonstrating the lack of vision and planning for a common and sustainable future for developing countries.
Meanwhile, in May, a Dutch court ordered oil and gas giant Shell to cut emissions by nearly half by 2030, holding the company responsible for climate change. Shell also found itself in hot water in Albania when it discovered it was searching for oil around the Vjosa River in southern Albania, despite claims it had not yet carried out any drilling. Still, photos of Block 4 show machinery and areas of land that have been disturbed as part of the work in progress.
Given the Dutch ruling, the BankWatch report and Albania’s binding signature on the Paris Agreement, an investment from Shell could lead to long-term problems for the country, both legally and environmentally. .