EBRD fresh plans show intent to pour more public money into coal

Brussels – In a draft mining strategy published yesterday, the European Bank for Reconstruction and Development (EBRD) made it clear that it intends to continue investing in the coal sector for years to come.(1) Supporting the coal sector with European public money is unacceptable, according to CEE Bankwatch Network, as it undermines the EU’s climate policy and the transition to a decarbonised European economy that the EU and the EBRD both claim to support.(2)

In its current formulation, (3) the EBRD’s mining strategy allows for new climate-damaging coal projects (4) and contributes to an energy market that still favours new polluting installations.

„Once coal is taken out of the ground, no technology can keep carbon from getting into the atmosphere, there is no point in deluding ourselves,” comments Ionut Apostol, Bankwatch EBRD coordinator. „Plus, coal plants built today will be pumping CO2 into the atmosphere for fifty years into the future, so putting money into coal plants now means making a complete mockery out of EU plans to decarbonise the European economy by the middle of this century.”

Between 2006-2010, the EBRD lent over 412 million euros for coal mining and combustion in its countries of operation, among them, Serbia, Slovenia, Poland, Mongolia and Kazakhstan.(5)

Climate change and the need for decarbonisation have moved up the political agenda recently. It is increasingly recognised, including in the EU Roadmap to a Low Carbon Economy and the EU Energy Roadmap to 2050, that an 80-95 percent reduction in greenhouse gas emissions is needed in the so-called ‘developed’ countries, with significant reductions needed elsewhere compared to a business as usual scenario. The EBRD mining strategy, in the form released yesterday, completely contradicts such targets.

„The European Commission and EU countries with a stake at the bank need to make sure that EBRD loans which should be in line with broad European objectives do not achieve the contrary result,” comments Apostol. „This means the mining strategy draft must be revised to ensure that no coal extraction or production project can receive financial support from the EBRD.”

„The European Investment Bank, owned by the EU, plans to increase investments in projects outside the EU promoting the reduction of CO2 emissions and phase out funding climate-damaging projects,” adds Apostol.  „How is it possible for the same shareholders to say we should ban coal lending at the EIB while allowing the EBRD to do otherwise?” (6)
 

Notes for the editors:

(1)  http://www.ebrd.com/downloads/policies/sector/draft-mining-strategy.pdf
The final version of the strategy is expected to be approved later on this year, following two months of public consultations and a reassessment of the draft by the bank staff.

(2)  The EBRD is a European public bank, its operations being supported with EU taxpayers’ money and the European Commission sitting on its management board.

(3)  “[…] the Strategy does not cover carbon-related issues such as the impact of thermal coal combustion on climate change […] The Mining Strategy will, however, cover other aspects of thermal coal mining activities, such as EHS&S issues.”

(4)  A few example of harmful projects currently in the bank’s pipeline:

https://bankwatch.org/our-work/projects/kolubara-lignite-mine-serbia

https://bankwatch.org/our-work/projects/mining-boom-mongolia

(5)  See an analysis of EBRD energy lending completed by Bankwatch in December 2011: https://bankwatch.org/sites/default/files/EBRD-energylending-Dec2011.pdf
and
https://bankwatch.org/ifi-energy-lending

(6) Put together, the EU, the EIB and EU member states own 62.8 percent of the capital of EBRD. Decision No 1080/2011/EU of the European Parliament and of the Council of 25 October 2011 granting an EU guarantee to the European Investment Bank against losses under loans and loan guarantees for projects outside the Union and repealing Decision No 633/2009/EC:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2011:280:0001:0001:EN:PDF

For more information, contact:

 
Ionut Apostol
Bankwatch EBRD coordinator
ionut AT bankwatch.org”
0040721251207