EU fails to eliminate fossil fuels from the Juncker Investment Plan

12.12.2017
Today’s extension of the Juncker Investment Plan again includes fossil fuels (photo: iStock)
Today’s extension of the Juncker Investment Plan again includes fossil fuels (photo: iStock)

While EU leaders are discussing climate finance at the One Planet Summit in Paris, today the European Parliament failed once again to prevent further public investments in fossil fuels. A decision made in the Parliament turns a blind eye to the Juncker plan’s investments in energy projects which have so far benefited fossil fuels almost as much as renewables, a study shows.

The Parliament’s approval of the extension until 2020 of the Investment Plan for Europe (also known as the ‘Juncker Investment Plan’) and its main instrument, the European Fund for Strategic Investment (EFSI), stands in stark contradiction with this regulation’s original intention to enable 'fully sustainable infrastructure investments'. The text adopted today by the European Parliament concludes the negotiations with the Council and the Commission that started earlier in 2017 about the prolongation of the EFSI until 2020 with the aim to leverage EUR 500 billion in additional investments across the EU.

Support of conventional energies is set to continue

While the revamped EFSI will have a stronger focus on climate action – 40% of future financing is earmarked to project components in line with the Paris Agreement – CEE Bankwatch Network, Climate Action Network (CAN) Europe, Counter Balance and WWF’s European Policy Office warn that support to gas infrastructure projects is set to continue since fossil fuel investments remain eligible under the EFSI’s scope.

Markus Trilling at Climate Action Network Europe, said: “We welcome the climate target for EFSI 2.0. But to be in compliance with the Paris Agreement, all EFSI projects have to be assessed against their long-term climate impacts.”

Support to carbon-intensive transport infrastructure is also set to continue since the decision by parliamentarians considerably weakens a proposal by the European Commission to restrict support to motorways, despite requirements to finance zero-carbon solutions in the transport sector.

Fossil fuels benefiting from EFSI as much as renewables

A new analysis released recently by Bankwatch shows that EFSI investments in energy projects have so far benefited fossil fuels (€1.8 billion) almost as much as renewables (€2 billion), despite the EU’s commitment to the Paris Agreement. It reveals that 75% of the fund’s investments in transport went to carbon-intensive projects such as motorways, airports and the car industry. The report also highlights the lack of transparency of the fund’s project selection and decision-making process.

Sebastien Godinot, Economist at WWF’s European Policy Office, said: “While EU leaders are busy showcasing their commitment to the Paris Agreement to the world at the One Planet Summit in Paris, they are acting as if they can finance all the fossil fuels they want at home. If the EU is true to its climate commitments, the EU’s public financial institutions, starting from the EFSI, must immediately end their support to fossil fuels which are the main driver of climate change.”

“Post-2020 period already in the pipeline!”

Anna Roggenbuck, EIB Policy Officer at CEE Bankwatch Network, said: “European decision-makers missed an opportunity here: they could have decided to make EFSI a truly sustainable initiative. Given that a further extension of EFSI for the post-2020 period is already in the pipeline, Members of the European Parliament must make sure that EFSI 3.0 will be 100% climate proof .”

Xavier Sol, Director at Counter Balance, said: “The extended EFSI should be more transparent than its initial version. It is now time for the EFSI governing bodies to put those commitments into practice by publishing extended minutes of their meetings and finally disclosing to the public the assessments of projects under the scoreboard of indicators. This is a necessary step to raise the bar on transparency and accountability, and demonstrate the additionality of EFSI”.

Buddensiek / CAN Europe

Further reading:

The analysis “Doing the same thing and expecting different results? - Analysis of the sustainability and transparency of the European Fund for Strategic Investments” (Nov. 2017) can be found here.

Similar Entries

The Industry Committee of the European Parliament is backing a binding target of at least 35% renewable energy for 2030 (photo: European Parliament)

The Industry Committee of the European Parliament is backing a binding target of at least 35% renewable energy for 2030 and more stringent renewable energy laws.

Today, the European Parliament has voted in favour of reinforcing the Energy Efficiency Directive and the efforts by Rapporteur MEP Miroslav Poche for accelerating the delivery of Energy Union benefits to citizens and businesses after 2020.

Organized by the European Technology and Innovation Platform for Photovoltaics (ETIP PV), EUREC - The Association of European Renewable Energy Research Centers and Solar United - The Global Solar PV Technology & Industry Association (Solar United) as well as equipment manufacturers, materials providers and PV Manufacturing companies published today an “Open Letter from the European PV Community”. This open letter is targeted and will be distributed to European policymakers in order to focus on the further development of photovoltaics in Europe.

InnoEnergy has announced a € 3.5 Mio. investment in Northvolt AB, to enable the company to develop Europe’s first large-scale battery factory. The factory will have a final production capacity of 32 GWh, similar to that of Tesla’s US gigafactory, by 2024. The battery cells will be used for electric cars, energy storage and other electrical powered products.