EBRD bans new oil, but fails to align its gas criteria with Paris Agreement
On 25 September, the EBRD released the draft of its upcoming Energy Sector Strategy. The Strategy will guide the Bank’s operations in the sector for the next five years, and had not been updated since 2013, prior to the fundamental change in the energy and climate policy context brought on by the Paris Agreement.
While WWF supports the strategy moving away from funding new oil projects, and its inclusion of supporting coal-centered countries transition, by leaving the door wide-open for financing future gas development projects without clear and detailed criteria, the overall strategy itself fails to align with the objectives of the Paris Agreement.
Less than a year ago, in the December 2017 One Planet Summit , multilateral development banks, including EBRD, committed explicitly “to align their financial flows with the Paris Agreement” . This draft Strategy is not suited for properly implementing EBRD’s commitment.
Sébastien Godinot, Economist at WWF European Policy Office commented:
“We welcome the EBRD commitment to ban new oil support, but we are very concerned with the vagueness about gas. The EBRD sets up confusing, vague or weak criteria to decide about new gas projects, that we believe are misaligned with the objectives of the Paris Agreement of keeping global temperature rise well below 2°C, aiming for 1,5°C. For WWF, the EBRD should be a climate leader not a laggard: we call it to radically strengthen and clarify its criteria on gas project selection.”
For example, in this new Strategy the EBRD requires that gas projects investments need to be consistent with Nationally Determined Contributions (NDCs): this is necessary but very insufficient and misleading as the NDCs are aligned with a 3°C scenario on average, hence falling short--by a long shot-- of aligning with the Paris Agreement.
Quite worryingly, overall the EBRD draft Energy Sector Strategy is less ambitious on reducing fossil fuel support than that of the World Bank’s, who committed last year to rule out investment in upstream oil and gas exploration and development by the end of 2019. Earlier this year, the African Development Bank achieved a 100% investment in renewable electricity in 2017, setting a new benchmark .
WWF will engage with the Bank to make concrete recommendations to improve this draft.
The European Bank for Reconstruction and Development’s Energy Strategy will guide
its investments in the energy and natural resources sector for the next 5 years.
The Strategy is currently open for public consultation until 9 November 2018.
EBRD’s draft Energy Sector Strategy is available here as a PDF under “Sectoral Strategies”.
Notes to editors: