Workers are standing at the construction site of the receiving station of the Nord Stream 2 Baltic Sea pipeline in Mecklenburg-Western Pomerania, Lubmin. Photo: Stefan Sauer/picture alliance via Getty Images
The European Investment Bank has decided to end all financing for fossil fuel development by the end of 2021 — including natural gas projects.
Why it matters: It's the "first time any major multilateral lender has curbed lending to natural gas projects because of climate change concerns," the Financial Times reports.
- And Bloomberg points out that the bank, which adopted the policy Thursday, is the world's largest multilateral financial institution.
- "Given the EIB's market impact and influence over the lending strategies of investors, its decision could end up depriving polluting projects from other sources of financing as well," they write.
Yes, but: The policy leaves the door open for financing natural gas projects — with a big caveat.
- "Gas projects are still possible, but would have to be based on what the bank called 'new technologies,' such as carbon capture and storage, combining heat and power generation or mixing in renewable gases with the fossil natural gas," Reuters reports.
The big picture: The move underscores a growing focus in climate circles on natural gas, which produces far less CO2 when burned than coal, but is nonetheless a major emissions source.
- "The EIB's new financing criteria will make lending to gas projects very difficult. It highlights that gas is also increasingly in the spotlight of the climate debate," Wood Mackenzie research director Nicholas Browne said in a note Friday.