We witnessed today a historical mistake by the EIB, a self-styled green finance champion which has shown its true colours. The bank is showing its poor consideration of climate challenges, as well as its disregard to the problematic human rights situation in Turkey and Azerbaijan
The European Investment Bank (EIB) agreed during its board meeting in Brussels yesterday (Tuesday, 6 February 2018) to invest £1.3 billion into the Trans Adriatic Pipeline project, increasing future EU emissions.
The loan is one of the largest spendings of public money in the history of the bank, and is meant to help complete the construction of the Trans Adriatic Pipeline (TAP), crossing most of Southern Europe. TAP will traverse Greece, Albania and the Adriatic Sea before making a landfall on Italy’s southern shores. The planned pipeline is envisaged as the western leg of the Southern Gas Corridor (SGC).
A 3500 kilometre long chain of pipelines starting in Azerbaijan’s Shah Deniz II offshore gas field, this project is designed to pump ten billion cubic metres of fossil gas to Europe annually, starting 2020. This is in addition to six billion cubic metres of gas that could arrive to Turkey as early as this year.
The £1.3 billion loan approval follows the release of a study last week demonstrating that the Southern Gas Corridor – of which TAP is a part – could be as emissions-intensive or even more so than coal power.
A new study conducted by researchers from the Observatori del Deute en la Globalització and the Polytechnic University of Catalonia has found that the level of fugitive emissions of methane - the main component of natural gas and an exceptionally potent greenhouse gas - is highly likely to result in the Southern Gas Corridor’s climate footprint being the same of greater than the equivalent generated through coal.
The share of unintended releases of methane in the extraction and transmission of natural gas would range between 2.5 and 6 percent. Gas infrastructure with fugitive methane emissions above 3 percent is considered to be more emission-intensive than coal-fired power. The study concludes that the TAP and SGC thus raise the risk of amplifying, rather than mitigating, climate change.
In addition, the study shows that the annual emissions of the Southern Gas Corridor's first stage alone would exceed the total emissions of Bulgaria in 2015, or even match Romania's in that year.
Anna Roggenbuck, EIB Policy Officer at CEE Bankwatch Network, who commissioned the study, said: "As long as Europe continues to pursue the Southern Gas Corridor project, the findings of this study cast serious doubts over the EU's commitment to tackling the climate crisis as a party to the Paris Agreement."
In the past, officials at the European Commission and European financial institutions have argued the Southern Gas Corridor would actually help the EU meet its climate goals.
Miguel Arias Cañete, the Commissioner for Climate Action and Energy, admitted last year that the Commission has not carried out any climate assessment of what is in fact the largest fossil fuel project the EU is currently pursuing.
He said at the time: “[Our assessment process has] confirmed the economic viability of these projects. The Commission has not undertaken any climate assessment of the SGC. However, gaining access to gas from new sources under competitive market conditions should enable countries in South East Europe to replace some of the most polluting lignite power stations with efficient gas turbines. This should bring substantial gains in terms of greenhouse gases reduction in the region.”
Over the past few years, a growing number of civil society groups across the world have warned that TAP and the entire Southern Gas Corridor project would be detrimental to the EU’s efforts to cut greenhouse gas emissions.
In spite of these calls, none of the institutions promoting or financing the Southern Gas Corridor have actively publicised a climate impact assessment on the TAP so far, and the European Investment Bank has now pledged £1.3 billion of public money into the project.
Xavier Sol, Director of Counter Balance, an organisation monitoring investment banks, said about the decision: “We witnessed today a historical mistake by the EIB, a self-styled green finance champion which has shown its true colours. The bank is showing its poor consideration of climate challenges, as well as its disregard to the problematic human rights situation in Turkey and Azerbaijan.”
Anna Roggenbuck, EIB Policy Office with CEE Bankwatch Network, stated: “This is symptomatic that the Southern Gas Corridor has been approved without EU institutions disclosing its climate impact.”
Arthur Wyns is a tropical biologist passionate about biodiversity and climate change action. He's been involved in research teams all over the world, and recently joined the Climate Tracker team as a campaign manager. He Tweets at @ArthurWyns.