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Ending fossil fuel subsidies in Europe Newsletter No. 13 - December 2017 - January 2018

A monthly update on policy development, campaigning and communications

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A monthly update on policy development, campaigning and communications by CAN Europe - Newsletter No.13 - December 2017 - January 2018
CAN EUROPE'S LATEST TAKE ON THE ISSUE

 

One Planet Summit goes a little bit beyond a PR exercise to inject modest momentum into global climate action

Maeve McLynn

 

Following the UN climate talks (COP23) held in Bonn earlier this year, President Emmanuel Macron, UN Secretary General Antonio Guteres and World Bank President Jim Yong Kim organised the One Planet Summit in Paris on December 12 to celebrate the 2 year anniversary of the Paris Agreement.

The summit brought together Heads of States and Government, businesses, financial actors and institutions, cities, civil society, local and regional authorities as well as celebrities to discuss and share efforts towards scaled up climate action.

The summit was an encouraging and insightful demonstration of the national, sub-national and private sector commitment to climate action. While this was important to inject momentum – and not just be a talking shop – it sets a precedent for work in 2018 to increase climate ambition, speed up the shift of financial flows away from fossil fuels, and build more resilient economies to the current and future impacts of climate change.

Some announcements on financing by European and international actors include:

  • Dutch government announcing a carbon floor price of €43 minimum, to be reached by 2030
  • The World Bank committed to end financing for upstream oil & gas (ie. exploration) by 2019
  • China will launch a national ETS in the very near future
  • The United Kingdom pledged £140 million to support climate resilience, in particular for countries in the Caribbean hit by hurricanes

The EU published a ten point initiative on the morning of the summit – the comprehensive package of them all is here.

Vice-President Sefcovic highlighted in particular ‘four of the most important’ initiatives:

  • URBIS - include the focus on cities and access to financing for cities;
  • The External Investment Plan
  • Science and Innovation – support through Horizon 2020 – 217 million investment, supporting the work of Bill Gates and Mission Innovation
  • European Youth for Climate Action

 

The following list summarises the plans outlined:

  1. Putting the Financial Sector at the Service of the Climate, sustainable financing initiative led by the High Level Expert Group on Sustainable Finance. It will see the launch of a roadmap in March 2018, including a legislative proposal on sustainable financing;
  2. EU External investment Plan - Opportunities for Africa and the EU Neighbourhood region which was launched at the EU-Africa summit in November, with the aim to mobilise €44 billion in investments in the region; €9 billion of this will focus on sustainable energy and agriculture;
  3. Urban Investment Support for European Cities, a new initiative which will focus on access to finance for cities that seek to pursue more ambitious decarbonisation plans;
  4. Clean Energy for Islands Initiative, also a new initiative which will support EU islands in gaining energy independence and boost renewable energy on EU islands;
  5. Structural Support Action for Coal and Carbon Intensive Regions, with the use of EU structural funding to identify short- and medium-term solutions to help three coal regions transition to a more future-proof business model.
  6. European Youth for Climate Action, another new initiative which will use existing and newly formed frameworks – Erasmus+ and the European Solidarity Corps – to integrate climate action and strengthen the engagement of young people in climate action.
  7. Smart Finance for Smart Buildings Investment Facility is part of the European External Investment Plan where it will seek to scale up financial support for energy efficiency – adding €10 billion in funding up to 2020;
  8. EU Rulebook for Investment in Energy Performance of Buildings builds on the work to ensure and guide EU Member States in making more concrete decisions on whether or not to enter into an Energy Performance Contract without increasing the risk of adding to national deficit.
  9. Investing in Clean Industrial Technologies which will use the Horizon 2020 programme to support clean energy and climate science (already happening). The European Commission also intends to use the Modernisation and Innovation Funds associated with the EU ETS for generating revenue to invest in developing low-carbon technologies in the EU.
  10. Clean, Connected and Competitive Mobility highlights the level of funding going from the EU funds – namely Cohesion Policy and the Connecting European Facility – towards the transport sector, though it doesn’t fully spell out that all of this support is targeted the decarbonisation of Europe’s transport system.

 

In brief, the announcement highlights a number of existing or recently launched initiatives so the European Commission has brought few new plans. With that said, the increased diversification of support and effort towards other sectors in the EU and its neighbourhood – namely towards youth, research and innovation, cities and a fair transition – is an important signal for future work on climate action in Europe and its partner countries.

Going into 2018, it will be essential to integrate climate change concerns more effectively and positively across all sectors in the EU.

 

Disappointingly, the EU made no significant nod to its support for building resilience and adaptation in vulnerable countries. The climate related focus of the EIP will likely be towards mitigation activities in the energy sector of EU Neighbourhood countries, while existing initiatives such as the Global Climate Change Alliance went completely under the radar of European Commission officials.

 


 

European Investment Bank delays decision to lend 1.5 billion loan to Trans-Adriatic Pipeline (TAP)

Maeve McLynn

While high-level officials were gathered in Paris to discuss the mechanics of financing the clean energy transition and implementing the Paris Agreement, the board of the European Investment Bank was in Luxembourg bracing itself for a decision on the controversial gas project Trans-Adriatic Pipeline (TAP). Last Tuesday morning likely started with the plan to endorse the pipeline and fund it through EIB support to the tune of €1.5 billion.

However, the day took a turn and the board delayed the decision to fund the controversial project.

The move to delay a final decision comes following intense pressure from civil society organisations and movements, as well as diverging moves from other financial institutions such as the World Bank which pledged to end support to upstream oil and gas - a highly significant move given that current support to upstream oil and gas at over $1 billion per year on average between Financial Year 2014 and 2016.


 

Third Report on the State of the Energy Union on fossil fuel subsidies

"Despite these positive trends, the clean energy transition may be hindered by unfair competition if Member States continue to provide fossil fuel subsidies. These come in many forms, such as direct subsidies to uneconomical coal mines, capacity mechanisms for Member States are allowed to provide closure aid until 2018, to cover the current production losses in the context of the definitive closure of uncompetitive coal mines. Aid to cover exceptional costs in order to alleviate emission intensive power plants, tax relief for company cars or diesel fuel and similar measures. Fossil fuel subsidies also increase the risk of investing in stranded assets, which need to be replaced before the end of their lifetime. The integrated national energy and climate plans should help to better monitor and assess Member States' efforts to reduce fossil fuels subsidies. The next report on energy prices and costs in 2018 will provide updates on fossil fuel subsidies in the EU."

You can read the full report here.

 

MEDIA COVERAGE

 

EU DEVELOPMENTS

- The Parliament Magazine (EU): EU must stop subsidising fossil-fuels infrastructure. “The European Fund for Strategic Investments is funding dozens of carbon-intensive projects, at the expense of genuinely sustainable infrastructure, argues Anna Roggenbuck.”

- The Guardian (United Kingdom): EU announces €9bn in funding for climate action. “EU funds will be focused on clean energy, and sustainable cities and agriculture, with Bill and Melinda Gates Foundation also pledging $300m towards climate adaptation.”

- Sun and Wind Energy (Germany): EU fails to eliminate fossil fuels from the Juncker Investment Plan. “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.”

- Euractiv (EU): Room for hope at Macron’s One Planet Summit. “A number of initiatives targeting the global transition away from fossil fuels have been established over the last two years, and most recently at the international climate summit in Bonn.”

- ExecReview (United Kingdom): ‘Death spiral’: half of Europe’s coal plants are losing money. “Air pollution and climate change policies are pushing coal-fired electricity stations to the brink, says a new report. Closing them would avoid €22bn in losses by 2030.”

- Euractiv (EU): Europe is not fighting hard enough to keep out coal subsidies. “To prevent coal subsidies, the European Commission proposed a CO2 threshold for power plants to receive public subsidies. However, due to last minute edits from current EU President, Estonia, the door will be open for existing high-carbon power plants to receive public money to stay online, writes Kathrin Gutmann.”

- Windkraft (Germany): Estonia makes surprise push for coal subsidies. “The coal industry and those governments dragging their feet on climate actions love nothing more than the idea to use public money to keep dirty plants open for another few decades. This last minute change of heart from Estonia is indefensible and biased towards coal lobby interests,” said Joanna Flisowska, Coal Policy Coordinator with Climate Action Network (CAN) Europe.”

- Euractiv (EU): The Brief: EU goes Jekyll and Hyde on climate and energy. “How can the Commission call on the EIB to grant €2bn to a mega gas pipeline and then release a report urging the member states and the same bank to do more to reduce subsidies for fossil fuels?”

- Climate Home News (United Kingdom): EU commission urged bank to support Azerbaijan gas pipeline. “Loans to the pipeline from the EIB and EBRD would qualify as fossil fuel subsidies, said Shelagh Whitley, a leading researcher on the issue at the Overseas Development Institute.”


 

NATIONAL DEVELOPMENTS

- Clean Energy Wire (Germany): Private climate finance under scrutiny on eve of Paris summit. “Christiane Averbeck, executive director of Climate Alliance Germany, said at an NGO press briefing: “It’s not about single little ’greening projects‘ in the finance sector, it’s about the redirection of large financial flows”.”

- The Irish Times (Ireland): Nordic countries offer to help Ireland reduce emissions. “If the world adopted the Nordic approach, by 2030 it would see a reduction in emissions equivalent to that which the EU is producing at the moment. In cost terms that would be equivalent to “nine days of current fossil fuel subsidies” amounting to over $490 billion a year.”

- Euractiv (EU): Commission launches probe into Spanish aid to coal-powered plants. “The European Commission has opened an in-depth investigation into Spain’s state aid for coal power plants to establish whether it is in line with EU rules.”

- Financial Director (EU): Autumn budget 2017 business round-up. “Hammond has announced a tax break for transfers of North Sea oil and gas fields, from next year, offering transferrable tax histories for oil and gas fields in the North Sea.”

- Clean Energy Wire (Germany): Poland's Katowice COP: Next coal country hosting UN climate talks. “The Polish Climate Coalition, a network of environmental NGOs, pointed out that while Polish ministry representatives are giving their support to the implementation of the Paris Agreement in Bonn, other members of the government were working on a new set of coal subsidies that could be adopted next week.”

- Reuters: Norway's $1 trillion wealth fund proposes to drop oil, gas stocks from index

- Clean Energy Wire: Govt energy transition commission calls for CO2 price, mobility action

 


 

INTERNATIONAL DEVELOPMENTS

- The Guardian (United Kingdom): World Bank to end financial support for oil and gas exploration. “Bank announces in Paris it ‘will no longer finance upstream oil and gas’ after 2019 in response to threat posed by climate change.”

- Phys.org: With fossil fuel subsidies, humanity investing in 'own doom': UN chief

- The Guardian (United Kingdom): Calls for greater fossil fuel divestment at anniversary of Paris climate deal. “Campaigners call for an end to fossil fuel finance and subsidies to avoid dangerous global warming at a meeting to mark two years since the signing of the landmark agreement.”

- Climate Action Programme (Internationational): Leading economists and major corporations call for the end of fossil fuel investments. “More than 80 leading economists from 20 countries have signed a Declaration on Climate Finance urging for an immediate end to investment in new fossil fuel projects and a dramatic increase in renewable energy investment.”

- NRDC (United States): Power Shift: New Report on International Coal vs. RE Finance. “Our latest report, Power Shift, compares G20 governments’ financing for coal projects and renewable energy projects abroad. Our findings indicate that countries are still financing more coal than renewables projects abroad.” 

- Huffington Post: Which development bank is leading the way on emissions reporting?

 

CSO CAMPAIGNS, ADVOCACY & PUBLICATIONS

 


Civil society groups have come together under the the Big Shift Global campaign to launch its Dirty Dozen briefing and Civil society letter on the day of the One Planet Summit in Paris.

As mentioned in the press release:  "(...) these groups released a briefing titled “Dirty Dozen: How Public Finance Drives the Climate Crisis through Oil, Gas, and Coal Expansion”, highlighting fossil fuel projects by the World Bank Group, other multilateral and national development banks and export credit agencies. These projects are examples that demonstrate how public finance is still acting as a critical lifeline for destructive fossil fuel projects, many of which could not otherwise be built, and how this support continues to this day, a full year after the Paris Agreement entered into force. 

On average, public finance institutions controlled by G20 governments, along with multilateral development banks such as the World Bank Group, provide $71.8 billion per year in public finance for fossil fuels, and only $18.7 billion in public finance for clean energy (figure taken from from the report Talk is Cheap: How G20 Governments are Financing Climate Disaster, July 2017, available here).

Accompanying the briefing, more than 190 civil society groups from over 55 countries have signed a letter urging multilateral development banks (such as the World Bank Group), export credit agencies and the governments backing them to stop funding fossil fuels by 2020, with an urgent and immediate need to move away from financing for oil and gas exploration projects, coal mining, and coal-fired power plants.''


 

BLOGS, LETTERS, POSITION PAPERS & BRIEFs

EU BUDGET

CAN Europe:

E3G: 

GERMANY FAILS AT G20 FFS REVIEW

 

TRANS-ADRIATIC PIPELINE


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OTHER ISSUES

CAN Europe:

OCI: The World Bank just drove another nail in the coffin of oil and gas

Food & Water Europe: Despite Commission promise, new list of energy infrastructure ‘projects of common interest’ prioritises climate-wrecking fossil gas

Banktrack: Banks vs. the paris agreement: Who's still financing coal plant development?

CMW: Beyond the EU ETS: Strenghtening Europe’s carbon market through national action

Friends of the Earth Europe:

Transport & Environment

ClientEarth:

CEE Bankwatch:

E3G:

350 .org

 


 

REPORTS

 

 

 
 

   
    
 

  

UPCOMING EVENTS

 

Click on the calendar image to view events and add them to your calendar:

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LINKS TO CAN EUROPE'S WORK ON SHIFTING FINANCIAL FLOWS

 

WEBSITE

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For an overview of the main national fossil fuel subsidies in Europe, click on the following map below (which you can also find on our website):

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The website's table of contents with direct links to the different sections:

 

       
  euro-white-icon-in-form-of-F.png   Fossil fuel subsidies
  ic_shuffle_white_48dp_2x.png   Avenues for change
  ic_description_white_48dp_2x.png   Publications
  ic_equalizer_white_48dp_2x.png  

Resources

Data

NGO publications

Visuals

Media

  ic_event_white_48dp_2x.png   Events
  ic_contact_mail_white_48dp_2x.png  

Contact

       

  


 

BUILDING A COMMON NARRATIVE 

The voice against fossil fuel subsidies has internationally grown stronger the last couple of years - both among civil society and world leaders - but it is apparent that European decision makers don’t feel enough pressure to start putting their money where their mouth is. A united voice from NGOs and other actors will help to steer the debate in the right direction – towards enhanced and fair climate action.  CAN Europe is working with members and non-members across Europe to support the development of a strong, common narrative on phasing out public financial support for fossil fuels. What is your story? Make it heard! Contact: Nicolas Derobert

Have any news you want to share or comments on the content ? Contact: Martin O'Brien

For continual news updates and useful resources, visit our website.

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