The European Commission pledged on Thursday to attach climate conditions to its massive funding package to save Europe’s coronavirus-battered economies, but stopped short of banning support for all fossil fuels.The European Union’s executive on Wednesday proposed a 1.1- trillion-euro EU budget for 2021-27 and a new 750 billion economic recovery fund while doubling down on its goal to become “climate neutral” by 2050.
The proposal earmarks 25% of the budget for climate-related spending. All money from the recovery fund, including cash not going to green projects, must meet climate conditions.Countries seeking support must design spending plans that the Commission will assess against a principle to “do no harm” to the bloc’s green goals.
Natural gas produces roughly 50% less emissions than coal when burned, but it is not zero-carbon and campaigners say new gas infrastructure could lock in emissions for decades, thwarting EU climate goals.Some parts of the EU package, including a 40 billion euro “just transition fund”, will explicitly exclude gas.This fund “restricts any kind of investment into fossil fuels, also for natural gas,” EU energy chief Kadri Simson told Reuters.
Planned EU definitions for green finance will also “guide” investment, the Commission said. These rules would stop gas investments from being labelled “green”, although they wouldn’t ban companies from investing in them. Rules blocking EU gas funding could face pushback from eastern countries, eight of which wrote to EU leaders last week seeking support for the fuel to help them stop burning coal.The Commission funding proposals need approval from all member states.
Source: Reuters
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