European Investment Bank
Olivia Saunders
98-100, boulevard Konrad Adenauer
L-2950 Luxembourg
elpconsultation@eib.org
Public consultation on the EIB Energy Lending Policy
Introduction
Energy investments needed in Europe and in third countries to facilitate low carbon economy and
mitigate climate change will be huge. EIB’s energy lending policy can have a major impact on the
progress.
Bioenergy is foreseen by IEA 1, IRENA2 and European Commission3 to play a major role still in 2030 and beyond.
Bioenergy can make significant contributions to low carbon development in every sector from
heating, cooling, electricity and transportation to industrial energy. Notably, bioenergy can deliver high temperature heat and steam and can stabilise/balance out the production of intermittent
renewable energy. Bioenergy Carbon Capture and storage (BECCS), pyrolysis CCS (PyCCS),
such as biochar all may be incorporated to the energy production and potentially offer notable
negative emissions solutions 4.
On heating and cooling Europe relies 75 % on fossil fuels 5. District heating and cooling with bioenergy and municipal waste as the main energy source has a lot to offer for urban and semi-urban areas. The investment often includes also the building or renovation of the heat network and achieves energy efficiency improvement. In Europe biomass is 96 % domestically sourced. It
greatly enhances energy security.
Bioenergy can be a benchmark for other energy forms due to legal framework ensuring sustainability. Recently approved Renewable energy directive recast kicks off considerable actions to ensure different aspects of bioenergy sustainability. Additionally local air pollutants are regulated
through MCPd, LCPd and ecodesign regulations.
Question and answers
Q1: Do paragraphs 15-27 above provide a reasonable characterisation of the longterm energy
transformation? Are there additional dimensions that the Bank should consider when reviewing
its Energy Lending Policy?
Our observation is that bioenergy with many of these characteristics has not been at all mentioned on pages 6 – 8 under Energy trends. We consider this a serious shortcoming. One of the information sources used by the EIB has been the European Commission’s Long term energy strategy (LTS), which recognises bioenergy as one major part of the solution.
The Bank’s key themes highlight new technologies to produce electricity. It is worthwhile to acknowledge that at the same time there is an urgent need to decarbonise heating and cooling and
to progress rapidly and with tolerable costs for end users. We need all the existing renewable production technologies and energy efficiency improvements for the large transformation ahead of
us.
We also note that liquid biofuels are not discussed at all. A new generation of liquid and gaseous biofuels and synthetic fuels are considered elemental parts of decarbonisation of transportation 6 7 parallel to electric mobility. Biofuels are needed in particular for longer distance, heavy transportation and aviation. This can be done with minimal changes to existing fleet as advanced biofuels are a drop-in solution. In order to maintain social justice and to move forward rapidly with
the transformation it is paramount to use biofuels on lighter vehicles, too.
We urge the Bank not to choose renewable technologies for the customers, but to maintain a technology neutral approach within the lending portfolio. Creating different priorities for renewable
energy technologies can create hierarchy and increase the costs of energy system transformation.
Q3: Within the broad areas of renewables, energy efficiency and energy grids, are there particular areas where you feel the Bank could have higher impact?
With regard to bioenergy win-win areas are renovation or replacement of the existing fossil fuel plants to utilise bioenergy and waste. This can be done, for example, by adding a gasification unit
on site or by building a new high efficiency bioenergy plant. With a parallel renovation of the heat grid the investment can achieve combined greenhouse gas savings beyond 100%.
Electricity from biomass feedstocks should be maintained as an optional technology in future, too. Power production may be combined with production of heat or process energy whenever possible. The bioelectricity production is flexible and can balance out variable production.
Q9: Does the EPS for power generation remain an appropriate safeguard? Do you agree that adjustment should be made to support flexibility and adequacy? In light of recent developments in
renewables, the Paris Agreement and the Sustainable Development Goals, would an exemption to the EPS for power plants in least developed countries continue to be justified?
We regard the threshold as quite high and it may drive fossil fuel energy lock-in. As long as there are no other thresholds coming from the regulation the threshold should be maintained. The EPS
threshold has been set up to align with EU energy market regulation.
Carbon lock-in can occur also in the least developed countries and we see no reason to provide EIB funding for new projects exceeding the EPS. The EIB should consider other arrangements for
concessions for least developed countries than exemptions to the EPS.
Q11: The Bank has developed a number of products – both financial and advisory – targeted to supporting innovative energy projects. Do you have a view on these instruments? Can the Bank
improve or better target the financing needs of the energy demonstration sector?
Yes. Energy demonstration projects should be better targeted in the instruments of the Bank. Sometimes demonstration of a technology first of a kind in a specific country should be supported
instead of more innovation. Example of such projects could be highly efficient CHP-production with biomass and waste, or Carbon Capture and Storage/Usage combined with bioenergy production (BECCS/BECCU/PyCCS).
Q15: Should the Bank refrain from supporting hydrocarbon production, in addition to exploration? If so, should gas be treated the same as oil? Within and outside the EU?
Yes, we believe that after the report of the IPCC on 1.5C global warming, it is not appropriate for the EIB to keep on supporting the root cause of climate change – fossil fuel use. Natural gas is no
different from other fossil fuels in adding fossil carbon in the atmosphere. On top of the direct combustion emissions the production causes indirect CO2-emissions as CO2 is separated from
the pumped raw gas and specially during production of shale gas substantial methane emissions can occur. Lending to fossil fuel production creates conflicting support that disincentivises the
Banks’s own lending to renewable energy.
Q16: Where can the Bank most usefully focus its support – either financial or advisory – to meet
the Sustainable Development Goals outside the EU and better support the scaling up of renewables, energy efficiency and electricity grids in a developing country context?
About 16 % of EIB’s energy lending has been targeted to outside EU. It is important to continue this as energy use is growing faster in Asia, Middle East and Africa. The best feasible technology
solutions should be made available everywhere. Lending should be made in ways, in which European technology providers can competitively participate in tenders.
Sincerely
Harri Laurikka
CEO
More Information about this consultation reply may be obtained from:
hannes.tuohiniitty@bioenergia.fi + 358 401948628
1
International Energy Agency. 2017. Technology roadmap. Delivering Sustainable Bioenergy.: https://www.iea.org/publications/freepublications/publication/Technology_Roadmap_Delivering_Sustainable_Bioenergy.pdf
2
IRENA. 2018. Renewable Energy Prospects for the European Union. https://www.irena.org/publications/2018/Feb/Renewable-energy-prospects-for-the-EU
3 European Commission. 2018. 2050 long term strategy. https://ec.europa.eu/clima/policies/strategies/2050_en
4 Minx, J. et al. 2018. Negative emissions. Environmental Research Letters, Volume 13, Number 6 https://iopscience.iop.org/article/10.1088/1748-9326/aabf9b/meta
5 European Commission. 2016. A
6 DECHEMA. 2018. Advanced alternative liquid fuels: For climate protection in the global raw materials change
https://www.ufop.de/files/9915/3777/0303/PP_Alt_Brennstoffe_2018_engl_ezl.pdf
7
IRENA. n.a. Liquid biofuels. https://www.irena.org/transport/Liquid-Biofuels