(Bloomberg) -- The leader designated to take over the European Commission endorsed the idea of creating a bank to concentrate on climate change, giving traction to a French proposal that would scale up green investment across the continent.
Ursula von der Leyen, who is nominated to become the next commission president, signaled that shifting the mandate of the European Investment Bank is among the options under consideration. The 28-nation European Union is weighing how to zero out greenhouse gas emissions by 2050, and the EIB’s board will discuss climate action on July 16.
“There’s a huge opportunity in the economic development towards climate neutrality,” von der Leyen told the Liberal group in the European Parliament on July 10. “If we go first on topics like green financing, green bonds, if we invest heavily in the research and the technologies associated with it, if we’re the front-runner there, if we transform our European Investment Bank into a European climate bank, a green bank, we will be role models worldwide.”
The previously unreported remarks underscore the scale of Europe’s ambitions in reining in greenhouse gases and shifting the economy away from fossil fuels. The EIB already is the continent’s biggest lender for renewables, having supported investment of 550 billion euros ($619 billion) and helped create a new class of securities known as green bonds.
Climate change is rising on the European agenda after elections for the EU parliament in May boosted the power of green parties. The bloc wants to lead the worldwide campaign against global warming and pledges to make good on the Paris climate agreement featured high in the electoral campaigns across political groups.
French President Emmanuel Macron made the issue one of his priorities and called for a “European Climate Bank to finance the ecological transition” ahead of the vote. In a manifesto for his Renew Europe movement in March, he asked, “Will we be able to look our children in the eye if we do not also clear our climate debt?”
The EIB had no official comment. Its current mission includes financing projects that help achieve Europe’s goals for emission reductions, energy savings and renewables. It’s already looking at how to step up its action.
“It is our intention to redirect the bank’s work in a way that makes all our investment consistent with the goal of achieving the Paris 2015 ambition,” EIB President Werner Hoyer said last month. “We will also propose to our shareholders new ambitious objectives for our financing directed at climate-change reduction and adaptation, objectives consistent with the need globally to step up investment from billions to trillions.”
While it’s not clear what it would take to make the EIB a “climate bank,” the most likely changes would entail stricter sustainability criteria in its lending. The challenge will be to convince member states more dependent on fossil fuels to accept new rules, which may make financing some gas infrastructure projects more difficult or even impossible.
The bank is planning to present its new energy lending criteria to the board of directors in early autumn, an official for the EIB said. The body includes representatives of all the EU member countries and the European Commission, and will take final decisions on the issue.
Von der Leyen said the EU will have to put “a strong emphasis” on climate change, stepping up its efforts to cut emissions and helping companies finance the transformation. The bloc has a binding goal to reduce carbon discharges by at least 40% by 2030 and is currently debating a long-term strategy for 2050.
“We’ve gone forward already but I think we have to be more ambitious,” she told the European Parliament’s Liberal lawmakers. “I fully commit to the goal for 2050 to be climate-neutral. I want Europe to be the first continent to be climate-neutral and for that we’ll have to be more ambitious with our climate goals for 2030.”
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