Social Europe

  • EU Forward Project
  • YouTube
  • Podcast
  • Books
  • Newsletter
  • Membership

Ukraine is no reason to invest in gas

Xavier Sol 17th May 2022

The EIB must resist pressure to finance liquefied-natural-gas projects and champion zero-carbon public transport instead.

LNG,EIB,liquefied natural gas,European Investment Bank
The EIB is still supporting investment in ships powered by or carrying LNG—just not pipelines (Mike Mareen / shutterstock.com)

The Russian invasion of Ukraine has turned European energy policy on its head. European governments previously reluctant to wean themselves off their addiction to Russian gas are now being called on to stop their money funding the Kremlin’s illegal war of aggression, which has forced over six million people to flee the country.

Yet rather than seeing the funding of such an authoritarian despot as another reason urgently to divest from fossil fuels and invest in renewables, too many European countries are setting fire to their climate commitments instead.

A recent report by Global Energy Monitor revealed a Europe-wide rush to build 14 new or previously blocked liquified-natural-gas (LNG) infrastructure projects since Russia invaded Ukraine. If approved, these projects would be a €5.9 billion series of white elephants sabotaging the EU’s plans drastically to reduce gas usage by 2030. They would also not solve the problem, which is more about the tightness of the global gas market than a shortage of EU import capacity.

‘Gas is over’

The European countries and corporations looking to build this useless infrastructure are also looking for ways to pay for it. One of their targets is the European Investment Bank (EIB).

In 2019, the EIB decided to divest from most fossil fuels and two years later its president, Werner Hoyer, declared that ‘gas is over’. Unfortunately, the devil was in the detail.

While the EIB has divested from LNG investments which it considers ‘energy’ projects, LNG transport infrastructure has been treated much more leniently. The bank has thus banned investments in gas pipelines yet still finances LNG-powered vessels and the large ships—’floating storage regasification units’ (FSRUs)—used to regasify and transfer LNG onshore. Moreover, the prohibition on LNG infrastructure was delayed until this year, allowing the bank to still sign off on a €150 million loan for an LNG terminal in Cyprus.

Between 2016 and 2020, the EIB invested almost €20 billion in polluting, high-carbon transport, including LNG. Now, however, it has a historic opportunity to resolve the contradictions in its approach to gas and become a global climate leader.

Pivotal role

In the next few weeks, the bank will change the criteria defining the type of transport projects it will and will not finance—the first revision of its transport policy since 2011. It comes at a crucial moment, when the EIB is transforming itself from the ‘EU bank’ into the ‘EU climate bank’ and is supposed to play a pivotal role in financing the European Green Deal.

EIB financing for all LNG infrastructure—including FSRUs and LNG-fuelled vessels—has to end. Instead, the bank can use its sector-shaping investment power to drive a surge in electric, zero-emissions public transport across Europe—from electric trams and buses in cities to more night-train services rivalling short-haul air travel.

Such a shift would have a ripple effect beyond Europe’s transport sector. Combined with increased investment in cycling and walking infrastructure, a complete moratorium on high-carbon transport investments would help Europe wean itself off the fossil-fuel addiction which has left it dependent on authoritarian regimes for energy.

Ill-advised splurge

The alternative to divestment is terrifying to contemplate. An ill-advised splurge on unneeded LNG infrastructure could trap Europe into burning fossil gas for decades as investors wait to make returns on their investments.

Europe, and the entire planet, cannot afford this. The latest report from the Intergovernmental Panel on Climate Change stated that it is ‘now or never’ in terms of acting to prevent catastrophic global temperature rises and that greenhouse-gas emissions must peak by 2025 at the latest.

This puts the EIB at a crossroads. Either it sticks to its commitments on climate by ending all investments in transport detrimental to them or it abandons its pretensions to climate leadership by caving in to pressure from EU governments. The latter option would send a disastrous signal about the fate of the European Green Deal.

By putting the planet first, the EIB can help steer Europe away from climate catastrophe and towards a transport system which respects planetary boundaries. To be the climate leader Europe needs, it must make gas truly over—for good.

Xavier Sol
Xavier Sol

Xavier Sol is director of Counter Balance, a non-profit organisation which works to make European public finance support the creation of socially and environmentally sustainable and equitable societies, within Europe and beyond.

Harvard University Press Advertisement

Social Europe Ad - Promoting European social policies

We need your help.

Support Social Europe for less than €5 per month and help keep our content freely accessible to everyone. Your support empowers independent publishing and drives the conversations that matter. Thank you very much!

Social Europe Membership

Click here to become a member

Most Recent Articles

u4219834664e04a 8a1e 4ee0 a6f9 bbc30a79d0b1 2 Closing the Chasm: Central and Eastern Europe’s Continued Minimum Wage ClimbCarlos Vacas-Soriano and Christine Aumayr-Pintar
u421983467f bb39 37d5862ca0d5 0 Ending Britain’s “Brief Encounter” with BrexitStefan Stern
u421983485 2 The Future of American Soft PowerJoseph S. Nye
u4219834676d582029 038f 486a 8c2b fe32db91c9b0 2 Trump Can’t Kill the Boom: Why the US Economy Will Roar Despite HimNouriel Roubini
u42198346fb0de2b847 0 How the Billionaire Boom Is Fueling Inequality—and Threatening DemocracyFernanda Balata and Sebastian Mang

Most Popular Articles

startupsgovernment e1744799195663 Governments Are Not StartupsMariana Mazzucato
u421986cbef 2549 4e0c b6c4 b5bb01362b52 0 American SuicideJoschka Fischer
u42198346769d6584 1580 41fe 8c7d 3b9398aa5ec5 1 Why Trump Keeps Winning: The Truth No One AdmitsBo Rothstein
u421983467 a350a084 b098 4970 9834 739dc11b73a5 1 America Is About to Become the Next BrexitJ Bradford DeLong
u4219834676ba1b3a2 b4e1 4c79 960b 6770c60533fa 1 The End of the ‘West’ and Europe’s FutureGuillaume Duval
u421983462e c2ec 4dd2 90a4 b9cfb6856465 1 The Transatlantic Alliance Is Dying—What Comes Next for Europe?Frank Hoffer
u421983467 2a24 4c75 9482 03c99ea44770 3 Trump’s Trade War Tears North America Apart – Could Canada and Mexico Turn to Europe?Malcolm Fairbrother
u4219834676e2a479 85e9 435a bf3f 59c90bfe6225 3 Why Good Business Leaders Tune Out the Trump Noise and Stay FocusedStefan Stern
u42198346 4ba7 b898 27a9d72779f7 1 Confronting the Pandemic’s Toxic Political LegacyJan-Werner Müller
u4219834676574c9 df78 4d38 939b 929d7aea0c20 2 The End of Progess? The Dire Consequences of Trump’s ReturnJoseph Stiglitz

KU Leuven advertisement

The Politics of Unpaid Work

This new book published by Oxford University Press presents the findings of the multiannual ERC research project “Researching Precariousness Across the Paid/Unpaid Work Continuum”,
led by Valeria Pulignano (KU Leuven), which are very important for the prospects of a more equal Europe.

Unpaid labour is no longer limited to the home or volunteer work. It infiltrates paid jobs, eroding rights and deepening inequality. From freelancers’ extra hours to care workers’ unpaid duties, it sustains precarity and fuels inequity. This book exposes the hidden forces behind unpaid labour and calls for systemic change to confront this pressing issue.

DOWNLOAD HERE FOR FREE

ETUI advertisement

HESA Magazine Cover

What kind of impact is artificial intelligence (AI) having, or likely to have, on the way we work and the conditions we work under? Discover the latest issue of HesaMag, the ETUI’s health and safety magazine, which considers this question from many angles.

DOWNLOAD HERE

Eurofound advertisement

Ageing workforce
How are minimum wage levels changing in Europe?

In a new Eurofound Talks podcast episode, host Mary McCaughey speaks with Eurofound expert Carlos Vacas Soriano about recent changes to minimum wages in Europe and their implications.

Listeners can delve into the intricacies of Europe's minimum wage dynamics and the driving factors behind these shifts. The conversation also highlights the broader effects of minimum wage changes on income inequality and gender equality.

Listen to the episode for free. Also make sure to subscribe to Eurofound Talks so you don’t miss an episode!

LISTEN NOW

Foundation for European Progressive Studies Advertisement

Spring Issues

The Spring issue of The Progressive Post is out!


Since President Trump’s inauguration, the US – hitherto the cornerstone of Western security – is destabilising the world order it helped to build. The US security umbrella is apparently closing on Europe, Ukraine finds itself less and less protected, and the traditional defender of free trade is now shutting the door to foreign goods, sending stock markets on a rollercoaster. How will the European Union respond to this dramatic landscape change? .


Among this issue’s highlights, we discuss European defence strategies, assess how the US president's recent announcements will impact international trade and explore the risks  and opportunities that algorithms pose for workers.


READ THE MAGAZINE

Hans Böckler Stiftung Advertisement

WSI Report

WSI Minimum Wage Report 2025

The trend towards significant nominal minimum wage increases is continuing this year. In view of falling inflation rates, this translates into a sizeable increase in purchasing power for minimum wage earners in most European countries. The background to this is the implementation of the European Minimum Wage Directive, which has led to a reorientation of minimum wage policy in many countries and is thus boosting the dynamics of minimum wages. Most EU countries are now following the reference values for adequate minimum wages enshrined in the directive, which are 60% of the median wage or 50 % of the average wage. However, for Germany, a structural increase is still necessary to make progress towards an adequate minimum wage.

DOWNLOAD HERE

Social Europe

Our Mission

Team

Article Submission

Advertisements

Membership

Social Europe Archives

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Miscellaneous

RSS Feed

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641