Today the ECOFIN Council agreed on its position on the future of the European Fund for Strategic Investments, EFSI, also known as the Juncker Plan or the Investment Plan for Europe.
While it contains some good elements on climate action, the council stills falls short of ensuring EFSI’s investments are in line with the EU’s climate goals and the objectives of the Paris Agreement.
In September 2016 the European Commission published its proposal for the prolongation of the EFSI until 2020 – two and a half years beyond its initial term – with the aim to leverage 500 billion euro in additional investments across the EU. While the Commission’s proposal offer some good news for the climate, such as setting a 40% target for projects with climate relevance or providing for technical assistance to beneficiaries to develop clean energy projects, it still allows for financing of fossil fuel infrastructure.
In its compromise adopted today, finance ministers support the positive provisions in the Commission’s proposal. However, they are not making up for the deficit of the commission’s proposal to exclude financing for fossil fuel infrastructure from the EFSI.
Today’s legislative proposal by the EU’s finance ministers, despite some positive language on climate, is not sufficient
Markus Trilling, Finance and Subsidies Policy Coordinator at Climate Action Network (CAN) Europe said:
“In its first year of operations EFSI failed to align its funding with the commitments the EU made under the Paris Agreement, as fossil fuel and high-carbon transport infrastructure continue receiving financial support from the EU’s purse. Today’s legislative proposal by the EU’s finance ministers, despite some positive language on climate, is not sufficient to bring EFSI on track to catalyse the EU’s clean energy transition”.
“As a signatory to the Paris Agreement, the EU has signed itself up to make financial flows consistent with a pathway towards fully renewables based and energy efficient economies. By adopting a weak compromise the Council kicks the can down the road to the Parliament, which now needs to put forward a proposal which is coherent with the objectives of the Paris Agreement. The final EFSI legislation must clearly state that fossil fuel projects should be completely prohibited to be financed from EU public funds.”
Xavier Sol, Director at Counter Balance said:
“The expansion of EFSI provides an opportunity to set a precedent by making it a truly sustainable and innovative financing tool. But the Council missed that opportunity by allowing further business as usual for the European Investment Bank which is implementing EFSI. It is now up to the European Parliament to steer genuine change in this regard and reflect on critical comments from the Court of Auditors about EFSI.”