CAF: European Investment Bank among the biggest sponsors of fossil fuel projects

The Clean Air Fund has called for action to protect air quality. Outdoor air pollution kills 4 million people every year, but just 1% of foreign aid is allocated to projects focused on clean air. This is according to the global organisation Clean Air Fund’s report The state of global air quality funding in 2024. The report also says that foreign financial support for fossil fuel projects has increased.

The report found that foreign aid financing projects that extend the life of fossil fuels increased by nearly 350% from 1.2 billion dollars in 2021 to 5.4 billion dollars in 2022. This marks a reversal of the downward trend recorded the previous year. The Guardian reports.

“This shocking increase in funding for fossil fuels is a warning sign,” said Jane Burston, chief executive of the non-profit Clean Air Fund, which conducted the research. “The world cannot continue down this path of supporting polluting practices at the expense of global health and climate stability.”

According to Adalberto Maluf, national secretary for urban environment and environmental quality in Brazil, which holds the G20 presidency and will host the COP30 climate summit next year, international public financing “is nowhere near commensurate with the scale of the problem” and often fails to reach the people most affected.

Commitment to reducing emissions

The report confirms this, finding that 7 of the 10 most polluted countries are still lagging behind. Low-income countries such as Chad and Somalia receive far less funding than upper-middle-income countries such as Serbia and Costa Rica.

“Even as countries commit to reducing emissions, raising their climate ambitions and moving away from fossil fuels, the figures tell a different story,” Maluf said.

The G20 countries pledged to phase out “inefficient” fossil fuel subsidies back in 2009. In 2022, the G7 agreed on stronger wording, committing to end taxpayer funding for projects that generate energy by burning coal, oil and gas.

Biggest sponsors

The report found that among the five biggest sponsors of fossil fuel projects in 2018-2022 were the Islamic Development Bank, the Japan International Cooperation Agency, the Asian Development Bank, the European Bank for Reconstruction and Development, the European Investment Bank and the International Finance Corporation, the World Bank’s private-sector arm.

For example, funding from the European Investment Bank amounted to just under 27 billion dollars in 2022, according to the Clean Air Fund. However, according to the EIB’s annual report, the organisation provided a record 19.4 billion euros in financing for clean energy development in the same year.

Some fossil fuel support does go to projects that lack clean alternatives even in wealthy countries, such as fertilizer or cement production, but it also includes energy projects for which alternatives, such as renewables, are available.

According to the International Energy Agency, capital costs for clean energy projects in poor countries are more than twice those in wealthy countries, while high upfront costs and poor lending terms force poor countries to continue burning fossil fuels.

“Tackling air pollution is essential—not only to protect the climate, but also to safeguard public health,” said Burston. “The stakes could not be higher.”