The EU charges against the financing of hydrocarbons on the eve of COP27

The Council of the European Union today adopted its position ahead of the COP27 climate summit to be held in Sharm-el-Sheikh (Egypt) between November 6 and 18, where the EU says it observes with “concern the magnitude of private financing” towards the fossil fuel sector.

The institution representing EU member states says in its pre-summit conclusions that it “notes with concern the scale of private funding that currently continues to support activities not aligned with the Paris Agreement, especially in the fossil fuel sector, and the harmful incentives that still exist.”

At the UN climate summit held in 2021 in Glasgow (United Kingdom), the parties agreed to “accelerate efforts towards phasing out coal power and phasing out inefficient fossil fuel subsidies.”

The objectives of COP27

“Carbon pricing (paying to emit_CO2) and phasing out environmentally harmful fossil fuel subsidies are key components of an enabling environment to shift financial flows towards climate-neutral, climate-resilient and sustainable investments,” the Twenty-seven stress.

The European Union also “renews the firm commitment” of the community bloc that rich countries mobilize a total of 100,000 million dollars a year from 2020 to help developing countries in the climate transition, with the hope that this unfulfilled promise will materialize “in 2023”.

In this regard, the Council recalled that the EU and its Member States are “the largest contributors to international public climate finance, and have more than doubled their contribution to climate finance to support developing countries since 2013”, so it called on “other donors” to continue along the same lines.

In the conclusions adopted before the climate summit in Egypt, the Twenty-seven also review some of the most outstanding climate policies of the EU in recent years, such as allocating 30% of the EU budget to climate action or approving and developing a law to reduce CO2 emissions by 55% in 2030 compared to 1990 values.

The Council also cites the design of the RepowerEU emergency plan following Russia’s invasion of Ukraine to move away from the Kremlin’s fuel dependence without deviating from climate targets, essentially through investments in renewable energy and energy saving.

It also welcomes the G7’s objective of creating “a Climate Club, as an intergovernmental forum of great ambition to support the effective implementation of the Paris Agreement” so that temperatures at the end of the century do not exceed 2 degrees Celsius with respect to pre-industrial values and are as close as possible to 1.5 degrees.

The Council also recalls that the EU has an emissions trading market, known as ETS, which taxes CO2 emitted by energy-intensive industries and aviation, and which is preparing a Carbon Border Adjustment Mechanism to prevent so-called “carbon leakage” and force products sold in the EU to have similar climate standards, even if they occur outside the community club.

Source: The Energy Newspaper