COP26: More than 20 countries end financing for fossil fuel projects

November 5, 2021
By CSE

Talks are continuing in Glasgow and the COP26 summit is accelerating even more the action towards the goals of the Paris Agreement and the UN Framework Convention on Climate Change. The discussion around fossil fuels is gaining momentum, with more than 20 countries committing to end financing for fossil fuel projects abroad. For the first time now, oil and gas projects are included in agreements, making it a “Historic breakthrough”.

 

Among these countries, UK took the lead, followed by Denmark, Finland, US and Canada. Italy has also signed on to a deal to end overseas financing for fossil fuels, reversing its initial negative position. Moreover, five development institutions joined the pact, including the European Investment Bank.

 

Although this is not a binding agreement yet, the aim is to stop foreign fossil-fuel funding by the end of 2022, blocking the flow of money to fossil fuel companies. The pact is also supported by the International Energy Agency, adding that investments in oil, coal or gas supply projects should end, so that we can reach net-zero global emissions by 2050. Taking into account that emissions from coal mining activity in 2021 were larger than those measured from 2017 through 2020 combined, this pact is even more important.

 

Diverting funds toward clean energy is a very ambitious goal, however, fossil fuel companies need to invest more money in green technologies. It is estimated that the required low-carbon investments will roughly reach $2-4 trillion per year until 2050.

 

Αs options narrow down, companies in the energy sector should choose the best way to adapt.

 

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