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Wednesday, February 1, 2023

Climate: Habeck warns against bad investments in fossil infrastructure

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Should the KfW development bank support fossil energy projects abroad? The federal government is still looking for an answer. Economics Minister Habeck already has one for himself.

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Federal Economics and Climate Protection Minister Robert Habeck warns against extensive investments in fossil fuels abroad. “In my view, we should not invest in fossil infrastructures that we will no longer need later and that will then become bad investments,” said the Green politician of the German Press Agency in Berlin. “There is still no final joint formation of opinion in the government.”

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The background is the forthcoming revision of a guideline by the state development bank KfW. It is about the question of whether KfW can also finance projects abroad that include fossil infrastructure – for example pipelines for oil or gas. “KfW has a funding guideline that is geared towards the 1.5 degree target,” said Habeck. “This is now to be reworked.”

Climate cutbacks in terms of energy supply

KfW has guidelines for financing in various sectors such as shipping and iron and steel production. There is still a need for discussion in the oil and gas sector. Climate protectors fear that, in terms of energy supply, cuts should be made to the goal agreed at the Paris Climate Agreement in 2015, to keep global warming well below two degrees compared to the pre-industrial period, but if possible to stop it at 1.5 degrees.

The new directive could also be relevant for a project in Senegal: Chancellor Olaf Scholz (SPD) had promised the small country in West Africa support in developing a gas field off the coast in May. This could fill at least part of the gap created by the lack of gas from Russia.

“The question is: do we finance natural gas or oil fields for our own needs? And we have to stick to the climate protection goals we have set ourselves,” said Habeck. “The commitments we made at G7 and climate protection summits state that we will no longer invest in fossil energy infrastructure for imports to Europe. We have committed to this and that applies.”

Habeck: focus on future technologies

At last year’s climate conference in Glasgow, Germany and other countries had agreed not to put any new public money into fossil energy projects in other countries until the end of 2022, except in limited and “clearly defined” circumstances that are in line with the Paris climate agreement and the goal of limiting global warming to 1.5 degrees compared to pre-industrial times.

If other countries wanted or had to produce gas for their own use, he would always advise African countries to focus more on future technologies, said Habeck. “But after we – the north-western hemisphere – have built our wealth on the combustion of fossil fuels, of course we shouldn’t ban anything. Former colonial powers who say ‘Please stay poor and climate-neutral’, that’s not possible.” However, he would advise energy production with renewable hydrogen. “That’s the future.”

Habeck was recently in Namibia with the aim of promoting a large hydrogen project. Hydrogen is considered a beacon of hope in the transition to more climate-friendly economies.

Source: Stern

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