EU Will Vow to Work Against Fossil-Fuel Investments Globally

Bloc set to pledge to embed climate goals into foreign policy EU will pledge to promote use of the euro in energy trading

EU Will Vow to Work Against Fossil - Fuel Investments Globally

The European Union plans to use its diplomatic and economic muscle to accelerate global energy transition away from fossil fuels, as the bloc aligns its foreign and security policy with its ambitious climate objectives.

“EU energy diplomacy will discourage all further investments into fossil fuel based energy infrastructure projects in third countries, unless they are fully consistent with an ambitious, clearly defined pathway towards climate neutrality,” foreign ministers are poised to say in a joint communique on Monday. “The EU will ensure that its trade policy and its trade agreements are consistent with its climate ambition,” ministers will declare, according to a draft of their statement obtained by Bloomberg.

EU leaders committed last month to cut the bloc’s 2030 greenhouse emissions by 55% compared to 1990 levels, and affirmed their pledge to turn Europe into the world’s first climate-neutral continent by 2050. Alarmed that the bloc’s ever stricter environmental regulations will simply force polluting activities to relocate elsewhere in the world, they are eager to eliminate “carbon leakage” by forcing the rest of the globe to fall in line with the Paris Agreement against climate change.

Taxing Pollution

The EU’s executive arm is drafting a law, to be unveiled by June, that would start penalizing imports of certain goods from countries with weak pollution rules, thereby helping to protect the competitiveness of local producers abiding by stricter standards. This push to export climate standards got a boost last week when President Joe Biden moved to restore the U.S. as a member of the Paris climate accord, which seeks to limit global temperature increases to 2 degrees Celsius through steep reductions in greenhouse gas emissions.

The Biden administration is planning to host world leaders in a climate summit on Earth Day in April, a sign of the new president’s commitment to strengthen the Paris agreements. Biden, who has signaled he wants the U.S. to encourage stronger climate action globally, will likely find the EU as a major ally in his initiatives.

The pledges are the latest in a series of policy initiatives comprising the so-called European Green Deal, a comprehensive package of measures that will push every sector of the region’s economy toward low and eventually zero greenhouse emissions. Officials in Brussels hope the sweeping overhauls will also help the bloc assert its “strategic autonomy,” which is constrained by the dollar’s dominance in international finance.

The European Commission is already on course to become the world’s largest issuer of green and social debt, which will be jointly backed by all EU member states. Brussels expects the issuance will turn the EU into a “global ‘green finance’ hub, bolstering the euro as the default currency for the denomination of sustainable financial products,” according to a policy document unveiled last week.

Adding to signs that weaning off dollar dependence has turned into a central policy objective, ministers on Monday will pledge to promote “the use of the euro in energy trading,” according to the draft of their statement.

About Stu Turley 3230 Articles
Stuart Turley is President and CEO of Sandstone Group, a top energy data, and finance consultancy working with companies all throughout the energy value chain. Sandstone helps both small and large-cap energy companies to develop customized applications and manage data workflows/integration throughout the entire business. With experience implementing enterprise networks, supercomputers, and cellular tower solutions, Sandstone has become a trusted source and advisor.   He is also the Executive Publisher of www.energynewsbeat.com, the best source for 24/7 energy news coverage, and is the Co-Host of the energy news video and Podcast Energy News Beat. Energy should be used to elevate humanity out of poverty. Let's use all forms of energy with the least impact on the environment while being sustainable without printing money. Stu is also a co-host on the 3 Podcasters Walk into A Bar podcast with David Blackmon, and Rey Trevino. Stuart is guided by over 30 years of business management experience, having successfully built and help sell multiple small and medium businesses while consulting for numerous Fortune 500 companies. He holds a B.A in Business Administration from Oklahoma State and an MBA from Oklahoma City University.