European Bank for Reconstruction and Development

Fossil fuel exclusion policies

This page is part of the E3G Public Bank Climate Tracker Matrix, our tool to help you assess the Paris alignment of public banks, MDBs and DFIs

Paris AlignmentReasoning
Some ProgressExclusion of coal and upstream oil and gas. EBRD lacks downstream oil and gas policies.
 Alignment and Reasoning
Coal policiesCoal and associated infrastructure excluded.
Upstream oil and gas policiesNo upstream oil exploration or development (with exceptions for projects that reduce GHG).
Downstream oil and gas policies No can be found for any downstream oil and gas exclusion policies.
Supply-side energy efficiency Will finance efficiency in the hydrocarbon sector. Supports installation of coal to highly efficient gas fuel switching.



In December 2018, the EBRD’s Board of Directors adopted its Energy Sector Strategy for 2019-2023. As part of this, the Bank will “not finance thermal coal mining or coal-fired electricity generation capacity” (including upgrades to existing plants or the construction of new capacity).  

In addition, the Strategy states that the Bank will not finance port terminals principally dedicated to thermal coal, nor will it finance transport links principally dedicated to carrying thermal coal (for example, a rail line transporting coal from a mine or port terminal to a power generation plant).   

For district heating the Bank will not finance any investment in coal-fired heat-generating plants. It may, however, finance district heating companies that use coal as part of their energy mix provided that the investment is not related to, or is outside the boundary of, coal-based heat generation. In such instances its focus will be on energy efficiency investments such as network rehabilitation, installation of modern controls, improved metering and demand-side measures. 

Oil and gas 

In the 2018 Energy Sector Strategy the EBRD stated that it would “not finance any upstream oil exploration; and not finance upstream oil development projects except in rare and exceptional circumstances where the projects reduce greenhouse gas emissions or flaring”.  

However, the Bank will continue to support the gas sector during the Strategy period “where it is consistent with a low-carbon transition that is both secure and affordable”. 

It outlines a series of criteria for gas investments, including that gas projects must: 

  1. not displace less carbon-intensive sources, or lead to carbon lock-in or stranded assets.  
  2. be subject to the EBRD’s usual economic assessments of projects, which will account for key externalities and apply a shadow price of carbon.  
  3. be consistent with NDCs and the Bank’s Environmental and Social Policy (including requirements for using best available techniques). 

It should be noted that all the EBRD projects are subject to its economic assessment which includes externalities and the EBRD’s Environmental and Social Policy, so those two parts of the criteria above are not additional for gas projects.

The EBRD Energy Sector Strategy is currently valid until 2023, which suggests that a review process should begin in late 2021 or early 2022. 

Recommendation: The EBRD should bring forward its review of its Energy Sector Strategy to early 2021 as part of its wider Paris alignment process, and reconsider its policy around oil and gas in particular. It should look to adopt any best practices from the EIB in this area. 

Supply-side energy efficiency 

The EBRD’s energy strategy allows fuel switching to less carbon-intensive sources, in particular from coal to gas (and renewables). 

The EBRD will finance network rehabilitation, installation of modern controls and metering for district heating companies that use coal as part of their energy mix provided that the investment is not related to, or is outside the boundary of, coal-based heat generation.  

The Bank may finance environmental and efficiency upgrades of existing coal heat generators, located within industrial facilities, supplying heat to industrial processes and/or district heating networks; provided that as a result of the investments, the specific units comply with EU emissions limits and Best Available Techniques requirements. 

Supporting energy-efficiency improvements along the oil and gas value chains (for example, waste-heat recovery) and increasing the capacity of companies to adopt energy-efficiency improvements are also included. 

Last Update: November 2020

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