Major oil and gas companies will gain easier access to green capital, which is intended to be channelled towards purely environmental transformation. This support for polluting corporations is being promoted by some European Union member states, which concluded a relevant agreement on Wednesday, 24 June.
Politico reports on this.
Oil and gas companies will be able to exploit this financial loophole if, alongside oil and gas drilling, they invest in ‘green’ energy — solar power stations, wind turbines or hydrogen technologies.
Betrayed values
Previously, the European Commission had proposed a clear distinction between ‘green’ funds and so-called transition funds, whose capital is provided to companies switching to cleaner technologies. In theory, this was intended to help combat greenwashing and give investors a clearer understanding of whether they were funding businesses that were already ‘clean’, those that were merely decarbonising, or those that were simultaneously exacerbating the climate crisis.
However, according to environmental activists, the amendments proposed by member states have gone too far.
"This clearly paves the way for greenwashing and betrays the trust of investors and consumers who believe they are investing in sustainable development," said Isabella Ritter, senior policy advisor at the non-profit organization ShareAction.
Climate disinformation
The debate centers on exactly which companies should be added to investment funds supporting the "green" transition. This is part of the ongoing review of the European Union Sustainable Finance Disclosure Regulation.
The position of the European Commission is to exclude companies that are exploring for new fossil fuel projects. The argument is straightforward: this contradicts the goals of the Paris Climate Agreement to limit global warming.
However, EU countries are demanding that companies with investments in green projects exceeding 20% should have access to sustainable financing.
"We can discuss the precise definition of fossil fuel expansion. However, an oil giant that continues developing new oil fields cannot credibly claim it is transitioning to renewables, even if some of its investment goes into renewable energy," insists Pierre Garraud, senior policy advisor at the European Sustainable Investment Forum.
Oil and gas companies further appeal to the energy crisis and the importance of increasing production to free the European Union from reliance on imported fuel. At the same time, they complain that their contribution to low-carbon energy is being ignored.
For example, in 2024 the French oil and gas giant TotalEnergies invested $4.8 billion in this segment. However, significantly more funds – around $6 billion – went into new oil and gas projects. If EU countries have their way, such companies will gain access to "green" capital as environmentally friendly entities.
EcoPolitic previously reported that, according to a BloombergNEF report, the abandonment of imported fossil fuels is the key to global energy resilience. However, experts see the optimistic scenario for this transition in the rollout of renewable energy capacities and electrification.
