Reuters:

The European Investment Bank said on Thursday it would stop funding fossil fuel projects at the end of 2021, a landmark decision that potentially deals a blow to billions of dollars of gas projects in the pipeline.

The bank’s new energy lending policy, which it said was approved with “overwhelming” support, will bar most fossil fuel projects, including traditional use of natural gas.

Under the new policy, energy projects applying for EIB funding will need to show they can produce one kilowatt hour of energy while emitting less than 250 grams of carbon dioxide, a move which bans traditional gas-burning power plants.

The policy raises new risks for the gas industry, which has more than $200 billion in liquefied natural gas projects lining up to go ahead worldwide over the next five years, aiming to provide a cleaner alternative to coal and oil.

“The EIB’s new financing criteria will make lending to gas projects very difficult,” Nicholas Browne, a Singapore-based research director with global energy and mining consultancy Wood Mackenzie, said in a note. “In turn this would be a major strategic challenge for companies that have identified gas as the key driver of future growth,” he said.

Under the new policy, gas projects would have to be based on what the bank called “new technologies,” such as carbon capture and storage, combining heat and power generation or mixing in renewable gases with the fossil natural gas.

More: European Investment Bank to cease funding fossil fuel projects by end-2021