Habeck warns against "bad investments" in fossil fuels

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."

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 - such as 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."

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 left by the lack of gas from Russia.

“The question is: do we finance natural gas or oil fields for our own use? 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 import to Europe. We have committed ourselves to this and that applies.”

At last year's climate conference in Glasgow, Germany and other countries 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 Northwestern Hemisphere - have built our wealth on burning fossil fuels, of course you can't ban anything either. 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.