THE ASIAN Development Bank (ADB) needs to stop financing all types of fossil fuel and waste-to-energy (WTE) projects when it updates its energy policy, non-government organizations (NGOs) said Thursday.
The NGOs were reacting to a bank working paper on its 2021 energy policy, which called for selective support for projects in the downstream oil, and midstream and downstream natural gas sectors.
“When we look at the wording of the ADB’s draft policy, what we see (that) it lines up alongside provisions to finance oil (and) gas… We call on the ADB to explicitly drop financing for new oil and gas projects, and clearly screen financial intermediaries to make sure that none of these modalities are exposed to coal, oil or gas,” Tanya Lee Roberts-Davis, the Energy Policy and Campaigns Strategist of NGO Forum on ADB, said during a virtual briefing Thursday.
The ADB’s working paper, posted on its website on Aug. 16, cited plans to limit funding for downstream oil projects to hybrid electricity solutions that use petroleum-based backup systems along with renewable energy (RE) for off-grid areas.
It added that it is considering supporting natural gas projects that will improve universal access to clean energy for cooking, as well as finance investment in natural gas infrastructure, based on criteria consistent with the Paris Agreement.
Center for Energy, Ecology and Development Research, Policy and Law Program Head Avril de Torres said the ADB must “close the door on all fossil fuels.”
“We need ADB to take on the greatest ambition and ramp up support for long-term RE alternatives instead of short-term alternatives that can perpetuate fossil fuel dependence, create barriers eventually or even crowd out RE,” she said in the briefing.
In a statement Thursday, Executive Director of the NGO Forum on ADB Rayyan Hassan said there are “loopholes” in the ADB’s working energy policy that may allow support for coal investment through financial intermediaries.
“While the coal exit language has been retained, loopholes remain. There is nothing stopping the ADB from supporting investment in coal via financial intermediary lending, or in transport and connectivity infrastructure that will enable further coal trade and extraction,” he said.
He added that the working paper also did not have well-defined or time-bound criteria on ending support for the expansion of fossil fuel infrastructure.
In its draft, the ADB also said it will consider supporting WTE investment for heat and electricity.
“WTE investments can improve local environments and health in cities and rural areas by removing the environmental hazards caused by open waste dumping… The potential environmental and social impacts of waste-to-energy investments will be managed by using the best internationally available technologies in the design and operation of such projects,” it said.
Yobel Novian Putra, an Asia-Pacific Climate and Clean Energy campaigner for Global Alliance for Incinerator Alternatives, said that the ADB should exclude investment in WTE since the technology emits more carbon than coal-fired plants.
“Science has clearly shown that waste incineration is not a low-carbon investment and studies also have shown that waste-to-energy incinerators emit more carbon than coal-fired power plants (CFPP). It also costs more than CFPPs per MW produced. In fact, it’s three times more expensive than renewable sources such as solar and wind,” he said.
In its draft, the bank said it plans to withdraw from investing in new coal-fired power projects, upstream and midstream oil projects, natural gas exploration, and nuclear power.
BusinessWorld asked the ADB to comment but had not received a reply at deadline time. — Angelica Y. Yang
