ECB Injects Over EUR7 Billion Into Fossil Fuels Since Start of COVID-19 Crisis

Greenpeace analysis shows that between mid-March and mid-May 2020, as part of its response to the coronavirus pandemic, the European Central Bank (ECB) purchased corporate bonds worth almost EUR30 billion. This included the injection of over EUR7.6 billion into fossil fuels.

With the purchase of bonds from just seven big polluters, the ECB contributed an estimated 11.2 millions tons of carbon emissions into the atmosphere, which is more than the entire annual emissions of Luxembourg. The ECB Governing Council is meeting on 4 June to discuss a review of its monetary strategy.

The breakdown of the ECB corporate bond purchases exposes that EUR4.4 billion went to utilities, with prominent polluters such as Engie or EON on the list of companies whose debt the ECB has been buying. Over EUR3.2 billion [1], with an estimated carbon footprint of almost eight million tons, went to the oil and gas industry, with bonds purchased from Shell - one of the most polluting companies on earth - Total and Eni, among others.

The ECB is one of the biggest bond purchasers in the world and the regulator of banks in the Eurozone. Any asset purchases the ECB makes have a massive influence on the fossil fuel industry and impact both Europe's 'green' recovery from the health crisis and the climate emergency. The ongoing asset purchasing programme launched by the ECB in 2014 as a response to the Euro crisis proved to be substantially destructive to climate efforts. Analysis from the London School of Economics demonstrated, for example, that although utilities make up only 5% of Euro-denominated corporate bonds, they accounted for 25% of ECB purchases [2].

Greenpeace calls on the ECB to exclude fossil fuel companies from quantitative easing, i.e. purchasing securities, largely bonds, to increase the money supply, and lower interest rates in the Eurozone. The ECB's monetary policy review must lead to the inclusion of climate risk throughout ECB operations, whether by the exclusion of fossil fuels from collateral that banks are allowed to give the ECB when they borrow money, or by increasing the amount capital banks are required to hold when they lend money to fossil fuel companies.