Think tank cites loopholes in new ADB energy policy

MANILA, Philippines — The latest energy policy of Asian Development Bank (ADB) to exit from coal financing is still being questioned as certain loopholes remain, according to a local think tank.

While it welcomed ADB’s decision, the Center for Energy, Ecology, and Development (CEED) said the Manila-based multilateral lender’s loopholes and plans to support fossil gas cloud the bank’s overall commitment toward a low-carbon transition in the region.

ADB recently announced that it would no longer fund new coal mining, oil and natural gas field exploration, drilling or extraction.

However, support for natural gas and oil will depend on support for energy access, avoiding carbon lock-in and strict screening criteria.

While CEED said the policy is a step-up from the bank’s coal-friendly strategy more than a decade ago, doubts remain on ADB’s commitment to support climate and sustainability ambitions of its developing member countries (DMCs).

“ADB says no more new coal financing, but the language the bank uses gives no assurance that the policy will also guard against coal investment activities through intermediaries,” CEED executive director Gerry Arances said.

“The coal buy-out scheme that ADB proudly says will assist member countries in phasing out coal actually risks unintentionally giving proponents of new coal projects confidence to proceed with their implementation while possibly providing a new lifeline for operating plants,” he said.

The group argued that it is imperative for ADB to address concerns amid worsening climate change.

CEED also noted that ADB’s support for gas threatens to overturn sustainability advances that its moves against coal potentially offer, emphasizing that gas is a roadblock to the Philippines and Asia-Pacific’s clean energy ambitions.

“Until ADB completely says no to gas, its attempts at positioning itself as the region’s climate bank remain clouded in suspicion,” Arances said.

The think tank reiterated its call to ADB to halt funding climate catastrophe with fossil fuels and to stop promoting false solutions.

“For ADB to inch toward becoming a bank for genuine development, it has to massively support our only way out of climate doom in the energy sector: the sustainable displacement of fossil fuels with clean and affordable renewable energy,” Arances said.