European Investment Bank’s ‘Blue SOS’: Tackling ocean degradation through financing blue-economy projects

BySergiu Ipatii

European Investment Bank’s ‘Blue SOS’: Tackling ocean degradation through financing blue-economy projects

Humanity depends on oceans. More than two-thirds of the Earth’s surface is covered by this large ecosystem. Oceans provide billions of people with food and jobs. They also provide those who live far from them with oxygen and climatic comfort. Yet, there seems to be much apathy in changing the paradigm of human behavior towards the oceans, according to environmental organizations. The Blue Ocean initiative, launched recently by the European Investment Bank (EIB), is one of the initiatives to provide €2.5 billion to enhance the sustainability of the blue-economy both within the European Union and beyond its borders. The importance of the blue economy and the main characteristics of the Blue Sustainable Ocean Strategy (Blue SOS) are the main issues addressed in this article prepared by DevelopmentAid.  

Why are the oceans important?

Up to 25 – 30% of man-made CO2 emissions are absorbed by the oceans. The phytoplankton produces half of the oxygen we breathe each day. The oceans absorb a tremendous quantity of the atmospheric heat and forward warmer currents such as the Gulf Stream around the planet, thus contributing to life existence in different parts of the globe.

Beyond the primarily existential importance of the oceans, billions of people rely on the blue economy. Blue economy is a term used for all economic activities related to the oceans, seas and coasts. It covers a wide range of interlinked established and emerging sectors.

Blue economy in figures and numbers

Experts estimate the value of the ocean-based economy to be somewhere between USD 3-6 trillion per year, with more than 3 billion people relying on the oceans for their livelihoods. The European Union (EU), with its 68000 km coastline (more than three times longer than that of the United States and almost twice that of Russia), is no exception. Out of 28 EU member states, 24 countries control an area of sea that is larger than the total land area of the EU (more than 4.4 square km). At the same time, the latest data provided by the European Environment Agency states that almost half of the EU population lives less than 50 km from the sea.

These facts underline the importance of the blue-economy in the European Union. In 2017, the established sectors of the EU’s blue-economy directly employed over 4 million people and generated €658 billion of turnover and €180 billion of added gross value.

Humanity Vs the Ocean

Multiple sources and research conducted by think-tanks and scientific groups across the planet have a common finding to share: The world’s oceans are slowly dying because of human activities. Decades of increasing CO2 emissions have led to a build-up of heat in the oceans and changes in their chemical composition. This has led to ocean acidification, climate change, sea-level rise, extreme weather events and coastal erosion, danger to marine and coastal resources from overfishing, pollution and habitat degradation.

For example, in the EU, marine garbage generates extra expenditure and lost revenues in sectors and sub-sectors such as fishing, aquaculture and tourism estimated at almost €11 billion a year. The prognosis is alarming. The negative economic impact of climate change in the form of coastal flooding in the EU is estimated to reach between €12 billion and €40 billion a year by 2050 and to affect between 500,000 and 740,000 EU citizens.

How will the Blue SOS contribute to change?

As the lending arm and the ‘climate bank’ of the European Union, the EIB can contribute what it does best – allocating financial resources through the financing of sustainable projects in the blue economy. On October 24th, 2019, the bank announced its commitment to more than double the amount of finance to sustainable ocean projects with €2.5 billion over the next five years (2019-2023), unlocking more than €5 billion of public and private investment into the established and emerging sectors of the blue-economy.

Emma Navaro, the Vice-President of the EIB, confirmed that the bank has launched a call to all the interested players to implement blue-ocean related projects and improve the situation:

“We want to work with businesses, cities, governments and all the partners to support investments in key sectors such as coastal protection and green shipping among others. Technical assistance and advisory will be reinforced making projects more attractive for investors and complement our financing”.

The Blue SOS completes the Clean Oceans Initiative, launched by EIB in October 2018, by addressing the blue-economy. This initiative identifies projects that concentrate on fighting plastic waste in rivers, seas and on land. Its goal is to finance €2 billion in public and private sector projects by 2023. So far, the initiative, launched by the EIB, the French Development Agency (AFD) and the German promotional bank (KfW) has met a third of its target.

Eligible projects for the EIB Blue SOS

EIB will encourage and finance projects related to 4 sectors of the blue economy: Sustainable coastal development (projects that aim at protecting coasts from flooding and erosion, restore coral reefs and improve water quality); Sustainable seafood production (projects that assist businesses to produce seafood sustainably. The main players of this sector are fisheries, aquaculture or businesses involved in processing and preservation of seafood; Green shipping (projects related to reducing CO2 emissions in the shipping industry, such as new ships that use less energy and cleaner fuels); Biotechnology (projects that support new marine biotechnology products, such as medicines, enzymes, biosensors and ingredients for food).

The EIB Blue SOS strategy represents one of the measures designed to tackle the climate and environment problems faced by the world’s countries today. The latest conclusions adopted in November 2019 by the European Council stress that “climate change is a direct and existential threat to life in oceans and seas globally”. The body that defines the priorities of the EU agenda called for increased policy action at all levels of government to protect marine and coastal ecosystems.

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