Nordic Investors Press EU to Hold Firm on Arctic Drilling Ban Despite Energy Crisis
EU Faces Pressure from Financial Institutions Amid Energy Crisis
By Stine Jacobsen and Kate Abnett
COPENHAGEN/BRUSSELS, May 27 (Reuters) - Financial institutions and investors have urged the European Union to maintain its opposition to new Arctic oil and gas drilling, as the bloc weighs revising its stance to prioritise energy security.
The call highlights investor unease that the energy crisis triggered by the U.S.-Israeli war with Iran could be used to justify rolling back climate commitments, as governments focus on securing supplies.
Nordic Financial Institutions Lead the Call
Nordea Asset Management, part of Nordic lender Nordea, and 11 other financial institutions were among signatories urging the European Commission on Wednesday not to weaken its stance, warning it would undermine both climate goals and long-term energy security.
Concerns Over Arctic Ecosystems
New Arctic fossil fuel developments would take more than a decade to come online, making them ineffective in addressing the current crisis, said the letter, organised by the Nordic Center for Sustainable Finance and Danish pension fund Sampension and also signed by civil society groups and scientists.
"The Arctic is one of the planet's most vulnerable ecosystems and home to unique wildlife .... Further oil and gas expansion would add pressure to these globally significant ecosystems, by increasing the risk of oil spills and leakages," the letter said.
Risks of Oil Spills in the Barents Sea
Oil spill simulations suggest more than 90% of spilled oil in certain fields of the Barents Sea would not be recoverable, it added.
Geopolitical Context and Norway's Position
The war in Iran has disrupted global energy markets and sent European gas prices surging.
Norway, Europe's biggest gas supplier but not an EU member, has been pushing Brussels to drop the moratorium.
With many ageing fields, Norwegian production is set to decline in the 2030s unless companies such as Equinor make new discoveries outside mature areas.
Norway's largest pension company, KLP, also signed the letter.
EU Policy and Ongoing Review
The EU's current policy supports a ban on further Arctic oil and gas development and rejects purchases of such hydrocarbons. However, no formal moratorium is in place.
A Commission spokesperson said the EU was reviewing its Arctic policy "in light of the new geopolitical and geoeconomic context" but no conclusions had been reached.
Investor Perspectives on Energy Security
Jacob Ehlerth Jorgensen, head of ESG at Sampension, said the fund backed Norway's role as an energy supplier but that Arctic drilling was not the answer to Europe's energy security challenge.
Balancing Energy Security, Climate, and Biodiversity
"This is about the next steps, where we really open up some risk - both in terms of energy security, climate and biodiversity - or whether there is a smarter way to do it," he told Reuters.
(Reporting by Stine Jacobsen in Copenhagen and Kate Abnett in Brussels. Editing by Mark Potter)
