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* Revised lending criteria rule out regular coal plants
* Board can tighten thresholds as EU climate policy evolves
* Latest in series of moves by multilateral banks on coal
By John McGarrity
LONDON July 24 (Reuters) - The European Investment Bank, theEU's finance arm, said it would stop lending to most coal-firedpower stations to help the 28-nation bloc reduce pollution andmeet climate targets, a move that may put pressure on otherlenders.
New and refurbished coal-fired power plants will beineligible for funding unless they emit less than 550 grams ofcarbon dioxide per kilowatt-hour (gCO2/KWh), the EIB said onWednesday, a threshold that could be met either by a combinedheat and power plant or one that also burns biomass.
"The vote to introduce an emissions performance standardrepresents a step-change in the EU's fight against climatechange and puts the bankers ahead of politicians in terms oftangible action," said Ingrid Holmes, of environmentalthink-tank E3G in a statement.
The EIB said it could tighten the emissions standard in thefuture to ensure its lending criteria are consistent with EUclimate policy and create jobs across Europe.
Since the start of 2007, the EIB has loaned around 11billion euros ($14.5 billion) to fossil fuel-fired plants, mostof it to gas rather than coal, a fraction of its total lendingfor power of 83 billion euros.
The EIB decision follows moves by other multilateralfinancial institutions such as the Washington-headquarteredWorld Bank to fund coal-fired power stations only in "rarecircumstances".
RECONSIDERING COAL
The pullback by multilateral banks comes as more privatesector lenders are already reconsidering their exposure tocoal-related assets.
"New coal power plants are no longer viewed as the low-risk,low-cost option for electricity, so we would expect that privatefinance for coal will stop flowing," said AthenaRonquillo-Ballesteros of Washington-based think tank the WorldResources Institute (WRI).
U.S. President Barack Obama said earlier this month hisadministration would impose tougher standards on coal-firedpower stations at home and urged multilateral lenders to curbfinance to the sector abroad, except for the poorest countries.
A report published by pressure group Bankwatch last yearlisted Barclays, Deutsche Bank, Royal Bankof Scotland, BNP Paribas and Credit Suisse asthe main European private sector lenders to the coal mines,transport and power stations between 2005 and 2011.
In an answer to emailed questions from Reuters, RBS said itslending to the power sector was "continually under review" andthat as of end-2012 its total lending to coal-related assets was1.2 billion pounds, or 0.2 percent of its total lending.
In the United States, JP Morgan Chase, Citigroup, Bank of America and Morgan Stanley werethe main financiers for projects that mine and burn the fossilfuel, according to the WRI report. Bank of China, Industrial andCommercial Bank of China and China Construction Bank have beenthe main private-sector Asian lenders to coal.
Some observers have questioned whether private andstate-backed lenders in Asia and the Middle East will cutinvestments in coal, given the high returns that mines and powerplants could yield in power-hungry developing countries and theearnings at stake for suppliers of coal-related technology.
In the past year, Abu Dhabi state-owned energy company TAQAsigned a $12 billion deal with Turkey to mine and generate powerfrom lignite, the dirtiest form of coal, while the ChinaDevelopment Bank agreed to lend Ukraine around $3.6 billion todevelop the gasification of coal, a technology deemed to beemissions-intensive.
Although China and India are expected to record the biggestgrowth in energy demand in the coming decades, other largedeveloping nations are likely to build hundreds of newcoal-fired power stations in order to fuel economic growth,according to WRI.
Last year the International Energy Agency said coal couldovertake oil as the world's primary energy source, making iteven more difficult to slow the pace of long-term climatechange.
