Monetary policy and climate obligations: Can the ING case bypass ECB independence?

This article discusses the independence of the European Central Bank in relation to climate obligations. The article first considers the independence of the ECB and the applicability of secondary legislation through the OLAF case; it then discusses the relationship between the primary mandate and the right to environmental protection codified by the Charter of Fundamental Rights of the EU. The article argues that the primary mandate must abide by the climate obligations. It then continues by assessing the climate plan of the ECB’s monetary policy in light of the recent ECtHR case law on the matter and determining that the current ECB climate plan lacks specific targets and evaluation criteria. The article then discusses the ECB’s climate obligations in light of the secondary mandate. It is argued that there are multiple options open to the ECB on how to reach emission reduction targets, and that detailed instructions on how to reach the targets from the legislator would interfere with its independence. Finally, the upcoming Dutch climate case of Milieudefensie v ING may provide a further piece of the puzzle, in that it may provide more clarity on the obligations of (commercial) banks. By contrast, without climate targets in its monetary policy, the ECB may circumvent financial stimulation to brown industries through its own purchases. This would result in an undesirable situation as the ECB would be able to purchase assets that commercial banks cannot. It is therefore this article’s conclusion that preliminary questions touching on this topic should be asked in the Dutch case; ideally, the Court of Justice of the European Union should then use the opportunity to require of the ECB that it abides by its climate obligations