(Peterborough Examiner, 18 October 2021) The federal government has no plans to immediately stop Crown corporations from financing fossil fuel companies, but it’s not ruling out pushing them to reduce those supports more quickly, says Canada’s environment minister. The issue of public financing for oil and gas companies is expected to be on the agenda at the next major world summit on climate change this month, where countries that signed the 2016 Paris Agreement — including Canada — are under pressure to increase efforts to reduce their annual greenhouse gas emissions. A major report from leading scientists this summer prompted the United Nations’ secretary general to herald the “death knell” for fossil fuels that have driven emissions for decades. In an interview Friday, federal Environment Minister Jonathan Wilkinson told the Star that Crown institutions like Export Development Canada (EDC) are already committed to “net-zero” emissions — when nature or technology can remove remaining greenhouse gas pollution from the air — by 2050. Big money is in play here. EDC, the government’s export credit agency, says it provided financing and insurance that helped facilitate $62 billion in business for Canadian oil and gas companies from 2015 to 2020. And the board that invests the Canada Pension Plan’s $500-billion pool of money says it had about $17.6 billion invested with fossil fuel producers around the world as of March 2021.
Canada
Export Development Canada Promises Net Zero by 2050
(Globe Newswire, Ottawa, 22 July 2021) Export Development Canada (EDC) is committing to net zero emissions by 2050 across its business lines and in its own global operations. The Crown corporation’s plan will include interim reduction targets for the most carbon intensive sectors for 2023 and 2030, supported by sustainable finance objectives. Meanwhile, EDC may face court action in the not-too-distant future, after a legal opinion commissioned by Oil Change International and several other organizations concluded that national export credit agencies have an international legal obligation to scale back their financing for fossil fuel-related activities. Canadian mining and gas company ReconAfrica is currently exploring for oil and gas in Namibia and Botswana which could become one of the biggest oil finds of the last few decades.
As banks [and ECAs?] flee coal, campaigners turn sights on gas
(Global Trade Review, London, 16 June 2021) Environmental campaign groups are switching their aim to public and private financing for natural gas projects as they get closer to winning the battle over thermal coal. But the only firm commitments on financing have been on thermal coal, where the G7 nations – Canada, France, Germany, Italy, Japan, the UK and the US – committed to “take concrete steps towards an absolute end to new direct government support for unabated international thermal coal power generation by the end of 2021” including export finance and trade support. But data from Oil Change International, a non-profit that campaigns against the use of fossil fuels, suggests the move will make little impact on overall public financing for fossil fuels. In recent months, UK Export Finance (UKEF) has been working to roll out a new transition development guarantee scheme to help oil and gas companies switch towards less polluting operations. But while industry bodies have backed the export credit agency’s plans, analysts (and campaign groups) have warned new initiatives must avoid funding any and all fossil fuels… There has not yet been much market uptake of instruments issued using for example the LMA’s Social Loan Principles.
EDC singled out on fossil fuel finance by international legal opinion
(National Observer, Vancouver, 5 May 2021) EDC’s financial support to the oil and gas sector came under scrutiny Tuesday as part of a new legal opinion outlining Canada’s obligations in responding to the climate crisis. The legal opinion from London says governments must take steps to stop their export credit agencies from providing financial help to oil and gas projects worldwide. EDC provided over $8 billion in support last year to the oil and gas sector, it has confirmed, and over $10 billion the year before. EDC says it operates at arm’s length from the government, that it has cut down on its lending portfolio’s exposure to high-carbon sectors in recent years, and complies with all the OECD climate-related policies. Viñuales and Cook’s legal opinion explicitly singles out EDC as representing the largest supporter among G20 export credit agencies of fossil fuels during the 2016-18 period. EDC’s climate change policy — and some criticism levied against it related to oil and gas — is also highlighted.
Canada’s oil and gas sector received $13 billion in EDC subsidies during the pandemic
(The Narwal, Victoria, 15 April 2021) Despite repeated promises to phase out fossil fuel subsidies, Canada’s federal government dedicated $18 billion in 2020 to assist the country’s oil and gas sector, according to a new report from Environmental Defence that outlines additional support for the industry since the COVID-19 pandemic was declared last March. Included in the $18 billion are $3.28 billion in direct spending and $13.6 billion in public financing for oil and gas companies that primarily comes from the opaque crown corporation Export Development Canada, according to the report, Paying Polluters: Federal Financial Support to Oil and Gas in 2020.
CSOs say newly launched export finance coalition (E3F) fails to lead
(Oil Change International, Washington, 15 April 2011) In response to the launch of a new Export Finance for the Future coalition (E3F), 21 civil society organizations (CSOs) from 14 countries released a statement criticizing the lack of ambition from the coalition. The seven European countries, which according to French Finance Minister, Bruno Le Maire represent around 40% of export financing in the OECD, pledged to end formal trade and export financing directed at thermal coal mines and coal supply chain infrastructure. While welcoming the initiative as a step in the right direction, the CSOs, including Oil Change International, state that the coalition fails to take the urgent action that is required to meet climate goals: “Rather than adding new commitments, the E3F principles are simply a reiteration of what most signatories are already doing: not supporting the coal sector, increasing support for ‘green products’, and being more transparent about their support for oil and gas. For this coalition to make a real difference, it needs to take decisive action to end all export finance for fossil fuels, following at least the level of ambition shown by the UK, which put an end to virtually all new export finance for fossil fuels last month.” Seven European countries (Denmark, France, Germany, the Netherlands, Spain, Sweden and the United Kingdom) formally pledged to end their support for agencies that finance export projects Fossil fuels. CSOs note that a few countries are embarrassingly absent from the coalition, including the US and Canada. In January, the White House published an Executive Order stating that it would “promote ending international financing of carbon-intensive fossil fuel-based energy,” including finance provided by US EXIM. And while Canada’s export finance institution, Export Development Canada (EDC), was among the first ECAs to adopt a climate change policy, it remains a top provider of export support for fossil fuels.
EDC is undermining Canada’s climate commitments. Will Ottawa step in and take action?
(Above Ground, Ottawa, 13 January 2021) Between 2016 and 2018, Canada provided more public finance for fossil fuels than any G20 country other than China, with Export Development Canada (EDC) providing on average $13.8 billion in support to oil and gas companies each year. Last month more than 50 civil society organizations joined us in calling for Ottawa to cut off this enormous flow of public financial support to an industry fuelling the climate crisis. Our letter to the trade minister urges the government to immediately end EDC’s support for all fossil fuels and to scale up its support for sustainable, renewable and equitable climate solutions that respect human rights. Find out more about EDC’s support to fossil fuel producers in our fact sheet.
Bombardier cooperating with SFO corruption investigation
(Compliance Week, Boston, 6 November 2020) The U.K. Serious Fraud Office (SFO) on Thursday confirmed it is investigating plane maker Bombardier over suspected bribery and corruption in relation to contracts and orders from Indonesian airline carrier Garuda Indonesia. According to the allegations, Garuda’s former CEO received US$3.2 million in bribery payments from consultants in exchange for securing maintenance and procurement contracts for Rolls-Royce, Airbus, Bombardier, and Avions de Transport Regional. The bribery payments were said to have originated from the commissions received by the consultant from each of these airline manufacturers. The U.K. Serious Fraud Office (SFO) on Thursday confirmed it is investigating plane maker Bombardier over suspected bribery and corruption in relation to contracts and orders from Indonesian airline carrier Garuda Indonesia. As Compliance Week previously reported, a March 2017 report by the Organized Crime and Corruption Reporting Project — a consortium of nonprofit investigative centers and media outlets around the globe — alleged Bombardier Transportation paid “millions of dollars in bribes to unidentified Azerbaijani officials through a shadowy company registered in the United Kingdom. Canada’s Export Development Corporation (EDC) first initiated a review of Bombardier in August 2019, following leaked preliminary findings from a World Bank investigation into a 2013 contract Bombardier Transportation had with Azerbaijan Railways. In February 2020, (EDC, Canada’s export credit agency wholly owned by the Government of Canada, concluded in an independent review of Bombardier’s compliance policies and procedures that the company was progressing.
G12 ECA Group Issues First-Ever Joint Statement
(Global Trading Magazine, Dallas, 25 September 2020) At the Sept. 9 end of the two-day 2020 G12 Heads of Export Credit Agencies (ECAs) meeting, which EXIM Bank hosted virtually from its Washington, D.C. headquarters, the 12 Heads of ECAs issued its first-ever G12 joint statement. ECAs involved included: EXIM USA (Host), Brazil, Canada, China, France, Germany, India, Italy, Japan, Russia, the Republic of Korea and the United Kingdom. The 2020 G12 Heads of Export Credit Agencies (ECA) Meeting was a productive and open exchange that highlighted efforts aimed at stabilizing the availability of working capital and export credit in a volatile international market environment. The transparent discussion brought forth the important work each ECA is undertaking to mitigate the economic impacts of the COVID-19 pandemic. The ECA leaders reiterated their steadfast commitment to supporting their global supply chains—domestically and internationally—as well as promoting exports, job security, and financial investment, all of which underpin prosperity at home and abroad. In the wake of the COVID-19 pandemic, this is an important time for Export Credit Agency leaders from around the world to find common ground on key initiatives, especially those that foster greater transparency,
Gensource Potash awaits Hermes approval of ECA support
(Business Wire, Saskatoon, 31 August 2020) Gensource Potash Corporation, a Canadian fertilizer development company focused on sustainable potash production, announces the successful completion of the next major milestone for its Tugaske Project. Gensource has now received approval of its Development Permit Application for a potash mine from the Rural Municipality of Huron No. 223, whose offices are in the Village of Tugaske, Saskatchewan. A significant portion of the Facility is to have ECA coverage from Hermes, with procurement managed by MAVEG Industrieausrüstungen GmbH using a Debt Facility of approximately US$180 million, with due diligence to be overseen and managed by KfW IPEX-Bank.
