(FOE Japan, Tokyo, 14 November 2017) On November 14, The Japan Bank for International Cooperation (JBIC) disbursed the first installment of a loan for the 1000 MW Cirebon coal-fired power plant expansion plan which Marubeni and JERA invested in, known as Cirebon 2. The total loan amount JBIC has signed in the loan agreement is around USD 731 million. However, the validity of the new environment permit, which has only recently been issued, is still in question. The local community and NGO groups, which are opposing the project, are preparing to file an administrative lawsuit next week, demanding the revocation of the new environment permit. This would make it impossible for the Cirebon 2 project to violate the laws of the host country (Indonesia) and the “JBIC Guidelines for Confirmation of Environmental and Social Considerations”. This disrepectful JBIC neglect of the lawsuit by local residents is a repeat of its conclusion of the loan agreement without an adequate EIA. JBIC had a meeting with the local community and NGO groups in Indonesia last October and directly heard their concerns and the judicial risks. Nevertheless, JBIC decided to disburse the loan and just push through with the project ignoring their concerns.
Friends of the Earth Japan
G20 countries need to stop using export credit agencies to finance fossil fuel projects
(FOE US, Washington, 16 October 2017) Although at least seven major countries — including Canada, France, and Germany — have made commitments to phase out coal power domestically, their export credit agencies, or ECAs, have poured money into coal plants and other fossil fuel projects in other countries. According to a new report by Friends of the Earth U.S. and Oil Change International, ECAs annually fund $32 billion worth of projects in the oil and gas sector alone. That is 11 times more than what ECAs provide to clean energy projects. The OECD Export Credit Group has implemented restrictions on financing of some coal plants but unfortunately, these restrictions are not enough to stem the destructive financing of ECAs. Key findings of the report include: From 2013 to 2015, G20 ECAs provided 12 times as much support to fossil fuels as clean energy; ECAs provided over $32 billion annually to support oil and gas projects; Japan is the worst offender, providing over $13 billion annually to fossil fuels, followed by Korea and the United States supporting almost $8 and almost $6 billion annually, respectively. An end to ECA’s support of fossil fuels would probably stop many dangerous projects from going forward. One is a coal plant in Vietnam — Long Phu 1 — that would produce at least 6.3 million tonnes of carbon dioxide each year. Another project is the development of liquefied natural gas in northern Mozambique, which has already destroyed the land of local communities and endangers unique ecosystems such as mangroves and coral reefs. The president of the World Bank recently noted that plans to build more coal-fired power plants in Asia would be a “disaster for the planet” and overwhelm the deal forged at Paris to fight climate change. The report recommends that all ECAs disclose the amount and nature of all fossil fuel-related transactions, as well as information on their decision making process, and formulate policies to phase out all support for fossil fuels. The report follows an NGO coalition’s July 2017 report showing G20 nations provide four times more public financing to fossil fuels than to renewable energy.
Indonesian Community Reps File Cirebon Coal Plant Objections with JIBC
(Friends of the Earth Japan, Tokyo, 24 May 2017) On May 24, 2017, two Indonesian community representatives affected by the JIBC supported Cirebon Coal-fired Power Plant Project in West Java arrived in Japan and handed their objections to the Japan Bank for International Cooperation (JBIC) with respect to the expansion of the Unit 2 power plant (1,000 MW). At the same time, Indonesian and Japanese NGOs filed their complaints with the Japanese National Contact Point (NCP) under the OECD Guidelines for Multinational Enterprises (MNEs). Japanese public and private sectors, including Marubeni and JERA as investors, have pushed through the project despite already serious damages to the livelihoods of the local community and the April 19 revocation of its environmental permit by the District Court in Bandung.
JBIC Must Immediately Review and Repeal its Loan Agreement for Illegal Indonesian Coal Project
(Friends of the Earth Japan, Tokyo, 19 April 2017) Following objections from local affected villagers, on April 19th the regional court in Bandung, West Java revoked the environmental permit for the 1000MW Cirebon coal-fired power plant expansion plan known as Cirebon 2 (which Marubeni and JERA invested in). The Japan Bank for International Cooperation (JBIC) had concluded a loan agreement for Cirebon 2 on April 18, the day immediately before the court verdict was due. JBIC now must sincerely take into account the local villagers’ rights and the judicial decision in the host country. JIBC must immediately review and repeal its decision to provide financing for Cirebon 2, as the project is illegal according to local law and in violation of the “JBIC Guidelines for Confirmation of Environmental and Social Considerations” (Guidelines) which require “the compliance with environmental laws of the host nation and local governments concerned” and “the submission of environmental permit certificates issued by the host governments.”
280 CSOs from 47 Countries Call on Japanese Government to Reject Support for Indonesian Coal Plants
(FOE Japan, Tokyo, 27 March 2017) On March 23, Indonesian and Japanese CSOs submitted an international petition signed by 280 CSOs from 47 countries to the Japanese government, calling on JBIC and JICA not to finance the Cirebon expansion coal-fired power plant (1,000 MW) and the Indramayu expansion coal-fired power plant (1,000 MW), both located in West Java, Indonesia.
Japanese ECA finances Indonesian coal plant despite widespread opposition
(Banktrack, Nijmegen, 28 February 2017) As financial close was announced on the Tanjung Jati B 2 (TJB2) coal expansion power project in Indonesia yesterday, BankTrack, Friends of the Earth Japan and 350.org Japan criticised the Japan Bank for International Cooperation (JBIC) and several Japanese and Singaporean banks for their support for the project. JBIC’s approval of a USD 1.7 billion loan agreement for the project, with further backing from the “big three” Japanese commercial banks – Mizuho Bank, Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corporation – as well as other Japanese banks and Singapore’s OCBC, comes after French banks Société Générale and Crédit Agricole withdrew from the bank consortium in December. The building of two new coal power units will make the already hard-felt impacts of the existing Tanjung Jati B coal power station worse. The local fishing community cites reduced catches, damage to the coral reef and collisions between fishing boats and coal transport barges. It will also worsen the impacts of air pollution. A Greenpeace report has estimated that the first four units are already responsible for 1,020 premature deaths per year because of respiratory infections caused by air pollution from the plant.
Indonesian Batang Villagers file objection against JBIC coal-fired power project
(FOE Japan, Tokyo, 5 December 2016) On December 5, eleven local Indonesian community leaders, who have continued to oppose the “Batang Coal-fired Power Plant Project” over five years now, visited the Japan Bank for International Cooperation (JBIC) Jakarta office and submitted their objections against JBIC. (18 villagers signed on as community representatives and the signatures of more than 900 villagers who supported this objection were also attached.) In their objection, the villagers pointed out that the project has failed to comply with “JBIC Guidelines for Confirmation of Environmental and Social Considerations”, has made their lives worse and has caused the violations of human rights.
Stopping coal financing for Indonesian coal plants is crucial in the fight against climate change
(Friends of the Earth Japan, 17 November 2016, Tokyo) Within the next couple of months, the Japan Bank for International Cooperation (JBIC) will decide whether to fund two giant dirty coal-fired power plants in Indonesia. These power plants will have a total capacity of 3000 Megawatts. They are the Cirebon 2 coal-fired power plant is in West Java and the Tanjung Jati B coal-fired power plant is in Jepara, Central Java. Six months ago, JBIC approved funding for one of Southeast Asia’s largest coal-fired power plants in Batang in Central Java, which is already having terrible negative social and environmental impacts, and will make a massive contribution to climate change. French Bank Crédit Agricole also wants to join JBIC in funding the coal power plant in Cirebon and the Tanjung Jati B power plant. This is in spite of a very recent public commitment made by Crédit Agricole to stop providing finance to new coal plants. Civil society groups from across the world, including Friends of the Earth France, Banktrack and Oxfam France, have criticized the double standards of Crédit Agricole in making new climate commitments a few weeks before COP22 in Marrakech, whilst continuing with its coal finance business as usual. They argue Crédit Agricole must not finance these two damaging power plants.
Press release – International NGO Call on Goverments to #EndCoalFinance
FOR IMMEDIATE RELEASE
11 June 2014
International NGOs Call on Governments to #EndCoalFinance
On Monday, June 16 the Organization for Economic Cooperation and Development (OECD)’s Export Credit Group will meet to discuss climate and energy related financing through Export Credit Agencies – public agencies that fund or guarantee private corporations from their home country to invest or export overseas.
International civil society organizations are targeting governments today, Wednesday, June 11, to call for an end to public finance for coal. A Twitterstorm will urge OECD governments to end financing and guarantees for coal through Export Credit Agencies.
Last week in Brussels, G7 nations confirmed their commitment “to the elimination of inefficient fossil fuel subsidies and continued discussions in the OECD on how export credits can contribute to our common goal to address climate change.”
In the OECD Export Credit Group meeting, governments will be considering a proposal from the United States and the United Kingdom to open a process to adopt restrictions for financing high carbon intensity projects (primarily coal power plants).
This opportunity to end Export Credit Agency financing for coal is a key part of the larger effort to end public financing for fossil fuels and high carbon projects.(1)
Regine Richter, from Urgewald in Germany says: “Guarantees worth billions from the country of energy transition? While climate experts warn that more coal plants mean the end of the 2° C target?! It’s time to stop this contradiction and finish coal support through Hermes guarantees.”
Lucie Pinson, Amis de la Terre France says: “After ending coal support through its development agency last year, France has to finish its job if they are serious about fighting climat change. France could not give the lead to the COP21 in Paris next year if Coface keeps supporting coal power plants overseas whose emissions account for 14% of domestic emissions!”
Between 2007 and 2013 public financial institutions provided at least $51 billion in funding for coal projects abroad. The largest proportion of this comes from national Export Credit Agencies (ECAs) from OECD countries, which have provided at least $32 billion over this period or 63 percent of total public support. (2)
Over the past year, the World Bank, the European Investment Bank, and the European Bank for Reconstruction and Development have committed to ending support for coal projects except in limited circumstances. The US, the UK, the Netherlands and Nordic countries have made similar commitments to end public finance for coal projects overseas.
Given the improvements in multilateral practice, it is increasingly likely that OECD Export Credit Agencies could end up as a place of last resort for carbon intensive industries that are no longer able to secure funding due to their high risk and poor environmental performance.
For more information on the Twitterstorm, go here: http://www.eca-watch.org/node/3600
1. According to the International Energy Agency (IEA), to stay within a 2°C global temperature rise – a level climate scientists believe would allow us to avoid the worst impacts of climate change: at least two thirds of current proven fossil fuel reserves need to stay underground.
2. According to data compiled by the Natural Resources Defense Council (NRDC) and Oil Change International. These staggering statistics probably under-estimate the total amount due to lack of reporting by many of these shadowy institutions.
Civil Society groups request ECAs discontinue financing of coal projects
September 13, 2013
Participants to the Export Credit Arrangement
Members of the Export Credit Group
To the Participants and the Members:
We are writing to urge your member Export Credit Agencies to discontinue financing of coal projects following recently announced decisions by other leading public finance institutions to halt public financing of coal. In this context, we would also like to suggest important implications for the provision of beneficial financing for carbon capture and storage and other fossil fuel technologies in the Sector Understanding on Export Credits for Renewable Energy, Climate Change Mitigation and Water Projects (hereafter Climate Change Sector Understanding). And, we write concerning the need for increased transparency in the OECD Export Credit Group and the Participants to the Arrangements’ climate change-related policy setting and implementation processes.
Carbon Capture and Storage: As Greenpeace and others have shown, carbon capture and storage (CCS) presents a false hope for mitigating climate change. CCS has not proven to be either environmentally or economically viable at scale. The capture, transport, compression and injection of CO2 is an inefficient process which has been estimated to actually increase the fuel requirements of a plant with CCS by about 25% for a coal-fired plant, and about 15% for a gas-fired plant, requiring the extraction, transport and combustion of even more fossil fuels, increasing harmful pollution. Scientists also fear that in many locations CCS injection can trigger earthquakes, rendering CCS to be a risky and likely unsuccessful strategy to significantly reduce greenhouse gas emissions.
Systems to capture, transport, compress and inject CO2 can dramatically increase the price per kWh of power generated over a project’s lifecycle, rendering such systems uncompetitive. Thus, financial support for CCS permissible under the Climate Change Sector Understanding diverts limited climate change mitigation financing away from sustainable renewable energy solutions and hinders, rather than assists, the necessary transition away from fossil fuels.
CCS creates unacceptable risks and liabilities for project sponsors, financiers, governments and the environment. The number of project cancelations is high, putting financiers and project sponsors at risk. Host government capacity to effectively implement and manage local liability regimes that protect communities and the environment over the life of a project is unknown; and it is next to impossible to create a financial provision to fund post-site closure monitoring and remediation because the long term costs of CCS are unquantifiable. Moreover, there is a risk of chronic and catastrophic CO2 leakage, posing climate risks as well as threats to the local environment and human health.
CCS technology is still in the demonstration phase. It is highly unrealistic as an option for delivering carbon emission reductions at the scale and timeframe necessary to avert catastrophic climate change, with only 8 demonstration projects operating globally, falling far short of the International Energy Agency’s CCS roadmap target of 100 plants by 2020 and 3,000 plants by 2050. Technological maturity will take another decade or two, thus missing the most critical window for emission reductions. Thus, CCS cannot deliver significant reductions in time to keep the global temperature increase below 2 degrees Celsius.
Even if, theoretically, CCS were to become feasible, its widespread use would facilitate the perpetuation of fossil fuel combustion on a massive scale, with all the attendant adverse health and environmental impacts, including respiratory & cardiovascular system damage, disease, cancer, and death, along with air & water pollution. Carbon capture and injection is increasingly used to boost oil production, which will likely result in a net increase in greenhouse gas emissions and other pollution. The provision of special financial benefits for a technology that facilitates a new era of coal plants clearly conflicts with emerging bans on public financing of coal plants (see Ending Coal Financing below). Thus, the use of CCS to expand both coal and oil projects defeats the credibility of the Climate Change Sector Understanding.
CCS thus contradicts the overall purpose of the Climate Change Sector Understanding to provide adequate financing to projects “significantly contributing to climate change mitigation,” as well as other specific provisions including that supported projects “should result in low to zero carbon emissions, or CO2 equivalent, and/or in high energy efficiency.” Hence, we call on you to abandon the inclusion of CCS in the currently agreed Climate Change Sector Understanding. We urge the Participants to rescind provisions supporting CCS at the Participants’ next negotiating session on the Climate Change Sector Understanding.
Low Emissions/High Energy Efficiency Fossil Fuel Power Plants: We are also deeply concerned about the Participants’ consideration of potential inclusion of “[C]onditions for low emission/high energy efficiency fossil fuel power plants including definition of CCS-readiness.” Support for low emission/high energy efficiency fossil fuel projects perpetuates the use of fossil fuels is a false solution which ensures more greenhouse gas emissions, worsening climate change while diverting precious, limited public resources away from sustainable renewable energy solutions. Increases in efficiency normally occur with the evolution of technologies, whereas in this case the Participants are being asked to subsidize the status quo.
As described in the section above, CCS fails to meet the requirements of the Climate Change Sector Understanding, and CCS-readiness contravenes these requirements even further. Since the future viability of CCS technology in general and on any given project remains wholly uncertain, proponents of CCS-readiness cannot provide verifiable quantitative and measurable data to demonstrate that the following requirement of the Climate Change Sector Understanding Appendix II can be met:
- “Participants shall provide a detailed description of the proposed Project Class or Type and information on how such projects fulfill the criteria [including] evaluation of the direct contribution of the Project Class or Type to climate change mitigation, including a comparison of the sector performance, based on measurable data regarding carbon emissions or CO2 equivalent and/or in high energy efficiency, with conventional and in-use newer technological approaches; this comparison shall, in all cases, be based on quantitative measures, such as a decrease in emissions per unit produced.” [Emphasis added]
And:
- “A description of the technical and performance standards of the Project Class or Type.”
What’s more, adding a project class or type to the Sector Understanding on the basis that it might be viable in the future eviscerates any reasonable standard of compliance. The potential inclusion of CCS-readiness also begs the question of whether any and all types of projects covered under other Sector Understandings should be granted advantageous financing conditions just because project sponsors might comply with a given requirement in the future.
As such, the proposal to include CCS-readiness based on conjecture about the future is grossly irresponsible, and should be soundly rejected.
Ending Coal Financing: We would like to draw your attention to the fact that the European Investment Bank (EIB), World Bank, and the U.S. Government have recently issued directives to end the financing of coal projects abroad except in extremely limited circumstances. We feel this is an important move in addressing both climate change and local environmental and community health concerns, and an important step in the larger process of addressing public financing for harmful fossil fuel projects. We believe other public finance institutions, such as the members of the OECD Export Credit Group, should also discontinue coal financing without exception, and begin a rapid phase-out of other forms of fossil fuel financing. If not, coal developers will exploit this policy gap in order to push through projects with ECA support that other institutions would not contemplate supporting, thus renewing a race to the bottom. The risks of this scenario to ECAs and the OECD would be severe.
Lack of Transparency: We remain concerned that the Participants and the OECD Export Credit Group continue to provide scant information on the implementation of the Climate Change Sector Understanding and climate change provisions of the Common Approaches. For example, despite requests, these bodies have not provided public information on the number, type, financial volume or location of projects that benefit from the Climate Change Sector Understanding. Also, the Export Credit Group has not provided requested public information on carbon emissions that are to be accounted for and reported on under the revised Common Approaches. As the world’s largest class of public finance institutions, which is establishing public policy on one of the most important global issues of our time, this lack of public transparency is inexplicable and unacceptable. You can and must do better.
We look forward to your response to all of the above concerns and suggestions.
Sincerely,
ECA-Watch Europe
Antonio Tricarico
Re:Common
Italy
Ben Schreiber
Acting Climate and Energy Program Director
Friends of the Earth
United States
Iris Cheng
Energy Campaigner
Greenpeace International
The Netherlands
Vanya Walker-Leigh
Climate Change Adviser
Nature Trust Malta
Malta
Amanda Starbuck
Energy & Finance Program Director
Rainforest Action Network
USA
Arthur Mitzman,
Coordinator
Concerned Citizens against Climate Change
The Netherlands
Tomislav Tkalec,
Head of Energy Programme
Focus, Association for sustainable Development Slovenia
Slovenia
Hozue HATAE
Campaigner
Friends of the Earth Japan
Japan
Gloria Kuang-Jung Hsu
Coordinator, Academic Committee
Taiwan Environmental Protection Union
Bikash Rath
Sr. Programme Manager
Regional Centre for Development Cooperation
India
Kuba Gogolewski
Energy campaigner
CEE Bankwatch Network
Central and Eastern Europe
Lucie Pinson – Les Amis de la Terre
Chargée de campagne Finance privée/Coface
Private finance/ Coface campaigner
France
Sam Chelladurai
India READ Centre
India
Visar Azemi
Kosovo Civil Society Consortium for Sustainable Development
KOSID
Kosovo
Rose Braz
Climate Campaign Director
Center for Biological Diversity
United States
Garret Tankosić-Kelly
SEE Change Net Principal
SEE SEP Programme Manager
Bosnia & Herzegovina
Mahesh Pandya
ParyavaranMitra
India
Feli Esau
RCP-Network/OLEDD-CSO
D.R.Congo
Helene Connor
Helio International
France
Nick Hildyard
The Corner House
England
Wiert Wiertsema
Both ENDS
The Netherlands
Christopher Brandt
The Climate Concept Foundation
Germany
Regine Richter
Urgewald
Germany
Doug Norlen
Pacific Environment
United States
Heike Drillisch
CounterCurrent—GegenStroemung
Germany
Johan Frijns
Executive Director
BankTrack
The Netherlands
Julien Vincent
Market Forces
Australia
Debi Goenka
Executive Trustee
Conservation Action Trust
India
Falguni Joshi,
Gujarat Forum On CDM,
India
Eva Filzmoser
Nature Code – Centre of Development and Environment
Austria
Gabriel Sundoro Wijoyo Wynn
Green Empowerment
Southeast Asia
Adrian Lasimbang
Tonibung
Malaysia
Alba Valle
Euronatura
Portugal
Thomas Braunschweig
Berne Declaration
Switzerland
Cynthia Ong
Land Empowerment Animals People (LEAP)
Malaysia
Yuki Tanabe
Japan Center for a Sustainable Environment and Society (JACSES)
Japan
Thomas Wenidoppler
ECA-Watch Austria
Austria
Heike Mainhardt
Oil Change International
United States
Aviva Imhof
Pacific Coal Network Coordinator
Sunrise Foundation
Australia
