Hold The Applause on UK Coal Financing Announcement

(ECA Watch, 30 November 2013, Ottawa) Export Credit Agency Watch (ECA-Watch) members say “hold the applause,” on today’s UK announcement that the government will limit financing for foreign coal fired power plants.  Although restrictions on some sources of public financing for coal are something to shout about, the U.K. plan has loopholes big enough to drive a coal train through.

For example, the U.K. plan exempts financing through the government’s export credit agency, UK Export Finance, which is an important source of corporate welfare for U.K. companies involved in the coal sector  The U.K. government announcement implies that this exemption is nothing to be concerned about because that the government has not financed a coal power plant since 2002.  However, since 2007 U.K. Export Finance has supported at least $100 million in financing for the coal mining sector, according to a forthcoming report of the Natural Resources Defense Council.    

The U.K. announcement on increasing coal financing restrictions should not cloud the fact that the government will likely continue to finance climate and environment-damaging fossil fuel projects despite pledges in recent years to ban this practice.

“This ’pledge‘ is not worth the pledge it is written on.  It excludes U.K. Export Finance, the main part of the U.K. government which funds dirty fossil fuels overseas,” said Tim Jones, ECA-Watch member and Jubilee Debt Campaigner in the U.K.  “In the last year, U.K. Export Finance has guaranteed loans to Siberian coal mines and Brazilian offshore drilling.  All this is set to carry on, continuing to break a previous government commitment in 2010 to end U.K. Export Finance support for “dirty fossil fuels,” said Jones.

ECA Watch recently asked OECD export credit agencies to discontinue financing of coal projects.