Letters & statements

EU position on ending public support for fossil fuels fails to do exactly that

March 15, 2022

Contact:

  • Niels Hazekamp, Senior Policy Advisor Both ENDS, +31 6 81 9062 81
  • Antonio Tricarico, Programs Director, ReCommon, +39 328 8485448
  • Bronwen Tucker, Campaign Manager, Oil Change International, +1 587 926 7601

Brussels – Today the Council of the European Union approved a statement that commits all Member States to end international public finance in the form of export credits for projects in the fossil fuel energy sector. The Council also calls on the European Commission to launch negotiations at the Organization for Economic Cooperation and Development (OECD) to end such finance for fossil fuels beyond coal, including oil and fossil gas. The goal is to accelerate the energy transition needed to limit global warming to 1.5°C. However, as a concrete deadline for ending fossil fuel support is lacking, the EU’s plan falls short on delivering on its very objective.

No deadline
At the global climate conference in Glasgow last year, 39 countries and institutions, including 12 EU countries and 19 OECD members, signed a joint commitment to end international public finance for unabated fossil fuels projects by the end of 2022. This near-term deadline was adopted to reflect the urgency of shifting away from fossil fuels, recognizing IPCC and IEA research showing that both the production and use of all fossil fuels needs to decrease significantly by 2030. However, rather than transposing this timeframe at the EU level and towards the OECD, the Council conclusions propose a different approach whereby, pending discussions at the OECD, EU Member States determine their own “science-based” deadlines for ending export credits to fossil fuel projects after 2023. The statement also suggests that the EU taxonomy can be used to guide green export finance, while the taxonomy has been widely criticized, including by its own technical expert group, for labeling gas and nuclear projects as green investments.

“Science-based”
Differentiated timeframes for ending oil and gas export finance do not respond to the urgency of the climate crisis, nor do they ensure a level playing field, which is typically of primary concern to Export Credit Agencies (ECAs). The science is clear that there can be no further expansion of fossil fuel infrastructure in a 1.5C scenario and thus efforts to immediately end export finance for fossil fuels at the OECD are critical. Between 2018 and 2020 the G20 ECAs provided 11 times as much support for fossil fuels than renewable energy with $40 billion per year flowing to fossil fuel projects compared to just $3.5 billion for renewable energy. Putin’s war against Ukraine adds another imperative for reducing dependency on fossil fuels anywhere by doubling down on energy efficiency and renewable energy solutions. Counter-intuitively, Russia was the second largest recipient of G20 international public finance for fossil fuels between 2018 and 2020.

ECA-watch, a network of civil society organizations from around the world, is calling on the Council and the OECD to ensure their efforts to align export finance with climate goals match the urgency of the climate crisis. This means adopting a 2022 deadline for ending oil and gas export finance, a deadline that 50% of OECD members have already signed onto.

Quotes from individual organizations:

Laurie van der Burg, Co-manager Global Public Finance at Oil Change International, says:
“While the window for securing a liveable planet is rapidly closing and Putin is waging a dirty, fossil fuelled war against the Ukraine, EU countries continue to prop up fossil fuel production with public money. The EU is right to bring the issue of restricting oil and gas export finance to the OECD after the progress that has been made with restricting coal finance, but time is of the essence. At COP26, one in two OECD members signed onto a 2022 deadline for ending public finance for fossil fuels. The EU’s proposed differentiated timeframes for phasing out oil and gas export finance are inherently inconsistent with either climate or energy security objectives.”

Niels Hazekamp, Senior Policy Advisor at Both ENDS, says:
“At COP26, 12 EU member states agreed to end their public support for fossil fuels by the end of 2022. It is disappointing that the EU as a whole does not follow suit. A concrete path and a deadline for phasing out fossil fuels, in line with the COP26 commitment, is nothing short of necessary. Leaving member states the leeway to procrastinate will seriously undermine the chances of limiting climate change to 1.5°C. “

Anna-Lena Rebaud, Climate and Just Transition campaigner at Friends of the Earth France said:
“It is positive to see efforts by the European Union to push for an agreement on oil and gas at the OECD level, however we regret that Member States only agreed to adopt phase out policies by 2024 when it is clear we should have stopped fossil fuel expansion yesterday. We don’t have the luxury of time and half measures. The fossil fuelled war against Ukraine reveals once more the vulnerability of our societies caused by our dependence on fossil fuels. It also reminds us that we build this dependence ourselves by investing billions each year in fossil fuel projects. It is past time governments stop all public support for fossil fuels.”

Regine Richter, energy and finance campaigner at urgewald, says:
“In the accelerating climate crisis time is running out for baby steps to stop it. While a good initiative from the EU, the planned action needs to be quicker, bolder and with a clearly defined timeline.”

Antonio Tricarico, Programs Director at ReCommon, states:
“The same European ECAs which have backed new and large scale fossil fuel infrastructures in Russia are now shying away from taking a clear commitment to put an end to the financing of the expansion of fossil fuels. The weak decision of ECOFIN Council is a blank cheque for European fossil fuel companies to make us more dependent, not less, from fossil fuels in the near future. The time has come to put an end to such institutional schizophrenia”.

 

Press Release: New website shines a light on the extent of export credit agencies’ support for fossil fuels

INTERNATIONAL PRESS RELEASE 

Governments worsen climate crisis with USD billions in export finance

New website shines a light on the extent of export credit agencies’ support for fossil fuels

 October 11, 2021

 (Amsterdam, Netherlands) – Each year governments provide tens of billions of dollars in financial support to fossil fuel projects via export credit agencies (ECAs). Today, 20 civil society groups from 15 countries are launching a new website to shine a spotlight on how ECAs are undermining global climate goals. In advance of the November UN climate conference, the organisations are calling on governments around the world to end public financial support for coal, oil and gas projects, including support from ECAs. Ending this support and redirecting financial resources to sustainable alternatives is essential for a just energy transition.

ECAs are primarily public entities that provide companies with government-backed loans, loan guarantees, credits and insurance, usually to support exports overseas. Despite the International Energy Agency’s conclusion that, in order to limit global warming to 1.5°C, there can be no investments in new fossil fuel supply, governments continue to support fossil fuel projects on a massive scale through their ECAs. “This support often flies under the radar,” says Niels Hazekamp of the Dutch organization Both ENDS. “The aim of www.fossilfreeecas.org is to shed light on how governments are propping up fossil fuels through their export credit agencies. We are urging governments to end this support.”

The website highlights a sample of ECA-supported projects around the world. Among them are two projects in Mozambique, which together have received up to USD 18 billion in ECA support from China, France, Italy, Japan, Netherlands, South Africa, South Korea, Thailand, the UK and the US. “Ten years ago, this region was seen as the new Dubai. The gas would bring steady jobs and wealth to the farmers. The opposite is true. It has fuelled existing inequalities and violence,” says Julio Bichehe of the farmers’ union União Provincial dos Camponeses (UPC) of Cabo Delgado.

The website also highlights Santos’ proposed Barossa gas project in Australia. “The Barossa project is probably the world’s dirtiest gas project,” says Dina Hopstad Rui of Jubilee Australia. “It has already received support from South Korea’s ECA, KEXIM. Several other ECAs are also considering support. If it moves forward, Barossa will not only accelerate the climate crisis but also put the unique biodiversity in the project’s area at risk.” 

Earlier this month, the UK government and the European Investment Bank urged governments and public financial intuitions to commit to phasing out all fossil fuels and proclaim their support for clean energy. “The science is crystal clear,” says Laurie van der Burg of Oil Change International. “If the world is to have any chance of limiting global heating to 1.5°C, export credit agencies need to immediately stop financing new fossil fuel projects, including gas projects. At the upcoming global climate conference, ECAs need to join the UK and the European Investment Bank in committing to end all fossil fuel finance. Only then will we have a livable future.”

For more information, contact:

Karen Hamilton, Director of Above Ground, khamilton@aboveground.ngo    

Niels Hazekamp, Policy Advisor at Both ENDS, n.hazekamp@bothends.org 

Dina Rui, Campaigns Director at Jubilee Australia, dina@jubileeaustralia.org

Laurie van der Burg, Global Public Finance Campaign Co-Manager, laurie@priceofoil.org 

 

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Activists demand end of massive OECD support for fossil fuels

18 November 2014

This week in Paris, a secretive body within the OECD will discuss the potential revision of the “gentlemen’s agreement” (1) under which they provide billions of dollars of public financing into the fossil fuel sector through their member export credit agencies.

This morning, prior to a meeting with the OECD Export Credit Group, activists from the Export Credit Agency Watch network (ECA-Watch), including Les Amis de la Terre-FoE France, will protest outside the OECD, calling this public institution to enter the 21st century and end its support for fossil fuels.

“We all know that fossil fuels cause all kinds of mayhem, including damage to environment and to human health, violation of human rights and harm to the global climate.And yet rich countries’governments play a crucial role in supporting  fossil fuel projects through their Export Credit Agencies,. With the international climate summit in Paris in 2015,  the OECD’s moral duty to stop worsening the world’s fossil fuel addiction is even higher: it has to end fossil fuel support if it want to bring something to the fight against climate change””, explains Doug Norlen, Friends of the Earth US, member of the ECA–Watch network (2).

Export Credit Agencies (ECAs) provide governmental-backed guarantees, insurance and loans to private corporations from their home country in order to promote exports and projects abroad. ECA support just for coal, the worst climate killer of the fossil fuels, has been enormous: the OECD ECAs have provided at least 32 billion US$ between 2007 and 2013 for coal plants and mines according to data compiled by the Natural Resources Defense Council (NRDC). (The French government alone, who will host the COP next year, put in 1,2 billion euros to support Alstom exports for just two power stations in South Africa during that time).

“This subsidy stands in stark contradiction to the findings of leading climate scientists. The United Nation’s Intergovernmental Panel on Climate Change made clear that if global warming is to be kept under dangerous levels, the majority of proven fossil fuel reserves will have to be left in the ground” says Lucie Pinson from Friends of the Earth France, as well an ECA-Watch member. The activists want to take OECD’s Secretary General Angel Gurría at his word, who called for every government to consider curbing domestic and overseas support for coal plants.

Today’s reason for the protest is a consultation in the Export Credit Group of the OECD. In this body discussions to consider restrictions on ECA support for coal plants commenced earlier this year with the US, UK and Netherlands proposing to implement an emissions performance standard ruling out future support for coal plants. “However, even this modest move, which focuses only on coal power plants and omits coal mining and infrastructure, is opposed by some retrograde OECD members”, complains Linde Zuidema, ECA-Watch coordinator. “Some OECD governments even dare to propose extended terms (e.g., longer repayment terms) for some kinds of coal plants, which would expand coal use even further. Their domestic coal industry, Alstom, Siemens, or Hitachi, pressures them to put corporate profits above climate, environment and human rights, which is outrageous”, says Zuidema.

Notes:

(1) The Arrangement is a “Gentlemen’s Agreement” amongst its Participants who represent most OECD Member Governments. The Arrangement sets forth the most generous export credit terms and conditions that may be supported by its Participants.

(2) ECA Watch is a global network of NGOs that campaigns to reform Export Credit Agencies towards better rules on transparency, accountabilty and respect for the environment and human rights. 

For more information, please contact Regine Richter from Urgewald: regine@urgewald.de or  Doug Norlen at Friend of the Earth US dnorlen@foe.org 

 

NGOs call on OECD countries to reject any coal financing via ECAs

ECA Watch in cooperation with the WWF European Policy Office and other European and global NGOs, has written a letter to Finance Ministries and Export Credit Agencies to move those public institutions away from coal financing and subsidies in the context of ongoing discussion on this topic in the OECD Export Credit Group. In particular, the NGO letter argues that any proposals to perpetuate coal financing and extend preferential terms to certain coal plant technologies should be rejected. Allowing this would pervert the original idea of curbing export credit agency support for coal in order to address climate goals. 

We invite you to read the letter below. 

For more information on this campaign, contact Doug Norlen at doug@foe.org 

For more information on this campaign at EU level, contact Linde at linde@fern.org

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.

NGO Statement Ending Fossil Fuel Support

In May 2014, more than 50 NGO have endorsed common recommendations provided by the briefing ‘Ending Fossil Fuel Support: the way forward’ (to be downloaded on the bottom of this page). This briefing was developed by ECA Watch members in close collaboration with other international and regional organisations.

Climate action is more pressing than ever. Therefore, as also stated by the March 2014 IPCC report, annual investments in conventional fossil fuel power plants have to decline by an average of 30 billion dollars a year over the next two decades, and simultaniously investments in the extraction of fossil fuels have the decline by an average of 110 billion dollars. Coal is the most carbon intensive fossil fuel,and several and several countries have already moved to end public finance for coal. This initiative should be extended by ending support for all fossil fuels and high carbon projects.

It is high time for change. OECD countries need to lead by example to get traction. They must show exemplarity and consistency with their climate claims – before the COP21 of the UNFCCC in Paris in 2015: they must commit that public finance will not support coal projects any more – and more broadly all carbon intensive projects.
 
Such a step forward by OECD countries is a must before any similar action can be effective with non-OECD countries like China.
 
1. OECD countries should immediately and publicly commit to end all forms of ECA support for high carbon projects, including coal plants, mines and associated infrastructure
 
2. To ensure common consistent action of developed countries, they should also support a multilateral OECD agreement to effectively prevent any support for high carbon projects, including coal plants, mines and associated infrastructure from OECD Export Credit Agencies.
 
For more information on this briefing, please contact: linde@fern.org
 

Coordinator at ECA Watch Europe – part time position / maternity cover (1st November – 1st March)

Part-time position or consultancy contract (2 days per week) for four months,
intended to become a permanent job if funding is available. The successful applicant
will work from Brussels.
We are looking for a coordinator to provide strong and professional support to the
ECA-Watch network. The job would be ideally suited to a campaigner with several
years’ experience in facilitating non-governmental organisations (NGOs) and an
interest in helping ECA-Watch achieve our campaign objectives. The successful
candidate will be a good team worker with experience of working across different
cultural backgrounds. They must be able to show initiative and work without close
supervision.

Giving human rights credit: EU countries agree to toughen export loan scrutiny

(Brussels, 29 June 2011)A press release from ECA-Wach, Amnesty International and Eurodad. It welcomes EU permanent representatives’ endorsement of the European Parliament’s proposal to make national export credit agencies (ECAs) more accountable for the support they give companies doing business around the world. The three organisations believe this move will increase transparency and human rights compliance and  hope that this will trigger more ambitious reforms in EU capitals, leading to a general reform in global ECA standards.

Member State compliance with Article 21 of the Lisbon Treaty

On 6 August 2012, ECA Watch and the European Coalition for Corporate Justice sent a letter to the President of the Commission Jose Manuel Barroso requesting a meeting to discuss how the Commission intends to monitor Member State compliance with Article 21 of the Lisbon Treaty and how NGOs can be involved in the elaboration of an appropriate compliance framework