Greens demand to stop fossil fuel subsidies such as through Export Finance for Coal Fuelled Power plants

This week the European Commission will be discussing an unofficial DG Trade proposal on Export Finance and Coal Fuelled Power plants.

 

The proposal would enable EU Export Credit Agencies to allow incentives for the construction of coal fired power plants abroad, in terms of loans with up to 18 years repayment term. According to the document, this would mean that coal fired power plants with 40% efficiency (emission level of 750 g CO2/kWh) could get more favourable loans than gas fired power plants that have lower emissions (350 g CO2/kWh)

 

The Greens have big concerns that this proposal, once adopted, would be ruining Europe's climate credibility in the run-up to the COP 2015 negotiations.

 

With only a year and a half left before a climate deal is to be sealed, it would be absolutely chocking to allow European banks to be able to subsidise fossil fuels in general. Taxpayers' money should not be used to finance coal power plants, especially that this decision would be totally at odds with what the EU is saying on the importance to fight against climate change and the importance for Paris 2015 to be a success.

 

While Germany - which is pushing for an energy transition in its own territory- and France - which will host the COP 21 in December next year - are publically claiming to be the leaders on climate policy efforts, they are in fact the biggest financial supporters for coal among all European countries! This contradiction must stop. During last week's G7 Summit these EU Member States have stated: "We remain committed 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." Germany and France must now stick to their commitments and must not allow that their taxpayers finance the construction of coal power plants abroad.

 

Several international banks such as the World Bank, as well as countries such as the USA, UK and the Netherlands have stopped financing coal power plants. This must now become a common European rule.

 

On 12 June the European Council will discuss the issue, as well at an OECD Meeting the week after. Therefore, several Green members have decided to write to President of the European Commission Jose-Manuel Barroso, Commissioner for Climate Action Connie Hedegaard, Commissioner for Trade Karel De-Gucht to urge them to adopt a Commission position that is consistent with climate mitigation and that respects the international treaties as well as IPCC report analysis, notably to end public support for coal.

 

 

See the NGOs' recommendations for OECD countries on their Export Credit Agencies and an infographic from WWF.