Credit: Original article can be found here
Sustainable development | Brussels, 22 October 2021
Following the EU’s call for action, OECD countries have today reached an agreement in principle to end support, in the form of export credits, for unabated coal-fired plants in the lead up to COP26. This agreement will enter into effect once all participants have completed their internal agreement processes, which they aim to do by the end of October 2021.
Export credits constitute an important element in the promotion of international trade. The EU, as a participant to the OECD Arrangement on Officially Supported Export Credits, plays a major part in the efforts to ensure an international level playing field and to achieve consistency in the common goal of combating climate change.
Since January, the EU has been committed to ending support for export credits to unabated coal. The European Commission proposed in its Trade Policy Review, in February, an immediate end to export credit support for the coal-fired power sector.
Executive Vice-President and Commissioner for Trade Valdis Dombrovskis said: “We are delighted that our proposal at the OECD to put an end to an outdated practice has become reality. Government support for export credits of coal-fired electricity projects will now be a thing of the past. We committed in our new trade strategy to greening trade and we have shown that we are honouring our pledge. Our effort to beat climate change must reach across all policy areas – trade can and must play an important role.”
In June this year, G7 members recognised that continued global investment in unabated coal power generation is incompatible with the Paris Agreement goal of limiting global warming to 1.5°C when compared with pre-industrial levels. G7 members committed to an end to new direct government support for unabated international thermal coal power generation by the end of 2021, including through export finance.
This agreement in principle within the OECD framework is a significant step forward in aligning export credit operations with the Paris Agreement goals and is a concrete contribution to climate ambition, including in the context of the forthcoming/upcoming COP26.
The participants to the OECD Arrangement are Australia, Canada, the EU, Japan, Korea, New Zealand, Norway, Switzerland, Turkey, the United Kingdom, and the United States.
For more information
Council Conclusions on energy and climate diplomacy, from 25 January 2021
G7 Summit Communique, from 11-13 June 2021