| Barbara Lewis |
BRUSSELS (Reuters) – Rich nations provided nearly $15 billion over a decade from 2003 to 2013 to fund exports of coal-fired power plant and coal mining technology, data seen by Reuters shows, defying calls to end subsidies for the most polluting of the fossil fuels.
A document prepared late last year by the Paris-based Organisation for Economic Cooperation and Development (OECD), marked confidential, comes the closest yet to providing official figures on how much the group’s 34 developed countries provide technology for coal industries outside their own economies.
Climate campaigners have been trying for years to collect data as they demand that governments outlaw all fossil fuel subsidies, particularly for coal, which on average emits twice as much carbon dioxide as natural gas.
The European Union, whose member state France hosts UN climate talks this year, has said it will end government domestic subsidies for coal plants by 2018. But the future of developed world subsidies for exporting technology to the industry is still a matter of hot debate.
The subsidies – provided via export credits, or preferential loans, guaranteed by governments – will be discussed by European Union technical experts at a closed door meeting in Brussels later this month.
The debate will centre on whether and in what form they should continue. A draft document prepared ahead of the meeting, seen by Reuters, notes that the issue is very complex.
“Export credits should contribute to the common goal of addressing climate change,” that document says, and adds that export finance should be eliminated for “the least energy efficient and most carbon-intensive coal combustion technologies”.
Non-governmental organisations also plan to raise the issue on the sidelines of talks in Istanbul on Monday and Tuesday attended by finance ministers from the G20 leading economies. An OECD spokesperson declined to comment on the confidential figures, which showed France was the EU’s biggest provider of coal plant export credits over 2003-2013 with $1.8 billion, followed by Germany, whose multinational conglomerate Siemens makes coal plant technology, at $1 billion.
In all of the OECD, the countries that put the most export credits into coal plants were South Korea ($4 billion) and Japan ($3 billion). The United States provided export credits of $1.7 billion.
In total the $12.8 billion in coal plant technology export credits offered by the OECD amounted to more than a third of the $36 billion in financing for all kinds of fossil fuel power plants by the group during the decade, the data showed.
When it came to coal mining technology, Germany was the largest provider of export credits within the OECD at roughly 60 per cent of a global total of $1.8 billion. The largest recipient was Russia, which has been in conflict with the EU since its seizure of Ukraine’s Crimea region in March last year. The coal mining credits accounted for around three per cent of a global OECD total of $52.6 billion for fossil fuel extraction over the decade.
Companies such as France’s Alstom say that export credits can help to reduce emissions by ensuring cleaner technology is used in nations such as India.
However, none of the funding over the decade analysed in the OECD document went to the most efficient of three types of technology – the type known as ultra super-critical.
Giles Dickson, Alstom’s vice president for global public affairs, said the company believed export credits would increasingly play “a decisive role” in the development of state-of-the-art technology in developing countries.
“Our focus going forward with coal is super-critical and ultra super-critical technologies to help ensure that new coal plants maximise their efficiency and reduce their carbon dioxide emissions,” he said.
Alstom said it had built ultra super-critical coal generation in Southeast Asia without export credits.
The position of the European Power Plant Suppliers Association (EPPSA) is that coal has an important role to play in ensuring stable power supplies and that it is not always possible for smaller plants to be as efficient as larger ones, the industry body said in an email answer to Reuters questions. Climate campaigners dismiss industry arguments as self-serving excuses and want export financing to be stopped altogether.
The French energy ministry did not return a request for comment on the OECD figures. Socialist President Francois Hollande announced last November that France would eliminate all export credits to coal projects in developing countries, but it is unclear when the measure will take effect.
The German economy ministry also did not respond to Reuters’ requests for comment. Developed countries should start making data on export credits public, if for no other reason than to set the record straight, the OECD document concluded.
“Given the high profile of climate finance issues, it is hard to argue against having accurate, comprehensive and useful figures on the volume of export credit financing,” it said.
If the OECD does not provide the figures, others will and their figures are likely to be “inflated”, the report said.
The issue is due to be raised at a general OECD meeting in March.