EU teams up with other OECD countries to propose ban on export credits for coal-fired electricity projects

Discussions will be based on a proposal submitted by the EU and other Organisation for Economic Co-operation and Development member countries (Canada, the Republic of Korea, Norway, Switzerland, the United Kingdom and the United States) earlier this month.

The proposal supports the greening of the global economy and is a significant step aligning the activities of the export credit agencies with Paris Agreement goals.

Export credits constitute an important element in the promotion of international trade. The EU, as a participant in 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.

The EU is committed to ending export credits support to unabated coal and is in parallel engaging internationally on a just transition. In January 2021, the Council of the European Union called for a global phase-out of environmentally harmful fossil-fuel subsidies along a clear timeline and a resolute and just worldwide transformation towards climate neutrality, including phasing out unabated coal in energy production and – as a first step – an immediate end to all financing of new coal infrastructure in third countries.

The European Commission committed in its February 2021 Trade Policy Review to propose to end immediately export credit support for the coal-fired power sector. In June this year, G7 members also recognised that continued global investment in unabated coal power generation is incompatible with keeping the goal to limit global warming to 1.5°C within reach and committed to end new direct government support for unabated international thermal coal power generation by the end of 2021, including through export finance.

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