New rules on export credits to coal-fired power plants, developed within an OECD framework, have been endorsed by the EU.
This is an important EU contribution for the COP21 negotiations on climate change, which start in Paris on 30 November 2015. It marks a further step in work ongoing since 2012 in aligning export credit policies with climate change objectives.
The participants to an arrangement on officially supported export credits agreed a sector understanding on coal-fired electricity generation projects on 17 November 2015. The Council endorsed the EU's position on 26 November 2015, thus allowing the EU formally to join the consensus on the new rules.
Terms and conditions for export credits
The understanding is aimed at encouraging the use of high efficiency low emission technologies, and revises existing rules.
It sets out financial terms and conditions that will apply to export credits for coal-fired electricity generation projects from 1 January 2017. Official support for coal-fired power plants will thus be banned or phased down, with a view to significantly reducing the use of less efficient coal-fired power plants.
The new rules are the fruit of nearly two years of negotiations among the participants to the arrangement, where the EU has consistently pushed for an ambitious outcome. The EU is an important player in the arrangement and EU input was a decisive factor in the breakthrough that led to final agreement on the new rules.
Current participants to the arrangement are Australia, Canada, the EU, Japan, Korea, New Zealand, Norway, Switzerland and the United States. Other OECD members and non-members may be invited to participate.
Role of the OECD
The OECD is the only international body that has developed detailed technical rules for export credits. For many years, membership of the arrangement has been representative of the world's major providers of export credits.
The arrangement has been transposed into EU law since it came into effect in 1978, most recently by regulation 1233/2011.
The decision to endorse the new understanding was taken at a meeting of the Transport, Telecommunications and Energy Council, without discussion. It was taken by qualified majority; France abstained.