Major international trading partners, including the US, EU, Australia and Canada, today agreed to end export credit support for coal-fired power plants. This was agreed at the Organization for Economic Co-operation and Development (OECD) meeting before COP26.
The UK ended all financial support for overseas fossil fuel projects in March 2021 and encourages international partners to make similar commitments as G7 chairman and independent member of the OECD.
Thanks to the UK’s international climate leadership, the country’s export credit agency, UK Export Finance (UKEF), helped align the climate change commitments of export credit agencies in the OECD with the UK’s global leadership position on fossil fuels.
International Trade Secretary and UK international champion for adaptation and resilience for the COP26 presidency, Anne-Marie Trevelyan, said:
I am delighted that UK Export Finance has contributed to this important breakthrough on the eve of COP26. The UK has led the way for climate action internationally as the first country in the world to end support for overseas fossil fuel projects and legislate on net zero.
After a series of difficult negotiations over several months, our firm action to decarbonize our support for export credit is now respected by our trading partners. There is more to do – we will continue to argue that action is needed now to align our finances with green trade to protect our planet.
UKEF operates according to international standards set by the OECD ensure that exporters do not gain an unfair competitive advantage in the international arena. This ban guarantees exporters of OECD member countries will not be able to apply for export credit and tied aid support for:
- new non-operating coal-fired power plants (CCUS) facilities; and
- existing coal-fired power plants, unless the purpose of the equipment supplied is to reduce pollution or CO2 and such equipment does not extend the useful life or capacity of the plant, or unless it not a modernization to be installed CCUS.
For more information on the policy announcement, please visit the OECDthe website of.
UK Export Finance is the UK’s export credit agency and government department, working alongside the Department of International Trade as part of its strategy and operations.
Created in 1919, UKEF provides insurance, guarantees and loans where the private sector will not. Building on the strength of the government’s balance sheet, UKEF has Â£ 2bn in direct loans dedicated to financing clean growth projects and over Â£ 50bn of capacity for exporters to tap.
This allows for exports that otherwise could not occur, especially in an economic downturn when access to finance is limited. All support provided by UKEF is on commercial terms, generating a return for the UK taxpayer.