Background

The U.S. and a number of other countries recently agreed on new disciplines that prohibit export credits for all new unabated coal power generation technology (i.e., without carbon capture, utilization, and sequestration features). This arrangement also limits export credit support for existing coal-fired power plants to pollution or carbon emission abatement equipment that does not extend the useful lifetime or capacity of the facility.

A Reuters article notes that the OECD “defines export credits as government financial support, direct financing, guarantees, insurance, or interest rate support provided to foreign buyers to assist in the financing of the purchase of goods from national exporters.”

“Ending export credit financing of unabated coal is crucial for the decarbonizing of the power sector,” a statement from the Treasury Department said. “The new prohibitions build on the 2015 coal power-financing restrictions and close off the remaining avenues for OECD export credit agencies to support unabated coal power, consistent with our international obligations. With these new disciplines in place, OECD countries can redirect attention to supporting appropriate financing in areas like clean energy technology, climate mitigation, and other non-fossil fuel intensive sectors.”

According to Treasury, the new disciplines “should be fully implemented this month and were unanimously supported in principle” by economies including Australia, Canada, the European Union, Japan, Korea, New Zealand, Norway, Switzerland, Turkey, and the United Kingdom.

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