France, Denmark, Germany, Spain, the Netherlands, Sweden and the United Kingdom launched on Wednesday 14 April the international coalition “Export Finance for Future” (E3F) to eliminate financial export support for oil and gas projects.
Meeting virtually in camera, under the chairmanship of French Finance Minister Bruno Le Maire, the Ministers of these countries signed a statement of principles to better integrate climate policy objectives into public export financing.
“Export financing is one of the decisive levers for effectively combating global warming”, said Bruno Le Maire during a telephone press briefing on Tuesday 13 April.
Export finance allows public authorities to support exporting companies by providing direct financing or insurance against risks that private lenders and insurers are not prepared to assume completely due to the economic and political situation in the recipient country.
Three years ago, there was no public policy for the greening of export finance. It was France, the first country, in 2019, which decided to put in place a strategy to “stop financing elsewhere what we no longer want to finance at home”, he recalled.
Main commitments
The E3F coalition makes several commitments. Firstly, the seven countries commit to cease all export guarantees for the financing of fossil fuels, taking into account the specific industrial characteristics of each country and their impact on employment.
It is not just a question of prohibiting, but also of supporting sustainable projects. Thus, they commit to supporting projects that are compatible with the Paris Agreements, including through incentive mechanisms such as climate bonuses.
Finally, the signatories of the statement also promise to be transparent about their actions and to inform citizens.
To each their own timeline
However, the statement does not set a common deadline. The coalition is in the process of being built and, while all countries share the same ambition to eventually exit from such financing, they are not all at the same stage of political decision making, explained a source in the French Finance Ministry.
Sweden, for example, has already set a date of 2022, while France has opted for a timeline extending to 2035. In the Netherlands and Spain, no decision has yet been taken in terms of timing.
Notice to interested countries
Bruno Le Maire called for other countries to join the coalition as soon as possible, with a particularly strong appeal to the United States. France intends to raise this issue both with its European partners and at OECD level.
According to the French Finance Ministry, these first seven countries were selected because they were the ones that showed “the most willingness” and were the most advanced at the political level to engage their governments. Between the seven, they account for 45% of all export credit financing in OECD countries.
Italy, for example, is not among the signatories, as it does not currently have a comprehensive strategy on this subject that corresponds to the degree of ambition of the statement of principles, nor is its reflection on the subject sufficiently advanced to commit itself at the political level, the same source explained.
The coalition is expected to meet again in the coming months and could, at that time, integrate new members and deepen the commitments made.
See the statement of principles: https://bit.ly/3mNvPfx (Original version in French by Marion Fontana)