The fossil elephant in the room - How the Dutch government nullifies its own international climate ambition by not including its export credit ...
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Both ENDS November 2019 The fossil elephant in the room How the Dutch government nullifies its own international climate ambition by not including Connecting people for change its export credit agency in a fossil fuel phase- out pathway
CONTENTS
Executive summary 3
Introduction 4
Foreign climate ambitions ignoring export credits 4
Need for a new report 4
Methodology 5
Aim of this updated report 5
Results 6
Purpose and type of project 7
Dutch exporters involved 7
Trend 8
Comparison with public support for climate abroad 9
Arguments to not to phase-out fossil fuels, a discussion 11
‘We need an international level playing field’ 11
‘The ECA is not an instrument to achieve climate objectives independently’ 13
‘The share of oil and gas in our portfolio will decrease in time’ 13
‘ADSB already gets more applications for renewables’ 13
‘ADSB will green its portfolio’ 14
Conclusions 14
Recommendations 15
Annex 15
Both ENDS gratefully acknowledges the financial
support of the KR Foundation for this publication
2EXECUTIVE SUMMARY
The Dutch government nullifies its climate finance support by continued and significant
export credit support to new oil and gas projects abroad via its export credit agency
(ECA) Atradius Dutch State Business (ADSB).
Key findings from this report include: Therefore, we recommend the Dutch government:
• From 2012 to 2018, the Dutch ECA annually provided 1. Include the export credit facility in its foreign climate
over € 1.5 billion to support fossil fuel projects. targets and set the target for ADSB to provide no new
• Almost all (98%) insurances that support energy projects fossil fuel support by 2020.
are related to fossil fuels. 2. Advocate for the same target at the OECD, and urge for
• Despite recognising it has a responsibility under the Paris an immediate stop of all ECA support for coal-related
agreement, the Dutch ECA provided 36 times as much projects.
support to fossil fuels than clean energy. 3. In 2020, set up a Coalition of the Willing: a dialogue
• By not including export credits under its targets to phase between countries willing to decarbonise their ECAs
out fossil fuel support from bilateral financial support together in line with the Paris Agreement.
instruments, the Dutch government created a policy 4. Take initiatives to ensure EU policies for ECAs take
incoherence that nullifies its own international climate into account commitments of the EU to contribute to
ambition. combating climate change.
• There might be political space to establish a coalition of
countries - like the UK, Sweden, Denmark and France –
prepared to decarbonise ECA support. The Netherlands
could take a leading role in establishing this coalition.
• A coalition of willing countries can only be successful if
countries are prepared to take steps unilaterally.
3INTRODUCTION FOREIGN CLIMATE AMBITIONS
IGNORING EXPORT CREDITS
The evidence is clear: climate change is here, and it's
Looking at the foreign trade and
rapidly getting worse. Climate change is impeding the development policy context in
fulfilment of our human rights, such as rights to life, health, relation to climate, the Netherlands
is one of the countries taking the
food, water and sanitation and a healthy environment.1
lead in raising international climate
Scientists have never been more certain: climate change ambitions. The Dutch Prime Minister
is human made2, with the fossil fuel energy sector is actively pushing for an increased
contributing the most.3 Committed emissions from existing CO2 emissions reduction target for
the EU in 20309 10 11 and he recently
energy infrastructure already jeopardises the 1.5C climate discussed joint action with the Federal
target.4 Governments have made an important contribution Chancellor of Germany on this
by keeping the fossil fuel sector financially afloat,5 thereby subject.12
reducing the competitive advantage of renewables. In an effort to align its bilateral
Government support for fossil fuels comes in many forms: financing instruments with the
subsidies, tax benefits, guarantees, insurances, etc. Paris Agreement on Climate and
the SDG-agenda, in February
Government backed loans, guarantees and insurances
2019 the government presented
issued via export credit agencies (ECAs) provide the largest its ambition13 that as of 2020, it
– but least known – pool of public support. will end all financial support to
coal projects and exploration and
development of new oil and gas fields
The ECAs of G20 nations jointly provided an annual abroad from its foreign trade and
amount of € 35 billion support to fossil fuel production development cooperation instruments.
between 2013 and 2015.6 In 2017, Both ENDS found that Unfortunately, this commitment is
not applied to the export credit
the ECA of the Dutch state, Atradius Dutch State Business facility, which supports the by far
(ADSB), insured fossil fuel-related projects with a total largest volume of fossil fuel related
maximum insured value of € 7.3 billion in the period 2012- business transactions abroad. Rather,
the government aims for a greening
2015.7 This is two-thirds of its total insured value for that effort by supporting Dutch companies
period. in international projects in the field
of climate adaptation and energy
transition. ADSB recognises that the
These findings resulted in discussions in the government
government is committed to the Paris
and parliament, with researchers, climate campaigners climate goals and the Sustainable
as well as within ADSB itself. However, these discussions Development Goals (SDGs)14, and that
the ECA also has a responsibility. In
haven’t yet resulted in an alignment of the policies
this context it is primarily looking for
and regulations governing ADSB’s business with the proposals to enhance its support to
goals set out in the Paris Agreement. In July 2019, the green projects.15
Advisory Council of International Affairs concluded that
NEED FOR A NEW REPORT
export credits for fossil fuels are not in line with the Paris
Agreement and recommended to phase out all public In a response to parliamentary
support for fossil fuels.8 questions, the Dutch Minister of
Finance wrote on the 5th of June 2019:
“The ECA portfolio consists of some
very large and many small transactions.
There were few very large transactions
in 2017 and 2018. Such transactions
4NOTES
1 https://wedocs.unep.org/bitstream/
are usually oil- and gas-related: the AIM OF THIS UPDATED REPORT handle/20.500.11822/30158/Safe_
Climate_Report.pdf
part of the portfolio that is related We hope that this report further
to oil and gas has fallen from 39% in articulates the problematic nature of 2 https://www.reuters.com/article/
mid-2017 to 31% at the end of 2018. the ECA support enabling the locking us-climatechange-temperatures/
evidence-for-man-made-global-
When such large transactions occur in of new oil and gas investments for
warming-hits-gold-standard-scientists-
again in 2019 the falling trend can decades to come. Such developments idUSKCN1QE1ZU
reverse.”16 In its annual overview of are in conflict with the ever more
2018,17 ADSB reports that 23% of its accumulating evidence that there is 3 https://www.epa.gov/ghgemissions/
global-greenhouse-gas-emissions-data
portfolio is supporting the oil and gas an urgent need to drastically reduce
infrastructure sector. Since the support greenhouse gas emissions into the 4 https://www.nature.com/articles/
to the shipping sector (18%) is for a atmosphere within the next decade.19 s41586-019-1364-3
large part also supporting the oil and Policy- and decision makers need 5 https://www.iisd.org/library/g20-
gas industry, the actual share of fossil to intensify and speed up existing fossil-fuel-subsidy-reforms
fuel support in ADSB’s portfolio is discussions on the need for a greening
6 http://priceofoil.org/2017/07/05/g20-
significantly higher. of the portfolio of ADSB by adding a
financing-climate-disaster/
decarbonisation policy.
Keeping in mind that also projects in 7 https://www.bothends.org/en/
other sectors can be linked to fossil The report summarises the main Our-work/Dossiers/Paris-Proof-Export-
Support/
fuel related activities, the Dutch ECA findings of our research into ADSB’s
continues to significantly support fossil support for the fossil fuel sector 8 https://aiv-advies.nl/9zl#request-for-
fuel-related projects. In general it between 2012 and 2018. It analyses advice
remains difficult to exactly determine the insured value of such transactions 9 https://www.volkskrant.nl/nieuws-
the amounts of export credit support and defines what kind of fossil fuel- achtergrond/echte-beproeving-
issued for fossil-fuel related projects. related projects ADSB insures. It komt-nog-voor-groenste-kabinet-
ooit~b12ba9db/
The Ministry of Finance and ADSB also looks into ADSB’s support
do not seem to use the same for renewable energy projects. 10 https://twitter.com/minpres/status/9
categorisation18 and it is not clear The report provides Dutch policy- 40517841689858048?lang=en
whether the shares of ADSB’s portfolio makers and parliamentarians with
11 https://www.volkskrant.nl/
relate to volume of exposure or to the recommendations as to how to ensure nieuws-achtergrond/rutte-slaat-alarm-
number of transactions supported. alignment between the practices of in-speech-voor-eu-parlement-zelfs-
ADSB and the Paris Agreement. onze-verhouding-met-de-vs-is-geen-
vast-gegeven-meer~bd9910ca/
In order to better understand and
visualise how the Dutch government- 12 https://www.nrc.nl/
backed ECA continues to support the nieuws/2019/08/22/rutte-haalt-merkel-
bij-klimaatkopgroep-a3970893
fossil fuel industry abroad, we present
this report covering the period 2012- 13 https://www.rijksoverheid.nl/
2018 as an update from our previous binaries/rijksoverheid/documenten/
report covering the period 2012-2015 kamerstukken/2019/02/14/
kamerbrief-internationaal-
only. financieren-in-perspectief-kansen-
pakken-resultaten-boeken/
METHODOLOGY kamerbrief-internationaal-financieren-
in-perspectief-kansen-pakken-
resultaten-boeken.pdf
The methodology detailing what data
we used and how we analysed and 14 Following an accepted motion
by Van Raan and Diks https://zoek.
classified these can be found in
officielebekendmakingen.nl/kst-26485-
Annex 1. 263.html
15 Invitation to an event: “Greening
of the export credit facility” on 26
September 2019
16 https://zoek.
officielebekendmakingen.nl/kst-35200-
IX-5.html
5RESULTS FIGURE 1:
Dutch government support for the fossil fuel sector via its ECA from 2012-2018
The Dutch government insured 524
transactions in the period 2012-
2018. These 524 transactions had
a maximum insured value of € 17.7 Atradius Group
(private) Ministry of Finance
billion. A significant portion of that,
154 transactions, supported the ATRADIUS DSB
energy sector with a maximum insured DUTCH ECA
value of € 11.1 billion. Almost all
(98%) transactions that support energy
Ministry of Foreign Affairs
projects are related to fossil fuels, in
particular to the oil and gas sector.
ADSB’s support for renewable energy
Total 2012-2018
projects in this period is only 2% of the
€ 17.7 billion
maximum insured value for energy-
supporting transactions.
Non-energy
As in our previous report, our results € 6.6 billion
show that:
• ADSB mainly supports projects of Energy
clients that serve the purpose of € 11.1 billion
extracting and transporting oil and
gas Renewable energy
• Fossil fuel-supporting insurances are € 0.3 billion
mainly related to the maritime sector
• Most fossil fuel-related ADSB Fossil fuel sector
support is for activities of shipyards € 10.8 billion
and dredging companies
To visualise our results, figure 1
provides an overview of the main
Offshore sector Non-offshore sector
sectors that receive export credit € 8.6 billion € 2.2 billion
support by the Dutch ECA.
Shipyards Dredging Other companies
€ 5.1 billion companies that provide offshore
€ 2.7 billion services € 0.8 billion
6NOTES
17 https://atradiusdutchstatebusiness.
PURPOSE AND TYPE OF PROJECT nl/nl/documenten/2018-dsb-
jaaroverzicht.pdf
Table 1 illustrates how fossil fuel- 18 For example, whereas ADSB
related transactions supported by identifies the oil and gas infrastructure
as a specific category, the Ministry
ADSB can be categorised according of Finance seems to categorise
to the purpose that they serve. ADSB infrastructure separately.
mostly supports projects of clients that
19 https://www.ipcc.ch/sr15/
serve the purpose of extracting and
transporting oil and gas.
TABLE 1: ADSB supported fossil fuel-related transactions (purpose)
PURPOSE TOTAL FOSSIL FUEL- TOTAL MAX INSURED
RELATED INSURANCES VALUE (BILLION)
Exploration 0 €0
Extraction 50 € 3.6
Transport 43 € 4.6
Processing 20 € 2.0
Consumption 19 € 0.5
Decommissioning 1 € 0.09
Not clear 3 € 0.03
Total 136 € 10.8
Table 2 shows the types of fossil fuel-related projects that the Dutch exporters
serviced with these same ADSB-supported transactions. Maritime projects refer
to the construction, supply or utilisation of ships. The buyers or debtors in these
transactions often are service companies, such as marine contractors.
TABLE 2: ADSB supported fossil fuel-related transactions (sector)
TYPE OF PROJECT TOTAL FOSSIL FUEL- TOTAL MAX INSURED
RELATED INSURANCES VALUE (BILLION)
Offshore sector 94 € 8.6
Goods/System supply 40 € 2.1
Other fossil fuel-related 1 € 0.03
activities
Project management and 1 € 0.02
consultancy
Total 136 € 10.8
DUTCH EXPORTERS INVOLVED
Dutch shipyards are the category of exporters that obtain the highest volume
of export credit insurances for export transactions that benefit the fossil fuel
sector. Dutch dredging companies also obtain significant support in this field. As
illustrated in table 3, the export transactions of companies in the Dutch offshore
sector accounted for 79% of all maximum insured risks related to the fossil fuel
sector.
7TREND TABLE 3: ADSB supported fossil fuel-related transactions (exporters)
Over the years between 2012 and EXPORTER TOTAL FOSSIL FUEL- TOTAL MAX INSURED
2018, both the total value of the RELATED INSURANCES VALUE (BILLION)
insurance policies and the amount Shipyards 69 € 5.1
of support to fossil fuel-related Dredging companies 14 € 2.7
projects has fluctuated. On average Other offshore 11 € 0.8
over the studied period, 61% of contracting companies
the total support by the Dutch Total offshore € 8.6
ECA went to fossil fuel-related transactions
projects. The support for fossil fuels
compared to the total portfolio had Other companies 42 € 2.2
pretty significant fluctuations. The Total 136 € 10.8
fluctuations between 2012 and 2014
were less pronounced than they have
been since 2015. The fluctuations in TABLE 4: Maximum insured value for fossil fuels over the years in billions of euros
ADSB support for fossil fuels are more
pronounced than the fluctuations YEAR TOTAL (IN BILLIONS) FOSSIL FUEL (IN BILLIONS) PERCENTAGE FOSSIL
in the total volume of insured FUEL/TOTAL
transactions (see Table 4 & Figure 2). 2012 € € 1.7 € € 1.1 62 %
2013 € € 2.5 € € 1.3 51 %
2014 € € 3.5 € € 2.1 61 %
2015 € € 3.4 € € 2.8 83 %
2016 € € 2.4 € € 1.1 48 %
2017 € € 1.8 € € 0.7 36 %
2018 € € 2.4 € € 1.7 72 %
Total € € 17.7 € € 10.8 61 %
Figure 2: Maximum insured value for fossil fuels over the years in billions of euros
3,0 100%
90%
2,5 80%
70%
2,0
60%
1,5 50%
40%
1,0 30%
20%
0,5
10%
0,0 0%
2012 2013 2014 2015 2016 2017 2018
Support for fossils in billion euro’s Percentage fossil fuel/total
8NOTES
20 2016. Page 47-48 https://
COMPARISON WITH PUBLIC SUPPORT www.rijksoverheid.nl/binaries/
rijksoverheid/documenten/
FOR CLIMATE ABROAD kamerstukken/2017/05/17/
bijlage-kamerbrief-aanbieding-
hgis-jaarverslag-2016/HGIS-
jaarverslag+2016.pdf
In 2018 the Dutch government Besides climate support for projects
spent an amount of € 0.58 billion in developing countries, the Dutch 21 2017. Page 46-47 https://
from its Official Development government might be supporting www.rijksoverheid.nl/binaries/
rijksoverheid/documenten/
Assistance budget for climate action climate projects in other countries as
jaarverslagen/2018/05/01/jaarverslag-
in developing countries.20 21 22 This well. Unfortunately, no data on this 2017-hgis/jaarverslag-2017-hgis.pdf
involved activities that contributed support exists.23
in whole or in part to the reduction 22 2018. Page 50-52 https://www.
rijksoverheid.nl/documenten/
of greenhouse gases (climate Although no hard conclusions can be jaarverslagen/2019/05/15/jaarverslag-
mitigation) and / or the increase of drawn, the figures in Table 5 illustrate 2018-homogene-groep-internationale-
resilience to climate change (climate that effectively the Dutch government samenwerking
adaptation). Additionally, the Dutch support to the fossil fuel sector via
23 The Ministry of Foreign Affairs and
Government mobilised an amount of ADSB is likely to more than nullify the the Ministry of Economic Affairs and
€ 0.5 billion in private investments in impacts of the same government’s Climate were not able to provide such
data.
climate projects in the same period, investments in climate finance abroad.
through public-private partnerships,
multilateral climate funds, multilateral
development banks and the Dutch
development bank FMO.
TABLE 5: Dutch climate finance abroad vs ADSB support for fossil fuels for 2018
CLIMATE FINANCE ADSB FOSSIL FUEL
(IN BILLIONS) SUPPORT (IN BILLIONS)
Public ODA € 0.58
Private flows developing € 0.50
countries
ADSB renewables support € 0.05
ADSB fossil fuels support € 1.76
Total € 1.13 € 1.76
9BOX 1: Case study abroad with efforts to promote In general, Mozambique’s wildlife
Mozambique LNG emission reductions in line with is understudied and there has
the goals of the Paris Agreement. been too little scientific research
In 2010 the American company Mozambique is one of the countries done to assess and define all
Anadarko did its first gas find in which are hit hard by climate change. impacts on existing biodiversity.
the northern province of Cabo This was proved by this year’s two Environmental impacts of the project
Delgado in Mozambique. The since very strong cyclones.30 Export credit are underestimated as only impacts
then identified gas reserves in the support for Mozambique LNG would of the project itself have been
region are amongst the largest in undermine the government’s own calculated. The impacts of additional
the world. Many ECAs are, or are formulated priority to work on climate investments, such as infrastructure,
planning to be involved in financing and inclusive sustainable development food and housing, to be attracted by
further project developments. in this country. this project have so far been ignored.
Currently, ADSB is studying an
application regarding ‘offshore 2. Security 5. Countering corruption and
LNG mining and an onshore LNG Cabo Delgado Province has become effective tax collection
plant’ in the northern province of affected by an insurgency since 2017 Mozambique is one of the poorest
Mozambique, Cabo Delgado.24 and is now described as a war zone.31 countries in the world. Its currency
The identity of the Dutch exporter Well over 200 people have been killed has lost more than 60% of its value
remains classified. However, and attacks occur frequently.32 The over the past decade. A significant
multiple contracts with Dutch development of the gas infrastructure part of Mozambique’s current debt
companies have been signed in the Cabo Delgado area contributes problems was the result of fraud.36
already, such as Van Oord (USD 1 to tensions in the region and puts The discovery of substantial offshore
billion25), Boskalis associate Smit communities and civil society at risk. gas reserves is usually seen as a
Lamnalco (USD 200 million26) and great opportunity to get out of
Shell (intends to build a gas to 3. Human rights these financial problems.37 Given
liquid plant to turn natural gas into Although the gas project does the low ranking on the corruption
liquid fuel27). bring some benefits, social and perceptions index of Transparency
environmental impacts and concerns International,38 and the absence
In 2016 and 2017, the Dutch persist. There are conflicts between of articulated guarantees that the
government provided around € communities and the government citizens of Mozambique will benefit
30 million a year to Mozambique about access to land and it is unclear from the revenues of the gas
for overseas development aid.28 how the distribution of land for resources, the country sadly faces
As stated in the multi-annual displaced families will take place. In all the ills of the so-called resource
strategy of the Dutch embassy the context of huge investments in curse.
in Mozambique, food security, Cabo Delgado, communities lose
strengthening civil society and access to land and resources providing Both ENDS, together with local,
climate are amongst the priorities for their livelihoods. Social and national and international NGOs,
in the bilateral cooperation economic inequality has increased in has been raising attention for these
efforts.29 Dutch public support the past decade.33 concerns with ADSB and other
for projects related to LNG ECAs. Although ECAs do not have
developments in Mozambique 4. Protecting ecosystems a development mandate, these
would clash with ambitions to The coastline of northern Mozambique government backed agencies would
promote sustainable development is home to significant biodiversity. have an obligation not to work
in several ways. Official environmental studies for the against sustainable development
gas developments in Cabo Delgado objectives.
1. Climate action indicate that the onshore and offshore
New fossil fuel infrastructure areas include a number of species
projects don’t fit within the 1.5 that are considered imperiled by the
degree target agreed in the Paris International Union for Conservation
Agreement. It is contradictory of Nature (IUCN). A number of species
for the government to combine have been observed that appear to be
support for the fossil fuel sector new to science.35
10NOTES
24 https://atradiusdutchstatebusiness.
nl/nl/documenten/ex-ante-a-
classification.pdf
25 https://www.vanoord.com/
news/2019-van-oord-awarded-large-
contract-mozambique-lng-project
26 https://boskalis.com/press/press-
releases-and-company-news/detail/
boskalis-associate-smit-lamnalco-signs-
first-10-year-terminal-services-contract-
in-mozambique.html
27 https://www.shell.com/energy-and-
innovation/natural-gas/gas-to-liquids.
html
28 https://zoek.
officielebekendmakingen.nl/ah-
tk-20182019-859.html
29 https://www.nederlandwereldwijd.
nl/binaries/nederlandwereldwijd/
documenten/publicaties/2019/07/03/
multi-annual-country-strategy-
--mozambique-2019-2022/
Photo34: Woman in a rice field in Senga. Most communities depend on farming for their livelihood. MACS+Mozambique+2019-2022.pdf
30 https://www.weforum.org/
agenda/2019/05/mozambique-cyclone-
ARGUMENTS TO NOT PHASE-OUT idai-climate-change-hits-poorest/
31 https://clubofmozambique.com/
FOSSIL FUELS, A DISCUSSION news/mozambique-cabo-delgado-war-
continues-by-joseph-hanlon-136599/
‘We need an international level decisions for climate protection to
32 https://clubofmozambique.com/
playing field’ be adopted here. An international search-result/?q=cabo+delgado
level playing field for ECAs is in
In March 2017, the Dutch State reality also seriously hampered by 33 https://www.nederlandwereldwijd.
nl/binaries/nederlandwereldwijd/
Secretary for Finance replied to differences in institutional set-up as documenten/publicaties/2019/07/03/
parliamentarian questions on the well as in financial products offered multi-annual-country-strategy-
support for fossil fuels. He wrote: “If by various ECAs. Some ECAs offer --mozambique-2019-2022/
MACS+Mozambique+2019-2022.pdf
the Netherlands were to pursue a direct cover (loans), while other
different policy than other countries ECAs limit their services to so-called 34 By Milieudefensie.
with regard to the oil and gas sector pure cover (guarantees & insurances
35 http://www.mzlng.com/pt/content/
via the ECA, the result would be a loss only). Many ECAs offer financial
documents/MZLNG/EIA/Volume_I/
of market share of Dutch companies products that are not covered by English/Chapter_7-_LNG_Final_EIA_
or the relocation of production the OECD Arrangement. These Feb_2014_Eng.pdf
facilities.”39 He also wrote: “Dutch differences indicate more space for
36 https://www.ft.com/
exporters compete intensively with the development of new policies than content/9ecf86f4-0fb2-11e9-a3aa-
foreign competitors on orders from ECAs usually suggest. In the end it 118c761d2745
the oil and gas sector”.40 remains a matter of political will for
37 https://www.reuters.com/article/us-
ECAs to adopt new policies to ensure mozambique-debt-creditors-factbox/
This narrative is similar to governments new quality standards that society factbox-mozambique-debt-crisis-what-
in other countries like Sweden, expects them to apply. does-the-country-owe-and-to-whom-
idUSKCN1VU1WE
Denmark, France and UK. The
international level playing field In some countries, discussions around 38 https://www.transparency.org/
of ECAs is primarily made at the export credit support for fossil fuels country/MOZ
OECD, where decisions are made by are taking place at the national level.
consensus only. Objections of only one Here we present an overview.
government are sufficient to prevent
11BOX 2: Overview of national credit support for oil and gas, it is Canada
discussions on decarbonising discussing with parliamentarians
ECAs some propositions to reduce • ECA: Export Development
export credits for fossil fuels. Also, Canada (EDC)
United Kingdom the government and its ECA are
forced to become more transparent • Support for fossil fuels per year:
• ECA: UK Export Finance (UKEF) and start a reflection on climate € 7.4 billion50
reporting. Not only for oil and
• Support for fossil fuels per year: gas, but also aircraft industry and • Situation: The Canadian
€ 0.6 billion41 shipping. Lastly, the government parliament will complete a review
wants to use export credits to of EDC’s governing legislation
• Situation: Both UK parliament’s accelerate the energy transition. in 2020. Among other issues,
Environmental Audit Committee the review will consider support
and the International Development Denmark for fossil fuels. Meanwhile, EDC
Committee have criticised UKEF recently introduced a climate
for providing support to fossil • ECA: Eksport Kredit Fonden (EKF) change policy that includes a
fuel projects. The Environmental commitment to measure, monitor,
Committee concluded in its • Support for fossil fuels per year: and commencing in 2020, set
report42 that most of UKEF’s € unknown47 targets to reduce the carbon
investment undermines the UK’s intensity of its lending portfolio.51
climate commitments. It therefore • Situation: Due to the strong wind
recommends that UKEF should energy sector in Denmark, wind Sweden
end support to new fossil fuel projects account for more than 70%
projects by 2021, and align its work of EKF’s total guarantee exposure • ECA: The Swedish Export Credit
with achieving net zero emissions and loans.48 Although EKF’s year Agency (EKN) and Swedish Export
by 2050. The International report of 2018 doesn’t show how Credit Corporation (SEK)
Development Committee much support it provides to fossil
concluded that the fossil fuel fuel-related projects, it mentions • Support for fossil fuels per year:
support by UKEF currently is that 2% of its customers are EKN € 0.11 billion and SEK € 2.4
damaging the coherence of the working in the oil and gas industry. billion52
UK Government’s approach to The Danish ECA doesn’t have
combating climate change and thus specific exclusion policies and is, • Situation: No ECA has yet banned
needs to be rectified urgently.43 like all ECAs, demand driven. The all fossil fuel support, but Sweden’s
fact that Denmark is a world-wide Export Credit Corporation (SEK)
France leader in wind energy is mainly appears to have come closest.
due to national governmental SEK’s Annual Report and Accounts
• ECA: Bpifrance Assurance Export policies shifting towards electricity 2018 report that: Gross lending
production initiated after the oil to fossil fuel extraction (not
• Support for fossil fuels per year: crisis in the 1970s.49 EKF’s overall infrastructure or power plants)
€ 1.05 billion44 45 portfolio in renewable energy should be less than 5% of SEK’s
in practice reflects the Danish total lending. In practice total gross
• Situation: During the UN General export priorities moving away lending to fossil fuel extraction was
Assembly on 24 September from support for fossil fuels. How less than 1%, plus 2.3% for fossil-
2019, President Macron said that Denmark can catalyse others in fuel dependent infrastructure.53
“we continue to have export following suit towards climate The Swedish Society for Nature
financing [...] which is opening up resilience remains to be seen. Conservation therefore calls on
new polluting structures. This is both Swedish ECAs to become the
incoherent. It's irresponsible.”46 world’s first fossil-free export credit
The French government for some agencies.54
years has not supported coal
projects. Although the French
government didn’t yet stop export
12NOTES
39 Page 22. https://www.
Both ENDS and other NGOs advocate ‘The share of oil and gas in our rijksoverheid.nl/documenten/
kamerstukken/2017/03/17/
for specific governments to agree portfolio will decrease bijlage-beantwoording-
with likeminded countries to form a in time’ vragen-beleidsdoorlichting-
level playing field for climate action exportkredietverzekeringen
by ECAs beyond the OECD consensus The State Secretary also stated:
40 Page 22. https://www.
in what might be called a coalition- “As the importance of the oil and rijksoverheid.nl/documenten/
of-the-willing. The Netherlands could gas sector in the world economy kamerstukken/2017/03/17/
bijlage-beantwoording-
take a leading role in establishing decreases, for example as a result
vragen-beleidsdoorlichting-
such a coalition. Non-action by other of the climate agreement concluded exportkredietverzekeringen
countries furthermore is no excuse to in Paris, the share of the oil and gas
not phase out ECA support for fossil sector in the insurance portfolio is 41 https://www.parliament.uk/
business/committees/committees-a-z/
fuels unilaterally. expected to decrease.”58 This is not commons-select/environmental-audit-
reflected so far in ADSB’s figures. committee/news-parliament-2017/uk-
‘The ECA is not an instrument Furthermore, this statement is export-finance-report-published-17-19/
to achieve climate objectives contradicting itself. The importance
42 https://www.parliament.uk/
independently’ of oil and gas will not decrease if business/committees/committees-a-z/
governments keep supporting new commons-select/environmental-audit-
committee/inquiries/parliament-2017/
The government sees ECAs as projects. Support for fossil fuels
uk-export-finance-17-19/
market-based instruments to promote disadvantages the competitiveness of
domestic business abroad operating renewables in the energy market and 43 https://publications.parliament.
without a political agenda or hampers the transition to a renewable uk/pa/cm201719/cmselect/
cmintdev/1432/1432.pdf
responsibility themselves.55 However, energy based global economy.
article 2.1c of the Paris Agreement 44 € 9.3 billion since 2009 only for
clearly states that governments should ‘ADSB already gets more oil & gas https://www.contexte.
com/article/energie/info-contexte-
make “finance flows consistent with applications for renewables’ la-france-rechigne-a-arreter-de-
a pathway towards low greenhouse financer-les-projets-dhydrocarbures-a-
gas emissions and climate-resilient To strengthen the argument that the letranger_106995.html
development.”56 Since ECAs certainly share of fossil fuel support by ADSB
45 € 10.5 billion since 2009 including
facilitate finance flows, this article also will decrease over time, the State the export credits for coal plants in
applies to ECAs. As mentioned in the Secretary for Finance also informed South Africa Kusile & Medupi https://
introduction, ADSB recognises this as Dutch Parliament that, “In recent www.bpifrance.fr/Qui-sommes-nous/
Nos-metiers/International/Assurance-
well. Achieving climate objectives thus years, I have seen an increasing Export/Evaluation-Environnementale-
is a responsibility for ADSB. In light amount for offshore wind projects”.59 et-Sociale
of the size of new oil and gas projects From 2012-2018, ADSB insured 15
46 https://twitter.com/amisdelaterre/
in its portfolio, it's hard for ADSB to renewable energy projects of which
status/1177606526095302656
ignore calls for a phase-out of fossil 7 were related to offshore wind, 5
fuels support. to solar and 3 to biogas. More than 47 While export credits, guarantees
and project financing are to a large
half of these 15 renewable energy
extent now publicly available, due
Also the Dutch Central Bank (DNB) projects were supported between to how “promise-of-cover” items are
expressed expectations towards 2014 and 2015. In 2016, 2017 and deemed as commercially sensitive
individual financial institutions and 2018 only one renewable project per information, it is not possible to assert
the actual figure of support for fossil
policy makers to respectively mitigate year was supported. The total support fuel.
financial risks for their portfolio by for all renewables together over
taking energy transition risks into the researched period, with a total 48 https://www-prod.ekf.dk/annual-
report/2018/ekf-2018-engelsk.pdf
account and avoid unnecessary losses maximum insured amount of
by implementing timely, reliable € 264 million, remains only 2% of 49 https://www.irena.org/
and effective climate policies.57 As ADSB’s total support for energy documentdownloads/publications/
gwec_denmark.pdf
mentioned above, ECAs don’t need projects.
to phase out fossil fuels individually 50 https://www.edc.ca/en/about-us/
if they can combine strength In the past two years ADSB has corporate/disclosure/reporting-
internationally. produced two papers: ‘Renewable transactions/canadian-industry-sub-
sector-2018.html
energy outlook’60 and ‘The export
opportunities for the Netherlands 51 https://www.edc.ca/en/about-us/
newsroom/climate-change-policy-2019.
html
13in the renewable energy sector’.61 export credit facility faces in light CONCLUSIONS
These documents show that the Dutch of climate change and the Paris
renewables sector exported € 15.1 Agreement. Although civil society In a multilateral context, the
billion worth of goods in 2017. Dutch highlighted the need for a rapid Netherlands claims a leading role in
offshore and construction companies total phase-out of support for fossil financing the energy transition and
are now also - sometimes hesitantly62 fuels, the State Secretary for Finance excluding bilateral financial support
- investing in this renewable energy affirmed that rather than phasing from its ODA budget for fossil fuel
generation sector. However, given out fossil fuels, ADSB will focus on projects. As of 2020, it will end all
the size of this export market the size greening its portfolio. financial support to coal projects
of ADSB support in this field remains and exploration and development of
remarkably small. One of the main objectives for ADSB new oil and gas fields abroad from
is to provide full transparency on the its foreign trade and development
In its latest annual review, ADSB level of support for green projects. A cooperation instruments. By not
commits to report in 2020 which challenge it faces is how to calculate applying the same principles to its
transactions are contributing to if a project is considered ‘green’. It public export credit support, the
climate mitigation and adaptation was mentioned that internationally, Dutch government is creating a policy
over 2019.63 Unfortunately, it doesn’t the Netherlands is already having incoherence that nullifies its own
yet commit to also report which (bilateral) talks about how green contributions to international climate
transactions are contributing to the projects can be supported more. ambitions.
fossil fuel sector in general and the However, some countries are not
amounts of (scope 3) greenhouse gas being very constructive. Clients of Based on publicly available data, the
emissions from these transactions in ADSB mainly shared the notion that results of this study show that ADSB
particular. The disclosure of such data lower interest rates of banks and insured fossil fuel-related projects with
would be an essential step to clarify ADSB would go a long way in making a total insured value of € 10.8 billion
the challenges the Dutch government green projects more financially in the period 2012-2018. This is more
faces in its efforts to contribute to a attractive to their customers. Here, the than 60% of its total insured value for
full phase-out of ECA support for fossil question can be raised how green such that period and € 1.5 billion a year
fuels. projects really are. For example, can on average. Almost all (98%) export
an electricity powered supply vessel credit insurances that support energy
In conclusion, the State Secretary be classified as ‘green’ if it supplies projects are related to fossil fuels, in
might indeed have seen an increase oil rigs or is charged by a diesel particular in the field of new oil and
in applications for renewables up generator? gas projects. Despite recognising it
to 2015. However, the figures of has a responsibility under the Paris
ADSB show no sign of an increase agreement, the Dutch ECA provided
in renewable energy support while 36 times as much support to fossil
support for oil and gas is not declining. fuels than to clean energy.
Commitments to be transparent on
public support for climate mitigation The vast majority (80%) of the fossil
and adaptation are a distraction from fuel-related support goes to the
the real issue, which is the persistent offshore sector and 76% supports the
massive ECA support for fossil fuels. extraction or transportation of new oil
and gas, covering the construction or
‘ADSB will green its upgrading of specialised ships such
portfolio’ as Floating Production, Storage and
Offloading vessels (FPSOs), fast crew
On September 26, 2019, the and supply vessels, dredging and
government together with ADSB pipe-laying ships.
organised a stakeholder meeting
to discuss options for greening the The State Secretary’s estimated
export credit facility. Many regular decrease in oil and gas applications is
customers of ADSB, banks and civil not reflected in the figures. Support
society groups joined to discuss the for renewables by ADSB is not
challenges and opportunities the increasing and commitments to be
14NOTES
52 https://www.naturskyddsforeningen.
transparent on support for ‘green’ RECOMMENDATIONS se/sites/default/files/dokument-media/
the_worlds_first_fossil-free_export_
projects are welcome, but also a credits.pdf
distraction from the real issue which is As a level playing field on
its volume of support for fossil fuels. decarbonising is not to be expected 53 https://www.sek.se/en/wp-content/
uploads/sites/2/2019/04/Annual-
any time soon, there is an urgent need
Report-2018.pdf
There might be political space to for countries to take up their own
establish a coalition of countries responsibility. 54 https://www.naturskyddsforeningen.
se/sites/default/files/dokument-media/
willing to consider steps to phase out
the_worlds_first_fossil-free_export_
export credit support for fossil fuels, We call on the Dutch government credits.pdf
for example in countries like the UK, and parliament to ensure that export
Sweden, Denmark and France. Such credit support works towards the 55 Page 22. https://www.
rijksoverheid.nl/documenten/
a coalition could provide for a new climate goals laid down in the Paris kamerstukken/2017/03/17/
international level playing field. The Agreement and the implementation of bijlage-beantwoording-
Netherlands could take a leading role the Sustainable Development Goals.64 vragen-beleidsdoorlichting-
exportkredietverzekeringen
in establishing this coalition. In light of Therefore, we recommend the Dutch
the urgency for effective climate action government: 56 https://unfccc.int/sites/default/files/
to be put in place, non-action by other english_paris_agreement.pdf
countries can no longer be an excuse 1. Include the export credit facility in
57 https://www.dnb.nl/binaries/
to delay the phasing out of fossil fuel its foreign climate targets and set OS_Transition%20risk%20stress%20
export credit support at national level. the target for ADSB to provide no test%20versie_web_tcm46-379397.pdf
new fossil fuel support by 2020.
58 Page 22. https://www.
2. Advocate for the same target at the rijksoverheid.nl/documenten/
OECD, and urge for an immediate kamerstukken/2017/03/17/
stop of all ECA support for coal- bijlage-beantwoording-
vragen-beleidsdoorlichting-
related projects.
exportkredietverzekeringen
3. In 2020, set up a Coalition of
the Willing: a dialogue between 59 Page 22. https://www.
rijksoverheid.nl/documenten/
countries willing to decarbonise
kamerstukken/2017/03/17/
their ECAs together in line with the bijlage-beantwoording-
Paris Agreement. vragen-beleidsdoorlichting-
4. Take initiatives to ensure EU exportkredietverzekeringen
policies for ECAs take into 60 https://atradiusdutchstatebusiness.
account commitments of the EU to nl/nl/documenten/atradius_renewable_
contribute to combating climate energy_outlook-.pdf
change.
61 https://atradiusdutchstatebusiness.
nl/nl/documenten/atradius_economic_
research_exportkansen_duurzaam_
january_2019.pdf
ANNEX
62 Mr. Peter Berdowski – CEO of
Annex 1: Methodology description, the Dutch dredging company Royal
in seperate document. Boskalis Westminster N.V. - called
offshore wind a horrible industry ;
interview Het Financieele Dagblad, 11
March 2019.
63 https://atradiusdutchstatebusiness.
nl/nl/documenten/2018-dsb-
jaaroverzicht.pdf
64 Accepted motion by Van
Raan and Diks https://zoek.
officielebekendmakingen.nl/kst-26485-
263.html
15CREDITS
November 2019 • Both ENDS
Text: Niels Hazekamp and Wiert Wiertsema
Production: Masja Helmer
Design: Margo Vlamings
Both ENDS
Nieuwe Keizersgracht 45
1018 VC Amsterdam
The Netherlands
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