EU faces coal aid acid test

The European Union is working hard to reach a consensus between industry and environmental policy in its attempts to phase out funding the export of coal technology to developing countries.

Brussels hopes to find common ground ahead of a meeting of leading governments on the issue.

Changes being considered include shortening the time period to repay coal export credit preferential loans and reducing the number of countries that could benefit.
EU Commission
The World Bank says it should remain a viable option to continue exporting coal technology to the poorest countries that have no fuel alternatives, while the coal industry says export credits ensure cleaner, more efficient technology is used than would otherwise be the case.

Environment campaigners disagree and want an early end to all fossil fuel subsidies, especially for coal-fired power.

An unpublished paper from the European Commission says the proposal from the chairman of the OECD export committee, which failed to produce a deal in June, was "in principle" balanced, but the EU should strengthen it.

However resistance is also found from within European industry who oppose an abrupt end to coal export credits and say proposed requirements on carbon capture and storage (CCS) to neutralise emissions have to be realistic as the technology is still in its infancy.

The Commission paper raises the possibility of allowing coal export credits for plants suitable for CCS, a step back from a previous suggestion they can only be permitted for plants with operational CCS.

Euractiv reports that negotiations at the Organisation for Economic Cooperation and Development (OECD) in June ended in statemate and another OECD meeting on the issue is scheduled for September. Experts from EU member states will meanwhile meet in Brussels on Wednesday to debate their position to take to the OECD talks, EU sources said.

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