Netherlands to phase out public funding for new fossil fuel exports
The Netherlands has joined the group of countries who are committing to ending direct public funding for new fossil fuel projects abroad in the short term. The Netherlands has signed a declaration to this effect in Glasgow, State Secretary for Finance Hans Vijlbrief informed the House of Representatives in conjunction with Minister for Foreign Trade and Development Cooperation Tom De Bruijn, Minister of Economic Affairs and Climate Policy Stef Blok and State Secretary for Economic Affairs and Climate Policy Dilan Yeşilgöz-Zegerius.
The United Kingdom presented the declaration on 4 November during the COP26 international climate conference being held in Glasgow. The caretaker government, after careful consideration of the declaration, concluded that the Netherlands wished to become a signatory.
‘This is a significant boost,’ said Vijlbrief. ‘A big step in the right direction to combat climate change.’
The pledge means that the government will speed up the transition to a green energy supply and in 2022 will present new policy to end public funding for fossil fuel projects abroad, in particular export credit insurance. The aim is to implement this new policy before the end of 2022.
Dutch businesses will feel the impact of the pledge on their international competitiveness, as they will no longer be able to make use of export credit insurance while major foreign competitors will. The government will discuss with stakeholders what steps are feasible and necessary to ensure a green transition in the Netherlands while retaining jobs and knowledge, as well as to ensure a sustainable, reliable and affordable energy supply in developing countries.
In the interests of a level playing field, it is vital that as many countries as possible sign the declaration, especially those in Europe and Asia where major competitors to the Dutch energy sector are located. The government very much hopes that more European countries will join the pact.
The government has already introduced various measures to make the export credit insurance portfolio greener. This includes developing a measurement methodology that provides greater insight into the proportion of green and fossil fuel-based projects, for instance.
In May 2021 the State Secretary for Finance submitted a study to the House that set out a potential pathway towards phasing out fossil fuel transactions. The caretaker government is leaving the level of ambition in this regard up to the next government. Current export credit insurance policy is not in line with the COP26 declaration, which is why the decision to sign the declaration was not taken straight away.
The Netherlands was already working at international level to green export credit insurance. In October, agreements were reached within the OECD and G20 on ending public financing for coal-fired power plants. Moreover, in April the Netherlands and six other countries established the Export Finance for Future (E3F) coalition. Alongside the phasing out of support for fossil fuel transactions, the coalition is working on incentives for green transactions, as well as encouraging joint reporting for greater transparency and the use of international forums. On 24 November the Netherlands will host the second E3F summit and is working to persuade more countries to join this coalition.