The Netherlands takes a new step in greening export credit insurances
From 1 January 2023, businesses and banks will no longer be eligible for export credit insurance for new projects in the fossil energy sector, unless these are in line with the international climate goal to limit global warming to 1.5 degrees. The export credit insurance will also be made more attractive for green projects, to support businesses in the energy transition. The elaboration of the declaration from last year’s COP26 climate conference in Glasgow is an important step in the further greening of export credit insurance. In the elaboration of the COP26 declaration, the government sought coordination with other signatories in order to guarantee a level playing field as much as possible.
In line with the declaration signed by the government at COP26, the intended government policy is aimed at ending new public support via the export credit insurance for the fossil energy sector abroad as of 1 January 2023. Within this intended policy, there won’t be any room for support for new projects aimed at the exploration and extraction, processing, storage, transshipment and transport of fossil fuels and electricity generation by means of fossil fuels. The elaboration of the declaration from last year’s COP26 climate conference in Glasgow is an important step in the further greening of export credit insurance.
Seizing opportunities in energy transition
Although the energy transition can be challenging for businesses with many activities in the fossil sector, this development also offers opportunities for the Dutch business community. In this way, businesses can use their knowledge for climate projects worldwide. In addition, the energy transition will require a great deal of investment in green projects in the near future. The government would like to take advantage of these opportunities and is committed to doing so. Many measures were recently introduced to better support green transactions with the export credit insurance, such as insuring higher-risk green transactions and green cover for investments in green innovations. With additional measures, the government is committed to further greening export credit insurance. For example, a start will be made on proactively setting up credit lines for foreign buyers of Dutch products, so buyers can obtain an export credit insurance-covered credit line for purchasing goods and services in the Netherlands. In addition, the aim is to have 70% of the assignments under the development collaboration infrastructure programmes carried out by Dutch businesses.
Strict conditions for exceptions
Due to the energy transition, certain investments in fossil infrastructure will continue to be necessary in the coming years to provide our energy security. The export credit insurance therefore remains accessible under certain conditions for investments in existing fossil infrastructure, provided the economic life of the infrastructure is not extended. Other examples of exceptions are fossil infrastructure support services, multi-purpose ports and electricity production in low-income countries with extreme energy poverty. Due to current geopolitical developments, the proposed policy also offers scope for projects that safeguard the security of supply in Europe and are in line with European REPowerEU policy.
Because many projects have a long lead time, the government has opted to apply a transition period of one year. In this respect, applications submitted before 1 January 2023, at the latest on 31 December 2023, can lead to a policy. The Netherlands has opted for careful implementation.
Since the signing of the COP26 declaration in Glasgow (2021), businesses and NGOs have been involved in the elaboration. At an international level, coordination has been sought about the elaboration of the COP26 declaration with co-signatories. The government wants to ensure a careful introduction of the new policy and a level playing field for businesses. In the coming period, the government will continue to consult with other countries that have signed the COP26 declaration. The elaboration is therefore intended policy that can still be revised if policy developments in other countries give cause to do so.