Brussels (Brussels Morning)The French Ministry of Economy, Finance and Recovery announced on Monday that the government will phase out state export guarantees to oil and gas projects, according to a Reuters report. Guarantees for oil projects should be discontinued by 2025 and those for gas projects by 2035.
Earlier this year, the French government stopped providing export guarantees to projects involving fracking and flaring as well as coal developments. The new proposal includes ending export guarantees for thermal power plants with emissions higher than the national median in the benefiting country, starting from 2021.
According to the proposal, guarantees will be halted next year for projects involving shale oil, heavy oil and bituminous sands. This could prevent the creation of up to 700 new jobs. Ending financial support for exploration and exploitation of new oil fields in 2025 could cost some 1,800 job. The plan to stop financing new gas fields could cost an additional 3,000 jobs.
France’s Minister of Economy, Finance and Recovery Bruno Le Maire said the move reflects the government’s efforts to stop support for fossil fuels abroad through export financing. He also indicated that the deadline for gas projects could be moved, subject to market developments.
The ministry stated that support for gas will be cut later than oil since gas can help developing countries as they transition to cleaner forms of energy. The ministry also noted that the government has provided export guarantees worth some Euros 4.5 billion to oil and gas industries over the last 10 years, of which approximately 60% were still outstanding in May this year.
Reuters reports that on Monday UN Secretary-General António Guterres called on development banks to stop supporting fossil fuel projects. The UN’s growing pressure on state-backed banks sets the scene for the climate change summit France will host next month. Speaking at a virtual meeting with finance ministers and economic policymakers, Guterres stressed the importance of development banks phasing out support for fossil fuel investments and scaling up support for renewable energy projects.