France to end subsidies for coal plants abroad

Eiffel Tower Paris
Eiffel Tower Paris
Denna, MorgueFile

Publish date: February 10, 2015

The French government has announced its plans to halt subsidies for the construction of coal power plants in developing countries. Funding would only be granted to plants equipped with Carbon Capture and Storage (CCS) technology. As the host of the upcoming United Nations Climate Summit, COP 21, where a post-2015 global climate deal will be agreed on, France wants to make sure it sets a positive example through its climate practices at home and abroad.

This announcement by the French government comes on the heels of a call for a European CCS target along with increasing recognition by governments and major oil companies, of the reality of the carbon bubble.

While coal makes up only a small share of the French energy mix, the country subsidises new coal energy in third countries through public guarantees from the French export credit agency, Coface. Coface has guaranteed over €1.2 billion of coal projects since 2011, and was the fifth largest subsidiser of coal energy exports from the OECD between 2007 and 2013. The withdrawal of this support will be written into the energy transition for green growth bill, which is currently undergoing examination in the French Senate.

The French Prime Minister, Manuel Valls, has stated that France will no longer be funding coal power construction in developing countries unless they are equipped with CCS. The necessity of this measure was acknowledged in the recently released Synthesis Report of the Intergovernmental Panel on Climate Change which warns that “all fossil fuel power generation without CCS technology should be phased out by 2100 if the world is to keep temperature rise below 2°C, the threshold recommended to prevent dangerous climate change”.

Bellona strongly commends France’s intention to withdraw support for coal construction abroad. Unabated coal use is devastating for the climate; the pre-requisite of CCS for continued French support to coal generation sends a clear signal that business as usual will no longer be rewarded. The IPCC states in clearest terms that the absence of CCS will drive up the costs of reducing global emissions by more than double.

Whereas the conditions and the timetable for the withdrawal of the subsidies is still to be determined, French NGOs have called for the pledge to take effect immediately and have insisted on the importance of France speaking out in the upcoming OECD negotiations on the need for EU-wide withdrawal of subsidies to coal power plants. Bellona agrees that there is no time to waste, and as always words need to be followed by actions.