Hidden subsidy for dirty power plants will be eliminated as Japan, Australia and South Korea drop objections
OECD agreement nudges developing countries towards more efficient coal plants (Pic: Pixabay)
By Megan Darby
Rich countries will phase out export credits for inefficient coal power technology, after the Organisation for Economic Cooperation and Development reached a deal on Tuesday.
It removes a hidden subsidy for polluting plants being built in emerging economies, mainly in southeast Asia.
Japan, the biggest exporter of that technology, agreed with the US to support a phase-out last month. South Korea and Australia, the last holdouts, came on board after demanding minor concessions.
Steve Herz of the Sierra Club, who was following the talks closely, told Climate Home: “This is a significant step forward for international climate diplomacy…
“Now you have consensus among developed countries it is not okay to continue to subsidise the export of coal technology on business-as-usual terms.”
OECD countries accounted for almost half of US$73 billion spent on coal export credits worldwide over the past seven years, a recent report by Oil Change International, WWF and the Natural Resources Defense Council found.
The most efficient category of coal plant, ultra-supercritical, can still get credits. But at least 300 large supercritical power stations in the pipeline are no longer eligible, according to Herz.
Members of the Paris-based OECD are set to review the conditions in 2019, when environmentalists hope they will decide to end subsidies across the board.
The difference in emissions between supercritical and ultra-supercritical power plants is about 5%, Greenpeace’s Lauri Myllyvirta noted.
That is “way too small to justify any special treatment for these plants,” he said. “The fact that so-called ultra-supercritical plants are still being allowed does call into question whether Japan, Korea and other laggards are serious about not pouring more tax money into exporting pollution.”