Japan was the leading source of coal financing among Group of Seven nations in the nine years ended in 2015, accounting for more than half of all support from governments or quasi-government bodies, according to a study by environmental groups seeking a ban on the funding of coal-power plants.
The Asian nation provided $22 billion of all loans, guarantees and technical assistance, or 52 percent of the $42 billion provided by G7 nations for international coal projects, according to the study by the Natural Resources Defense Council, the World Wide Fund for Nature and Oil Change International. Germany followed Japan with $9 billion in support.
The study comes after members of the Organization for Economic Cooperation and Development agreed in November to scale back public financing for coal-fired power plants and follows December’s historic global deal on climate change. It was released ahead of the G7 meeting in western Japan scheduled for May 26-27.
Group of Seven countries provided $2.5 billion for coal finance in 2015 alone, according to the study.
“Although multilateral commitments to reduce coal financing are largely being honored, Japan, Germany, and other nations are still promoting coal developments around the world,” the environmentalists said in the study.
Coal Funding
Governments that are still backing international projects such as coal-power plants and coal mining “lag behind a growing number of private financial institutions, which are reducing or banning coal from their lending or investment portfolios,” they said.
The Japan Bank for International Cooperation, a state-owned lender to development projects around the world, was the top provider of public coal financing, followed by Euler Hermes, a company that manages Germany’s export-credit guarantees, the authors said.
The report largely focused on overseas financing, but also included domestic projects financed by some of the institutions under study. While some developed countries are beginning to apply stricter policies at home, they continue to fund coal projects overseas, the groups said.
“Financing coal projects abroad also contrasts with domestic policies,” the authors said. “For instance, the U.K. government is considering a shutdown of coal-fired power plants by 2023, and Germany is phasing out some financial support for coal domestically — even while it continues to finance coal abroad.”