US Export-Import Bank Lifts Curbs on Coal Plant Loans After Trump Order

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(Bloomberg) — The US Export-Import Bank is getting back in the business of helping to finance foreign coal power plants, after its board voted unanimously Thursday to lift roughly 12-year-old curbs on its lending. 

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The decision comes just weeks after President Donald Trump signed an executive order directing Ex-Im, the International Development Finance Corporation and other federal agencies to ensure their policies don’t deter coal mining and power projects. 

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The now-jettisoned restrictions, first adopted in 2013 following a lawsuit by the environmental group Friends of the Earth, barred Ex-Im support for coal projects in most countries unless carbon capture and storage technology was used to cut their emissions. The bank hadn’t financed any coal plants since the restrictions took effect. 

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Coal is the most carbon-intensive fossil fuel and supplies about one-third of the world’s electricity generation, according to the International Energy Agency. Demand for coal has fallen in developed countries but is still rising globally. 

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The board’s vote means the bank’s internal Environmental and Social Due Diligence Procedures and Guidelines (ESPGs) now are aligned with a separate Trump mandate, signed his first day in office, to put the interests of the US first in developing international agreements, Ex-Im said in an emailed statement. 

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“Coal-fired power projects will continue to be subject to the remaining provisions of the ESPGs in the same manner as other projects,” the bank said. 

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Conservationists blasted the move to unleash taxpayer dollars for foreign coal projects at a time when the Trump administration is moving to slash government funding and international aid. 

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And, they said, it’s only the latest disappointment by the Export-Import Bank. Although it has long been seen as a potential lender for emission-free energy projects overseas, the bank has instead been a persistent source of support for fossil fuel projects, under Democratic and Republican presidents alike.

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For example, under former President Joe Biden, the bank continued providing loans for overseas oil and gas projects, with Ex-Im’s supporters stressing that its charter bars the denial of financing “based solely on the industry, sector or business.” The bank’s charter also empowers it to block support for projects based on environmental concerns. 

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Thursday’s decision “basically says the US government is no longer supporting projects that save people, it is supporting projects that kill people,” said Kate DeAngelis, international finance program manager for Friends of the Earth. “Why are we still allowing this agency to exist?”

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Before Trump returned to the White House, the EU, UK and US pushed to limit export-credit agency finance for global fossil fuel projects, in what was seen as a bid to protect against a shift like Thursday’s. But that effort broke down last year in the final weeks of the Biden administration.  

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The bank’s decision is likely to intensify scrutiny of its role and stoke more questions from critical lawmakers about whether its congressional authorization should be allowed to lapse next year. 

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The change shifts Ex-Im’s policies back to a time when it was “one of the largest financiers of overseas coal projects in the world,” said Jake Schmidt, senior strategic director of international climate for the Natural Resources Defense Council, another environmental nonprofit. “Congress needs to realign this rogue agency when it considers its reauthorization next year.”

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