France rows back on coal export subsidies amid job loss fears
Paris is considering watering down a climate change commitment to stop support for companies exporting coal technology amid fears that it might lead to job losses at power company Alstom.
The French government said in November it would “remove all export credits” for coal technology to developing countries. Paris also said it would be pushing at a European level for the broader removal of fossil fuel subsidies.
But in a working paper, seen by the Financial Times, the government has laid out five exemptions under review, citing concerns that the full withdrawal of export credits could cost jobs at Alstom, which employs 750 people providing coal technology to other countries.
The U-turn highlights tension between environmental commitments and safeguarding jobs that countries face in the run-up to a UN-sponsored climate change summit in Paris in December.
Germany said last month it would scrap plans to raise emissions charges for older, coal-fired power stations, bowing to pressure from the industry, which warned that the levy would result in the closure of mines and power plants.
While the number of export credits issued by France for coal technology is low, environmental campaigners say the issue has a symbolic significance as it is the host country for this year’s summit, where the west is pushing emerging countries to accept stricter rules on controlling harmful carbon emissions.
Lucie Pinson, of environmental campaigners Friends of the Earth, said the exemptions being considered would “undermine the credibility and persuasiveness of France in its role as chair of [the summit].”
Paris is also key to talks at the OECD — a group of countries that aims to promote sustainable growth, which has been charged with regulating credit export agencies — about whether to limit their use for coal technology.
The French exemptions — some of which could delay the ban until after 2020 — were laid out in a June 25 memo to the French National Council for Ecological Transition, which includes non-governmental organisations, politicians, and local communities. The final decision is set to be made as early as this month.
In the working paper the government cited the need for France to “continue hosting an important industrial activity,” adding that this business provided not just 750 jobs at Alstom’s plants in Belfort and Massybut supported another 2,000 jobs indirectly and produced exports worth €700m a year.
Alstom said it took “note of the willingness of the French government to set a timetable for the withdrawal of export credits” but stressed that coal was going to continue to be part of the global energy mix for years. Through its technologies, Alstom was helping to bring about “significant improvements in efficiency and reduced CO2 emissions”, for example through carbon capture storage, which can help to “reduce the impact on global warming of electricity production based on coal.”