Karen Frantz
GHG Monitor
1/31/2014
Sen. David Vitter (R-La.) this week pushed the head of the Export-Import Bank of the U.S to explain the basis of the Ex-Im Bank’s new policy to no longer provide financing for coal-fired power plants in most countries unless the plants are equipped with carbon capture and storage technology. “Is there any specific statutory basis for all of these recent, new requirements and considerations directly related to coal, carbon capture, etc.?” Vitter asked the Bank’s Chairman and President, Fred Hochberg, during a Senate Banking, Housing and Urban Affairs Committee hearing. Hochberg responded: “It’s obviously an evolving policy, as with any federal agency or, frankly, when I was in the business world, in any corporation. We would continually evolve over time.” He added that the Bank’s standard environmental policies and procedures have modified over time.
Vitter, though, said, “I translate that as a ‘no’ in terms of statutory basis, but go ahead.” Hochberg replied that the basis is that the bank must be clear to exporters what it means by its environmental policies, “so we put on our website what are the environmental concerns that we will look at and making it a determination whether we can provide financing or not.”
Hochberg also elaborated on a provision of the revised policy that exempts poorer countries from the requirement of CCS technology to secure Bank financing. “For the 82 poorest countries in the world, we will not block that at all,” he said. “We will look at making sure that it’s environmentally sound and financially sound.” Vitter pressed further: “So coal-related projects would be environmentally sound for those [poor] countries, but not for richer countries?” Hochberg replied: “For the very poorest countries … which have problems finding basic power—things we take for granted, seven days a week, 24-hour power—in the very poorest countries, we have a lower standard or a more relaxed standard, I should say, than for the richer countries. If Canada’s looking to build a power plant, there are different standards that would apply in Canada than would apply in Sub-Sahara Africa.”
The Bank announced its revised policy in December. This month, Republicans successfully attached a rider to the recent omnibus spending package for FY 2014 that expanded the list of poorer countries to which the CCS requirement would not apply. Hochberg said that for those countries the Bank looks purely at its environmental policies to determine whether to provide financing. The rider is in effect through Sept. 30, after which it would no longer apply unless it is extended by another appropriations bill or continuing resolution, according to a Bank spokesperson.
