U.S. WILL NO LONGER FUND OVERSEAS COAL PLANTS WITHOUT CCS

Karen Frantz
GHG Monitor
11/01/13

The United States will largely no longer provide aid through international development banks for new oversees coal-fire projects unless those projects deploy carbon capture and storage technologies, the U.S. Treasury Department announced this week. The new policy was issued in an updated and revised technical guidance that builds upon a 2009 guidance that curbed funding of coal plants at the multilateral development banks (MDB)—such as the World Bank, of which the U.S. is the largest shareholder. However, the Treasury Department said in the updated guidance that it would support MDB funding of new coal plants without CCS if they use “the most efficient coal technology available in the world’s poorest countries in cases where no other economically feasible alternative exists.” In a statement, Treasury Under Secretary for International Affairs Lael Brainard said, “By encouraging the use of clean energy in multilateral development bank projects, we are furthering U.S. efforts to address the urgent challenges of climate change.”

A spokesperson for the World Bank would not comment this week on how much of an impact the new guidelines would have on its financing of new coal-fired projects in the future. But the spokesperson did say that coal projects account for only 10 percent of its energy profile, with the vast majority of its focus going to increasing efficiency. In the last five years, the World Bank has been involved in financing of 13 coal projects. The World Bank was involved in increasing efficiency of existing coal-fired plants to reduce greenhouse gas emissions in nine of those cases. Only three of the coal projects the World Bank supported were new constructions.