German draft export credit rules leave fossil gas loopholes open, NGOs say

Environmental groups have criticised a government proposal on climate guidelines for German export credit guarantees, arguing that the changes would make it easier for companies to secure state-backed support for fossil and nuclear power projects abroad. The economy ministry’s draft, billed as a “transformation framework,” fails to close existing loopholes in legislation and instead loosens rules on backing natural gas projects abroad, the NGOs DUH and urgewald said in a joint statement. 

“If these guidelines take effect, this would be an admission of failure on climate policy and breach of the promise made at the climate conference in Glasgow (COP26) to end support for foreign fossil energy projects,” said Regine Richter, energy campaigner at urgewald. 

Climate activists had called Germany’s pledge at the 2021 UN climate conference to end support of fossil projects abroad a “game changer” for decarbonisation. Earlier this year, Germany also joined more than 50 states at a conference in Colombia that declared their ambition for a faster phase-out of fossil energy sources.

The climate guidelines are intended to align public export credit funding with the Paris Agreement’s 1.5C° target. They determine which technologies are eligible for support and which ones no longer qualify for public funding because of their negative climate impact. 

The NGOs said that the proposal by the economy ministry would continue to allow for the support of natural gas plants under the condition of making them ready for later use with hydrogen and if they are equipped with carbon capture and storage (CCS/CCU) technology. According to DUH and urgewald, this opens the door to more general support for fossil gas infrastructure, including maintenance work on existing plants and new construction in developing countries. “Also the exploration, extraction, transport and storage of fossil gas remain eligible for support under certain conditions,” the groups said. 

The proposal also allows the support of existing nuclear power plants, which had been excluded since 2001 with several interruptions, to “increase security.” Similar support in the past had led to the embattled Ukrainian Zaporizhzhia plant running longer than initially planned, DUH and urgewald said.

The civil society groups acknowledged that support for renewables would also increase substantially under the draft. However, they highlighted that the government had received applications worth more than one billion euros in public funds for gas plants abroad since 2023. The government further had filed 15 Letters of Interest for gas projects worth another three billion euros, a step that typically precedes formal guarantee applications, the groups added.