Statement by Julia Levin, Associate Director, National Climate
Dubai, UAE – Today at COP28, Export Development Canada (EDC) joined four other export credit agencies to launch the Net-Zero Export Credit Agencies Alliances (NZECA). NZECA is an alliance of international public finance institutions committed to reaching net-zero greenhouse gas emissions by 2050. NZECA members are committing to ensure all of their financing activities are aligned with limiting global temperature rise to 1.5 degrees and publishing greenhouse gas emissions data annually. However, EDC continues to provide public financing to oil and gas companies. In 2022, EDC provided around CAD $20 billion in public financing to oil and gas companies (which includes $12 billion for the Trans Mountain Expansion, or TMX, pipeline). So far this year, they have provided around CAD $12 billion (which includes $6 billion in loans for the TMX pipeline).
“Crown corporation Export Development Canada has no place in a net zero alliance. Canada’s export credit agency continues to provide tens of billions each year to oil and gas companies, using publicly-back money to finance the companies and the activities that are fueling the climate crisis. Years of climate promises, including their own net zero commitment, have not made a difference. The Government of Canada must move quickly ahead with new rules to stop all fossil financing. Communities across Canada, already devastated by this year’s climate disasters, cannot afford to wait another year.”
Key Information:
- NZECA commits export credit agencies to:
- Ensure all the activities they are financing – through guarantees, lending portfolios and other business activities – align with pathways to net-zero by mid-century, or sooner, consistent with a maximum temperature rise of 1.5°C. This includes the full life cycle emissions of the projects they are financing, therefore would include downstream or Scope 3 emissions for oil, gas or coal projects
- Set and publicly disclose intermediate science-based targets for 2030 or sooner for the highest emitting sectors in their portfolios
- End new direct support for the fossil fuel energy sector by the end of 2024
- The alliance currently includes UKEF, Export and Investment Fund of Denmark (EIFO), Export Development Canada (EDC), and the Swedish National Export Credits Guarantee Board and Swedish Export Credit Corporation (EKN and SEK) as full members. ECAs from the UAE, Kazakhstan and Spain have also joined the Alliance as affiliates. Combined, these ECAs supported an estimated US$120 billion in global trade in 2022 alone.
- In December 2022, the Government of Canada committed to ending public financing for international oil and gas companies provided by Export Development Canada. In July 2023, the federal government also introduced new rules ending inefficient fossil fuel subsidies. However, the majority of the financial support provided by the Government of Canada is in the form of public financing for domestic oil and gas projects, provided through Export Development Canada. The government has committed to phasing this out by Fall 2024.
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