Germany to overhaul export guarantee scheme to push climate protection

Germany is planning to end export guarantees for oil and coal projects and will bolster support for green technology exports in an effort to align the country’s foreign trade with climate goals, according to the Green Party-led economy ministry (BMWK). The ministry wants to funnel more funds toward climate protection by splitting its export credit guarantee scheme for the energy, industry and transport sectors into three categories. The scheme, also called Hermes Cover, reduces commercial risk for German exporters and banks by providing insurance in the case of payment defaults. Exports of renewable energy technologies, for example, would fall under the “green” category and have easier access to the scheme as well as to more “attractive” insurance conditions. The new sectoral guidelines, which are now open to consultation with trade unions and business associations, foresee a “red” categorisation for climate-damaging technologies, such as oil and coal. These would no longer be covered by export credit guarantees. Conditions for technologies that fall under a “white” category would remain unchanged and include projects that help to phase out fossil energy. However, the scheme would continue to support gas projects in special circumstances until 2025, reports weekly newspaper Die Zeit.

Environment NGO Germanwatch criticised the exceptions for gas, saying they damaged Germany’s international credibility when it comes to a “global energy transition.” The executive director of Greenpeace Germany, Martin Kaiser, also said the country should halt guarantees for gas drilling projects. “Apparently, climate protection is to be sacrificed again to German industrial interests. In view of the climate crisis, we must no longer invest in coal, oil and gas,” Kaiser told Die Zeit. A 2021 investigation by NGOs Urgewald and DUH found the German government issued export credit guarantees to 12 billion euros worth of fossil fuel projects between 2015 and 2021, including just over nine billion for gas projects. The BMWK said the Hermes Scheme covered renewable energy to the tune of 492 million euros in 2022.