France targets fracking and flaring with export guarantee overhaul
France is considering halting funding guarantees for energy projects abroad that involve fracking or flaring, according to a finance ministry report.
The government aims to make its program of state guarantees for export financing more environmentally friendly and is dropping support for coal projects as a first step.
Next year it will also look into stopping export guarantees for oil and gas activities that are banned in France, including fracking and gas flaring, the report submitted to lawmakers states.
In the medium term, a ban on state guarantees for developing new foreign oil fields might also be considered.
“All forms of leverage must be used to help transform the economy and production, and one of these is export guarantees,” a finance ministry official said.
The government has extended nearly 9.3 billion euros ($10.3 billion) in public guarantees for oil and gas projects since 2009, mainly in the form of export credit insurance, the ministry’s report said.
The biggest French firms active in that sector are Total and Engie.
As of the end of May, nearly 4 billion euros was still outstanding, making up 7% of the Bpifrance public investment bank’s export credit portfolio.
Half of the guarantees covered gas projects, 30% oil and other liquid hydrocarbons, and the rest was for legacy coal-fired plant projects dating from before 2009, the report said.
France is set to became the first country to ban state export guarantees for coal projects and aims to push others to do the same as part of a reform of OECD guidelines next year, a second finance ministry official said.
Source: Reuters (Reporting by Leigh Thomas, Editing by GV De Clercq and John Stonestreet)