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Communication to the OECD’s Arrangement on efforts to expand the Coal-Fired Electricity Generation Sector - complaint

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Communication to the OECD’s Arrangement on efforts to expand the Coal-Fired Electricity Generation Sector - reply

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On October 20, 2021, the UN Special Procedure on hazardous wastes, Mr. Orellana, and human rights and the environment, Mr. Boyd, issued a communication Participants to the OECD’s Arrangement on Officially Supported Credit Arrangement on their efforts to expand the Coal-Fired Electricity Generation Sector Understanding (currently, Australia, Canada, the European Union, Japan, Korea, New Zealand, Norway, Switzerland, Turkey, the United Kingdom, and the United States). They note that mining and combustion of thermal coal make an outsized contribution to the aggravation and causation of the global climate crisis, with devasting effects on the ‘effective enjoyment of rights to life, health, and a healthy environment’. 

The communication notes that according to recent reports from the IPCC, UNEP, IEA, and UNICEF, the negative effects of coal mining and combustion, including on children’s rights, are overwhelmingly clear and worrying. To achieve net zero emissions by 2050, ‘all countries need to immediately stop construction of new coal power plants, phase them out completely by 2030 in advanced communities and close all of them by 2040 globally’ to meet the Paris temperature targets. Amongst the concerns cited are that coal-fired electricity causes about 35% of total methane emissions from all fossil fuel related sources, an extremely potent greenhouse gas (GHG). 

In follow up to G7 and other commitments, the Special procedures recommend that the Participants to the OECD Coal-Fired Electricity Generation Sector Understanding expand their commitment by agreeing to immediately (a) stop building new coal-fired power plants, (b) immediately terminate subsidies and export financing and guarantees for any and all actions related to coal-fired plants and exploration, extraction and production of thermal coal and associated infrastructure, without exceptions or exemptions;  (c) require existing coal-fired plants to be closed by 2030 in high-income nations and by 2040 in middle-income nations.

The group replied on December 17, 2021, that they agreed in a meeting on October 22, 2021, to end official export credit support and to tie aid support for unabated coal-fired power plants2. This ban came into force on 1 November 2021 and will be reflected in the next version of the group’s Arrangement on Officially Supported Export Credits, to be issued in early 2022. They also noted that recommendations on stopping construction of new plants, phasing out, and subsidies are not issues ‘that might be addressed or resolved by the groups working on export credits at the OECD.’ There are, however, further plans to improve due diligence screening and assessments of project applications for potential severe project-related human rights impacts in further amendments of other instruments, and the human rights experts are welcomed as stakeholders in the consultation to provide advice on how responses to potential human rights impacts could be enhanced.