German climate guidelines for foreign trade face criticism

Environmental organizations Deutsche Umwelthilfe (DUH) and urgewald have criticized a draft proposal by the German government regarding new climate guidelines for foreign trade promotion. The proposed guidelines, referred to as a ‘transformation framework,’ aim to align the issuance of public export credit and investment guarantees with the 1.5-degree target of the Paris Climate Agreement.

Critics argue that the draft fails to close existing loopholes and instead weakens current rules for funding fossil gas projects abroad. Specifically, the proposal may facilitate the granting of credit guarantees for conventional fossil gas power plants. While requirements for ‘H2-readiness’ and carbon capture technologies (CCS/CCUS) are being refined, funding for gas power plants remains possible, including technical upgrades to existing plants and new builds in developing countries under certain conditions.

The guidelines are being developed by the Federal Ministry for Economic Affairs in coordination with the ministries of Finance, Environment, Economic Cooperation and Development, and Foreign Affairs. A consultation phase with associations and civil society is beginning to review the draft.