France’s finance ministry on Monday stated it would propose to parliament to stop providing export guarantees for fossil fuel projects. Export guarantees are often needed by companies to secure bank credit for their projects. Earlier this year, the country halted giving export guarantees to projects involving flaring and fracking. It also scrapped financial assistance for coal developments.
In the new proposal, export guarantees will not be provided to exploration and development of new projects involving dirty oil forms such as shale oil, heavy oil, and bitumen oil sands starting from 2021, all types of oil from 2025, and natural gas from 2035. According to Finance Minister Bruno Le Maire, the later deadline for gas is because it can help the country during the transition toward low-carbon energy. However, it could be brought forward based on how the market evolved, Le Maire added.
Total has not requested export guarantees for its $20-billion Mozambique LNG project, which is among major projects expected to be affected by the government’s latest move. The company has so far made no decision on a Russian Arctic LNG project, where it is also involved.
In the last ten years, the gas and oil sectors have enjoyed export guarantees of about €4.5 billion ($5.3 billion) from the French government. Of which, 60% remained in place as of May 2020. The halt in export guarantees is expected to affect the creation of up to 5,500 jobs across the industries. The parliament will discuss the proposal in the 2021 budget bill.
