Australia and Norway on Monday published national guidelines that implement their commitment to ending new international investment in unabated fossil fuel activities.
Forty-one governments and institutions have now enforced the Glasgow declaration for International Public Support for the Clean Energy Transition, according to an online statement by their alliance, the Clean Energy Transition Partnership (CETP).
From January 1, 2025, Norway’s export credit agency will no longer grant funding for petroleum and gas projects with no operational carbon capture and storage or equivalent technologies in the form of electrification.
The halt applies to all forms of direct public support, or “financial – including commercial, official development assistant and other official flows – export financing and all other direct financial or sales promotion support provided by the Norwegian authorities”, Norway said in its guidelines text.
However, Export Finance Norway “can provide loans and guarantees for climate and environmental technology (e.g., carbon capture and storage) and HSE [health, safety and environment] measures on existing infrastructure for the extraction of oil and gas”, the guidelines stated.
Norway, one of the world’s top 10 natural gas producing countries, said it is prioritizing renewable energy in development financing.
“As part of our Energy for Development initiative Norway will transfer relevant knowledge from the petroleum industry to new renewable industries in developing countries”, Norway’s guidelines stated.
“Norway has recently established two new de-risking instruments aimed at mobilizing investments in renewable energy in developing countries. The Climate Investment Fund, established in 2022, is Norway’s most important tool in accelerating the global energy transition by investing in renewable energy, storage and transmission in emerging markets with large emissions from coal and other fossil power production”.
Norway’s Climate Investment Fund plans NOK 10 billion ($898.57 million) in capital over five years. “A new state guarantee instrument is also under establishment”, the guidelines said. “The instrument will issue guarantees for renewable energy up to a total of NOK 5 billion over a period of five years”.
Besides export credits and renewables financing, Norway included business promotion as another area covered by its CETP commitment. “The state budget enshrines as a main principle that projects that receive funding through the business-oriented support schemes must be aligned with the government’s transition target for 2030 and the goal that Norway will be a low-emission society in 2050”, Norway said.
“This principle also applies to business promotion internationally. The principle embraces both projects with a neutral effect and projects with a positive effect on green transition and means that there will be room for projects in the petroleum industry that are aligned with the Paris Agreement”.
“These Guidelines will also guide Norway’s voting on the boards of multilateral development banks, and guide Norway’s positions in multilateral foras”, Norway added.
In Australia, direct public support including loans, guarantees, insurance and equity for unabated coal, gas and oil abroad was to end December 5, 2024.
“Unabated refers to a project that does not or cannot demonstrate a high level of emissions reductions through operational carbon capture (e.g., CCS or CCUS), or other effective technologies”, Australia’s guidelines said.
“Furthermore, to be considered abated a project will need to demonstrate significant emissions reductions over the lifetime of the asset, support transition pathways to net zero, and not create lock-in effects that delay or diminish the transition to renewable energy. Offsets or credits are not considered a form of abatement”.
An exemption may be granted “on an exceptional basis” if an international unabated fossil fuel project serves the national interest.
“In such cases, as part of its decision, the Government should also take into account whether the country has a credible low-carbon transition strategy or nationally determined contribution covering the energy sector; if the transaction is consistent with the goals of the Paris Agreement (including the 1.5 degrees warming limit); and situations in which there are no viable renewable alternatives, or, if the project is time-bound and has a point-in-time for transition to or integration of renewables”, Australia said.
Australia may also grant an exemption on humanitarian grounds. “The Government may decide, on a case-by-case basis, to provide support for emergency power generation supply for the purposes of humanitarian response”, it said.
