The Netherlands contradicts COP26 promise, moves ahead to support 30 year oil and gas production project in Brazil

The Netherlands contradicts COP26 promise, moves ahead to support 30 year oil and gas production project in Brazil
23 March 2023, Netherlands – The Netherlands just contradicted its COP26 pledge to end public finance for fossil fuels by the end of 2022 and shift this money to clean energy by issuing a commitment to insure the Brazil Santos Basin Pre-Salt Pole oil and gas production project for around USD 321 million.

Just last week, a new Oil Change International report showed that the Glasgow Statement, a joint commitment made by 39 countries and institutions at COP26 in 2021, is already shifting an estimated USD 5.7 billion per year out of fossil fuels and into clean energy, with the potential of a further USD 13.7 billion per year if all Glasgow Statement signatories fulfill their commitments.

The Netherlands published a policy implementing the commitment in November 2022, but it has major loopholes that allow continued fossil support by the Dutch Export Credit Agency (ECA) Atradius DSB. This includes a “transition period” in breach of the agreed end of 2022 deadline, allowing projects that have requested financial support in 2022 to still be approved in 2023. 

This “transition period” in the Dutch policy has now been used to justify the approval of export finance support for a floating production storage and offloading (FPSO) vessel, that will support production of oil and gas in Brazil for a duration of 30 years, well into 2050 – a decision announced just days after the Intergovernmental Panel on Climate Change (IPCC) issued a ‘final warning’ that global emissions must fall. 

Scientific evidence shows that emissions from existing fossil fuel energy infrastructure jeopardises the 1.5?°C goal, and nearly half of existing fossil fuel production sites need to be shut down early if global heating is to be limited to 1.5ºC. This means that there is no room for any international public support for the expansion of coal, oil, and gas production. 

In December 2022, Dutch and Brazilian civil society organisations (CSOs) sent a public letter calling on the Netherlands and Atradius DSB to decline export finance support for the project, in which CSOs wrote:

“This project is in blatant contradiction with the COP26 Statement and the Paris Agreement and the objectives articulated therein. It would significantly increase Brazil’s oil and gas production at a moment when a rapid phase-out of fossil fuel infrastructure is necessary.

The new FPSO will further impact human rights and nature, affecting the ways of life of traditional communities such as artisanal fishing, quilombolas and indigenous people, who inhabit the coves, beaches and mangroves of the region’s Atlantic coast.”

The International Energy Agency (IEA) has repeatedly stated that clean energy, not fossil fuels, are the solution for energy affordability, security and climate and development goals. Unless countries meet and expand their commitments to end international public finance for fossil fuels in 2023, climate, development and security goals will be pushed further beyond reach.

Laurie van der Burg, Co-Campaign Manager Global Public Finance at Oil Change International said:

“The Netherlands approving this massive new fossil fuel investment in Brazil despite committing to stop funding fossils by the end of 2022 is shameless failure of their so-called climate leadership, only days after the IPCC issued its “final warning”. 

“The Netherlands should not be allowed to take credit for climate action while funding climate disaster. This should have consequences for the Netherlands’ participation in the Glasgow Statement initiative (officially ‘Clean Energy Transition Partnership’).” 

Isabelle Geuskens, Just Energy Transition Senior Officer, Milieudefensie said:

“Despite signing the Glasgow Statement, urgent calls by Brazilian and Dutch civil society, and critical questions by Dutch MPs, the Dutch government decides to turn a deaf ear and just go ahead. The massive fossil Santos project is not in line with the Paris agreement and threatens eco-sensitive areas. Only 3 days into the IPCC’s latest alarming wake-up call, this dirty multi-decade project is being pushed through. It is a big slap in the face of climate science and current and future generations facing the consequences of governments putting the interests of a few big companies above people and planet.”