Netherlands to stop insurance for new fossil fuel projects
BRUSSELS, Nov 5, (Agencies): The Dutch government is to stop providing insurance for new fossil fuel projects involving Dutch companies abroad unless these are in line with the international climate goal to limit global warming to 1.5 degrees.
The decision was first announced a year ago but the details have only just been published by the Dutch finance ministry, Dutch local news reported Friday.
The decision means “there won’t be any room for support for new projects aimed at the exploration and extraction, processing, storage, transshipment and transport of fossil fuels and electricity generation by means of fossil fuels”, the ministry said in a statement.
The Dutch government currently provides export credits for companies operating abroad on risky projects to cover them if the client defaults on payment. These often involve fossil fuel projects in countries where there is instability.
Last year, the Dutch government had insured fossil fuel projects to the value of nearly 5 billion euro (USD 4.8 billion).
The change in the Dutch position means companies will have find a private insurance group to cover them, if possible.
A Japanese consortium has decided to retain its stake in the new Russian operator of the Sakhalin-1 oil and gas project and is set to notify Moscow, moving to secure stable energy supplies for resource-scarce Japan.
“It’s an extremely important project,” Economy and Industry Minister Yasutoshi Nishimura said Friday in welcoming the unanimous decision by the shareholders in Sakhalin Oil and Gas Development Co., or SODECO, a consortium of Japanese companies holding a 30% stake in Sakhalin-1 in Russia’s Far East.
Nishimura said SODECO was expected to notify the Russian operator of its decision by Nov. 11, meeting a deadline set by Russia. The government will do its utmost to ensure Japan’s energy security by working closely with the private sector, he said.
The decision by SODECO shareholders Friday came days after Nishimura met with consortium executives asking them to keep their stake in the Russian project.
Japan’s government owns a 50% stake in SODECO. The remainder is held by private companies including major trading giants Itochu Corp. and Marubeni Corp. and energy compa
nies Inpex Corp. and Japan Petroleum Exploration Co.
Many major Western energy companies have withdrawn from projects in Russia due to the war in Ukraine. Japanese officials maintain that oil and gas from Sakhalin is vital for the country’s energy security.
Russian President Vladimir Putin in October unilaterally announced a plan to establish a new operator for the project previously led by Exxon-Mobil, which left the project after Moscow terminated the company’s interests in the project.
The European Commission Friday announced its approval of a 16.8 billion euro (USD 16.6 billion) Danish guarantee
scheme to support companies in the context of Russia’s war against Ukraine.
The measure, managed by the Denmark’s Export Credit Agency, will be open to electricity producers and gas shippers active in the Danish electricity and gas markets, said the Commission in a press release.
The maximum guarantee amount per company will cover the liquidity needs stemming from its activity on the energy markets for the 12 months following the granting of the aid.
In a related development, the European Commission also today approved a 1.34 billion euro (USD 1.32 billion) Danish scheme to support energy intensive companies in the context of Russia’s war against Ukraine.