Last night, the Senate passed an omnibus spending bill that provides appropriations for the federal government through September 30. The FY2014 appropriations bill, passed by the House earlier this week and headed to the President for signature, also included a policy rider that will temporarily stop the U.S. Export-Import Bank and the Overseas Private Investment Corporation (OPIC) from preemptively denying support for exports of U.S. goods to most new coal-fired power plants abroad.
The provision – outlined on page 1385-87 of the legislation– states that none of the funds appropriated or otherwise made available may be obligated or expended to provide (until September 30, 2014) for the enforcement of any rule, regulation, policy, or guidelines implemented pursuant to the Supplemental Guidelines for High Carbon Intensity Projects approved by Ex-Im Bank on December 12, 2013. The bill also bars the enforcement of the modification proposed by the Overseas Private Investment Corporation (OPIC) in November 2013 to OPIC’s Environmental and Social Policy Statement relating to coal. The NAM had previously argued against Ex-Im Bank’s new guidelines, since they run contrary to the Bank’s principle mandate to support U.S. jobs through exports. Manufacturers applaud House Appropriations Committee Chairman Hal Rogers (R-KY) for tackling this issue in this important legislation.
The revisions to Ex-Im Bank’s Environmental Procedures & Guidelines, as approved by the Ex-Im Bank Board of Directors in December, would substantially deter Ex-Im support for new coal-fired power plants abroad. Although those rules provide some flexibility with respect to the poorest countries in the world, the new guidelines required carbon capture and sequestration (CCS) technology to secure Ex-Im financing for coal-fired power plants in most countries – a technology that manufacturers of CCS systems have repeatedly said is not yet ready. The changes were intended to align Ex-Im Bank’s procedures with the President’s Carbon Action Plan, announced in June. The NAM submitted comments to Ex-Im in November, in response to the first draft of proposed changes to Ex-Im Bank’s environmental guidelines.
Ex-Im Bank’s underlying carbon policy, and the updated supplemental environmental guidelines enacted last summer by a unanimous Board vote, will remain in effect. While the OECD has recommendations for common approaches on environmental and social due diligence for export credit agencies, there is not yet any international or domestic consensus on how best to address the challenges associated with climate change. Meanwhile, demand for coal and other energy sources continues to rise around the world as countries develop and millions of people are lifted out of poverty and begin to seek industrial and economic gains. Examples abound of official export credit agency (ECA) support for energy and infrastructure projects that ensure steady energy supplies to countries with these growing demands. New coal-fired power plants are also in the works in many developed countries – Japan, the Netherlands, Germany, Italy and the UK. The carbon guidelines that remain in place at Ex-Im Bank encourage and permit the Board to take into account the environmental effects of goods and services for which support is requested, without categorically barring support for U.S. exports to foreign coal-fired power plants.
Manufacturers continue to strongly support Ex-Im Bank and its mission to support U.S. exports. Ex-Im authorized more than $27 billion in support of about $37 billion of U.S. exports in FY2013, supporting approximately 205,000 American jobs in communities across the country. Nearly 90% of Ex-Im Bank’s transactions were with small businesses. In the last five years, Ex-Im Bank has assisted in financing more than $188 billion of U.S. exports and supported 1.2 million American jobs – and last year, the Bank generated $1 billion in revenue for the Treasury Department. Ex-Im Bank helps level the global playing field and plays a vital role in ensuring manufacturers have access to competitive export financing. Read more about the importance of Ex-Im Bank to manufacturers at www.nam.org/ExIm.