By Timothy Cama – 11/17/15 05:16 PM EST
Members of the 34-nation Organisation for Economic Cooperation and Development (OECD) agreed Tuesday to limit public funds for exporting coal-fired power plants and equipment.
The agreement came after months of negotiations, as countries like South Korea and Australia pushed for looser rules that would allow more financing.
In the United States, the new guidelines, long sought by President Obama, mean that the Export-Import Bank will be severely limited in how it lends money to foreign countries and companies to buy coal technology.Export-Import’s authorization has expired, so the rules would only apply if Congress renews it, as it is moving to do.
A senior Obama administration official familiar with the OECD negotiations called it a “landmark” agreement that makes it more financially viable to move the country away from high-carbon-emitting power sources.
“This is a big step forward,” the official told reporters. “It removes a kind of negative carbon price, and puts clean energy technologies, like renewable energy, on a stronger footing to compete with higher-carbon energy sources.”
Plants with certain carbon capture and storage technologies will be allowed financing in some poorer nations under the agreement.
And while the standards for those exceptions were changed in the final agreement from what Obama wanted, the official said the changes were not material.
It’s unclear how the new agreement will play if Export-Import is renewed, since Congress wants to remove all coal restrictions in the authorization.
Environmental groups were happy with the final deal.
“For the first time, the world’s developed countries have agreed to common standards to limit their subsidies to exporters of coal plant technology,” John Coequyt, global climate policy director at the Sierra Club, said in a statement.
“This is a major step forward for international climate diplomacy, as it represents the first restrictions on coal project subsidies by major coal exporters like South Korea and Japan,” he said.
— This story was updated at 7:44 p.m.