Dutch government still supporting oil, gas projects abroad, despite promises to stop

The Dutch government is still insuring fossil fuel extraction by Dutch companies abroad, despite promising to stop the practice this year at the COP26 international environmental conference in Glasgow. At least three fossil fuel projects got state guarantees worth 310 million euros this year. Another four companies' applications are still being processed. They could increase the amount to 2.5 billion euros, BNR reports based on figures from export credit insurer Atradius Dutch State Business.

The ongoing government support mainly stems from a transitional arrangement in which requests submitted last year can still get insurance throughout 2023. The government also set several other grounds for an exception. Ten companies applied for 2023. Three have been approved, three withdrawn or rejected, and four are still processing.

One of the approved projects is the construction of a huge oil production platform off the coast of Brazil by SMB Offshore. The Dutch government insures almost 300 million euros in income for SMB Offshore. Alkmaar-based Koks Group, which supplies 12 vacuum trucks to clean oil platforms and factories to a Saudi oil company, can count on 3 million euros in State guarantees. And shipbuilder Damen has a policy worth 6 million euros for supplying two ships to the American company Tidewater, which transports personnel and equipment to and from oil platforms at sea.

PvdA parliamentarian Joris Thijsen called it “madness” that the Dutch State is still backing companies active in the fossil fuel industry. “These companies are bursting with money. And if projects are really too risky, you can pass that on and raise the price instead of asking for state guarantees. An additional advantage of this is that sustainable energy will become a competitive alternative.”

Niels Hazekamp, who has been researching export credit insurance for the NGO Both ENDS for years, previously calculated that half of all export credit insurance in the Netherlands goes to the fossil industry. He called it “striking, to say the least,” that the government added multiple exceptions for still providing this insurance to fossil companies. There are exceptions for insuring existing infrastructure, guaranteeing the security of supply, making existing fossil infrastructure more sustainable, and helping developing countries set up their own energy supply, among other things.

“The Netherlands promised to only issue policies for projects that fit into ‘the 1.5-degree scenario’ of the Paris climate agreement. But the same agreement also mentions the need to phase out existing infrastructure,” Hazekamp told BNR. “Dutch companies are not participating in doing that, with support from the government.”