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4. Assessment of EIFO’s alignment with the Paris Agreement

We assess the ‘Paris alignment’ of EIFO based on a methodology specifically developed to evaluate the alignment of ECAs with the Paris Agreement (Shishlov et al., 2021b). This methodology conceptually and practically builds on existing approaches to ‘Paris alignment’ developed for other financial institutions, such as multilateral development banks (MDBs). Most notably, this includes the structure and rationale of the Public Development Banks’ Climate Tracker Matrix by the environmental think tank E3G, which, in turn, is based on the six building blocks of the Paris Alignment Working Group (PAWG) by major MDBs. The assessment of ECAs like EIFO differs notably from these two approaches since it transparently underpins each assessment dimension (hereafter referred to as ‘dimensions’) with specific key questions (3–5 questions per dimension, in total 18 questions) as well as specific benchmarks (four benchmarks per question, in total 72 benchmarks). The four benchmarks correspond to four labels of Paris alignment (Figure 2).
Unaligned
0.00 – 0.50
Some progress
0.51 – 1.50
Paris aligned
1.51 – 2.50
Transformational
2.51 – 3.00
Figure 2: Labels of Paris alignment and corresponding score ranges.
This methodology also notably differs from other approaches to assess the ‘Paris alignment’ of financial institutions since it applies a weighting approach to the assessment dimensions. This permits the emphasis of some dimensions over others as some dimensions are more imminently important to reaching the Paris climate goals (e.g., mitigation is more important than disclosure). The selection of weights reflects a careful consideration of priorities and is based on the expertise of experts from research and civil society organisations (Shishlov et al., 2021b). The final scoring for each question is carried out by evidence-based expert judgement. EIFO received an overall assessment score of 2.54/3.00 and therefore received the label ‘Transformational’. The following presents a justification for the scoring of each question per assessment dimension.

4.1 Dimension 1: Financial and non-financial disclosure and transparency

The first dimension is underpinned by four key questions regarding the transparency of financial and non-financial disclosures of ECAs. This dimension is a crucial prerequisite to evaluate the Paris alignment of ECAs in subsequent dimensions and to hold governments accountable for supporting businesses abroad against their commitments under international treaties, such as the Paris Agreement. Furthermore, it is especially important since ECAs were found to particularly lack transparency in the past (Shishlov et al., 2020). The methodology weighs this dimension
with a total of 20%, recognising that transparency, while important, is only a precondition for decarbonisation itself.
In this assessment dimension, EIFO was rated with ‘Paris aligned’ with an assessment dimension sub-score of 2.25/3.00.
Q Nr.
Dimension 1 – key questions
Rating SEK
1.1
To what extent can the GHG intensity of all activities supported by the ECA be assessed based on publicly available data? (Non-financial disclosure)
Paris aligned
1.2
In how far can the share of fossil fuel finance over total portfolio be assessed? (Financial disclosure)
Transformational
1.3
In how far can the share of climate finance over total portfolio be assessed? (Financial disclosure)
Some progress
1.4
To what extent does the institution adhere to the Recommendations and Supporting Recommended Disclosures of the Task Force on Climate-related Disclosure (TCFD)?
Transformational

Q1.1: To what extent can the GHG intensity of all activities supported by EIFO be assessed based on publicly available data? (Non-financial disclosure)

The assessment question was rated with ‘Paris aligned’. EIFO (and previously EKF) has been providing assessments for its scope 1, 2 and 3 GHG emissions for each sector in the available Annual Reports for 2023 and 2022 (see Figure 3). EKF reported on the ECA’s direct and indirect emissions (scope 1 and 2) since 2020 and further offered estimates for its total portfolio emissions (including scope 3) for 2020 and 2021 (EKF, 2023; EIFO, 2024a). EIFO does not publish the GHG emission intensity per project or transaction and does not differentiate between emissions from its export and domestic business (EIFO, 2024a). However, Energistyrelsen, the Danish Energy Agency (ENS) published sector-specific calculations of EIFO’s scope 1, 2, and 3 export emissions in Denmark’s Global Impact Report in 2023 for the first time (ENS, 2024).
According to EIFO’s portfolio emission calculation (Figure 3), RE is the single largest emission source, making up 28% of total emissions. This is because RE project funding makes up a large share of the finance provided by EIFO (EIFO, 2024a). Additionally, emissions are high in the construction phase, especially for wind parks, and low in the operation phase (Thomson and Harrison, 2015). This is reflected in the low emission intensity of RE investments measured in tCO2e/EUR million. The second largest share of emissions is grouped under ‘Other’, mainly stemming from electricity machinery and transmission facilities (EIFO, 2024a).
65% of emissions in the ‘Others’ category stem from one single electricity grid project that reported high scope 3 emissions from the use of its power cables, as clarified in an exchange between EIFO and the authors.
 
Financial exposure
Portfolio Emissions
Emission intensity
Active class
(EUR bn)
Scope 1-2
(kilo tCO2e)
Scope 3
(kilo tCO2e)
Scope 1-2-3
(kilo tCO2e)
(%)
 (tCO2e/​mEUR)
Renewable energy production
13.27
90
962
1052
28
82.1
Cement
0.13
496
143
638
17
3655.4
Agriculture and food production
0.54
262
233
495
13
1007.1
Transport
2.01
59
273
332
9
164.1
Mining and quarrying
0.13
122
63
185
5
1432.3
Energy transmission and distribution
0.40
124
43
167
4
432.7
Chemical production
0.13
59
78
138
4
1275.7
Fossil energy production
0.13
56
13
68
2
1089.2
Metal products
0.13
15
36
52
1
604.3
IT service
0.80
2
7
9
0.2
7.5
Others
2.14
77
616
693
18
335.7
Total portfolio
19.71
1.362
2.468
3829
100
194.0
Figure 3: Portfolio emissions by sector (before reinsurance) for all of EIFO’s investments (domestic and international), 2023.
Source: EIFO, 2024a, p. 31.
EIFO’s procedures to calculate GHG emissions are somewhat traceable as an overview of the applied methodology is provided in the Annual Report. However, EKF’s merger with the two other state funds has posed challenges in maintaining comparability of portfolio emissions. 2023, the first year of EIFO's operation with its broader portfolio, will serve as the baseline for EIFO's portfolio emissions.
As clarified in an exchange between EIFO and the authors.
 Thus, future trends cannot yet be assessed. No higher score can be given since it is not (yet) feasible to compare EIFO's portfolio GHG emission trends against a baseline and since there is no information on lifetime emissions of assets publicly available.
EIFO’s Annual Reports differ from EKF's, particularly in the level of detail provided. While EIFO’s 2023 portfolio emission reporting is consistent with EKF’s 2022 report (EKF, 2023; EIFO, 2024a), EKF previously offered more comprehensive information, including geographic distribution, data on OECD-classified transactions with environmental and social risks (Category A, B, and C projects), and financing directed to SMEs (EKF, 2022, 2023). Annual reports from EKF and Vækstfonden from before 2022 are accessible through the Danish Central Business Register (CVR)
 but not on EIFO’s website.
We recommend EIFO to start reporting transparently on the project level including information on lifetime GHG emissions of assets. Considering the merger with EIFO, we further recommend that EIFO makes more metadata on its portfolio available, similar to the former reporting practices by EKF, including the geographic distribution. Information could also be made more accessible by publishing EKF’s and Vækstfonden’s Annual Reports on EIFO’s website. This would increase transparency regarding the fulfilment of international commitments and would offer observers insights into EIFO’s evolution and GHG trajectories.

Q1.2: In how far can the share of fossil fuel finance over total portfolio be assessed? (Financial disclosure)

This assessment question is rated as ‘Transformational’. EIFO’s share of finance to fossil fuel projects is available from the Annual Report and in Denmark’s Global Climate Impact Report (EIFO, 2024a; ENS, 2024). EIFO’s climate policy clarifies the scope of projects that the ECA defines as fossil fuel-related (EKF, 2021b). EIFO has further a clear fossil fuel exclusion policy with a defined scope. Exceptions for fossil gas projects are possible until 2025 following specified criteria (KEFM, 2021b). EIFO’s annual report does not clarify if any exception was applied and if a gas project was admitted in 2023.
We recommend refining the reporting on fossil fuel exposure by disclosing granular project-level information on transactions that continue to be within the extensive value chains of fossil fuel-related and -dependent infrastructure such as transport. Systems need to be established to mandate transparent reporting on exceptional financing granted to fossil fuel projects, including a justification of how this aligns with EIFO’s fossil fuel exclusion policy. This would allow for greater public accountability regarding the ECA’s Paris Agreement. Ideally, reporting should also be made publicly available with an option to download as EXCEL tables to facilitate public data accessibility and processing.

Q1.3: In how far can the share of climate finance over total portfolio be assessed? (Financial disclosure)

This assessment question is rated as ‘Some progress’. EIFO’s share of finance for RE is available for its total portfolio through its Annual Report and for its export portfolio through Denmark’s Global Impact Report (EIFO, 2024a; ENS, 2024). However, EIFO does not provide a clear definition for climate finance and does not classify its projects accordingly as green or sustainable. Thus, there is no information available on the share of climate-beneficial investments other than RE.
In 2021, however, EKF has been providing figures for ‘climate-related export credits’ going beyond only RE projects, publishing total investments in different mitigation technologies and relevant sectors. The applied definition of ‘climate-related’ was based on a methodology used in the OECD Group on Export Credits (ENS, 2021).
Table 2: EKF's climate-related export credits by technology in million EUR, 2017-2020.
Technology
2017
Average exchange rate in 2017: 1:7.44 (ECB, 2017)
2018
Average exchange rate in 2018: 1:7.47
2019
Average exchange rate in 2019: 1:7.47
2020
Average exchange rate 2020: 1:7.45
*
Wind power
775.8
3,147.4
1,372.4
1,243.6
Solar PV
0.0
0.0
29.9
0.0
Biomass
0.0
9.2
0.0
0.0
Rail (electricity)
239.5
0.0
0.0
912.3
Transmission links, electricity (RE)
0.0
246.5
Transmission line connecting a hydropower plant, as clarified by EIFO.
0.0
0.0
District heating
0.0
7.9
0.0
0.0
Waste management
0.0
0.0
0.8
0.0
Agriculture, aquaculture
0.0
0.0
69.1
0.0
LED lighting
0.0
2.7
1.3
0.0
Total
1,015.3
3,413.8
1,473.5
2,155.8
Note: *Data for 2020 are preliminary figures.
Source: The authors, based on ENS, 2021, p. 101.
We recommend reporting climate finance both for new transactions and total exposure as a broader category that includes finance for RE and related infrastructure but also cross-cutting activities for both mitigation and adaptation (Shishlov and Censkowsky, 2022). Such an approach should be based on sound definitions of all subsectors on exhaustive or near-to exhaustive lists of activities. The EU Taxonomy
The EU Taxonomy is a system created by the European Union in 2020 to classify and promote environmentally sustainable economic activities, helping align investments with EU environmental goals.
 provides such a comprehensive list of ‘sustainable’ activities and is already applied by EIFO to parts of the portfolio for financing under the Green Future Fund (Denmark Green Future Fund, 2020). Established practices for MDBs and the OECD provide further guidance on when support may be deemed eligible under international climate finance commitments (African Development Bank [AfDB] et al., 2020; OECD, 2024).

Q1.4: To what extent does the institution adhere to the Recommendations and Supporting Recommended Disclosures of the Task Force on Climate-related Financial Disclosure (TCFD)?

This assessment question was rated as ‘Transformational’. EKF has provided comprehensive TCFD-aligned reporting in its Annual Report 2022 for the first time (EKF, 2023), preceding Finnvera by two years (Finnvera, 2024), but one year after Sweden’s (EKN, 2021) with its dedicated TCFD Pilot Report. EIFO’s Annual Report for 2023 again includes a TCFD report (EIFO, 2024a).
In early 2024, the work of the TCFD has been completed and companies‘ progress on the TCFD recommendations is now tracked under the International Financial Reporting Standards Foundation‘s IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures (IFRS, n.d.).
We recommend that EIFO should start adhering to the Task Force on Nature-related Financial Disclosure (TNFD) whose recommendations promise a more holistic approach to disclosures on environmental risks and opportunities.

4.2 Dimension 2: Ambition of fossil fuel exclusion or restriction policies

The second assessment dimension is underpinned by three key questions covering the ambition of fossil fuel exclusions and/or restriction policies by type of fossil fuel. Today, the most notable policies emerged from the signatories of the Statement on International Public Support for the Clean Energy Transition and members of the E3F coalition. However, the majority of G20 governments only vaguely committed to climate- and or sustainability-related targets, which have substantive interpretative leeway. Due to the pre-eminent importance of rapid phase-out of public support for fossil fuel value chains, the methodology weighs this assessment dimension with 40%.
In this assessment dimension, EIFO was rated as ‘Transformational’ with an assessment dimension sub-score of 3.00/3.00.
Q Nr.
Dimension 3 – key questions
Rating
2.1
Coal: How ambitious is the ECA regarding exclusions or restrictions for support of coal and related value chains?
Transformational
2.2
Oil: How ambitious is the ECA regarding exclusions or restrictions for support of oil and related value chains?
Transformational
2.3
Natural gas: How ambitious is the ECA regarding exclusions or restrictions for support of gas and related value chains?
Transformational

Q2.1: How ambitious is the ECA regarding exclusions or restrictions for support of coal and related value chains?

This assessment question was rated as ‘Transformational’. Shortly after signing the COP26 Statement on the Clean Energy Transition Partnership (CETP), Denmark published its Paris-aligned policy to implement the commitment (KEFM, 2021b) as one of the first countries internationally and within the Nordic region (OCI, 2024b). Aligned with the Danish position, EKF’s 2021 climate policy upholds the ban on export finance for coal power as was previously agreed on at the OECD level. The policy further commits to phasing out international and domestic finance for all fossil fuels, starting in 2022 (EKF, 2021b).

Q2.2: How ambitious is the ECA regarding exclusions or restrictions for support of oil and related value chains?

This assessment question is rated as ‘Transformational’. The above justification applies (see Q2.1).

Q2.3: How ambitious is the ECA regarding exclusions or restrictions for support of gas and related value chains?

This assessment question is rated as ‘Transformational’. The above justification applies (see Q2.1). The exceptions for gas until 2025 are strict. For instance, investments in power generation capacity may not delay the transition to RE and need to prove that these investments do not lead to a carbon lock-in. Infrastructure projects need to enable a reduction of emissions, e.g. by being ‘hydrogen-ready’
The term ‘hydrogen-ready is contested as it is not clearly defined. The costly implementation and the currently low supply of green hydrogen give rise to concerns if hydrogen-ready plants will actually use to no/low emission fuels in the future (Beyer, 2023).
; and support for gas for cooking and heating can only be granted for particularly challenged countries
Defined as the poorest developing countries (International Development Association (IDA) and African Development Fund (ADF) countries).
 (KEFM, 2021b).

4.3 Dimension 3: Climate impact of and emission reduction targets for all activities

The third assessment dimension is underpinned by three key questions regarding the climate impact and GHG emissions reduction targets for all ECA activities. To achieve the objectives of the Paris Agreement, not only is rapid fossil fuel phase-out required, but other sectors need to also drastically reduce absolute emissions levels (IEA, 2021). This dimension is assigned an overall weight of 20%.
In this assessment dimension, EIFO scored ‘Paris aligned’ with an assessment dimension sub-score of 2.00/3.00.
Q Nr.
Dimension 3 – key questions
Rating
3.1
Can a declining trend in GHG intensity of the total portfolio be observed? (tCO2e/EUR, Scope 1–3 emissions)
Paris aligned
3.2
How significant is the fossil fuel financing relative to total energy-related portfolio? (average of new commitments from the last three years where data is available)
Transformational
3.3
To what extent do all emission-relevant sectors have targeted GHG reduction targets and in how far are GHG reduction targets in line with benchmarks of acceptable 1.5 °C pathways?
Some progress

Q3.1: Can a declining trend in GHG intensity of the total portfolio be observed? (tCO2e/EUR, scope 1-3 emissions)

This assessment question is rated as 'Paris-aligned'. A general downward trend in the GHG intensity of EKF's and later EIFO's overall portfolio (both export and domestic) is evident, based on available total emissions data (scope 1, 2, and 3) from 2020 onwards (EKF, 2023; EIFO, 2024a). Emission intensity and total emissions both declined between 2020 and 2022. However, while total emissions increased for EIFO in 2023, emission intensity remained relatively stable (see Figure 4). It's important to note that the comparability of EIFO's and EKF's portfolio emissions is limited due to the integration of two additional investment funds into EIFO. Furthermore, the significant declines observed between 2020 and 2022 may partly reflect EKF’s evolving carbon accounting methods.
As clarified in an exchange between EIFO and the authors. 2020 and 2021 total portfolio emissions are estimations, with EKF presenting the first detailed portfolio emission calculation in 2022 (EKF, 2023).
 Nevertheless, the downward trend in emission intensities provides a strong indication of overall progress for EKF/EIFO.
Figure 4: GHG emission trends for EKF and EKF before reinsurance, 2020–2023.
Source: The authors, based on data shared by EIFO.
EKF’s total emissions for the years 2020 to 2023 are available in the Annual Report of 2022 (EKF, 2023) and EIFO’s 2023 Annual Report (EIFO, 2024a). Financial exposure for the calculation of emission intensities were provided by EIFO. 
EIFO expects its total portfolio emissions to potentially increase in the short term due to its high focus on RE which has high associated GHG emissions in the construction phase (EIFO, 2024a). Denmark’s Global Climate Impact Report shows a two-thirds reduction in emissions from oil, gas, and fossil energy production between 2022 and 2023. However, emissions in sectors like mining, quarrying, infrastructure, and transport saw significant increases (see Figure 5) (ENS, 2024), mainly due to individual projects.
As clarified in an exchange between EIFO and the authors. For instance, the increase in emissions in the mining sector is associated with a nickel mining project in 2023, that is currently at a standstill.
 EIFO’s sector-based GHG emissions distribution highlights the need for a broader shift to greener practices beyond energy, even in sectors with smaller shares of export financing.
Figure 5: Comparison of EIFO’s annual export emissions, 2022–2023.
*fossil fuel energy including oil and gas.
Although there are no new financing commitments between 2018 and 2022, projects with longer maturities will be part of the portfolio until 2031.
Source: Authors, based on ENS, 2024, p. 101.
In addition to its report on GHG ‘inventory’ emissions,
Inventory emissions are physically measurable GHGs emitted in the atmosphere by the entity’s activities, categorised into scope 1, 2 and 3 (WBCSD, 2023).
 EIFO reports on ‘displaced’ (avoided) emissions
Displaced emissions, also called avoided emissions, are counter-factual emissions that have been circumvented due to installed wind-, solar, and biogas energy substituting fossil fuel energy in the electricity grid (EIFO, 2024a).
 through its RE projects to demonstrate its positive climate mitigation impact. In 2023, the avoided emissions through nine new RE projects amounted to 23.1 million tCO2e over the project’s lifetime attributable to EIFO (EIFO, 2024a). In 2022, EKF financed eight wind turbine projects that will inhibit 28.3 million tCO2e attributable to EKF over their lifetime (EKF, 2023). EIFO's contribution to emissions avoidance thus remained comparable to that of EKF.
We recommend that EIFO continues improving the transparency of its GHG (intensity) reporting (see Q1.1) by publishing granular information on its investments in emission-intensive sectors and explanations for emission trends beyond the RE sector. Further, to improve comparability, EIFO’s GHG accounting in its Annual Report and the estimation of export emissions in the Global Climate Impact Report should be aligned, also considering EKF’s previous GHG emission reports.
EIFO’s reporting on avoided emissions and the disclosure of the calculation method are commendable. We further recommend that EIFO engages in discussions with other ECAs on the optimal application of displaced emission reporting to enhance financing of impactful climate solutions while mitigating greenwashing risks (see WBCSD, 2023).

Q3.2: How significant is the fossil fuel financing relative to the total energy-related portfolio?

This assessment question is rated as ‘Transformational’. RE comprised a share of 99.5% (EUR 13 billion) of its total energy-related portfolio, fossil fuels only 0.5% (EUR 67 million) (ENS, 2024). The remaining stock in fossil fuels is linked to oil-fired power plants (ENS, 2021) and will remain part of EIFO's portfolio for this decade.
As clarified in an exchange between EIFO and the authors.
 EIFO’s low exposure to fossil fuels arguably facilitated Denmark’s commitment and leading role in pushing for an international phasing out of fossil fuel finance. EIFO is one – if not the ECA among OECD countries with the lowest risks of facing stranded fossil fuel assets
Stranded fossil fuel assets are coal, oil and gas investments that have lost value prematurely due to market shifts, regulatory changes, or technological advancements, particularly due to stricter climate policies and increased competition from RE.
 and the highest potential to accelerate global energy transitions.
(A) Support to Fossil Fuel Energy Sector
Total
Gas
Oil
Coal
Oil & Gas (undefined)
Value Chain
Credit Value
Credit Value
N* of transa.
Credit Value
N* of transa.
Credit Value
N* of transa.
Credit Value
N* of transa.
Upstream
0
0
0
0
0
0
0
0
0
Midstream
2
2
1
0
0
0
0
0
0
Downstream
0
0
0
0
0
0
0
0
0
Power generation
88
0
0
88
2
0
0
0
0
Total
91
2
1
88
2
0
0
0
0
(B) Supported transactions by targeted sectors on an annual basis in million EUR
Gas
Oil
Coal
O&G
Total
Electric Infra.
Ren. Energy
Total
2022
0
0
0
0
0
0
3693
3693
2021
0
0
0
0
0
0
824
824
2020
0
0
0
0
0
0
1287
1287
2019
0
0
0
0
0
0
1402
1402
2018
0
78
0
0
78
247
3157
3404
2017
2
10
0
0
12
17
775
792
2016
0
0
0
0
0
0
1435
1435
2015
0
0
0
0
0
22
1323
1344
Figure 6: Fossil fuel transactions, 2015-2022.
Source: E3F 2023b, p. 13

Q3.3: To what extent do all emission-relevant sectors have targeted GHG reduction targets and in how far are GHG reduction targets in line with benchmarks of acceptable 1.5 °C pathways?

This assessment question is rated as ‘Some progress’. As highlighted in section 4.2, EIFO has had strong fossil fuel exclusion policies in place since 2021 (EKF, 2021b). However, no higher score can be given since no long-term emission pathways have been published yet to reach net-zero emissions by 2045, which also have to cover all scope 1, 2 and 3 emissions (EIFO, 2023g). However, as a member of NZECA, EIFO is required to publish sectoral science-based targets for emission reductions until 2030 not later than mid-2025 (NZECA, 2023). EIFO plans to adhere to this commitment by defining sector-based targets in 2024 (EIFO, 2023g) and is already in the process of defining targets for four of its most emitting sectors: power generation, cement, mining, and agriculture. Defining benchmarks for mining and agriculture proves difficult as emission reduction pathways and scenarios are still nascent and contested.
As clarified in an exchange between EIFO and the authors.
We recommend that for developing its long-term emission pathways in 2024, EIFO should be guided by the best-available climate science and ensure the Paris alignment of all its financed sectors. These sectoral targets for net zero GHG emission in 2045 should be made publicly available, starting with the highest emitting sectors such as mining, metals, agriculture and transport and be reiterated in Annual Reports as well as key policy documents amended to reflect these targets.

4.4 Dimension 4: Climate finance: Positive contribution to the global climate transition

The fourth assessment dimension is underpinned by five key questions regarding EIFO’s contribution to a just climate transition and sustainable development. Rapidly ramping up and improving climate finance is crucial to achieving the objectives of the Paris Agreement and contributing to a green and just post-COVID recovery (Averchenkova et al., 2020). This dimension is weighted with 10%.
In this assessment dimension, EIFO was rated ‘Paris aligned’ with an assessment dimension sub-score of 2.20/3.00.
Q Nr.
Dimension 4 – key questions
Rating
4.1
What is the reported share of climate finance over total portfolio?
Transformational
4.2
How can the quality/appropriateness of climate finance earmarks be assessed?
Unaligned
4.3
What is the share of clean energy financing over total energy-related financing? (average of new commitments from the last three years where data is available)
Transformational
4.4
To what extent does the pricing structure take into account climate impacts of activities?
Transformational
4.5
In how far does the institution ensure positive sustainable development contributions of its activities?
Paris aligned

Q4.1: What is the reported share of climate finance over total portfolio?

This assessment question is rated with ‘Transformational’ due to EIFO’s strong focus on RE. In the absence of a clear definition or continuous application of the EU Taxonomy’s list of ‘sustainable’ activities to the whole portfolio, we use EIFO’s RE portfolio as a proxy for its climate finance which makes up 75% (EUR 13 billion) of EIFO’s export portfolio (ENS, 2024).
In absolute terms, Denmark is the leading provider of export finance for RE. Denmark makes up nearly half of all the export finance invested in RE by E3F members since 2015 (see Figure 7). In 2022, Denmark provided approximately EUR 3.7 billion for RE projects, which is nearly nine times more RE finance than offered by France, the next biggest RE financer (E3F, 2023).
Figure 7: Share of investments in RE and electricity infrastructure of E3F members in million EUR, 2015–2022.
Source: E3F, 2023, p. 6.
We recommend that EIFO continues seizing the vast opportunities that greening export finance offers (e.g., Klasen et al., 2021). Ultimately, fully aligning EIFO with the Paris Agreement means allocating even more resources to climate-related activities, which can boost domestic jobs under the right enabling environment.

Q4.2: How can the quality/appropriateness of climate finance earmarks be assessed?

This assessment question is rated with ‘Unaligned’. EIFO intends to set a financing target for the green transition, but still lacks a clear definition of what would count as a 'green' investment or climate finance (EIFO, 2023i). So far, the ECA has not published its assessment of projects' sustainability prospects. However, such data should be available through the ESG due diligence processes and the scanning for ‘green’ projects as investment opportunities for the Green Future Fund and Green Accelerator (see further Q4.4). Green Future Fund projects are identified by applying the EU Taxonomy and are subject to a catalogue of assessment criteria and priority areas (Denmark Green Future Fund, 2020). This reporting gap prevents a higher score. The EU Taxonomy must be considered a best practice approach as it is far more granular and adaptable than the Rio markers or the MDB Joint Approach (AfDB et al., 2020; Shishlov and Censkowsky, 2022; OECD, 2023). The taxonomy excludes investments in retrofits of existing fossil fuel power plants that could extend their lifetime, but it allows the classification of investments in gas
And nuclear.
 as ‘sustainable’ (European Commission, n.d.), which, however, is not relevant for EIFO given that it ceased gas support.
We recommend clearly defining climate finance in the export finance system based on the EU Taxonomy and providing granular, project-level reporting (see more recommendations in Q1.3). After identifying green projects, EIFO should report on their sustainability performance and climate impact, similar to the calculations of displaced emissions for EIFO’s RE finance. We further recommend the Danish government contribute to streamlining efforts towards a common definition of climate finance in the global export finance system.

Q4.3: What is the share of renewable energy financing over total energy-related financing? (average of new commitments from the last three years where data is available)

This assessment question is rated as ‘Transformational’ since all energy-related transactions between 2018 and 2022 have been for RE and related infrastructure (E3F, 2023; EIFO, n.d.d). EIFO is one of the leading ECAs for RE projects, especially wind energy. In 2022, Denmark’s export finance for RE reached a new high since the adoption of the Paris Agreement, vastly outstripping its fossil fuel finance (see Figure 8) (E3F, 2023). Wind energy projects have made up the largest share of the ECA’s portfolio and received the bulk of newly issued guarantees every year for over a decade (EKF, 2017, 2023).
Data on the share of new guarantees for wind energy is available from 2013 onwards in EKFs Annual Reports.
Value Chain
Credit value (in EUR million)
Number of transactions
Electric infrastructure
285
3
Renewable Energy
13,896
293
Total
14,181
296
Table 4: EIFO’s RE and related infrastructure financing in EUR million, 2015–2022.
Figure 8: EIFO's RE and fossil fuel financing in EUR million, 2015–2022.
Source: E3F, 2023.
EIFO’s model for calculating displaced emissions assesses the decarbonisation impact of its RE projects, which largely depends on the carbon intensity of the grid in the project’s location. EIFO’s wind energy projects in Australia and Taiwan have greater emission reduction potential than those in France (EKF, 2023). For instance, EIFO recently financed one of the world’s largest wind farms in the Baltic Sea that will supply Poland with RE, reducing the country’s reliance on coal (EIFO, 2023d). EIFO, and previously EKF, have primarily financed wind projects in Western Europe, as shown in Figure 9. The Asia-Pacific (APAC) region ranks as the second most significant location for financing and promises high emission displacement potential too. Sub-Saharan Africa has seen the fewest wind energy projects financed to date.
Figure 9: Installed wind energy capacity by region in MW, 2003–2024.
Source: Shared by EIFO with the authors.

Q4.4: To what extent does the pricing structure take into account climate impacts of activities?

This assessment question is rated as ‘Transformational’. EIFO has a clear mandate to support a sustainable and green transition and is thus authorised to take up higher risks for investments promising social returns (EIFO, 2024a). For instance, EIFO is providing venture capital for ‘green’ start-ups to help them expand into international markets (EIFO, 2024c, 2024b).
Denmark launched two dedicated funds to support green investments in 2020: the Green Future Fund with EUR 3.4 billion and the Green Accelerator with EUR 11 million. EKF/EIFO manages parts of these funds that offer beneficial finance to EU taxonomy-aligned projects. For instance, the Green Accelerator grants reimbursements of up to 70-80% for certain activities to companies with mature green solutions to enable their business to expand and start exporting (EIFO, 2024e). In 2022, EKF supported nine projects with EUR 846 million through the Green Future Fund of which eight were wind energy projects (EKF, 2023). In 2023, EIFO disbursed EUR 685 million under the Green Future Fund, not disclosing the nature of these projects (EIFO, 2024a). Under the Green Accelerator, EIFO approved 51 projects with a total funding volume of EUR 6.3 million since 2021, supporting green solutions in water management, agriculture, transportation, RE, robotics, and automation.
As clarified in an exchange between EIFO and the authors.
EIFO endeavours to price climate impact into its financial products by starting a series of sustainability-linked financing initiatives (EIFO, 2024d). Starting with the agricultural sector, EIFO engaged intensively with market leaders in dairy production to plan a sustainability performance-based financing mechanism. Measured through a scorecard, dairy farmers who use feed, fuel, and fertiliser more sustainably will be rewarded with more beneficial financial conditions.
As clarified between EIFO and the authors.
 However, this climate reward scheme has not been launched yet.
We recommend that EIFO continue exploring all options they have under the OECD Arrangement on Officially Supported Export Credits and within their mandates to incentivise ‘green’ exports, including national content requirements, minimum premium rates, fee waivers for green projects (see further Q3.2). We further recommend that EIFO expand its sustainability performance-based financing mechanisms across all relevant sectors and make discounts and incentives more explicit to encourage business transformation. Additionally, EIFO should publish a list of projects classified as 'green,' including those financed through the Green Future Fund and the Green Accelerator.

Q4.5: In how far does the institution ensure sustainable development contributions from its activities?

This assessment question is rated as ‘Paris aligned’. EIFO adheres to the requirements of the OECD’s Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (OECD, 2024). As part of the OECD’s requirements, EIFO monitors and reviews projects with high (category A) and medium (category B) social and environmental risks. EIFO can withhold funding for projects that do not adhere to their ESG commitments under the agreed Environmental and Social Action Plan (ESAP) (EIFO, 2024a).
Denmark and EIFO actively engage in working groups in the OECD and EU Parliament to influence guidelines and frameworks for ESG-relevant policies regarding ECAs (EIFO, 2024a). For instance, before the merger, EKF contributed to working groups on Climate, Biodiversity, Human Rights and Risk-based Approaches for the revision of the OECD Common Approaches (EKF, 2023). EIFO also collaborates with other financial institutions to further sustainability in project finance by participating in the Equator Principles, with a particular focus on biodiversity and climate change risk assessment and joined its steering committee in 2021 (EIFO, 2023f). Furthermore, EIFO adheres to the sustainability performance standard
The IFC performance standard consists of eight areas: 1. Managing environmental and social risks, 2. Labour rights and working conditions, 3. Resource efficiency and pollution prevention, 4. Community health and safety, 5. Land acquisition and involuntary defences, 6. Biodiversity protection and sustainable use of natural resources, 7. Indigenous people, 8. Cultural heritage.
 of the International Finance Cooperation (IFC) for its due diligence on ESG (IFC, n.d.). Thus, EIFO refers to the same international standards and initiatives on sustainability as the other assessed Nordic ECAs (Perspectives Climate Group, n.d.).
EIFO’s mandate tasks it with generating social returns which are not simply limited to financial returns or climate aspects but encompasses EIFO’s wider sustainability performance. EIFO has a dedicated sustainability policy (EIFO, 2023h) that is focused on biodiversity targets (Kunming-Montreal Agreement), diversity and human rights.
EIFO does not publish a detailed sustainability performance report. EIFO’s Annual Report outlines the company’s climate mitigation performance, diversity aspects and financial risks very well but demonstrates a lack of disclosure on its portfolio’s biodiversity risks and human rights compliance (EIFO, 2024a). In its annual Equator Principles Report, EIFO lists the large-scale projects
Project finance of more than USD 10 million and project-related corporate loans of more than USD 100 million.
 that were identified as category A, B, and C projects according to the OECD common approaches and Equator Principles. Notably, most of EIFO’s category A projects are onshore and offshore wind farms, indicating environmental and social trade-offs despite their potential to reduce emissions. On its webpage, EIFO makes information and project documents available on high-risk (category A) projects.
 Other Nordic ECAs, however, also publish their category B and C projects (Finnvera, n.d.).
We recommend that EIFO amends its ESG and sustainability policy with sectorial targets and publishes a sustainability report presenting the main trends in its sustainability performance, largest risk exposures and mitigation strategies which it identified through its ESG due diligence procedures. This should especially focus on the project’s biodiversity risks and human rights compliance as EIFO’s Annual Report presents large gaps in these themes. We further recommend that EIFO publishes its list of category B projects. Moreover, EIFO’s sustainability report could follow the instructions of the Taskforce on Nature-Related Financial Disclosures (TNFD). We further recommend that EIFO reports more transparently on the alignment of all its operations with the United Nations’ Sustainable Development Goals (SDGs) for 2030, placing concerns regarding a just climate transition at the heart of its institutional identity.

4.5 Dimension 5: Engagement - Outreach and ‘pro-activeness’ of ECAs and their governments

The fifth assessment dimension is underpinned by three key questions aimed at capturing the engagement and ambition of climate and sustainability policies of the Danish government and EIFO in international fora as well as with national exporters and banks. This dimension is weighted with 10%.
In this assessment dimension, EIFO is rated as ‘Transformational’ with an assessment dimension sub-score of 2.67/3.00.
Q Nr.
Dimension 5 – key questions
Rating
5.1
To what extent does the institution itself or its government actively engage in relevant international fora (e.g., E3F, OECD, the Berne Union, WTO or the World Economic Forum) to liaise with like-minded for ambitious climate policies in the export finance system?
Transformational
5.2
To what extent does the institution itself or its government actively engage in relevant national fora with a view to implementing ambitious climate policies in the (national) export finance system?
Paris aligned
5.3
To what extent does the institution or its government actively engage with national companies to transform fossil fuel-related value chains and incentivise low GHG exports?
Transformational

Q5.1: To what extent does the institution itself or its government actively engage in relevant international fora (e.g., E3F, OECD, the Berne Union, WTO or the World Economic Forum) to liaise with like-minded for ambitious climate policies in the export finance system?

This assessment question was rated as ‘Transformational’. EIFO acts as a frontrunner in many international initiatives, building on Denmark’s wider Global Climate Action Strategy (UM, 2020): Denmark is trying to lead by example and simultaneously being a driving force in many international initiatives, especially in the energy sector. This is exemplified by co-founding the Beyond Oil and Gas Alliance (BOGA) at COP26 in 2021, pledging to halt O&G production by 2050 and actively encouraging other countries to join (BOGA, 2021). Prior to this, in 2017 Denmark was already a founding member of the Powering Past Coal Alliance and one of the vocal parties pushing for a call to phase out all fossil fuels at COP28, by facilitating the Global Stocktake and joining the High Ambition Coalition (High Ambition Coalition, 2021; ENS, 2024). Denmark also promotes climate-mitigating technologies in international arenas and launched the Global Offshore Wind Alliance (GOWA) at COP27 and the Group of Negative Emitters (GONE) at COP28, pushing countries to commit to negative emission targets.
EIFO also plays an active role in international ambition groups as ‘green diplomacy’ goes hand in hand with the promotion of green exports, according to the Danish Global Climate Action Strategy (UM, 2020; Đikanović, 2024). E3F is one of the most significant initiatives for EIFO. Denmark joined E3F in 2021 and EIFO has been chairing the initiative on behalf of Denmark since 2023. In this role, EIFO emphasizes the potential for ECAs to provide climate finance by hosting a two-day workshop on that topic in 2024 (E3F, 2024). EIFO further co-founded the NZECA alliance with the ECAs from Sweden, the UK and Canada (NZECA, 2023). EIFO is also a member of the Berne Union’s Climate Working Group which is focused on disseminating learnings regarding climate-beneficial export finance products, low-carbon transitions and climate target alignment (Berne Union, n.d.c). In 2018, EIFO initiated the EU Export Finance Lab (ExFi) consisting of ECAs from EU member states. The ExFi Lab acts as a think tank, offering guidance on strategic questions including sustainability and green transition efforts (ExFi, 2024). Since 2021, EIFO has been part of the steering committee of the Equator principles (EIFO, n.d.b) and has been advancing the guidelines on Climate Change Risk Assessment (EIFO, 2023f).
We recommend that Denmark continues taking diplomatic action on a global scale to establish restrictions on public support for fossil fuels. Only then can scenarios be avoided where Danish or European-only ECA support for fossil fuels ends, while other ECAs from less climate-concerned countries continue their business as usual. This includes:
  1. Strategizing with like-minded OECD Arrangement participants about how to achieve a transformative climate-related policy reform of the Arrangement, e.g., through adopting full exclusions/restrictions for O&G export finance;
  2. Further deepening and publicly reporting on negotiations at the OECD and its international Infrastructure Working Group (IWG), especially with China, Japan and the US;
  3. Deliberating with like-minded countries about forming a new ‘level playing field’ outside the OECD Arrangement and E3F to accelerate progress and typify the design of a Paris-aligned and sustainable international export finance regulation;
  4. Enhancing and publicly reporting on the Danish position in international climate-related negotiations involving policies in the export finance system;
  5. Enhancing and publicly reporting on progress on climate- and environmental diplomacy between the OECD and non-OECD members of the export finance system, through the IWG with China, the G7 and G12 Heads of ECA meetings as well as through the Berne Union;
  6. Following the lead of Denmark’s capital Copenhagen and the formal call for the negotiation of a Fossil Fuel Non-Proliferation Treaty (2024); and
  7. Encouraging Norway to join NZECA, the Berne Union’s Climate Working Group, to become a full member of the E3F as well as of BOGA.

Q5.2: To what extent does the institution itself or its government actively engage in relevant national fora with view to implementing ambitious climate policies in the export finance system?

This assessment question was scored with ‘Paris aligned’. The Government of Denmark did successfully implement restrictions on fossil fuel support, in line with the CETP (see further section 4.2). EIFO is an important actor in climate investment initiatives by the Danish government, implementing industrial support schemes, like the ‘Investment Scheme for Green Industry’ which focuses on ramping up production facilities, mainly for wind turbines (EIFO, 2024f). EIFO’s predecessor, EKF, was also key in implementing Denmark’s economic stimulation packages during the COVID-19 pandemic which were focused on the green transition like Denmark’s Green Future Fund (EKF, 2021a). The merger of the three investment institutions into EIFO bundled state financing for (export) companies and harmonised climate and sustainability requirements (EIFO, 2022). The merger reduced institutional complexities and redundancies, creating a one-stop shop for Danish companies, similar to the Team Sweden or Team Finland approach. However, no higher score can be given since Denmark does not have a dedicated climate policy action plan that sets ambitious targets for export finance like, for instance, France has (Schmidt et al., 2023).
We recommend that EIFO and the Danish government closely collaborate with other relevant national actors to align their approaches and work on a common set of climate targets. We further recommend that KEFM and EM, together with other relevant ministries, follow the lead of the E3F-founder France to develop and publish a climate policy action plan for export finance.

Q5.3: To what extent does the institution or its government actively engage with national companies to transform fossil fuel-related value chains and incentivise low GHG exports?

This assessment question was rated with ‘Transformational’. As mentioned above (see sections 2 and 4.2), the Danish government has made several announcements over the last few years to restrict fossil fuel exports. EIFO committed to partnering with carbon-intensive and hard-to-abate industries to enable their climate transition in its climate policy (EIFO, 2023g). Therefore, EIFO engages with national businesses and market leaders in high-emitting sectors like transport, chemical production, and agriculture to support sustainable business practices. EIFO plans to support these sectors' transition through sustainability-linked financing schemes, starting with the dairy sector (EIFO, 2024d).
EIFO invests in strategically important climate technologies like Power-to-X and Carbon Capture and Storage (CCS) utilising Denmark’s location advantage with abundant wind energy and O&G infrastructure that can be repurposed for CCS (EIFO, 2023c, 2023e, 2023b). EIFO’s support for innovative companies is especially pronounced in its SME business field, where it supports start-ups with exporting prospects that are often emerging out of Denmark’s universities (EIFO, 2024c). But this also includes collaboration with large companies in hard-to-abate sectors such as Maersk, one of the world's largest shipping and logistics companies, to promote alternative shipping fuels (EIFO, 2023a).
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