November 10, 2015 / 6:24 PM / 2 years ago

UPDATE 1-EU to urge rich nations to cut coal subsidies -EU sources

* OECD has been seeking compromise for more than year

* EU studies U.S.-Japan compromise on subsidies

* Australia, South Korea seen unlikely to back compromise (New throughout, adds details and background about U.S.-Japan compromise and comments from environmental activists)

By Barbara Lewis and Valerie Volcovici

BRUSSELS/WASHINGTON, Nov 10 (Reuters) - European Union negotiators will push other rich countries next week for a robust deal to phase out subsidies for exports of technology used to build coal-burning power plants, EU sources said.

Upcoming talks at a Paris meeting of the Organisation for Economic Cooperation and Development (OECD) may be a final chance to end export credits for coal, the most polluting of fossil fuels, before United Nations climate talks on a global deal to curb climate change.

The U.N. talks begin on Nov. 30, also in Paris.

The OECD has been seeking a compromise on coal export credits for more than a year and has called the phase-out of fossil fuel subsidies “alarmingly slow”.

Prospects for a deal improved after Japan agreed to a compromise proposal with the United States. The plan, seen by Reuters, would end most export credits except for the most efficient “ultra super critical” technology.

The cleanest available coal plant technology is currently built by Japanese companies.

”The US-Japan deal is not ideal but it sends a strong signal that the world is moving away from coal, said Nicole Ghio, a campaigner for the Sierra Club.

But environmental campaigners say Australia and South Korea seem unlikely to budge. Those countries have introduced their own proposals that would allow exports of less-efficient coal plant technologies.

One European Commission official said the EU executive was studying the compromise proposal agreed last month from the United States, Japan and Canada “with particular interest,” adding it was an important new step toward an OECD accord.

Another EU official said the U.S.-Japan position could work if the EU aligned with it.

Japan, wary of regional competition from China, had been at the vanguard of opposition to phasing out coal export credits that benefit companies such as Toshiba Corp.

But following talks in the United States, China promised to curb public funding of “highly polluting projects”.

Australia and South Korea, major users of coal export credits, signalled they were unlikely to back the compromise. They offered their own proposals that allow countries to export less-efficient coal plants to middle-income countries.

“Behind window-dressing rhetoric, they clearly want to sabotage the OECD deal,” said Sebastien Godinot, an economist at the environmental group WWF.

Japan and South Korea are the biggest users of coal export credits. Along with coal industry bodies, they argue coal has a role in providing energy security for poorer nations.

South Korea’s position paper, seen by Reuters, says developing nations lack “energy source options” and that non-OECD countries such as China and India, the biggest recipients of technology funded by export credits, should be included in efforts to cut greenhouse gases.

OECD officials declined to comment, while a South Korean energy ministry official only confirmed the position paper was the government’s position.

European Commission officials, speaking on condition of anonymity, said they saw scope for agreement next week.

Additional reporting by Meeyoung Cho in Seoul; Editing by Tom Heneghan and David Gregorio

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