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A group of more than 30 countries cut public funding for fossil fuel projects overseas by up to $15 billion last year, even as the U.S. continues to pour billions of dollars into oil and gas finance. This was revealed in the report.
At the United Nations climate change conference COP26 to be held in Glasgow in 2021, countries including the US, Canada, UK and France have pledged to shift up to $28 billion a year in trade and development finance from fossil fuels to clean energy. .
The countries that formed the Clean Energy Transition Partnership (CETP) were able to reduce such financing by $10 billion to $15 billion to $5.2 billion in 2023, the program’s first year of implementation.
This represents a decrease of two-thirds compared to the 2019-2021 average, according to a report by the International Institute for Sustainable Development.
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However, a report released Wednesday found that countries have not increased funding for clean energy accordingly. This was $21.3 billion, an increase of just 16% last year compared to the 2019-2021 baseline.
Report co-author Adam McGibbon said rich countries were not “scaling up clean energy financing fast enough.”
Efforts to divest from fossil fuel projects typically target export credit agencies, which provide cheap loans and insurance for companies to trade overseas.
“[It used to be]that if I were a British fossil fuel company and wanted to export gas turbines to Iraq, but thought it was a little risky, the British government would step in and provide below-market insurance and financing. “We’ll help you make that deal,” he explained. “They also directly finance (oil and gas) production, which tends to extend throughout the fossil fuel value chain.”
IISD found that OECD governments’ export financing institutions were “actually a more important source of energy financing than multilateral development banks,” he added.
The report said Britain, France and Canada were among the most enthusiastic signatories. Since the commitment was implemented, the UK’s export credit agency, UK Export Finance (UKEF), has reduced its fossil fuel trade from $11.3 billion to zero between 2010 and 2020. Previously, UKEF regularly allocated more than 99 per cent of its energy finance to the following areas: Fossil fuels, the report says.
But the United States, CETP’s largest member, was the biggest violator of the pledge, providing $3.2 billion to 10 overseas fossil fuel projects last year. The Export-Import Bank of the United States also recently approved financing for six megaprojects, including $500 million to develop 300 oil and gas wells in Bahrain. It is considering financing projects in Guyana, Papua New Guinea and Mozambique.
Switzerland, Italy, Germany and the Netherlands also broke their commitments.
The United States also provided $12 billion in domestic subsidies to oil and gas companies in 2022, according to the OECD’s Fossil Fuel Subsidy Tracker.
McGibbon highlighted that President Joe Biden signed an executive order phasing out fossil fuel export financing in early 2021, calling it “unfortunate” that the U.S. has not kept its commitments. Ta.
The OECD group of developed countries is now calling for a binding commitment to suspend $41 billion a year in export financing for oil and gas, which would also include flows from Japan and South Korea. It turns out.
Although the United States has not expressed its position during negotiations, McGibbon said the downward trend in fossil fuel financing is now fixed.
Data visualization by Janina Conboye
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