Friends of the Earth USA

U.S. Misses the Mark on ECA Fossil Fuel Finance Agreement

(Friends of the Earth, Washington, 21 November 2024) Today at the conclusion of the OECD Export Credit Group negotiations, participating nations failed to reach an agreement on fossil fuel finance, despite scientists’ repeated calls for urgent climate action. While no formal conclusion has been announced from the talks, the United States appears to have failed to secure an agreement. The proposal has already been championed by the European Union, UK, Canada, Norway and most recently, Australia. It would have potentially restricted financing for the entire fossil fuel value chain. Up to $40 billion per year could be shifted away from fossil fuels to renewable energy projects. This would have paved the way for the agreement to be presented as part of a climate finance package at COP29. Unlike the Paris Agreement, it would have been difficult for the Trump Administration to remove itself from just one piece of the arrangement.

ECAs prepare to lock horns over fossil fuel financing

(Global Trade Review, London, 14 October 2024) Ahead of crunch talks within the OECD Arrangement, climate groups are pressuring the US, Korea and Japan to agree to a comprehensive proposal that would halt billions of dollars in fossil fuel financing each year. In recent days, over 40 environmental and social activity groups have written to members of the OECD Arrangement on Officially Supported Export Credits, urging them to expand an existing ban on coal financing to also include oil and gas projects. Export credit agencies (ECAs) are among the world’s largest backers of fossil fuel transactions, often in developing regions such as Asia and Sub-Saharan Africa. Climate groups argue their support – in the form of guarantees, insurance and loans – can be vital in ensuring projects reach financial close. In the past year, the Export-Import Bank of the United States (US Exim) has seen two advisors on its climate board quit over a US$500mn loan guarantee backing oil and gas field expansion in Bahrain, while Japan’s agency has come under fire for financing a new gas field in Western Australia. Friends of the Earth, Oil Change International and BankTrack are among the signatories of the letter, which says it is “unthinkable that OECD agencies continue to pour billions into fossil fuel projects”.

Cutting Fossil Fuel Financing

(Friends of the Earth, Merrifield, 4 October 2024) Fossil fuel companies continue to be propped up by the government in the form of public financing like US EXIM. Often, these tax dollars are funding overseas fossil fuel projects wreaking havoc on our environment and local communities in places like Mozambique, India, Bahrain, Papua New Guinea — to name a few. At the 2021 United Nations Climate Change Conference (COP26) in Glasgow, more than 30 countries signed a commitment to end international public finance for fossil fuels and to prioritize funding for clean energy. If implemented fully, this resolution could shift $28 billion a year from fossil fuels into clean energy. In particular, the UK’s ECA (UK Export Finance) cut its fossil fuel transactions from $11 billion to zero in just ten years. Previously, the agency had allocated more than 99% of its energy finance to fossil fuels. We have also seen great success pressuring other countries but the United States is the biggest violator of the COP26 commitment. In 2023 and, so far, in 2024, the US provided $3.5 billion for overseas fossil fuel projects. The US EXIM alone just approved financing for six mega-projects, including $500 million to develop 300 oil and gas wells in Bahrain. The US is the largest member of the coalition of signers and is the biggest problem. We will continue to pressure our export credit agencies to take this commitment seriously and accept responsibility and the largest historical climate polluter.

Biden Urged to Make EXIM Stop Fueling Climate Crisis

(Common Dreams, Portland, 7 August 2024) Climate advocates on Wednesday formally urged the Biden administration to instruct the United States’ export credit agency to stop financially supporting activities that are fueling the climate emergency. “Over the last two centuries, human-caused greenhouse gas emissions have led to global warming of 1.1ºC above preindustrial levels by 2020 and caused detrimental changes in Earth’s climate,” Friends of the Earth (FOE) and the Global Law Alliance for Animals and the Environment wrote to U.S. Secretary of State Antony Blinken. Their letter calls on Blinken to “make a determination pursuant to the Chafee Amendment in the Charter of the U.S. Export-Import Bank… that EXIM should deny applications for financial support for all activities and projects whose life-cycle emissions intensity substantially contributes to greenhouse gas emissions and the climate crisis.”

Deal to limit ECA oil and gas funding abroad hinges on US

(E&E News, Arlington, 17 June 2024) The fate of an international plan to end a major funding source for fossil fuel projects could be decided this week by U.S. officials. Some of the world’s richest countries will meet behind closed doors starting Monday to discuss a European Union-led proposal to end loans and guarantees from their export credit agencies to oil and gas projects. It’s part of an evolving arrangement under the Paris-headquartered Organisation for Economic Co-operation and Development — a group of 38 countries that collaborate on issues of trade and finance — and follows a 2021 deal to end such investments in coal. If the countries under the arrangement reach a new agreement, it could help squelch the flow of billions of dollars into polluting energies. If they don’t, the proposal could get punted to the next round of talks in November, when former President Donald Trump, the presumptive Republican nominee for president, could be re-elected — which would threaten any agreement to restrict fossil fuel investments. “All eyes are on the U.S.,” said Kate DeAngelis, deputy director of international finance at the climate advocacy group Friends of the Earth. “Without the U.S coming to the table, we’re not going to see Japan and Korea get in line. And so I think if nothing happens, then that’s telling in and of itself that it’s a failure of U.S. leadership.”

Public Enemies: Assessing MDB & G20 IFIs energy finance

(Price of Oil, Washington, 9 April 2024) This new report, “Public Enemies: Assessing MDB and G20 international finance institutions’ energy finance” looks at G20 country and MDB traceable international public finance for fossil fuels from 2020-2022 and finds they are still backing at least USD 47 billion per year in oil, gas, and coal projects. The findings reveal that the wealthiest G20 nations are the primary culprits behind continued investments in fossil fuels, with Canada, Korea, and Japan emerging as the worst offenders. The report also highlights where there has been momentum to end international public finance for fossil fuels, finding that if countries keep their existing commitments to end not only coal finance but also oil and gas finance, it would shift $26 billion annually out of fossil fuels by the end of 2024. Download the 38 page Report

ECAs continue to debate fate of Mozambique LNG project

(Global Trade Review, London, 17 April 2024) Financial backers are continuing to assess whether they should reaffirm their support for a multi-billion-dollar LNG project in Mozambique as operator Total looks to restart work. The project was suspended in 2021 after insurgents known as the Islamic State Mozambique attacked Palma, a town in the northern province of Cabo Delgado. Total declared force majeure and withdrew its staff from the nearby Afungi project site. But earlier this year, the French energy major announced its intention to restart the project, meaning its financial partners are also expected to confirm their commitment. A coalition of 124 civil society groups, including BankTrack and Friends of the Earth, have called on financial backers to reconsider their support of the project and urged them to withdraw their funding due to “the continuation of insurgent attacks and the failure of the Mozambican government and TotalEnergies to tackle the drivers of the conflict”. They also cite “ongoing human rights violations” and “irreversible climate and environmental impacts” as reasons to end support. The project is backed by a range of public and private financial institutions, including eight export credit agencies (ECAs) and 15 commercial banks. The ECAs involved are the Export-Import Bank of the United States (US Exim), UK Export Finance (UKEF), the Export-Import Bank of Thailand, Italy’s Sace, Japan’s Nippon Export and Investment Insurance (Nexi), the Export Credit Insurance Corporation of South Africa (ECIC), Atradius DSB of the Netherlands and the African Export-Import Bank (Afreximbank).

Joe Biden should end EXIM support for overseas oil and gas projects

(Guardian, London, 14 February 2024) Oil Change International and Friends of the Earth US say the US president must follow his move to restrain fossil fuel expansion at home with similar measures to curb it around the world. We back Bill McKibben’s call for more of the sort of leadership recently shown by President Joe Biden in pausing new liquified natural gas export terminals. Biden has another opportunity to curb the fossil fuel industry’s relentless expansionist agenda and affirm his climate credentials in this election year at an upcoming meeting of the Organisation for Economic Co-operation and Development (OECD). At Cop26, the UN climate conference in Glasgow in 2021, 34 governments, including the US, pledged to end international public finance for fossil fuels by the end of 2022. Despite this, in the last year alone, the US has provided more than $2.2bn to oil and gas projects around the world via its export credit agency, the US Export-Import Bank, and its development finance institution.