Friends of the Earth USA

Biden orders U.S. to stop financing new carbon-intense projects abroad

(Reuters, Washington, 10 December 2021) The Biden administration has ordered U.S. government agencies to immediately stop financing new carbon-intensive fossil fuel projects overseas and prioritize global collaborations to deploy clean energy technology, according to U.S. diplomatic cables seen by Reuters. However, “This policy is full of exemptions and loopholes that lack clarity, and could render these restrictions on fossil fuel financing completely meaningless,” said Kate DeAngelis, a climate finance expert at Friends of the Earth. FOEUS notees that while the policy states that “infrastructure directly related to the production, transportation, or use of fossil fuels, including oil and natural gas, are considered ‘carbon-intensive international energy engagements,’” it then defines “carbon-intensive” using metrics (i.e., kWh) that appear to only apply to electrical generation (i.e., power plants), not production, transportation, or mid-stream like LNG.

G20 ECAs and public finance institutions are still bankrolling fossil fuels

(Oil Change Int’l/FOEUSA, Washington, October 2021) This 36 page reprort documents how G20 countries and the multilateral development banks (MDBs) they govern in 2018-2020 provided at least US$63 billion per year in international public finance for oil, gas, and coal projects. This fossil fuel finance was 2.5 times more than their support for renewable energy, which averaged only US$26 billion per year. This continued support for fossil fuels from trade and development finance institutions counters G20 countries’ commitments under the Paris Agreement to align financial flows with a safe climate future as well as their 2009 commitment to phase out fossil fuel subsidies. It also undermines the effectiveness of climate finance, which is still not delivered at either the scale promised (US$100 billion per year from 2020) or needed. ECAs continue to be the largest supporter of international fossil fuel projects, providing billions annually in 2018-2020: ECAs provided an average of US$40.1 billion annually to fossil fuels — 82% of ECA support. This 36 page report shows that the science is clear — governments must rapidly wind down fossil fuel production and use to avoid the worst climate impacts, noting that the recent Intergovernmental Panel on Climate Change (IPCC) report is a “code red for humanity.”

U.S., U.K. lead pledge to end overseas oil and gas financing, but with big caveats

(Politico, Glasgow, 4 November 2021) The United States, the U.K. and some 20 other countries and financial institutions pledged on Thursday to stop public financing for most overseas oil and gas projects by next year, though the agreement included wide latitude for participants to set their own exemptions and many of the world’s leading backers of those projects declined to sign on. The pledge is limited to ending financing of “unabated” oil and gas projects, and would allow those that include carbon capture and sequestration technology. A senior Biden administration official told POLITICO the measure includes exemptions, and that the Biden administration had not settled on how it would instruct its finance aid organizations like the U.S. Export-Import Bank. How tight any carve-outs are for oil and gas is potentially significant for Ex-Im, which approved $5 billion in fossil fuel finance the last two years, environmental group Friends of the Earth said in a statement. “While this is welcome progress, countries, especially the U.S., must hold firm to these commitments, shutting off the spigot to fossil fuel companies like [Mexico’s] Pemex and Exxon,” said Kate DeAngelis, manager of Friends of the Earth’s international finance program. She also called out “laggards like Japan and Korea” to join the new pledge.

Nearly 450 Organizations Call on Biden Administration to End Public Finance for Fossil Fuels

(Oil Change International, Washington, 18 MArch 2021) In a newly released letter, nearly 450 organizations called on the Biden Administration to immediately end all U.S. public financing for fossil fuels, including natural gas. Signatories to the letter span six continents and include major U.S. civil society organizations, international groups, and organizations in the Global South concerned about the impacts of U.S. support for overseas fossil fuel projects. U.S. public finance for overseas fossil fuel projects averaged more than $4 billion (USD) annually over the past decade, according to Oil Change International data, at times exceeding $10 billion USD in a single year. This finance was distributed primarily through the U.S. Export-Import Bank and the U.S. Development Finance Corporation, formerly the U.S. Overseas Private Investment Corporation. Dozens of groups from many countries where the U.S. has financed fossil fuel projects — including Brazil, Colombia, El Salvador, Georgia, Ghana, India, Nigeria, Papua New Guinea, South Africa, Turkey, Uruguay, and elsewhere — have signed onto the letter urging the Biden Administration to make good on it’s commitment to end high-carbon finance.

US to end int’l financing for fossil fuel projects – but how?

(Reuters, Barcelona, 27 January 2021) The United States will produce a plan to end international financing for fossil fuel projects, its special climate envoy John Kerry said Wednesday, as senior British and U.N. officials urged donor nations to meet a flagship climate finance promise. Speaking at an online panel organised by the World Economic Forum, Kerry said the new administration of U.S. President Joe Biden would draft a plan for U.S. climate finance, without giving further details. He noted the United States had spent $265 billion cleaning up three major hurricanes that hit the country in 2017, while another storm in 2020 racked up a bill of $55 billion. Yet “in stark contrast, we don’t fully fund” a commitment by wealthy governments, enshrined in the Paris Agreement, to raise $100 billion a year globally to help poor, vulnerable nations adopt clean energy and adapt to extreme weather and rising seas, he said.  Friends of the Earth noted that in the past two years the U.S. Export-Import Bank (EXIM) approved over $5 billion for fossil fuel projects abroad.

ECAs, COVID-19 and Climate: Recommendations to Ensure that Economic Support Protects People and the Planet

(ECA Watch members, 10 August 2020) This 9 page report finds that while ECA responses to COVID-19 are still quickly evolving, it’s now clear that these institutions are:

  •  Providing more favorable financing terms;
  •  Expanding the geographic scope of the projects and companies they are supporting, including new domestic coverage that was very rare for ECAs prior to COVID-19;
  •  Failing to ensure proper transparency and oversight of who is getting this support and how it is being used;
  •  Increasing risks of corruption, human rights abuses, and environmental destruction;
  •  Potentially increasing support for megaprojects like Mozambique LNG that has already received billions from ECAs; and
  •  Potentially supporting many oil and gas companies that were already financially unviable even before the COVID-19 crisis.

The report’s recommendations include that ECAs must:

  • Ensure that their COVID-19 responses are in line with the Paris Agreement’s 1.5 degree Celsius target and the Sustainable Development Goals;
  • Continue progress on climate policies and protections, including explicitly excluding support for fossil fuel related projects;
  • Promote transparency by providing detailed, public information on all support provided at the time the support is provided; and
  • Uphold all standards on social and environmental due diligence

Canada now second to China in public finance for fossil fuels

(Above Ground, Ottawa, 15 June 2020) A recent report from Oil Change International and Friends of the Earth U.S. reveals that Canada has become the second-largest public financier of fossil fuels in the G20, second only to China. On a per-capita basis, Canadian public finance for fossil fuels between 2016 and 2018 was the highest in the world. Nearly all of this support came from federal agency Export Development Canada (EDC). These findings bolster growing public concern about EDC’s support for fossil fuels, which has intensified since Ottawa tasked the agency with shepherding additional aid to the oil and gas industry in response to the COVID-19 crisis. The range of voices calling for Canada to redirect its export finance into low-carbon industries now includes lawmakers, civil society organizations and, as we detail below, sustainability experts. As Parliament prepares further stimulus measures in the coming months, it must ensure that Canada’s economic recovery serves to accelerate rather than delay the transition to a low-carbon future.