(Reuters, Johannesburg/London, 26 June 2020) Britain’s export credit agency UK Export Finance (UKEF) is set to back around $800 million of a $20 billion (£16 billion) liquefied natural gas (LNG) project in Mozambique led by French energy major Total. Campaigners say such projects lock in harmful emissions for the foreseeable future and hurt often impoverished local communities, especially in countries with a history of corruption, like Mozambique. They say they are out of step with commitments under the 2015 Paris Agreement, signed by almost 200 countries. “By backing this massive fossil fuel project, the UK would undermine their credibility as they prepare to host the UN climate negotiations next year,” said Alex Doukas of Oil Change International.
Friends of the Earth USA
Why $77 Billion a Year in Public Finance for Oil, Gas, and Coal Is Even Worse Than It Sounds
(Friends of the Earch, Washington, 28 May 2020) Right after the mostly-rich and powerful G2O countries signed the Paris Agreement with the goal of limiting global warming to 1.5ºC, they went home and continued with the business-as-usual public finance policies that directly undermined this goal. The world’s largest commercial banks are financing almost US$700 billion a year for oil, gas, and coal, with US$77 billion coming from public finance for fossil fuels, of which US$40 billion comes from ECAs, vs only US$2.9 billion from ECAs for clean energy… The G20 export credit agencies (ECAs), development finance institutions (DFIs), and the multilateral development banks (MDBs) FOE was able to track in its new report are still only a small fraction of all public finance for energy. Worldwide, 693 public banks own assets worth $38 trillion, and there is an overall estimated $73 trillion in public finance assets when central banks, sovereign wealth funds, pensions, and multilateral banks are also included. This also does not include direct subsidies through fiscal and tax measures that governments provide — for the G20 this support for fossil fuels is estimated at $80 billion a year. But as G20 governments prepare historic levels of public finance in response to COVID-19 we need them to break from the past and make sure this money goes to a just and sustainable recovery. For example, Spain has (alongside other promising measures from a wealth tax to an end to any new licenses for oil and gas) mandated their State and public institutions to divest from any holdings in companies whose activities include the extraction, refining and processing of fossil fuels.
Report: Still digging: G20 governments continue to finance the climate crisis
Report: Still digging: G20 governments continue to finance the climate crisis
Fossil fuel giants with ECA billions put Mozambique workers & communities at risk of COVID-19
(FOE USA, Washington, 20 April 2020) The COVID-19 pandemic has forced large portions of the population to stay home and left millions out of work. Farmworkers, grocery workers, medical professionals, and other frontline workers are forced to put themselves at risk in order to provide everyone with the food and healthcare needed to make it through this pandemic. Ensuring that these frontline workers are safe and have the resources they need is of the highest priority. Yet, in northern Mozambique, companies like Total – the French energy giant – are attempting to put their profits above the protection of their workers. Reportedly, Total, which recently acquired oil and gas reserves that were formerly owned by the U.S. company Anadarko – a company that received $5 billion from the U.S. Export-Import Bank (EXIM) last September, at first refused to halt or even slow its work in northern Mozambique. They lost precious time and failed to take early action that would have stopped an increase in the number of cases.
G20 ECAs fund $30 bn a year in fossil fuels $30 bn under the radar
(Space Daily / AFP, Paris, 30 January 2020) Rich nations are funnelling cash through government-backed financial institutions to provide $30 billion to fossil fuel projects each year that “run counter to the Paris Agreement”, a new analysis showed Thursday. The export credit agencies (ECAs) of G20 countries currently provide more than 10 times more state-backed finance to oil, gas and coal projects abroad than they do to renewable energy schemes, the analysis said. That translates to $7.1 billion annually in the years since the signing of the landmark accord that enjoins nations to slash carbon emissions. The analysis singled out China, Japan, South Korea and Canada as among the worst offenders, accounting for 78 percent of G20 fossil fuel support from 2016-2018. UK ECA Export Finance, has not funded a coal-fired power plant since 2002, but a separate analysis showed it is financing millions of tonnes worth of overseas emissions through continued oil and gas funding.
EXIM finances massive LNG project that will cause climate chaos
(FOE USA, Washington, 27 September 2019) The U.S. Export-Import Bank’s (EXIM) Board of Directors voted late yesterday to provide $5 billion in financing for a liquid natural gas (LNG) project in Mozambique, making it the largest federal subsidy for a fossil fuel project in the bank’s history. This final vote by the board follows a preliminary vote last month and a 35-day Congressional review period. The board’s vote comes as U.S. Representative Rashida Tlaib (D-Mich.) and Senator Jeff Merkley (D-Ore.) led delegation letters opposing the project. Despite the opposition, EXIM charged forward with this massive fossil fuel project, which EXIM admits will directly emit at least 5.2 million tons of carbon dioxide per year. “EXIM’s irresponsible approval of $5 billion for LNG development in Mozambique, despite Congressional opposition, demonstrates how the bank puts fossil fuel profits above the health of local communities and the planet,” said Kate DeAngelis, Senior International Policy Analyst at Friends of the Earth. “Congress now has the power to end EXIM’s support for fossil fuels if it chooses to reauthorize the agency.” Although natural gas is often touted as a cleaner fuel than coal, when you take into account the leaks involved in extraction, transportation, processing and burning of LNG it is not better for the climate than coal. Yet, the head of the EXIM board, Kimberly Reed, voiced her strong support for the industry. A 2016 Oxford study found that for the world to have a 50 percent chance of staying within internationally agreed limits for global warming, no new fossil fuel plants could be built after 2017.
US Export-Import Bank Hopes to Finance US$5 B Mozambique LNG project
(AllAfrica, Maputo, 25 August 2019) The Board of Directors of the Export-Import Bank of the United States (EXIM US) has voted to notify the US Congress of its consideration of a five billion dollar loan to support the export of US goods and services for the development of the liquefied natural gas (LNG) project on the Afungi Peninsula, in Palma district, in the northern Mozambican province of Cabo Delgado. EXIM US estimates that the US$5 B loan “could support an estimated 16,400 American jobs over the five-year construction period. Through follow-on sales, thousands of additional jobs may be generated across the United States” and “through fees and interest earned, the transaction also could create more than 600 million dollars in revenue for U.S. taxpayers”. The borrower would be the Mozambique LNG1 Financing Company, whose owners include the Anadarko Petroleum Company, which heads the consortium developing Area One of the Rovuma Basin, including the construction of the gas liquefaction factories on the Afungi Peninsula. Anadarko was recently purchased by another US company, the Occidental Petroleum Corporation. A 2016 Friends of the Earth report (pdf) noted that: “With their farmland and fishing grounds being taken by multinational corporations, entire communities will lose their homes, land, and livelihoods. Locals will receive very few jobs, and an influx of workers from other countries and other parts of Mozambique will likely bring an increase in diseases, including sexually transmitted infections, and place a strain on already limited health-care and education resources. Friends of the Earth further notes that “By approving $5 billion in fossil fuel financing, EXIM is accelerating the climate crisis while causing local environmental damage and propelling human rights violations in Mozambique,”
Senate Confirmation of Export-Import Bank Directors Means Billions More Dollars in Federal Fossil Fuel Financing
(Friends of the Earth, Washington, 8 May 2019) The U.S. Senate today voted to confirm 3 nominees to the Board of Directors of the U.S. Export-Import Bank. The confirmation allows Ex-Im to establish a board quorum, clearing the way for the bank to revive its financing of billions of dollars in fossil fuel projects abroad. After nearly four years without full authority to operate, today’s Senate vote paves the way for 12 fossil fuel projects in the agency’s queue to progress forward to a board vote — with many more applications for financing likely to come. These dirty projects will result in tens of millions of tons of carbon dioxide emitted into the atmosphere annually. “By approving these new directors, the Senate is letting the Export-Import Bank fuel the crisis of climate change,” said Doug Norlen, economic policy program director at Friends of the Earth. “The bank will return to its past practice of supporting projects that damage the global climate, harm community health, violate human rights and hasten corruption. Rather than addressing the threat of climate change proactively, this is a vote to make the Export-Import Bank Trump’s billion-dollar fossil fuel slush fund.” Two Presidential Candidates have now said they want Ex-Im Bank’s fossil fuel financing halted. Sen. Bernie Sanders voted against Trump’s nominees and is quoted in this article saying Ex-Im “should not be providing low-interest loans and loan guarantees to big fossil fuel companies that are endangering the planet.” And, Washington State Governor and Presidential Candidate Jay Inslee just released his Evergreen Economy for America Plan which pledges “to cease all support for new fossil energy projects” by Ex-Im Bank and OPIC. Ex-Im’s Congressional authorization expires Sept. 30, so the fight is brewing again!
ECA Support for Coal in the Face of OECD Financing Restrictions
(Friends of the Earth USA, Washington, 13 November 2018) In order to avoid the worst impacts of climate change, no new fossil fuel power plants should have been built after 2017. Despite this, little-known government agencies called export credit agencies (ECAs) are still providing many billions in financing to fossil fuel projects all over the globe. From 2013 to 2015, the world’s largest ECAs provided an annual average of USD 38 billion in support of fossil fuels. Eighty-eight percent of ECA support for energy projects went toward fossil fuels, compared to seven percent for clean energy projects. A new report available here (pdf) analyzes potential and current support for coal plants by ECAs in the Organization for Economic Cooperation and Development (OECD), which includes most of the world’s largest ECAs (though, notably, not China).
