Oil Change International
Campaigners Call on UK Government to withdraw financing from Mozambique LNG
South Korea and Turkey block landmark OECD deal to end fossil fuel subsidies
(Oil Change Int’l, Washington, 20 December 2024) OECD members have failed to pass a landmark deal to end over $40 billion in public subsidies to fossil fuels. Despite last-ditch attempts by senior government and international figures to sway South Korea and Turkey – the only countries blocking the deal – negotiators could not agree on a proposal to restrict export finance to fossil fuels. They will instead focus on a range of measures to improve transparency in export financing. Last year the UK, Canada and EU tabled a proposal at the OECD to end export finance for all fossil fuels, building on a 2021 OECD agreement that ended export finance support for coal plants. In a surprise move, the US recently switched its position at COP29 and came out in support of the proposal, leaving just a handful of countries blocking it.
The International Institute for Sustainable Development (IISD) on December 9th noted: “We have seen the potential of multilateral leadership in export finance before. In 2021, the OECD ended coal-fired power export credit financing, a key milestone in the phase-out of international public finance for coal. Now OECD countries have [had!] the opportunity to replicate this success for oil and gas. This could [have] freed up much-needed public finance to accelerate the uptake of clean energy. Rich countries still provide export credit finance of USD 41 billion per year to oil and gas, following their earlier agreement to end export credit support for coal.
President Joe Biden was poised to back restrictions on international funding for oil and gas projects in a move that could free up billions of dollars for clean energy and crystallize his climate legacy.
Europe and U.S. push for oil-funding ECA curbs deal to outlast Trump
(Philadelphia Tribune, 22 November 2024) The EU, U.S. and other countries are hammering out a plan to throttle tens of billions of dollars of financial support for foreign oil and gas projects, weeks before President-elect Donald Trump moves into the White House. Negotiators are working toward landing a deal at the Organization for Economic Co-operation and Development gathering in Paris by Thursday, according to people familiar with the matter. An agreement would be a culmination of more than a year of effort to expand existing rules that prohibit member nations’ export-credit agencies from financing unabated coal projects. It’s an about-turn for the U.S., which had effectively stalled work on the broader fossil fuel restrictions for months amid concerns from the country’s Export-Import Bank. But with Trump taking office in two months, it’s a last-ditch bid to lock in a climate policy that environmental advocates say be difficult for the new administration to reverse while freeing up multibillion-dollar funds for global clean energy projects. The group’s members have a longstanding gentlemen’s agreement that effectively allows them to use export-credit agencies to give preference to domestic companies in international deals without running afoul of WTO rules. Member countries have an incentive to abide by the policies since they help ensure a level playing field. Restricting export-credit agency support for fossil fuels is viewed as crucial to meet global climate goals, a year after nearly 200 countries agreed to transition away from polluting energy sources. “There aren’t many policy tools that Trump can’t undo, and this is one of the few,” said Laurie van der Burg, Public Finance lead at Oil Change International. Oxfam America notes that: “A ‘Trump-proof’ climate deal of this magnitude is mission critical for the Biden administration — not only to secure its legacy on climate progress, but also help safeguard every community, both in the U.S. and globally, from damaging storms, heat waves, and rising seas. The climate crisis won’t stop for a climate denier in the White House, and this is the last chance for the current administration to stop billions in global handouts to fossil fuel corporations.” Nearly 300 green groups have urged Biden to block LNG expansion ahead of Trump.
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”.
Switzerland still handing out fossil fuel finance like candy
(Swiss Climate Rambles, Berkely, 23 September 2024) According to its own website, the Swiss government’s export risk insurance agency SERV (Swiss Export Risk Insurance) has approved insurance for 7 gas projects with a total delivery value of CHF 3,375 million (or US$3,967 million at the current exchange rate) since the CETP took effect. The fossil fuel projects which SERV insured in 2023 and 2024 are listed in the following table. (Their delivery value may be larger than the value insured by SERV.) Switzerland is also the only country which has explicitly weakened its CETP policy. In March 2023, SERV pledged to end all its fossil fuel finance, with exemptions only for projects in line with the Paris Agreement’s 1.5°C goal. In July 2024, Oil Change International revealed that the agency had quietly watered down its policy by allowing SERV to fund any gas project it considers is in the “economic, foreign, trade & development policy interests of Switzerland”.
Rich countries could raise $5tn of climate finance a year, study says
(Guardian, London, 24 September 2024) Rich countries could raise five times the money that poor countries are demanding in climate finance, through windfall taxes on fossil fuels, ending harmful subsidies and a wealth tax on billionaires, research has shown. Developing nations are asking for at least $1tn (£750bn) a year of public funds to help them cut greenhouse gases and cope with the impacts of extreme weather. Research by the pressure group Oil Change International, published on Tuesday, shows that rich countries could generate $5tn a year from a combination of wealth and corporate taxes, and a crackdown on fossil fuels. A wealth tax on billionaires could generate $483bn globally, while a financial transaction tax could raise $327bn. Taxes on sales of big technology, arms and luxury fashion would be another $112bn, and redistributing 20% of public military spending would be worth $454bn if implemented around the world. Stopping subsidies [from OECD ECAs?] to fossil fuels would free up $270bn of public money in the rich world, and about $846bn globally. Taxes on fossil fuel extraction would be worth $160bn in the rich world, and $618bn globally.
EDC undermines climate commitments yet again with massive loan renewal for Enbridge
(EcoJustice, Vancouver, 24 July 2024) Export Development Canada (EDC) has renewed a $200- to $300-million loan to oil and gas giant Enbridge Inc., despite environmental organizations raising the alarm about the serious climate consequences and human rights concerns of this financing. EDC is a federal Crown corporation and Canada’s official export credit agency – it has also been a prolific funder of fossil fuels. Just days prior to EDC signing the deal, environmental organizations submitted an analysis to EDC asserting that corporate financing to Enbridge Inc., which has significant plans to expand fossil fuel infrastructure, does not align with the Crown corporation’s climate commitments, nor with international obligations to phase out fossil fuels and reduce greenhouse gas emissions. In the analysis submitted by Ecojustice on behalf of Above Ground (a project of MakeWay), the Center for International Environmental Law, Environmental Defence Canada, Oil Change International and Stand.earth, major concerns about EDC’s financing of Enbridge are raised. Their submission to EDC highlights the dire impacts of climate change while also citing public reports of human rights risks and violations, and active legal challenges involving Enbridge’s projects from Indigenous groups, impacted communities, and an Attorney General. The submission calls on EDC to examine the implications of continuing to fund fossil fuel companies like Enbridge.
UAE’s ALTÉRRA invests in fund backing fossil gas despite “climate solutions” pledge
(Climate Change News, Broadstairs UK, 27 July 2024) As world leaders gathered in Dubai at the start of COP28 last December, the United Arab Emirates dropped a surprise headline-grabbing announcement. The host nation of the UN talks promised to put $30 billion into a new climate fund aimed at speeding up the energy transition and building climate resilience, especially in the Global South. ALTÉRRA was billed as the world’s largest private investment vehicle to “focus entirely on climate solutions”. COP28 President Sultan Al-Jaber hailed its launch as “a defining moment” for creating a new era of international climate finance. Yet four months later, one of the initial funds ALTÉRRA backed with a $300-million commitment agreed to buy a major fossil gas pipeline in North America, Climate Home has discovered. Climate Home’s findings “confirm our worst fears”. “The ALTÉRRA fund uses a masquerade of green progress while funnelling investment into fossil fuel pipelines and gas projects, which are the biggest causes of the climate crisis,”
U.S. EXIM Funding Fossil Fuels Abroad
(Living on Earth, Lee NH, 3 May 2024) Despite an international agreement to phase out financing for fossil fuel projects abroad, the Biden administration recently approved a $500 million dollar loan guarantee for an oil and gas drilling project in Bahrain. The Biden-Harris administration is coming under fire for failing to keep its promise to stop funding international fossil fuel projects. One of those critics is Nina Pušić, senior climate finance analyst with the advocacy group Oil Change International. At the U.N. Climate Conference in 2021, which was called COP26 in Glasgow, 39 governments and public finance institutions signed on to this initiative called the Clean Energy Transition partnership, also known as the Glasgow Statement. They promised that within one year they would stop new direct financial support to fossil fuel projects within the year. It was the Biden administration who signed on. So even though the Biden administration has promised that U.S. government agencies would stop funding fossil fuels, U.S. EXIM and DFC have decided that they’re going to continue doing that regardless. And it wasn’t just at the U.N. Climate Conference in 2021 where the Biden administration signed on to this, but it was also at the G7 in 2022. So it’s not only one but actually two international commitments that this administration made.
