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.