Biden Admin releases weak standard for overseas fossil fuel finance

Biden Admin rolls out weak government-wide standard on overseas fossil fuel finance

WASHINGTON, D.C.- Today, President Biden put forward a government-wide performance standard to apply to U.S. financing of overseas energy projects. A full analysis of the announcement can be found here.

This announcement helps implement President Biden’s Executive Order on Tackling the Climate Crisis at Home and Abroad, calling on the U.S. International Development Finance Corporation (DFC), U.S. Export-Import Bank (EXIM), and other agencies “to identify steps . . . [to] promote ending international financing of carbon-intensive fossil fuel-based energy while simultaneously advancing sustainable development and a green recovery.” It also follows the statement that the United States signed onto in Glasgow that commits it to “end new direct public support for the international unabated fossil fuel energy sector by the end of 2022.”

Kate DeAngelis, International Finance Program Manager at Friends of the Earth U.S., issued the following statement in response:

The guidance put forward today looks like it was written a decade ago when climate change’s severity was less understood. Despite the Biden Administration’s big talk on climate, their overseas fossil fuel finance policies are like they were written by anti-vaxxers and anti-maskers, bereft of necessary protections despite high risks and compelling science. For the world to have half a chance of meeting the commitments made in the Paris Agreement, financing for fossil fuel expansion must end now. 

Nearly 450 organizations called on the Biden Administration to immediately end all U.S. public financing for fossil fuels, including natural gas. The U.S. International Development Climate Finance Plan requires the Department of Treasury to reorient OECD ECAs financing away from carbon-intensive activities. 

DFC also established a precedent-setting net zero by 2040 target and “committed to bringing sustainable, reliable electricity access to 10 million people by 2025.” The standard announced by the Biden Administration lacks the clarity and necessary regulations that would provide a pathway to reach these necessary GHG emission reduction goals.

Since the Paris Agreement, $3.8 trillion of investment monies have poured into the fossil fuel sector, with billions backed by U.S. financial agencies. In the past five years, DFC and its predecessor, Overseas Private Investment Corporation, approved almost $4 billion for overseas fossil fuel projects. In addition, EXIM has approved over $5 billion for fossil fuel projects abroad since mid-2019. Other agencies like the U.S. Trade and Development Agency (USTDA) and Millennium Challenge Corporation (MCC) have provided technical assistance and policy guidance in support of overseas fossil fuel projects.  

Expert Contact: Kate DeAngelis, Friends of the Earth U.S., (202) 320-4742, [email protected] 

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