G20 Nations Throwing Billions at Fossil Fuel Industry through Export Credit Agencies
WASHINGTON, D.C. – A network of secretive, government-backed financial institutions called export credit agencies are handing more than $31 billion USD per year to the oil, gas, and coal industry, new analysis by Oil Change International and Friends of the Earth U.S. shows.
According to the new report released today, the export credit agencies of G20 countries provide nearly 12 times more government-backed financing to fossil fuels than to renewable energy.
“While the world is racing to stop the worst of the climate crisis, export credit agencies are pouring billions of dollars into fossil fuel projects,” said Kate DeAngelis, senior international policy analyst at Friends of the Earth U.S. “Three of the worst offenders – Japan, Korea and Canada – talk a lot about ‘bold climate action’ while helping prop up some of the world’s dirtiest energy projects.”
In total, public fossil fuel financing from the export credit agencies of G20 countries amounted to 75 percent of their overall energy financing during the 2016-2018 timeframe covered by the report. This means that G20 export credit agencies have increased the proportion of their energy financing flowing to fossil fuels since the Paris Agreement was reached. This increase comes despite international restrictions on coal finance for many G20 export credit agencies.
“It’s reckless and reprehensible for any government to still be providing billions in public finance for oil, gas, and coal. It’s even more concerning for these fossil fuel handouts to be coming from G20 nations, many of which are the most historically responsible for the climate crisis,” said Bronwen Tucker, research analyst at Oil Change International.
These government handouts to the fossil fuel industry completely disregard the Paris Agreement on climate change, the mounting urgency of the climate crisis, and burgeoning public support for bold action on climate change.
Utilizing data from Oil Change International’s Shift the Subsidies database, the report analyzes support coming from the export credit agencies of G20 countries — government-backed financial institutions that provide loans, guarantees and insurance with the aim of supporting exports of goods or services from their country to outside markets.
The report, entitled “Adding Fuel to the Fire: Export Credit Agencies and Fossil Fuel Finance,” can be found here.
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- Export credit agencies have been increasingly under scrutiny for their fossil fuel support. On January 20, 2020 UK Prime Minister Boris Johnson announced the UK would end all direct support for coal mining and power plants abroad, but indicated they will continue to finance oil and gas activity. UK Export Finance has not funded a coal-fired power plant since 2002, and in the same week, new analysis showed that continued support for oil and gas by UK Export Finance is financing millions of tonnes of emissions overseas.
- At the recent World Economic Forum in Davos, Greta Thunberg, Vanessa Nakate, and more than a dozen other youth activists from around the world called for governments, financial institutions, and corporations to “halt all investments in fossil fuel exploration and extraction, immediately end all fossil fuel subsidies and immediately and completely divest from fossil fuels.”
- Many of the G20 Export Credit Agencies are part of the OECD Arrangement on Officially-Supported Export Credits, which in 2015 approved a new coal sector understanding establishing limits on export credits for coal. However, the policy was full of loopholes, and some institutions that are party to the Arrangement – especially Japan’s export credit agencies – have continued to provide high volumes of coal finance. In addition, the Arrangement is silent on oil and gas financing, where export credit agency support is an order of magnitude higher than their support for renewable energy.