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Few governments block clean energy transition with billions of dollars in international loans for fossil fuels
New study finds Japan, South Korea and the US are the biggest investors in fossil fuels
- From 2020 to 2022, G20 governments and multilateral development banks (MDBs) provided $142 billion in international public finance for fossil fuels, a new report says, compared to support for clean energy over the same period. ($104 billion).
- The largest investors in fossil fuels were Canada ($10.9 billion per year), South Korea ($10 billion per year), and Japan ($6.9 billion per year).
- If governments fully comply with recent commitments through the Clean Energy Transition Partnership (CETP) and the G7, 71% ($101 billion) of the $142 billion in fossil fuel spending will end over the next few years. Most signatories have already fulfilled these commitments, but the United States and Japan in particular have fallen behind.
- Only 8% of all G20 and MDB international funding for energy went to low-income countries. Almost three-quarters of that was for fossil fuels. This argument is frequently used to justify the continuation of fossil fuel financing, even though this financing provided virtually no access to communities in need of energy.
April 9, 2024 – Despite the largest increase in international financing for clean energy from the G20 and multilateral development banks (MDBs) in 2022; Report released today It has become clear that a small number of bad actors are blocking a just transition to renewable energy through massive financial support for fossil fuels.
In the new report, Public Enemy: Assessing MDBs and G20 International Financial Institutions in Energy Finance Endorsed by Oil Change International and Friends of the Earth United States, and endorsed by 23 other civil society organizations. [1]highlights a worrying trend in international energy finance. From 2020 to 2022, G20 and MDB international public finance for energy added fuel to the fire by pouring a staggering $142 billion into fossil fuels, while supporting only a small amount of clean energy projects. It was $104 billion. The report was released with the latest energy finance data. energyfinance.org.
To limit warming to 1.5°C in accordance with international climate agreements, 60% of already developed fossil fuel reserves must be secured. stay on the ground. Given these restrictions, the IEA sends a clear message that no new oil, gas or LNG investments should be made by the public or private sector beyond those already committed in 2021. sending.
The findings revealed that from 2020 to 2022, the richest G20 countries were the main culprits for continued investment in fossil fuels, with the worst culprits being Canada, South Korea and Japan.
- Canada: As of the end of 2022, Canada has fulfilled its commitment to the Clean Energy Transition Partnership (CETP) to end international financing of fossil fuels, and ends fossil fuel financing through the much larger domestic ECA at the end of 2022. pressure to fulfill another promise to do so. 2024.
- Japan: Despite signing a nearly similar G7 commitment to phase out international public financing for fossil fuels, Japan has yet to take steps to implement that commitment. Loopholes in Japanese policy continue to enable fossil fuel financing, further exacerbating the climate crisis.
- South Korea: South Korea is the only major fossil investor country that has not yet introduced a policy to end support for oil and gas.
The report also highlights where there is momentum to shift public finances away from fossil fuels. This shows that the coal exclusion policy had the effect of reducing international public funding for coal to almost zero. Seven G20 countries are also signatories to the CETP, pledging to end international public financing of fossil fuels by the end of 2022 and to prioritize support for clean energy transitions across the board. While many signatories are fulfilling their commitments, a small number of his CETP signatories, including the United States, Italy, and Germany, are undermining this progress by continuing to deliver. billions of dollars The transition to fossil fuel projects is well past the end of 2022 deadline. $33.5 billion a year would be shifted away from fossil fuels if countries kept their existing commitments to eliminate not only coal financing but also oil and gas financing, including the CETP commitment to negotiate an oil and gas ban at the OECD. It turns out.
Claire Omanik, financial analyst at Oil Change International, said:
“While wealthy countries continue to drag their feet and say they cannot afford to fund a global just energy transition, countries such as Canada, South Korea, Japan, and the United States There appears to be no shortage of public funds for We must end funding for fossil fuels, demand a global just transition and require countries to pay their share of the losses, and finance damage and adaptation.”
Kate DeAngelis, senior international finance program manager at Friends of the Earth USA.:
“Global public finance has the potential to be a catalyst for a just energy transition, but government leaders are failing to use it to deliver clean energy solutions where they are needed most. As shown in Figure 2, less than 10% of G20 countries, and major multilateral development banks, reach even low-income countries with the greatest energy access needs. Three-quarters goes to climate-destroying fossil fuel projects that provide virtually no energy access to local communities, instead locking in more pollution, climate-destroying emissions, and destruction. is.”
Peter Bossip, executive director of the Center for Environmental Law and Community Rights (CELCOR), said:
“More than a decade ago, international public funds flowed into Papua New Guinea to finance a disastrous liquefied natural gas project. The report shows that Papua New Guinea is not alone: international public finance still supplies billions of dollars each year for fossil fuels. The time has come for public financial institutions to learn lessons from past mistakes and refuse to support Papua LNG and other fossil fuel projects.”
Makiko Arima, Senior Finance Campaigner at Oil Change International, said:
“Japan is derailing the transition to renewable energy across Asia and around the world. Despite G7 commitments to end fossil fuel financing, public financial institutions like the Japan Bank for International Cooperation (JBIC) are , continues to support new fossil fuel projects such as Australia's Scarborough gas field and Mexico's gas power plant. JBIC is currently implementing social and environmental safety measures in the development of the Philippines' first LNG import terminal in Batangas. We are investigating allegations of failure to comply. Japan must prioritize people and planet over profits and shift its finances from fossil fuels to renewable energy.”
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Regional press releases for this report are available in the United States, Canada, Japan, South Korea, and Italy.
Note:
[1] You can download the report here.
This report is an update of the November 2022 report. At a crossroads: Assessing G20 and MDB international energy finance ahead of deadline for fossil fuel defunding pledgesThe study examines traceable international public financing of fossil fuels by G20 countries and MDBs from 2019 to 2021 and finds that they still support at least $55 billion annually for oil, gas and coal projects. found.
- of Clean Energy Transition Partnership (CETP) Announced at the 2021 United Nations COP26 Climate Conference in Glasgow. 41 signatories (full list) here) will “end new direct public support for the unabated international fossil fuel energy sector by the end of 2022,” and instead “prioritize support for the clean energy transition across the board.” That's what I'm aiming for.
- This implementation tracker It outlines country-level progress on CETP and is updated regularly.
- this Fossil Fuel Financial Violations Tracker It provides an overview of less developed countries that have broken their commitments to the CETP. weItaly, Germany to continue pouring public money into fossil fuel projects in 2023
- IPCC AR6 report highlights that public finance for fossil fuels is “significantly out of sync” with meeting the Paris targets, but if changed could close the gap in mitigation finance and enable emissions reductions and a just transition. It is said that it may play an important role in More information on the role international public finance plays in shaping energy systems can be found in This Oil Change International. Briefing session.
- a legal opinion Professor Jorge E. Vinuales of the University of Cambridge and lawyer Kate Cook of Matrix Chambers say governments and public financial institutions that continue to fund fossil fuel infrastructure are potentially at risk of climate litigation. claims.
