New website shines a light on the extent of export credit agencies’ support for fossil fuels
October 11, 2021
(Amsterdam, Netherlands) – Each year governments provide tens of billions of dollars in financial support to fossil fuel projects via export credit agencies (ECAs). Today, 20 civil society groups from 15 countries are launching a new website to shine a spotlight on how ECAs are undermining global climate goals. In advance of the November UN climate conference, the organisations are calling on governments around the world to end public financial support for coal, oil and gas projects, including support from ECAs. Ending this support and redirecting financial resources to sustainable alternatives is essential for a just energy transition.
ECAs are primarily public entities that provide companies with government-backed loans, loan guarantees, credits and insurance, usually to support exports overseas. Despite the International Energy Agency’s conclusion that, in order to limit global warming to 1.5°C, there can be no investments in new fossil fuel supply, governments continue to support fossil fuel projects on a massive scale through their ECAs. “This support often flies under the radar,” says Niels Hazekamp of the Dutch organization Both ENDS. “The aim of www.fossilfreeecas.org is to shed light on how governments are propping up fossil fuels through their export credit agencies. We are urging governments to end this support.”
Denmark has yet to officially phase out all fossil fuels from export credits. More efforts are needed to phase out support to fossil fuel-related and dirty industry. OECD members should push for a COP26 announcement of a complete coal exit date by 2021 and no later, setting global standards. Denmark as OECD member would be advised to support this exit date in practice, despite lower aspirations in its 2021 climate program.
The website highlights a sample of ECA-supported projects around the world. Among them are two projects in Mozambique, which together have received up to USD 18 billion in ECA support from China, France, Italy, Japan, Netherlands, South Africa, South Korea, Thailand, the UK and the US. “Ten years ago, this region was seen as the new Dubai. The gas would bring steady jobs and wealth to the farmers. The opposite is true. It has fuelled existing inequalities and violence,” says Julio Bichehe of the farmers’ union União Provincial dos Camponeses (UPC) of Cabo Delgado.
The website also highlights Santos’ proposed Barossa gas project in Australia. “The Barossa project is probably the world’s dirtiest gas project,” says Dina Hopstad Rui of Jubilee Australia. “It has already received support from South Korea’s ECA, KEXIM. Several other ECAs are also considering support. If it moves forward, Barossa will not only accelerate the climate crisis but also put the unique biodiversity in the project’s area at risk.”
Earlier this month, the UK government and the European Investment Bank urged governments and public financial intuitions to commit to phasing out all fossil fuels and proclaim their support for clean energy. “The science is crystal clear,” says Laurie van der Burg of Oil Change International. “If the world is to have any chance of limiting global heating to 1.5°C, export credit agencies need to immediately stop financing new fossil fuel projects, including gas projects. At the upcoming global climate conference, ECAs need to join the UK and the European Investment Bank in committing to end all fossil fuel finance. Only then will we have a livable future.”