FOR IMMEDIATE RELEASE
October 28, 2021
New Report: G20 governments Have Bankrolled More Than $188 Billion in Fossil Fuels Since 2018
New report updates analysis of public financing for energy projects ahead of expected joint announcement to end these flows at COP26
To view or download the full report: https://priceofoil.org/past-last-call
WASHINGTON, D.C. – A report released today by Friends of the Earth U.S. and Oil Change International reveals that from 2018 to 2020, G20 countries financed at least USD 63 billion per year ($188 billion in total) for oil, gas, and coal projects by through their development finance institutions, export credit agencies and the multilateral development banks (MDBs) they govern. This preferential, government-backed fossil fuel financing was 2.5 times more than G20 support for renewable energy, which averaged only $26 billion per year. Canada, Japan, Korea, and China provided the most public finance for fossil fuels, together accounting for nearly half of the MDB and G20 fossil fuel finance in our dataset.
Recognizing the urgent need to shift this export and development finance out of fossil fuels and into renewable energy, the UK and European Investment Bank (EIB) have passed policies restricting almost all of their international oil and gas finance. They are expected to release a joint commitment to shift public finance out of all fossil fuels with a group of new country and institution signatories on November 4th at the global climate conference, COP26.
“G20 countries pour billions into fossil fuels while the world burns and the devastating impacts of climate change get worse and worse,” said Kate DeAngelis, international finance program manager at Friends of the Earth U.S. “Even as the world’s scientists have sounded the alarm on the urgency of taking climate action, governments continue to ignore this code red. G20 governments must heed this call and once and for all shift their financing away from fossil fuels toward renewables.”
The report shows that international public finance for fossil fuels continues to counter G20 countries’ commitments under the Paris Agreement to align financial flows with a safe climate future. This financing also violates their 2009 commitment to phase out fossil fuel subsidies.
At the same time, the evidence to end public finance for fossil fuels has never been clearer: in the IEA’s 1.5°C scenario there are no investments in new fossil fuel production beyond 2021 and there is a rapid phase-out of fossil fuels across the rest of the supply chain. Fossil fuel finance also undermines the effectiveness of climate finance, which is still not delivered at either the scale promised by rich countries ($100 billion a year from 2020) or needed.
“Promising to end coal finance was bold climate leadership a decade ago. The leaders of wealthy countries need to know that taking the 1.5°C warming limit seriously now means immediate joint action on oil, gas, and climate finance,” said Bronwen Tucker, Public Finance Campaign Co-Manager at Oil Change International. “Public finance has an outsized impact because it ‘de-risks’ projects for other investors — so this $188 billion has made a much larger amount of private investment in new oil, gas, and coal possible. As the fossil fuel industry faces unprecedented global headwinds these preferential loans, grants, and guarantees mean that projects that otherwise wouldn’t see the light of day are getting to the finish line. Worse, they’re privatizing the profits of fossil fuel projects while socializing the risks.”
“If before the last IPCC report it was not acceptable to use public money to provide billions of profits to foreign companies like Total, after this year’s IPCC report, it should become a crime against humanity,” said Anabela Lemos, director of Justiça Ambiental! who has been raising the alarm on the international public finance behind LNG expansion in Mozambique. “The fact that some countries are using the COP treaty to attempt to formally block future legal cases linked to climate impacts shows they have skeletons in their closets. We have just seen Total’s skeletons — its knowledge around climate change, the impacts and the damage that they were and are doing. Total continued its crimes, lies, and blocked actions to resolve the climate crises and much more for many decades. In Mozambique, we have been exposing these skeletons of destroyed community livelihoods, social instability, militarization and creating another resource curse.”
“To date, G20 nations have not taken any steps to effectively address the climate crisis and break our economies’ dependence on fossil fuels. With COP26 just around the corner, people are counting on national leaders to deliver on ambitious commitments and the resources needed to tackle the climate impacts that are affecting every corner of the planet,” said May Boeve, 350.org Executive Director. “By pumping vast sums of money into recovery packages that benefit dirty corporations and high-carbon sectors, they’re trying to address one crisis by simultaneously fuelling another. At this critical moment people are demanding that governments and financial institutions put people to the front, not polluters. They need to direct money away from climate-wrecking fossil fuel companies towards a more equitable and green economy.”
Using data from Oil Change International’s Shift the Subsidies database, the report analyzes finance provided by the export credit agencies (ECAs) and development finance institutions (DFIs), as well as the major multilateral development banks (MDBs) that G20 countries control. It does not cover direct domestic subsidies for the industry through tax and fiscal subsidies or public finance from domestically focused institutions. Some of the key findings include:
- 51% of international public finance for fossil fuels flowed to gas projects. This $32 billion a year is larger than what any other energy type received from 2018 to 2020, and greater than all renewable energy finance combined. In comparison, coal received $8 billion a year and the aggregated “oil and gas” category $23 billion.
- International public finance for renewable energy has largely stagnated since 2014. Trade and development finance for renewable energy has fluctuated between $20 billion and $27 billion per year since 2014 instead of growing exponentially as is needed to support a globally just energy transition.
- ECAs were the worst public finance actors, providing 11 times as much support for fossil fuels than clean energy with $40 billion per year for fossils and just $3.5 billion for clean energy.
The report, entitled “Past Last Call: G20 public finance institutions are still bankrolling fossil fuels,” can be found here. In addition to the authoring organizations, the report has also been endorsed by 350.org, Above Ground, Asian Peoples’ Movement on Debt and Development (APMDD), Big Shift Global, Both ENDS, CEE Bankwatch, Center for Biological Diversity, Environmental Defence Canada, Friends of the Earth Europe, Friends of the Earth Japan, Fundación Ambiente y Recursos Naturales (FARN), International Institute for Sustainable Development (IISD), Iniciativa Climática de México, Japan Center for a Sustainable Environment and Society (JACSES), Jubilee Australia, Just Finance, Justiça Ambiental/Friends of the Earth Mozambique, Kiko Network, Les Amis de la Terre, Market Forces, Rainforest Action Network, Re:Common, Recourse.org, Réseau Action Climat France, Solutions for Our Climate, Urgewald, and Vedvarende Energi.
- In September 2021, 200+ CSOs launched a statement calling on world leaders to end public finance for fossil fuels in 2021 and launch a joint commitment to do so at COP26.
- In June 2021, 100+ Economists called on the G7 to put an end to not only coal finance, but also oil and gas finance in 2021.
- A legal opinion by Professor Jorge E Viñuales from the University of Cambridge and Barrister Kate Cook of Matrix Chambers argues that governments and public finance institutions that continue to finance fossil fuel infrastructure are potentially at risk of climate litigation.
- A comment piece by Harro van Asselt, professor at University of Eastern-Finland Law School and affiliated researcher at Stockholm Environment Institute, and Gita Parihar, an environmental advocate and in-house consultant for environmental NGOs and the UN, and a board member of the Climate Justice Fund, suggests that the ruling in the Shell court case should be a wake-up call for governments to end fossil fuel support.
- A comment piece discussing the US treasury guidance for MDB finance for fossil fuels and arguing that Joe Biden should seal the deal on ending fossil fuel finance by Bronwen Tucker and Laurie van der Burg from OCI.
Friends of the Earth fights to protect our environment and create a healthy and just world. We speak truth to power and expose those who endanger people and the planet. Our campaigns work to hold politicians and corporations accountable, transform our economic systems, protect our forests and oceans, and revolutionize our food & agriculture systems.
Oil Change International is a research, communication, and advocacy organization focused on exposing the true costs of fossil fuels and facilitating the coming transition towards clean energy.