FOR IMMEDIATE RELEASE
Adam McGibbon, Oil Change International, email@example.com
Anna-Lena Rebaud, Amis de la Terre (Friends of the Earth France), firstname.lastname@example.org
France restricts oil and gas finance to meet climate commitments, piling pressure on Germany, USA, Canada to follow suit
- New policy implements a commitment made at last year’s UN Climate Conference to end almost all French government-backed financing for international fossil fuel projects, responsible for €9.3bn in public finance for oil and gas between 2009 and 2019.
- Policy release builds on momentum of similar policies from UK, Denmark and Sweden
- Time is running out for other countries – such as Germany the USA and Canada – to publish their policies to phase out public finance for fossil fuels by the end of 2022, as agreed at the UN climate conference in Glasgow last year
Today, the French Government has published a new policy that restricts public finance for fossil fuels from the French export credit agency, BPIFrance. This policy is meant to implement France’s commitment to end international public finance for fossil fuels by the end of 2022, which it made at the UN Climate Conference in Glasgow last year along with 38 other countries and financial institutions (The Glasgow Statement).
The French Development Agency (AFD), which is also subject to the Glasgow commitment, had already adopted a near-complete fossil fuel exclusion in 2019.
The policy – which will be enacted in law through the French Government’s budget – is a landmark win for French campaigners who have been calling for an end to French export finance for fossil fuel projects for years. In addition, it builds pressure on fellow Glasgow Statement signatories to keep their promise and announce their Glasgow-compliant policies by the upcoming COP27 UN Climate Conference in Egypt. So far, the United Kingdom, Denmark, Belgium, Sweden and now France have published policies to implement their Glasgow commitment. Analysis shows that if all Glasgow Statement signatories live up to their commitment this will directly shift USD 28 billion a year out of fossil fuels and into clean energy, which will help shift even larger sums of public and private finance.
The new French policy ends BPIFrance’s support for the exploration, production, transport, storage, refining or distribution of oil and gas. Exceptions will be granted for support that would reduce negative environmental impacts, aid the dismantling or conversion of a facility, improve health or safety without increasing the lifespan or production capacity of a fossil fuel asset. Exceptions will also be granted for gas-fired and oil-fired power plants, if they can be proven to benefit the energy mix of a country. If these criteria are implemented with integrity, in practice this should not lead to any new financing for oil or gas-fired power, as this is incompatible with 1.5°C and alternatives are available and affordable.
As time ticks down to the COP27 climate summit, all eyes now turn to the major countries who have not yet published updated policies, including the United States, Canada, Germany, and Italy.
France now has an important opportunity to build on its new policy and encourage fellow Glasgow Statement signatories to follow suit as well as advance this agenda in various multilateral fora, commitments also outlined in the Glasgow Statement. Within the Export Finance for Future (E3F) initiative, of which France is a member, 60% of the members are yet to implement their Glasgow Statement commitments. Leading up to the upcoming E3F Summit on 3 November, France must utilize its political leverage to ensure all other E3F members and fellow Glasgow statement signatories implement their robust fossil fuel exclusion policies by COP27.
Reacting to the new policy, Adam McGibbon, Public Finance Strategist at Oil Change International, said:
“Today’s policy shows that France takes its commitment to end international finance for fossil fuels by the end of this year seriously and that other countries should do so too. Emmanuel Macron must now use France’s diplomatic power to ensure Germany and other countries also make good on their commitments by COP27.
These countries can say they are climate leaders, or they can keep funding fossil fuels overseas – but they can’t do both.”
Anna-Lena Rebaud, Climate & Just Transition Campaigner at Friends of the Earth France, said:
“Three years after Emmanuel Macron declared at the UN podium that supporting dirty projects abroad was “irresponsible”, and a year after the Glasgow Statement, France is finally enshrining in law its promise to stop supporting new fossil fuel projects abroad by the end of 2022, with the exception of oil and gas plants. Although incomplete, this decisive step forward is to be credited to the active mobilization of civil society over the past several years.”
- The Glasgow Statement was launched at the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP 26) in Glasgow. The 39 signatories aim to “end new direct public support for the international unabated fossil fuel energy sector by the end of 2022” and instead “prioritise our support fully towards the clean energy transition.”
- It was signed by 34 governments and five public finance institutions, including Agence Française de Développement (AFD), Albania, Banco de Desenvolvimento de Minas Gerais (BDMG), Belgium, Burkina Faso, Canada, Costa Rica, Denmark, the East African Development Bank (EADB), El Salvador, Ethiopia, the European Investment Bank (EIB), Fiji, Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO), Finland, France, Gabon, The Gambia, Germany, The Holy See (Vatican City State), Iceland, Italy, Jordan, Mali, Marshall Islands, Moldova, the Netherlands, New Zealand, Portugal, Republic of Ireland, Slovenia, Spain, South Sudan, Sri Lanka, Sweden, Switzerland, the United Kingdom, the United States, and Zambia.
- In its latest report, the IPCC concludes that public finance plays a critical role in closing the mitigation finance gap, enabling emission reductions and a just transition. Public finance signals government priorities, can help reduce inequities in access to finance and reduces risks for private investors – leveraging large sums of private money.
- Oil Change International research shows that in 2018-2020 alone, G20 countries and the multilateral development banks (MDBs) they govern provided at least USD 63 billion per year in international public finance for oil, gas, and coal projects. This fossil fuel finance was 2.5 times more than their support for renewable energy, which averaged only $26 billion per year. This shows the urgent need to implement the Glasgow Statement – this would tip the public finance for energy balance from fossil fuels to clean.
- 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.
- In May 2022, 122 civil society organizations sent letters to signatories to the Glasgow Statement on International Public Support for the Clean Energy Transition, laying out the actions they must take to meet their commitment. Letters to Germany, Italy, Canada, France, the US, and other non-G7 countries can be found here.