Oil Change International, Friends of the Earth U.S.
This briefing, Release the Guidance: Backgrounder on U.S. International Energy Finance ahead of COP27 Deadline to Stop Funding Fossils, reveals that from 2010 to 2021, the United States’ major trade and development finance institutions provided USD 51.6 billion in support for fossil fuels, nearly fives times as much support as for renewables (USD 10.9 billion).
Since taking office in January 2021, the Biden-Harris Administration has made a series of commitments toward ending this international public finance for fossil fuels, including joining 38 other countries and institutions as signatories to the Glasgow Statement commitment to end new direct public support for international unabated fossil fuel use by the end of 2022.
However, the Biden-Harris Administration has not released public guidance on the implementation of this commitment, which is set to take effect by the end of this year. This briefing reviews what is known about the current U.S. policy guidance, unpacks trends in recent energy finance from the U.S. Export-Import Bank (EXIM) and U.S. International Development Finance Corporation (DFC), identifies specific fossil fuel projects and loopholes that appear to be under consideration, and makes recommendations for how the United States can still implement its commitments with integrity and on time.
In order to meet the Glasgow Statement commitment with integrity, the Biden-Harris Administration must release a public interagency guideline that bars new public fossil fuel support in time for COP27, including the following:
- A proactive mechanism to ensure EXIM, DFC, and other agencies do not misuse loopholes to continue fossil fuel support.
- Robust fossil fuel exclusion policies, leaving no exemptions for gas projects.
- Ambitious targets for increased grant-based and concessional international renewable energy support, with an emphasis on universal energy access, energy efficiency, and local just energy transitions for workers and communities most impacted by fossil fuel phaseouts.
In addition, EXIM and DFC should implement the following agency-specific recommendations:
- EXIM and DFC should reject current international fossil fuel project applications under consideration.
- EXIM should permanently rule out “domestic” export finance for fossil fuels through EXIM’s Make More in America initiative.
- DFC should account for the true climate impact of its support.