Germany Fails to Lead at E3F Summit and Threatens Decades of Fossil Fuel Lock-In

FOR IMMEDIATE RELEASE

November 4, 2022

Contact: Nina Puši?, nina@priceofoil.org (CET)

Germany, host of Export Finance for Future (E3F) Initiative Summit, Fails to Lead and Threatens Decades of Fossil Fuel Lock-In

BERLIN – Yesterday, the Export Finance for Future (E3F) Coalition — Belgium, Denmark, Finland, France, Germany, Italy, the Netherlands, Spain, Sweden and the United Kingdom — gathered for its ministerial meeting, chaired by Germany. Rather than building momentum towards COP27 through delivering strong policies and a harmonized approach to implementing the collective promise to end international public finance for fossil fuels by the end of 2022, the Summit was overshadowed by backsliding.

The E3F’s Summit Third Ministerial Outcome reaffirmed the members’ pre-existing commitment to ending export finance for fossil fuels and said that the energy security crisis does not change this commitment. But countries watered down an earlier draft of the statement which adopted a common approach to implementation. The final statement instead solely commits to a joint approach to monitoring implementation, with every country taking their own approach, risking the quality and coherence of each member’s national policies. 

Italy already came under fire for its efforts to weaken the Summit’s ministerial statement by pushing against adopting a harmonized approach to implementing the commitment to end fossil fuel finance ahead of the Summit. 

At the global climate conference in Glasgow last year, all Export Finance for Future (E3F) members signed a commitment to end international public finance for fossil fuels by the end of 2022. This pledge, signed by 39 countries and institutions in total, is known as the Clean Energy Transition Partnership. At yesterday’s meeting, E3F members were supposed to jointly define the scope of this commitment, but instead much weaker language was adopted to provide a “standardized format [that] will help monitor policies”. The Netherlands used the occasion to publish its new policy to implement its Glasgow commitment, but campaigners said that loopholes meant that this policy breaks the Glasgow pledge. With countries expected to update on progress at next week’s global climate conference in Egypt and one month left until the end of the 2022 deadline, three E3F members including Italy, Spain and even this year’s E3F host, Germany, have yet to publish new or updated policies to turn their pledge into action. 

A Transparency Report published by the E3F coalition on 1 November, highlights that these four laggard members were also some of the largest providers of export finance for fossil fuels, having collectively supported a total of €23 billion in fossil fuels from 2015 to 2020 (respectively €7 billion by Germany, €11 billion by Italy, €5 billion by Spain). 

In addition, Germany has recently come under fire for indicating that it is keen to pursue gas investments despite its Glasgow pledge, and against the leading climate science findings of the most recent IEA World Energy Outlook and Intergovernmental Panel on Climate Change (IPCC) Special Report on 1.5°C. This year’s E3F host Germany also invited a gas industry representative, Mr. Ju?rgen Nowicki of Linde Engineering, while failing to invite any CSO representatives from the Global South impacted by projects financed by ECAs. 

“Frontline communities in the Global South suffer immense impacts due to continued financing of fossil fuel projects,” stated Diana Nabiruma of the Africa Institute for Energy Governance (AFIEGO), “Communities are forcefully displaced from their land and the natural resources that they rely on, such as forests, are destroyed because of this funding. Communities should be able to share their stories of pain at conferences to inform policies of countries that persistently fund their destruction. It is most unfortunate therefore that the most impacted communities were left out of the E3F Coalition meeting.” 

At E3F, the backsliding overshadowed  progress made by other E3F members, including Finland, Sweden, Denmark, the United Kingdom and France, which had already adopted policies to turn their Glasgow pledge into action without introducing “energy security”  loopholes, such as for gas extraction or Liquefied Natural Gas (LNG). These policies align with advice from the International Energy Agency that the solution to the energy security and crisis is a faster transition from fossil fuels to clean energy and energy efficiency. 

The Netherlands should strengthen its policy and Germany, Italy, and Spain must dramatically shift course, and launch their fossil fuel exclusion policies in time for the upcoming global climate conference, COP27, in Egypt. They can follow the existing standard setting policy examples of the United Kingdom and Denmark.

The CSOs previously called on E3F countries to, as self-proclaimed leaders, release their policies to implement their Glasgow Statement commitments, make ending fossil fuel support a prerequisite for new E3F members (within 1 year of joining the initiative), and signal that they would take on ambitious leadership to table oil and gas restrictions at the OECD level. This did not happen. Next week COP27 in Egypt provides their next best opportunity to get on track to keep their promise and deliver on parallel climate, development, energy security and affordability objectives by ending export finance for fossil fuels.  

Quotes: 

Nina Puši?, Export Finance Strategist, Oil Change International said:
“E3F was created to lead on an urgent task – aligning export finance with climate goals and fulfilling the 1.5°C warming target of the Paris Agreement. To date, we continue to see a number of E3F members failing to lead. At best, they are dragging their feet, and at worst, breaking their commitments.” 

Regine Richter, Energy and Finance Campaigner, urgewald stated:
“There were times when Germany tried to be a climate leader. Now it seems that energy security concerns have taken over and prevail over everything else. Signing onto the Glasgow statement and potentially continuing financing and guaranteeing even new gas fields must be exclusive to each other. It’s high time for the government to remember its climate commitments if it doesn’t want to lose all credibility.”

Charity Migwi, Africa Regional Campaigner, 350 Africa stated:
“Getting public finance out of fossil fuels is an urgent task. It’s time for E3F countries to make the right call to ensure available resources are spent on building a clean and sustainable energy future. This is a historic moment to drive real, transformative change. E3F governments need to stick to their promise to cut down all fossil fuel finance and instead provide climate finance to help countries in Africa leapfrog to a renewable energy future. By doing this it will send a strong political signal to other governments to uphold their commitment too.”

Antonio Tricarico, Programs Director, ReCommon stated:
“Italy’s shameful efforts to water down E3F ambition completely undermine its climate goals and threaten the legitimacy of the entire E3F initiative. If the new Italian government does not implement their Glasgow commitment for SACE [the Italian Export Credit Agency] soon, or waters it down to yet support gas expansion with an energy security excuse, then it would soon lose any international credibility on energy and climate matters.”

Niels Hazekamp, Senior policy adviser, Both ENDs stated:
“Climate change is a reality. The floods in Pakistan have already killed a thousand people and caused billions in damage. With its export support for oil and gas, E3F countries have contributed to worsening climate change and environmental pollution for decades. The current policy of the Netherlands does not stop this fossil fuel export support. Prime Minister Rutte’s COP26 call for ‘action-action-action’ turns out to be three empty words if this is not remedied.”

Samuel Okulony, Chief Executive Officer, Environment Governance Institute, Uganda, stated:
“The evidence across Africa is clear, no country has managed to develop using fossil fuels. The oil states scattered across the continent are no wealthier, more democratic, or more peaceful than they were without oil. Some are worse off while many have been scarred by decades of civil wars, environmental degradation, grand-astronomic corruption, community conflicts and poor quality of life for the citizens. It’s also clear that Climate Change is real and seriously affecting our people, and action must be taken. Africa has an unprecedented opportunity to become a global leader in the Just Energy Transition to clean energy, the energy that will guarantee our future and bring sustainable economic development. I appeal to you to be our advocate for a meaningful switch to clean energy in Africa and the world over.”

Davide Maneschi, Project Manager Climate and Finance, Swedwatch, stated:
“Countless reports and analyses have made it clear: there is no room for new investments in oil and gas if the world wants to have a chance to stay within the global warming limits of the Paris Agreement. This is not the time for half-hearted measures: if E3F countries really want to align public export finance with climate goals, they should immediately fill the gap between their commitments and their policies. The European Union should also regulate member states’ export finance and climate policies; we count on the Swedish presidency of the European Council and on the European Commission to lead and take action in this area, to accelerate the phaseout of fossil fuels, meet climate goals, and create a level playing field amongst EU countries.” 

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Notes:

• A report released this week by Oil Change International and Friends of the Earth U.S. reveals that between 2019 and 2021 the G20 countries and multilateral development banks (MDBs) provided at least USD 55 billion per year in international public finance for fossil fuels. This is a 35% drop compared to previous years (2016-2018), but still, almost twice the support provided for clean energy, which averaged only $29 billion per year.
• Oil Change International has compiled this implementation tracker that outlines country-level progress on implementation of the Glasgow Statement, which will be regularly updated in the lead up to and during COP27. 
• At COP27, OCI, Recourse and Tearfund are hosting a side-event on 16 November, at 15.00 EEST, ‘The Glasgow Pledge to end public finance for fossil fuels: scaling ambition for a just transition’. Please reach out to Nicole Rodel (nicole@priceofoil.org) with any press enquiries.
• In its latest report, the IPCC highlighted public finance for fossil fuels as ‘severely misaligned’ with reaching the Paris goals, but that if shifted, it would play a critical role in closing the mitigation finance gap, enabling emission reductions and a just transition. More background on the role international public finance plays in shaping energy systems is available in this Oil  Change International briefing.  
• 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 October, an International Day of Action called on governments and institutions to fully meet their Glasgow Public Finance Statement commitments, building on earlier letters, op-eds, and other pressure from civil society.