FOR IMMEDIATE RELEASE
Washington DC, July 18, 2023 – Last Friday, the Export-Import Bank of the United States (EXIM) — the official export credit agency of the U.S.— insured USD 400 million in revolving credit facilities for global commodities trader Trafigura.
The newly approved transaction will allow Trafigura Pte. to purchase liquefied natural gas (LNG) from U.S. exporters to sell primarily to European buyers.
Allie Rosenbluth, United States Program Co-Manager at Oil Change International said:
“It is alarming that Biden continues to break climate commitments to end international public finance for fossil fuels. Instead, he uses public money to prop up the dirty industry that fuels climate disaster and harms communities, while we suffer record breaking extreme heat. Biden has the executive authority to take transformative action to halt new fossil fuel expansion, end fossil fuel finance, and phase out fossil fuels – which is essential to protect public health, create good jobs in a renewable energy economy, protect democracy, and tackle the climate emergency head-on, but we have yet to see a semblance of this leadership.
“Other countries like Canada, the UK, and France have kept their promise to end international public finance for fossil fuels, and are already shifting billions of dollars towards clean energy. There needs to be accountability for signatories like the Biden administration for going back on their word.”
Notes:
At the UN COP26 climate summit in 2021, 39 countries and financial institutions, including the United States, signed the Glasgow Statement (now called the Clean Energy Transition Partnership), committing signatories to end their direct international public financing for fossil fuels by the end of 2022, except in exceptional circumstances, and fully prioritize their public finance for the clean energy transition.
Oil Change International research shows that this commitment is already shifting USD 5.7 billion a year from fossil fuels to clean energy. If all signatories meet their commitments, they can increase their clean energy finance to USD 37 billion per year, a sum large enough to close the energy access finance gap.
In May, the Biden administration approved almost $100 million in export finance for the expansion of an Indonesian oil refinery, neglecting the agreed end of 2022 deadline for ending such support. Just a month ago, the U.S. development finance corporation (DFC) pledged almost a billion U.S. dollars to support LNG imports in Poland and gas infrastructure in South Africa. And more is on the docket – the United States is currently considering export finance for a controversial LNG project in Papua New Guinea and several other oil and gas projects.
Oil Change International compiled an implementation tracker that outlines country-level progress on implementation of the Glasgow Statement, which will be updated in the lead up to COP28.
Oil Change International’s Public Finance for Energy Database shows that G20 countries and the major multilateral development banks (MDBs) provided at least USD 55 billion per year in international public finance for oil, gas, and coal projects between 2019 and 2021. This is almost 2 times more than their support for renewable energy.
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 could 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.
