German Government ‘Wasting Public Money’ With Promise-Breaking Fossil Fuel Finance

• Historic 2021 international agreement meant Germany restricted its international fossil fuel finance. German fossil fuel finance is dropping, showing the way forward.
• Yet, new data reveals Germany continues to approve public money for international fossil fuel projects in violation of its commitment. 
• The new German government is expected to further water down guidelines restricting fossil fuel finance.
• Parliamentary questions reveal Germany is considering public support for a raft of fossil fuel projects.

Research released today by Oil Change International and ClientEarth, Wasting Public Money, reveals how Germany is at risk of watering down a 2021 pledge to end taxpayer-backed financing of fossil fuel projects overseas. It outlines Germany’s long-term international role as a significant backer of fossil fuel projects overseas, sounds the alarm that the German coalition may soon seek to weaken their guidelines restricting international fossil fuel finance, and reveals that Germany is considering nearly EUR 1.2 billion in support for overseas fossil fuel projects.

In 2021, at the COP26 UN climate conference in Glasgow, Germany signed the Clean Energy Transition Partnership (CETP), a historic 40-signatory agreement to end taxpayer-backed financing for fossil fuel projects overseas. This government-backed finance is often crucial in making fossil fuel projects possible. The initiative has had real world impact, with recent research showing the CETP has brought down international public finance for fossil fuels by up to 78% (USD 11.3 – 16.3 billion annually). In Germany, international fossil fuel finance has dropped 81.2% compared to pre-CETP levels.

However, Germany’s implementation of the CETP is lagging behind. The 2023 policy providing guidelines to implement the CETP commitment contains many loopholes. While Germany’s finance for fossil fuels has dropped significantly, suggesting a pivot towards renewable energy, the weak guidelines and poor adherence to them makes Germany one of the biggest CETP violators. Germany has approved USD 1.5 billion in fossil fuel finance since the passing of the end of 2022 deadline for ending such support.

Worse, the new German government is expected to water down this commitment further.

Today’s report demonstrates that fossil fuels bring serious stranded asset risks and are a bad deal for German taxpayers, locking them into an expensive fossil-fuelled energy system where Germany pays around EUR 60 billion a year in oil and gas imports. Germany also risks its international reputation by reneging on an agreement that many of its peer countries – including France, the UK, Canada, Spain and many others have fully implemented. 

The report also contains new data from the Federal Ministry for Economic Affairs and Energy, which shows that despite the fossil fuel policy in place, from June 2024 to July 2025 the German government has been considering finance for international fossil fuel projects worth nearly EUR 1.2 billion. This suggests that a new raft of fossil fuel finance could soon be approved, undermining Germany’s climate standing further. The projects include gas power plants and refineries and span countries as diverse as Mexico, Iraq and Indonesia. This comes on top of envisaged large scale domestic public support to enable the development of gas power plants as part of Germany’s power plant strategy.

The report authors are calling on the government to protect Germany’s international reputation, economy, and energy transition by not watering down the fossil fuel guidelines. They point to the legal risks involved of not doing so, referencing a legal opinion on export credit agencies’ support for fossil fuels and the recent International Court of Justice’s climate change ruling. To avoid such risks, the government should fill the loopholes in the current policy to fully meet the CETP commitment and accelerate a fair transition to clean, affordable and reliable renewable energy.

Adam McGibbon, Campaign Strategist at Oil Change International, said:

“Instead of breaking its promise, Germany must fully meet its 2021 promise, ending its fossil fuel financing and prioritizing support for renewable energy. Fossil fuels are a bad deal for German taxpayers and come with escalating financial risks. Renewable energy means energy security and sound investments.” 

Lorenzo Fiorilli, Lawyer public finance, energy markets and competition at ClientEarth, said:

“If Germany backtracks on its 2021 pledge to end fossil fuel financing, it risks breaching international climate commitments and undermining its own credibility. Further weakening its fossil fuel guidelines would not only contradict global climate goals but also expose Germany to heightened legal accountability. In short: promises made must be kept, or trust in international climate leadership erodes.”

Download the report in English and German

Press Release in German

NOTES TO THE EDITOR: 

• At the 2021 COP26 UN climate summit in Glasgow, 39 countries and institutions – including many EU states, the United States, and Canada – launched the Clean Energy Transition Partnership (CETP, sometimes called the Glasgow Statement), committing to end direct international public finance for fossil fuel projects. Norway and Australia joined the CETP at the 2023 COP28 summit in Dubai. (Full list of signatories here).
• Oil Change International has compiled this implementation tracker that outlines country-level progress on implementation of the CETP and has recently co-published this report with IISD analysing new data to assess overall CETP progress.
• The IPCC’s AR6 report highlights 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.