Wasting Public Money: Germany’s Financial Support for Fossil Fuels Abroad
The report shows 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. The report also outlines how Germany risks its international reputation, economy, and energy transition by watering down the fossil fuel guidelines, including 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.
Download the briefing in English and German
Research 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.
Read the Press Release (English) and materials in German