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EU and UK seek ban on subsidies for foreign fossil fuel projects

The UK and EU will push the world’s richest countries to end subsidies for foreign oil and gas operations and coal mining at a closed-door OECD meeting next month, according to people familiar with the matter. The proposal to cut off the biggest foreign source of public finance for fossil fuels is expected to spark heated negotiations at the OECD’s Paris headquarters The move builds on a commitment by some OECD countries to align public finance institutions with Paris agreement goals to limit global warming to well below 2C and ideally 1.5C above preindustrial levels. But the effort to end subsidies for foreign projects will draw attention to the prevalence of domestic subsidies for oil and gas industries, even as a global deal to end fossil fuel production without the emissions captured at the upcoming UN COP28 climate summit looks increasingly unlikely. Ending export credit agencies’ provision of loans and guarantees for fossil fuel projects would be “an essential first step to keeping our international climate goals within reach”, said Nina Pušić, an export finance climate strategist at the US environment campaign group Oil Change International.  An estimated $41bn per year was spent by OECD countries’ export credit agencies to support coal, oil and gas projects between 2018 and 2020, according to OCI, nearly five times their support for clean energy.  Governments also committed at Glasgow to push bodies such as the OECD and multilateral development banks to update their governance frameworks to align with Paris agreement goals.   The changes to the OECD’s arrangement on export credits would be voluntary. It would also require the consensus of a group of member states that includes major fossil fuel financiers that did not back the Glasgow pledge, such as Japan and South Korea. It would also put pressure on signatories to rein in their export credit agencies’ financing of fossil fuels abroad. Directors at US export credit agency Exim, for example, voted in May to disburse almost $100mn to support the expansion of an Indonesian oil refinery, as well as fuel efficiency and safety upgrades. They also voted in July to back credit to support commodity trader Trafigura’s purchase of US liquefied natural gas for export to Europe. https://www.ft.com/content/b4d0e4be-aa81-4345-a004-b76cafc5129e

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  • Grace Njeri

    20 w

    Fossil fuel subsidies should be discouraged.

    • Gorffly mokua

      32 w

      This should be implemented Asap!

      5
      • Videlis Eddie

        33 w

        this is well overdue but its better late than never .. all fossil fuels subsides should be done away with

        5
        • Ann Nyambura

          33 w

          The transition away from fossil fuels is a global endeavor.

          8
          • Esther Wanjiku

            33 w

            Yes fossil fuels should be made more inaccessible

            6
            • Kevin

              33 w

              Great developments

              7
              • Saustine Lusanzu

                33 w

                Amazing move

                7
                • Peter Kamau

                  33 w

                  This is a bold move

                  7
                  • Rukia Ahmed Abdi

                    33 w

                    The UK and EU's push to end subsidies for foreign fossil fuel projects is a significant step toward aligning financial practices with climate goals. This effort reinforces the commitment to limit global warming and confronts the issue of domestic subsidies for the oil and gas industry. It also highlights the importance of international cooperation in combating climate change. While challenges lie ahead, including gaining consensus among major financiers, this move signifies a vital stride in the right direction

                    6
                    • Richard S

                      33 w

                      All the Way with🇺🇸 #Exim➡️ 🇲🇹

                      6
                      • George Kariuki

                        33 w

                        I hope that the UK and EU's proposal will help to build momentum for a global phase-out of fossil fuel subsidies.

                        7
                        • CHRIS NGATIA

                          33 w

                          This is great ... This will lead to phasing out of fossil fuels

                          9
                          • Edwin wangombe

                            33 w

                            This is a bold move... Making the product inaccessible will help phase them out

                            9
                            • zelda ninga

                              33 w

                              I hope the negotiation goes well.

                              9
                              • Princess

                                33 w

                                This aligns with the global shift towards sustainability and reducing carbon emissions.

                                21
                                • Edwin wangombe

                                  33 w

                                  @princess_nel_268 yes phasing fossil fuels out is the goal

                                  8
                                • mercy nduta

                                  33 w

                                  All subsidies in alignment with fossil fuels should be halted completely.

                                  21
                                  • Edwin wangombe

                                    33 w

                                    @mercy_nduta_984 I agree the more we make it difficult and expensive the easier it will be to phase them out due to lack of customers

                                    8
                                    • Patrick Kiash

                                      33 w

                                      @edwin_wangombe I concur with you.

                                      6
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