FOR IMMEDIATE RELEASE
Contact:
Laurie van der Burg, Oil Change International, laurie@priceofoil.org
Regine Richter, Urgewald (Germany), regine@urgewald.org
Anna-Lena Rebaud, Amis de la Terre (France), anna-lena.rebaud@amisdelaterre.org
Alexandra Goritz, Germanwatch e.V., goritz@germanwatch.org
Germany joins commitment to end international oil, gas, and coal finance, bringing up figure for potential finance shifted to USD 21.7 billion a year
GLASGOW — Last Thursday on November 4, a group of countries and institutions committed to end international public finance for unabated oil, gas, and coal by the end of 2022 at the United Nations climate conference in Scotland (COP26). Yesterday the Netherlands joined the initiative and today Germany and El Salvador confirmed that they are joining too. This increases the number of signatories to 29 and the annual average of potential public finance shifted out of fossil fuels and into clean energy to at least USD 21.7 billion per year.
Today’s announcement means that Germany’s government-backed export finance (called Hermes Cover and administered by Euler Hermes Deutschland AG), the German development bank (KfW), and the German Investment and Development Corporation (DEG), jointly responsible for USD 2.8 billion a year in public finance for fossil fuels between 2018 and 2020, will need to end financing for fossil fuels by the end of 2022. This includes gas finance.
France has not yet signed the statement. If France does join, this would increase the potential amount of annual public finance directly shifted to USD 22.1 billion, an amount equal to 35% of annual public finance for fossil fuels provided by G20 countries and the Multilateral Development Banks (MDBs) between 2018 and 2020.
This would also help raise pressure on the countries that are lagging behind. Laggards include Japan ($10.9 bn/yr), Korea ($10.6 bn/yr), and China ($7.6 bn/yr), which are the largest providers of international public fossil fuel finance in the G20 and together account for 46% of G20 and MDB finance for fossil fuels. Spain, Belgium, and the European Bank for Reconstruction and Development (EBRD), some of other largest remaining EU fossil fuel financiers, are also missing.
Shifting public finance for energy out of all fossil fuels and into clean energy is an urgent task. The International Energy Agency (IEA) says that to limit global warming to 1.5°C, 2021 needs to mark the end of new investments in not just coal, but also new oil and gas supply. After a wave of commitments to end international coal finance this year, last week’s commitment is the first international political commitment that also addresses public finance for oil and gas.
Quotes:
Laurie van der Burg, Global Public Finance Campaign Co-Manager at Oil Change International:
“It is great to hear that Germany today joined the commitment to end international public finance for oil, gas and coal after all. This means Germany will also need to end public support for gas infrastructure. The science is clear that without relying on large-scale deployment of unproven and expensive carbon removal technologies, expanding gas infrastructure is incompatible with limiting global heating to 1.5ºC.”
Regine Richter, Public Bank Campaigns lead at Urgewald, said:
“It is good news that Germany decided not to become the last resort for fossil fuel support via public money and guarantees. The strength of this commitment will now depend on what the details will look like and how quickly Germany stops its support for fossil fuels.”
Alexandra Goritz, Policy Advisor for Development Banks and Climate, GermanWatch:
“It is a strong signal that Germany is joining the coalition to end international fossil fuel financing. The immediate implication is that KFW and Hermes Cover will need to stop funding gas and revise their strategies. Particularly for developing countries it is important to not fund outdated fossil fuel technology but support them in a green and just transition.”
Anna-Lena Rebaud, Climate and Just Transition Campaigner at Friends of the Earth France:
“Last week at the COP, Emmanuel Macron once more lectured other countries and presented France as a climate leader. Yet this government plans on supporting gas production until 2035, and is still considering supporting TotalEnergies’ huge gas project in the Russian Arctic, Arctic LNG 2! If Macron really is as ambitious as he pretends, why is he not joining an initiative with the potential power to shift huge amounts of public finance towards clean energy? We urge the French government to follow Germany’s example and commit to ending all public support to oil and gas by the end of 2022.”
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Notes to Editors:
- The joint statement was launched at the UK pavilion at 10.30 GMT 4 November 2021.
- The countries and the institutions that have signed the joint statement include: Agence Française de Développement (AFD), Albania, Canada, Costa Rica, Denmark, Banco de Desenvolvimento de Minas Gerais (BDMG), The East African Development Bank (EADB), El Salvador, Ethiopia, Fiji, Finland, Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO), Germany, Mali, Marshall Islands, New Zealand, Moldova, Portugal, Slovenia, South Sudan, Switzerland, the European Investment Bank, The Gambia, The United Kingdom, The United States and Zambia.
- The estimate of a direct $21.7 billion shift is based on annual average international public finance for fossil fuels from the participating countries and institutions from 2016-2020. Data for Germany, Italy, AFD, Canada, EIB, the United Kingdom and the United States are from Oil Change International’s Shift the Subsidies Database. Data for Denmark, Finland and Sweden is taken directly from government reporting. No data was available for other donor signatories. Due to incomplete reporting, this is very likely an underestimate.
- “Past Last Call” is OCI and Friends of the Earth US’s latest briefing analyzing G20 public finance figures and trends. It shows that between 2018 and 2020 G20 governments and public finance institutions provided at least USD 188 billion in public finance for fossil fuels.
- In September 2021, 200+ CSOs launched a statement calling on world leaders to end public finance for fossil fuels in 2021 and launch a joint commitment to do so at COP26.
- In June 2021, 100+ Economists called on the G7 to put an end to not only coal finance, but also oil and gas finance in 2021.
- 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.
- A comment piece by Harro van Asselt, professor at University of Eastern-Finland Law School and affiliated researcher at Stockholm Environment Institute, and Gita Parihar, an environmental advocate and in-house consultant for environmental NGOs and the UN, and a board member of the Climate Justice Fund, suggests that the ruling in the Shell court case should be a wake-up call for governments to end fossil fuel support.
- In October in the lead up to COP26, a global group of campaigners organized Climate Debt Justice Days of Action calling on governments and lenders to take decisive action to address the debt problem in the global south and to provide grants, not loans in order to free up resources to enable countries to respond to the climate crisis.