As the end of his term approaches, Joe Biden is doubling down on efforts to decline international financial support for oil and gas projects. Under pressure to strengthen his ecological footprint, his administration is working with international partners amidst intense debates within the Organisation for Economic Co-operation and Development (OECD). These discussions aim to transform the global energy financing landscape, focusing on renewable energies and limiting investments in fossil fuels. If an agreement emerges, it could mark a decisive turning point for U.S. climate commitments.
In the final moments of his term, Joe Biden is striving to reduce funding for oil and gas projects internationally. Working with international partners, an agreement is being negotiated at the Organisation for Economic Co-operation and Development (OECD) to push export credit agencies to withdraw nearly all financing related to the fossil fuel sector. This policy shift could have a significant impact on future projects, freeing up potential funds for renewable energies. The goal is to limit public funding and refocus on more sustainable solutions.
biden intensifies efforts to reduce funding for oil and gas projects
With the end of his term approaching, Joe Biden is making it a priority to reduce public support for oil and gas projects abroad. His administration is looking to finalize an agreement with international partners to have export credit agencies withdraw nearly all financing related to the fossil fuel sector. These discussions are taking place within the OECD, a coalition of thirty-eight generally wealthy countries that coordinate their export aid. The aim is to prevent countries from distorting trade relationships by massively subsidizing their own industries. This dynamic could mark a turning point for American institutions such as the Export-Import Bank, the last bastion of governmental support for fossil fuels. If the OECD agreement were adopted, it would compel this bank to halt the approval of loans for oil and gas infrastructure, ultimately putting an end to financial supports reaching billions of dollars. (source)
challenges related to the Export-Import Bank’s withdrawal of fossil fuel funding
One of the major obstacles lies in the resistance of some influential countries such as South Korea, which has a shipbuilding industry heavily dependent on clients from the oil and gas sector. Despite European efforts and support from the United Kingdom and Canada, who have already taken a giant step towards abandoning these export credits, persuading still hesitant nations remains complex. Internally, the Export-Import Bank often cites linguistic constraints in its charter that prohibit any sectoral discrimination, although some members contest this claim. This situation creates a certain discomfort, making decisions related to oil imports a hot topic. (source)
momentum towards increased support for renewables
In this context, an agreement from the OECD could effectively redirect export credits towards renewable projects, a necessary transition in the face of pressing climate challenges. By freeing up funds typically allocated to the fossil fuel sector, these credits could support innovation and the development of clean technologies. As the International Energy Agency warns of the need to stop nearly all new coal, oil, and gas projects to keep temperature increases below 1.5 °C, the reallocation of financial resources could prove essential. Although this effort is not a definitive solution, it would have a significant impact in reducing funding for the riskiest projects.
