Why Is the Export-Import Bank Still Funding Fossil Fuels?

It was supposed to be a turning point.

Back in 2021, the United States, the UK, and 37 other countries and public finance institutions seized the headlines for a day at the UN’s COP 26 climate conference with the launch of the Clean Energy Transition Partnership.

The news here was the partners’ pledge to stop using new public money to support [ahem, unabated] fossil fuel energy projects abroad by the end of 2022 and prioritize clean energy instead. It was a big deal for the climate movement and seemed a mark of real progress at the time. Last year, Norway and Australia joined the group at COP 28, expanding the partnership to 41 signatories.

This is the point where, for most people, two thoughts come to mind in quick succession.

1.  Wait a minute. My country was using taxpayer money to help support fossil fuel projects abroad?
2.  Well, at least that’s over now, right?

 

Well, yes and not exactly.

If you live in the US or many other countries, your taxes have often been funneled to fossil projects through shady agencies that don’t get a lot of attention. Often to the tune of billions of US dollars per year.

These agencies are called export credit agencies, and the good news is that the Clean Energy Transition Partnership is already shifting over $5 billion per year from fossil fuels to clean energy projects around the world.

But not all of them have stopped funding fossil fuels. One of the biggest, the Export-Import Bank of the United States, also known as “Ex-Im Bank,” is still bankrolling fossil fuel projects deepening the climate crisis.

It’s time for that to change.

Who ARE these agencies?

If you haven’t heard of Ex-Im Bank or export credit agencies, you’re in good company. But if you’re a US company trying to work on critical infrastructure projects abroad, Ex-Im Bank is an important part of your expanding your business.

Export credit agencies are government institutions or private companies acting on behalf of governments that support domestic industries in their investments abroad. All sorts of scenarios might make it risky for a company to invest in a foreign country, such as economic conditions, political instability, or even climate risks. Export credit agencies offer mechanisms to reduce some of that risk, providing a more favorable investment environment for a domestic company looking for funding overseas.

And it isn’t always a bad thing. Just last year, Ex-Im Bank provided a direct loan of over $900 million to support solar energy power plants in Angola.

The catch is that the bank spent about the same amount to support fossil fuels over the same time period, and in early 2024, Ex-Im Bank voted to extend $500 million in support for an oil and gas project in Bahrain, a project that had already prompted two Ex-Im climate advisers to quit their jobs in the planning phase.

All of this is also happening in defiance of clear opposition to this kind of lending from the White House and some members of Congress. (And if you’re wondering how the bank can keep doing this, well, you’re not alone.)

That’s not to mention the time period before the Clean Energy Transition Partnership. Ex-Im Bank spent almost 20 times more money on fossil fuels than clean energy between 2017 and 2021.

The science is clear: we cannot continue building new fossil fuel infrastructure, and agencies like Ex-Im Bank have to stop funding fossil fuels.

Wow, that’s bad

The bottom line here is that Ex-Im Bank is using its public authority and US taxpayer dollars to further the climate crisis, expanding fossil fuels and devastating communities abroad.

Sadly, the US isn’t the only culprit. If you’re from Italy, South Korea, Japan, or many other countries, your government’s export credit agency is doing the same.

We’re starting with Ex-Im Bank. It’s time to take them out of the shadows and make them hear our demands.

Credit agencies get away with this kind of practice because few people even know their name, much less what they do. They’re not used to public scrutiny and well, it’s time to change that.

If you’re near Washington, DC on the morning of June 6, join Climate Reality and partner organizations as we greet participants at Ex-Im Bank’s 2024 Annual Conference with one message:

Stop Funding Fossil Fuels.

If you’re not in DC, take action to send this message to the bank’s leadership digitally.