World to Biden: Stop Financing Coal, Oil and Gas Abroad

NRDC and hundreds of other organizations around the world have just submitted a letter calling on the Biden Administration to immediately end all US public financing for fossil fuels, including “natural” gas.

NRDC and hundreds of other organizations around the world have just submitted a letter calling on the Biden Administration to immediately end all US public financing for fossil fuels, including “natural” gas. The letter asks the Biden Administration to make good on its climate executive order, which directed agencies to end ”carbon-intensive” finance, a commitment that Climate Envoy John Kerry characterized as “a plan for ending international financing of fossil fuel projects with public money.”

Over 430 organizations are represented, spanning six continents. This include representation from countries where the US government is already financing or planning to finance fossil fuel projects. US public finance for overseas fossil fuel projects averaged more than $4 billion annually over the past decade, according to Oil Change International, at times exceeding $10 billion in a single year (primarily through the US Export-Import Bank and the US Development Finance Corporation, formerly the Overseas Private Investment Corporation). Our organizations are calling for a policy that restricts US public finance for all fossil fuels, including gas, which received high volumes of support under both the Obama and Trump administrations.

Promoting Gas and Other Fossil Fuels Will Impede Global Decarbonization

By promoting fossil fuel projects overseas, especially gas infrastructure, the US is making it harder for countries to decarbonize. We have to stop subsidizing fossil fuel companies at the expense of our climate. It’s irrational for an administration so focused on climate change to promote LNG facilities. Those facilities could waste billions in taxpayer dollars and would lock countries into high-emissions pathways. Why would we promote fossil fuel infrastructure in Vietnam, for example, instead of competing with European and Chinese businesses that are dominating the renewables market there?

While gas exporters and suppliers of gas turbine equipment argue gas is a necessity for decarbonization, the data today demonstrates that promotion of gas exports has become a roadblock to decarbonization and renewable energy deployment globally, while significantly increasing U.S. domestic emissions. Increasing US LNG exports and associated infrastructure will drive up future emissions, divert resources from clean energy and decarbonization efforts, and deepen developing countries’ foreign debt obligations and reliance on fuel imports with volatile prices.

Gas expansion plans are a major impediment to renewables development and decarbonization, not a “bridge” to a clean energy future. Gas investments will continue crowding out renewables development and decarbonization efforts abroad. Most nations don’t have legacy gas infrastructure like the United States. And building severely underutilized gas infrastructure would be a reckless use of resources given the rapidly falling costs of clean alternatives.

In Vietnam, more gas contracts would lock-in overuse of gas at certain contracted utilization levels even when renewables could be used, and waste government’s limited public financial resources, leaving less room for renewables financing and deployment. Pakistan already faces an overcapacity problem and is seeking to move away from fossil fuel imports, while dealing with debt problems stemming in part from the volatility and high prices of imported fuels. In Bangladesh, the government’s 8th five year plan acknowledged that continued subsidization of fossil fuel use and inadequate incentives to renewable energy have adversely affected demand and supply of renewable energy. The US should not use scarce government financial or diplomatic resources promoting gas infrastructure, particularly for LNG, as that will impede global decarbonization and the achievement of net-zero emissions no later than 2050.

Support Clean Energy Exports from America, Don’t Subsidize the Export of Our Pollution

U.S. Government Support for gas expansion undermines America’s credibility. The Administration must recognize the conflict of interest between US gas exporters and equipment suppliers and long-term power sector interests in home countries. LNG expansion is not in the interest of countries as more cost-effective and clean options abound. The US should not promote gas exports or equipment or assist companies with gas promotion, as it does not contribute to decarbonization in developing countries. The US should be using policy and financial tools for accelerating renewables deployment, upgrading grids, raising energy efficiency, and introducing storage options to meet the future dispatch challenge of the high renewable penetration we need to meet our net zero climate objectives.

If the Biden Administration provides government support for new fossil fuel projects, especially for LNG exports, this will be criticized by social justice groups, environmental groups and others within the US and abroad as contributing to the climate crisis and increasing developing country government debts to pay for unnecessary fossil infrastructure and subsidizing American companies lagging in the global energy transition. (For example: ExxonMobil, AES Corporation, and GE are involved in US gas projects overseas, and there are reports Exelon may be involved in a gas project in Vietnam as well. Some of these projects have expressed interest in receiving US government support. The ExxonMobil gas project in Mozambique has been approved for billions in political risk insurance and financial support from EXIM and DFC.) Financial or diplomatic support for fossil fuel infrastructure overseas will be perceived as pressuring countries to adopt high-carbon infrastructure, at the expense of decarbonization efforts in developing nations.

The US should support nations through US programs for renewables deployment, grid improvement, storage, and energy efficiency. More gas is not needed for renewables deployment. In many countries, there is already sufficient dispatchable capacity to reliably integrate renewables assets. We have years—if not a decade or more—before most grids achieve high levels of renewable penetrations (80 percent or more). Investments in storage technologies, energy efficiency and demand response are more cost-effective ways to further reduce total loads and provide additional flexibility and load shifting services, without building expensive gas infrastructure and increasing a nation’s emissions.

Gas Loopholes in a Fossil Finance Ban Will Harm the Climate

Life-Cycle Emissions from additional gas infrastructure, especially LNG, are incompatible with a 1.5 or 2°C trajectory. Liquefied Natural Gas (LNG) generates substantial levels of carbon and methane emissions, and the GHG profile of gas is incompatible with a 2°C world, much less a 1.5°C world. NRDC released a new report in December 2020 summarizing the findings from a number of studies, including from DOE, about the lifecycle emissions of US LNG exports. For Europe, Japan, China, India, the average emissions rate from gas is substantially higher than the rates required to be consistent with the IEA’s Sustainable Development Scenario (a 1.8°C pathway with a one-third probability of exceeding this threshold). The UN Environment Program’s Production Gap report found that a production trajectory consistent with limiting warming to 1.5C would require gas production to begin declining immediately. New investment in gas, especially given the high levels of flaring and leakage reported in certain basins, could result in little or no near-term climate benefit - even in coal-heavy regions - and will hinder the ability for regions to decarbonize in the long term by diverting investment away from truly clean energy alternatives. Given these facts about the negative climate impacts of gas, the US should ensure that public dollars are not wasted subsidizing more fossil fuel companies, by issuing clearer restrictions on what the US government and financial institutions can finance overseas.

Time to Create a New Global Standard for Ending Fossil Finance

if the US announces an immediate end to its international support for fossil fuels, this will influence many other governments to do the same, and could help eliminate tens of billions of dollars annually in support for the fossil fuel industry. Analysis shows that G20 governments alone have provided at least $77 billion annually in public finance for fossil fuels, even after the Paris Agreement was reached. A commitment to end fossil fuel finance would enable the US to join forces with other governments that have taken steps in this direction. The UK— the host of this year’s G7 Summit and UN climate negotiations—is the first major economy to announce such a policy across the whole of government. Prime Minister Boris Johnson announced an end to public finance for fossil fuel projects overseas in December 2019, and following a public consultation on the topic, the government is expected to publish its new policy over the next few weeks. A joint commitment from the US and UK would put further pressure on peers providing large volumes of finance for highly-polluting activities such as Germany, Japan, Canada, South Korea, and China, and would build momentum for climate action toward the UN climate negotiations in November. If the commitment comes soon, it could also significantly influence the Asian Development Bank’s review of their energy lending policy, as the US is the Bank’s largest shareholder alongside Japan.


There’s no time to waste. Here are the demands from communities around the world to the Biden Administration on how to clean up America’s role subsidizing fossil fuel projects overseas:

Scope of Restrictions on Financing for Fossil Fuels:

  • Cover all U.S. public finance institutions, including the U.S. Export-Import Bank, U.S. International Development Finance Corporation, U.S. Trade and Development Agency, Millennium Challenge Corporation, United States Agency for International Development, and other relevant institutions. The plans should also apply to U.S. participation in multilateral institutions including the MDBs and the IMF.
  • Include a strategy to partner with the UK, the EU, and other front-running countries to secure additional commitments from other governments and public finance institutions to end their public finance for fossil fuels, including at the OECD Export Credit Group and the second Finance in Common Summit.
  • Apply across the oil, gas, and coal value chain (i.e., include upstream, midstream, and downstream segments), as well as for associated facilities and related infrastructure, and should apply to all funding streams and modalities, including indirect financing provided through financial intermediaries, and, in the case of the MDBs, development policy finance;
  • Scale up international support for a just transition away from fossil fuels, providing support for workers and communities affected by the transition, for decommissioning and repurposing sites, and replacing fossil fuel with clean energy.
  • Exclude new gas infrastructure from eligibility for all future government financing, except in extremely limited and well-defined, and closely regulated circumstances.[1] Gas is not a climate solution, nor is it a “bridge fuel.” Rather, it diverts resources from less polluting, economically advantageous renewable, efficiency, storage, and other solutions that truly support decarbonization. Nor is the case for gas as a tool for energy access compelling. Recent research has shown that public finance for gas has seldom delivered significant energy access benefits, and alternatives are often more cost-effective. The UN Sustainable Energy for All initiative recently concluded that “financing of fossil fuel projects as a means of closing the energy access gap should be terminated” because it locks countries “into decades of carbon emissions, import dependency and stranded asset risk.”

Timeline for Implementing Restrictions on Fossil Fuels:

  • Develop plans for ending fossil fuel finance across all institutions as soon as possible, within the 90-day timeframe. While the Executive Order does not specify a deadline for Treasury to develop a strategy on the use of “voice and vote,” or a deadline for the specified agencies to articulate a plan to promote ending international financing of fossil fuel-based energy, we ask that strategies and implementation plans regarding “voice and vote” and international diplomacy also be completed within a 90-day timeframe, similar to what was specified for other areas such as the development of the “climate finance plan.”
  • Clear Treasury guidance on the MDBs should be released as soon as possible in order to establish the U.S. position ahead of the Asian Development Bank’s forthcoming energy policy review, with a draft policy due to be released within weeks.
  • Have all measures take effect soon after the completion of the plan; while also seeking comment on ways to strengthen the plans further.
  • Conduct a public consultation process aimed at ensuring the outcome is as ambitious as possible.


[1] While the prospect is highly unlikely, very rare exceptions for fossil fuel projects intended solely for domestic energy consumption only in Least Developed Countries could be considered, but only after a thorough scenario analysis of all viable alternatives for meeting energy access demonstrates clear necessity and no viable alternatives. Such an assessment must  consider  price competitiveness over the full lifetime of the project from conception to full decommissioning, all costs of externalities, safety, and adherence to international best practices and environmental and social due diligence. Such conditions have not been demonstrated for any existing projects.

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