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Export credit agencies (ECAs) in the world’s biggest economies more than halved support for coal financing between 2018 and 2020 but support for the gas industry has jumped by almost US$10bn, according to new research.

Oil Change International and Friends of the Earth US, two environmental campaign groups, released figures on October 28 showing that over the three-year period ECAs supported fossil fuel financing to the tune of US$40.1bn per year, on average.

The figures only include the agencies of G20 nations and may significantly underestimate the scale of support because of difficulty gaining access to deal information in some countries.

The campaign groups are calling for governments to make much stronger commitments on ending public finance and ECA support for fossil fuels ahead of the Cop26 conference in Glasgow, beginning on October 31, when world leaders will descend on the Scottish city to discuss action on climate change.

“Governments should be implementing policies that exclude future fossil fuel finance through export credit agencies along with the rest of their public finance institutions and implement ambitious targets for responsible and community-minded renewable energy finance instead,” Bronwen Tucker, public finance campaign manager at Oil Change International, tells GTR.

The biggest backers of fossil fuel financing are ECAs in Canada, South Korea, Japan and China.

Renewable energy support has grown but remains paltry, with just 7% of total energy support from ECAs going to the sector between 2018 and 2020, according to the two groups’ report.

Total support for renewables rose to US$10.6bn between 2018 and 2020 compared to totals of around US$7.5bn in 2012-14 and 2015-17. Backing for coal projects slumped from US$23.8bn in 2015-17 to US$11.7bn in 2018-20, falling from 14% of the total share of ECA support for energy to 8%.

The figures are likely to be revised upwards later as data is updated through freedom of information requests. Of the support instruments identified by Oil Change International and Friends of the Earth US, 41% were loans and 33% guarantees.

Coal dropping, gas rising

Coal support is likely to drop further because the top providers – China, Japan and South Korea – have pledged to end public export finance for coal-fired plants overseas.

Earlier in October the OECD Arrangement, a loose agreement that sets standards for export credits, introduced a ban on support for new or existing unabated coal power plants. The Asian Development Bank has confirmed a similar ban covering all coal financing, including mining and transport.

But the figures in the new report confirm that scrubbing coal from export credit programmes will only make a small dent in overall fossil fuel support due to the huge sums going to the gas industry. G20 ECAs backed US$54.3bn in financing for the fossil fuel in 2018-20 compared to US$44.7bn in the prior two-year period.

Gas won 37% of all G20 ECA financing for energy over the three years, by far the most favoured energy source.

Natural gas emits less carbon dioxide than coal when burned to create energy, according to the US Energy Information Administration, but still creates about 53kg of the greenhouse gas per unit of energy output. Campaigners hotly dispute that gas has a role as a “transition” fuel.

“Promising to end coal finance was bold climate leadership a decade ago. The leaders of wealthy countries need to know that leadership at Cop26 means immediate joint action on oil, gas, and climate finance,” Tucker says in a statement accompanying the report.

Taking into account other public finance sources and multilateral development banks, G20 countries provided at least US$63bn a year to coal, gas and oil projects between 2018 and 2020, according to the groups.

But the report brands ECAs “the worst public finance actors” because their support for fossil fuels was 11 times that given to green energy.

Dirty fuels such as coal, oil and gas are still used for the vast bulk of electricity generation globally, even as the cost of some types of renewable energy tumbles.

But Tucker rejects the argument that financing for fossil fuels will still be needed into the future, particularly in developing countries where investment in new facilities may be lower.

“G20 public finance institutions definitely need to step in to finance much more energy in developing countries, it’s just that this finance should be for renewable energy, which is already cost-competitive with fossil fuels, even when storage is included,” she says.

Tucker also points out that the only developing country in the top 20 of fossil fuel public finance recipients is Mozambique, where ECA-backed natural gas extraction projects are intended for export rather than domestic consumption.

While several ECAs have announced plans to axe support for coal, UK Export Finance is the first to rule out almost all future financing for all fossil fuel types. Earlier this year Export Development Canada became the first ECA to lay out a detailed plan of reaching net zero greenhouse gas emissions by 2050.