The export credit agencies (ECAs) of OECD countries should take more ambitious action to protect the climate after pouring 77% of their spending into fossil fuel projects between 2018 and 2020, a campaign group has argued.

OECD members pumped an annual average of US$41bn into fossil fuel exports during the three-year period, totalling almost five times the amount of financing provided for clean energy, according to NGO Oil Change International.

The report uses energy finance data for OECD members with ECAs which held assets above US$1bn between 2018 and 2020.

“This directly contradicts internationally agreed climate goals, including the Paris Agreement objective to align financial flows with the low-carbon energy transition,” says the organisation, which campaigns for an end to public financing for polluting energy sources.

ECAs have come under increased scrutiny for their role in fossil fuel finance in recent months, and campaign groups called for strict curbs on such financing as part of the  modernisation of the OECD framework on export credits, announced earlier this year.

OECD Arrangement participants are meeting in Paris this week to begin drafting the text of the updated framework.

It will likely result in an expansion of the types of projects classed as climate-friendly to include clean hydrogen and ammonia, low emissions manufacturing, zero and low emissions transport, and clean energy minerals and ores.

The OECD Arrangement’s announcement of the modernisation package did not include any measures on limiting oil and gas support, but nevertheless Oil Change International has repeated its call for OECD Arrangement countries to come up with “a robust proposal on an oil and gas prohibition” that would end export finance for the entire fossil fuel supply chain, building on the treatment of coal power.

In 2021 the OECD Arrangement participants agreed to formally ban export credit support for unabated coal-fired power plants, but the NGO says members should go further and extend the prohibition to cover coal mining, transport and associated infrastructure.

“OECD country negotiators have a critical opportunity to build on recent momentum to shift public finance out of oil and gas,” the report says.

This includes ensuring that the OECD agreement prohibits “favourable investment conditions” from being offered “to any project or technology derived from fossil gas” such as blue, grey and black hydrogen and ammonia, or projects that extend the lifetime of fossil fuel assets.

The report draws attention to the role of OECD ECAs in making large fossil infrastructure projects possible, noting that ECAs provide on average more international public finance for fossil fuels than any other kind of public finance institution.

The top three OECD fossil fuel export financiers between 2018 and 2020 were Canada, South Korea and Japan, who together provided an average of US$28.8bn per year.

While Canada set in motion a plan to end new public finance for fossil fuels abroad at the start of this year, and is likely to move US$1.4bn into clean energy, according to Oil Change International, Japan and Korea are lagging behind.

In the same period, 30% of all OECD export finance for energy went to fossil gas, and between 2012 and 2022, OECD export finance provided US$80.7bn in loans, guarantees and equity investments for new liquefied natural gas (LNG) export terminal projects currently built or under development, the report says.

Campaign groups have criticised the oil and gas sector for touting LNG as a clean source of energy, with Global Witness claiming that the term “natural gas” obscures its fossil fuel roots.

And discussing ECA-backed fossil fuel projects in the Global South, Oil Change International claims that rather than providing a stepping stone on the route to renewable energy, “most OECD ECA oil and gas support in low-income countries is for upstream and midstream projects, often focused on boosting exports instead of delivering on energy access”.

These projects include LNG exports from Mozambique and the Santos Basin Pre-Salt Pole oil and gas project off the coast of Brazil, which has received backing from the Netherlands’ Atradius and Italy’s Sace and will support the production of oil and gas in Brazil for 30 years.

Oil Change International also urges Australia, Norway, Turkey, Korea and Japan to sign up to the Clean Energy Transition Partnership, which aims to align international public support towards the clean energy transition and out of unabated fossil fuels, and calls on existing signatories to “lead efforts towards the adoption of an oil and gas prohibition under the OECD Arrangement”.