A push to get rich nations to end their export credit support for overseas oil and gas projects has failed, after opposition from South Korea and Türkiye – and only late and lukewarm support from the United States.
The European Union, UK, Canada and Norway have been trying to get the 38 countries in the Organisation for Economic Co-Operation and Development (OECD) to agree to expand a 2021 ban on support for coal to the other planet-heating fossil fuels – oil and gas.
But South Korea and Türkiye opposed this effort, according to a document released by a South Korean government agency and seen by Climate Home. With pro-fossil fuel Donald Trump becoming US president on January 20, campaigners following the OECD talks said negotiators had given up trying to reach a deal.
An OECD spokesperson confirmed on Tuesday that governments had been “unable to reach an agreement to further restrict the provision of support for fossil-fuel related projects”, although “this issue may be revisited in the future”. Talks will continue in March but, because of Trump’s election as the incoming US leader, expectations of a breakthrough are low.
Missed chance
Climate campaigners lamented the lack of progress by OECD countries before Trump takes office. Kate DeAngelis, deputy director of international finance at Friends of the Earth US, said she had been “pretty hopeful that they were going to reach a deal” but “in the end, they failed”.
Dongjae Oh, gas lead at Korean campaign group Solutions for Our Climate, told Climate Home that “given the change in US administration, the 2024 momentum was a key moment for positive change – and it has been deeply regrettable to see talks stall, even with the majority of countries supporting the fossil fuel-finance restrictions”.
According to analysis from Oil Change International, the export credit agencies of OECD governments provide about $40 billion in support to foreign fossil fuel projects every year, with the vast majority going to oil and gas projects.
For example, before it promised to end support for fossil fuels in 2021, the UK’s export credit agency provided $300 million in loans to British companies working on a project to extract gas in Mozambique.
A joint UK-Canadian proposal and a separate one from the European Union would have committed governments – with some exceptions – to end their support for foreign projects that produce, transport, store, refine or distribute fossil fuels.
Opponents revealed
These OECD negotiations take place in secret, with no journalists or observers allowed to attend. But the Korean Trade Insurance Corporation (K-SURE) was present at the negotiations in March and June 2024. The organisation wrote up a summary of the talks and countries’ positions, which was released to a member of the Korean National Assembly – and an English translation has been seen by Climate Home.
It said that South Korea, Australia and Türkiye were opposed to the export credit proposals while the US, Japan and Switzerland were “reserved”.
According to K-SURE, South Korea argued that the ban would unfairly affect developing countries which are not members of the OECD and said there is a need to consider the pace of the green transition.
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Türkiye said that fossil fuels should be reduced only gradually, without disrupting energy supply chains and energy security, and Australia said it was “unable to accept the current proposal”.
In March, according to K-SURE, the US argued that options other than a blanket ban should be considered, while Japan pushed for more exceptions and Switzerland wanted additional time for discussions between Swiss ministries.
In June, K-SURE reported that most countries other than South Korea and Türkiye agreed on the “fundamental direction” of the ban but differences remained on the details.
“South Korea conveyed its dissenting opinion,” K-SURE noted, while Türkiye said the proposal was “not feasible” because of national and energy security.
Trump deadline
The talks continued – and, according to DeAngelis, intensified after the election of Donald Trump on November 5 last year “put a fire under the Biden White House to take this seriously and really engage in the talks”.
Oil Change campaign strategist Adam McGibbon told Climate Home there were several rounds of talks throughout November and December, but those talks broke down without agreement on December 20.
McGibbon, DeAngelis and Oh criticised Türkiye and especially South Korea for opposing the agreement. South Korea is a leading producer of the ships that carry liquefied natural gas, and its export credit agencies often loan companies the money to buy them.
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“Continuing to hinder global climate ambitions in the year ahead would be harmful both for domestic development and Korea’s global ambitions,” Oh said.
But DeAngelis believes the US should take “a lot of the blame” for only supporting the proposal late and for failing to persuade South Korea to agree to it, as she said the US had done for the previous OECD ban on coal finance.
Next steps
DeAngelis said that while the OECD talks seem to have stalled for at least the four-year period of Trump’s presidential term, climate campaigners would encourage countries to sign up individually to the Clean Energy Transition Partnership (CETP).
This initiative was launched at COP26 in 2021 and commits countries and public finance institutions to end overseas support for fossil fuels. Its members now number 41 after Norway and Australia joined at COP28. While the OECD only addresses export credit agencies, the CETP also includes support from development finance institutions and contributions to multilateral development banks.
Research released last August by the International Institute for Sustainable Development (IISD) found signatories were largely delivering on their promise, with their collective fossil fuel financing in 2023 amounting to $5.2 billion – a decrease of two thirds from the pre-CETP baseline. This, IISD said, was “a historic achievement”.
DeAngelis said campaigners are trying to get South Korea and Japan to join the CETP, particularly if there is a change of government in Korea after the current political turmoil triggered by the suspended president’s short-lived declaration of martial law.
The OECD spokesperson said that, when it comes to limiting international support for fossil fuel projects, any government “that wishes to do so is free to join those who have already voluntarily adopted more restrictive terms and conditions for such transactions”.
(Reporting by Joe Lo; editing by Megan Rowling)
The post Bid to end export credit help for oil and gas fails, with Korea and Türkiye opposed appeared first on Climate Home News.
Bid to end export credit help for oil and gas fails, with Korea and Türkiye opposed
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Middle East war is another wake-up call for fossil fuel-reliant food systems
Lena Luig is the head of the International Agricultural Policy Division at the Heinrich Böll Foundation, a member of the Global Alliance for the Future of Food. Anna Lappé is the Executive Director of the Global Alliance for the Future of Food.
As toxic clouds loom over Tehran and Beirut from the US and Israel’s bombardment of oil depots and civilian infrastructure in the region’s ongoing war, the world is once again witnessing the not-so-subtle connections between conflict, hunger, food insecurity and the vulnerability of global food systems dependent on fossil fuels, dominated by a few powerful countries and corporations.
The conflict in Iran is having a huge impact on the world’s fertilizer supply. The Strait of Hormuz is a critical trade route in the region for nearly half of the global supply of urea, the main synthetic fertilizer derived from natural gas through the conversion of ammonia.
With the Strait impacted by Iran’s blockades, prices of urea have shot up by 35% since the war started, just as planting season starts in many parts of the world, putting millions of farmers and consumers at risk of increasing production costs and food price spikes, resulting in food insecurity, particularly for low-income households. The World Food Programme has projected that an extra 45 million people would be pushed into acute hunger because of rises in food, oil and shipping costs, if the war continues until June.
Pesticides and synthetic fertilizer leave system fragile
On the face of it, this looks like a supply chain issue, but at the core of this crisis lies a truth about many of our food systems around the world: the instability and injustice in the very design of systems so reliant on these fossil fuel inputs for our food.
At the Global Alliance, a strategic alliance of philanthropic foundations working to transform food systems, we have been documenting the fossil fuel-food nexus, raising alarm about the fragility of a system propped up by fossil fuels, with 15% of annual fossil fuel use going into food systems, in part because of high-cost, fossil fuel-based inputs like pesticides and synthetic fertilizer. The Heinrich Böll Foundation has also been flagging this threat consistently, most recently in the Pesticide Atlas and Soil Atlas compendia.
We’ve seen this before: Russia’s invasion of Ukraine in 2022 sparked global disruptions in fertilizer supply and food price volatility. As the conflict worsened, fertilizer prices spiked – as much from input companies capitalizing on the crisis for speculation as from real cost increases from production and transport – triggering a food price crisis around the world.
Since then, fertilizer industry profit margins have continued to soar. In 2022, the largest nine fertilizer producers increased their profit margins by more than 35% compared to the year before—when fertilizer prices were already high. As Lena Bassermann and Dr. Gideon Tups underscore in the Heinrich Böll Foundation’s Soil Atlas, the global dependencies of nitrogen fertilizer impacted economies around the world, especially state budgets in already indebted and import-dependent economies, as well as farmers across Africa.
Learning lessons from the war in Ukraine, many countries invested heavily in renewable energy and/or increased domestic oil production as a way to decrease dependency on foreign fossil fuels. But few took the same approach to reimagining domestic food systems and their food sovereignty.
Agroecology as an alternative
There is another way. Governments can adopt policy frameworks to encourage reductions in synthetic fertilizer and pesticide use, especially in regions that currently massively overuse nitrogen fertilizer. At the African Union fertilizer and Soil Health Summit in 2024, African leaders at least agreed that organic fertilizers should be subsidized as well, not only mineral fertilizers, but we can go farther in actively promoting agricultural pathways that reduce fossil fuel dependency.
In 2024, the Global Alliance organized dozens of philanthropies to call for a tenfold increase in investments to help farmers transition from fossil fuel dependency towards agroecological approaches that prioritize livelihoods, health, climate, and biodiversity.
In our research, we detail the huge opportunity to repurpose harmful subsidies currently supporting inputs like synthetic fertilizer and pesticides towards locally-sourced bio-inputs and biofertilizer production. We know this works: There are powerful stories of hope and change from those who have made this transition, despite only receiving a fraction of the financing that industrial agriculture receives, with evidence of benefits from stable incomes and livelihoods to better health and climate outcomes.
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Inspiring examples abound: G-BIACK in Kenya is training farmers how to produce their own high-quality compost; start-ups like the Evola Company in Cambodia are producing both nutrient-rich organic fertilizer and protein-rich animal feed with black soldier fly farming; Sabon Sake in Ghana is enriching sugarcane bagasse – usually organic waste – with microbial agents and earthworms to turn it into a rich vermicompost.
These efforts, grounded in ecosystems and tapping nature for soil fertility and to manage pest pressures, are just some of the countless examples around the world, tapping the skill and knowledge of millions of farmers. On a national and global policy level, the Agroecology Coalition, with 480+ members, including governments, civil society organizations, academic institutions, and philanthropic foundations, is supporting a transition toward agroecology, working with natural systems to produce abundant food, boost biodiversity, and foster community well-being.
Fertilizer industry spins “clean” products
We must also inoculate ourselves from the fertilizer industry’s public relations spin, which includes promoting the promise that their products can be produced without heavy reliance on fossil fuels. Despite experts debunking the viability of what the industry has dubbed “green hydrogen” or “green or clean ammonia”, the sector still promotes this narrative, arguing that these are produced with resource-intensive renewable energy or Carbon Capture and Storage (CCS), a costly and unreliable technology for reducing emissions.
As we mourn this conflict’s senseless destruction and death, including hundreds of children, we also recognize that peace cannot mean a return to business-as-usual. We need to upend the systems that allow the richest and most powerful to have dominion over so much.
This includes fighting for a food system that is based on genuine sovereignty and justice, free from dependency on fossil fuels, one that honors natural systems and puts power into the hands of communities and food producers themselves.
The post Middle East war is another wake-up call for fossil fuel-reliant food systems appeared first on Climate Home News.
Middle East war is another wake-up call for fossil fuel-reliant food systems
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