Oxfam calls for a green overhaul of the US Export-Import Bank

As mounting climate concerns cause extreme weather events, and global efforts intensify to keep warming below 1.5°C, Oxfam calls on the Export-Import Bank of the United States (EXIM) to cease funding fossil fuel projects to instead champion just and clean energy initiatives.

In a new research report published today, “Alignment of the United States Export-Import Bank with the U.S. climate and development policy objectives,” Oxfam America and Perspectives Climate Research found that EXIM has financed hundreds of fossil fuel projects globally since its founding and continues to finance the most climate damaging sectors: at least 60% of its current $40+ billion portfolio directly supports fossil fuel-producing or dependent sectors like oil, gas, and aviation.

Despite a requirement in its charter to devote 5% of its funding to renewable energy, energy efficiency, and storage, in 2021, only $72 million – or 1.25% of EXIM’s new authorizations – were considered environmentally beneficial, and only 0.2% were for renewable energies.

“EXIM has long dragged its feet on shifting its portfolio to support the energy transition that the U.S. needs, both to remain competitive in the global economy and to stop locking in dirty fossil fuel infrastructure propelling the world to climate catastrophe,” said Daniel Mulé, Oxfam America’s Policy and Program Manager for Just Energy Transition and Extractives. “As countries worldwide rise to meet the challenges of the climate crisis, our American institutions must follow suit.”

EXIM’s trajectory also runs counter to the Biden Administration’s climate goals and leaves the U.S. trailing behind international counterparts like European export credit agencies (ECAs). Denmark’s ECA, for example, has been supporting renewable energies with at least $1 billion, or 75% of its portfolio, every year since 2015.

“Taking the energy transition seriously and fully aligning EXIM with the U.S. climate commitments would be a clear win-win situation for Democrats and Republicans, for exporters and foreign buyers, as well as for present and future generations,” said report co-author Igor Shishlov, Head of Climate Finance at Perspectives Climate Research.

“Phasing out support of the fossil fuel industries and supporting renewables would greatly boost the competitiveness of American clean tech companies, bolster the role of the U.S. as a leader in the global transition towards clean energy, and lead to more and better paying jobs for Americans in the clean energy sector.”

/ENDS

Notes to Editors

View or download the full research report and policy brief

The report includes recommendations for EXIM, Congress and the Executive Branch, and other government agencies such as the Treasury Department. Key recommendations include:

FOR EXIM:

• Adopt a clear fossil fuel exclusion policy in line with international commitments of the U.S., including the Glasgow Statement on International Public Support for the Clean Energy Transition.
• Substantially scale up clean energy finance to enable countries to transition from (or leapfrog) gas and other fossil fuels.
• Implement the recommendations of the subcommittee on climate, which include: a definition of climate finance; broad commitment to upgrade EXIM climate goals and include a net-zero target by 2050 at the latest (like other agencies) that would create significant opportunities to increase climate finance.

FOR THE BIDEN ADMINISTRATION:

• Revive the American spirit of “mission orientation” of U.S. government agencies, including EXIM, by placing a just energy and climate transition in the U.S. and abroad at the center of the agencies’ mandates. This must entail considering absolute limits of fossil fuel production in the U.S. and globally.

FOR CONGRESS:

• Fundamentally reshape and increase the flexibility in EXIM’s mandate by placing a just energy and climate transition at the center of the agency’s charter.
• Amend the Export Import Bank Act of 1945 and EXIM’s charter to:
• Change the nondiscrimination clause in EXIM’s charter (that allows it to continue its support to the fossil fuel industry by claiming that they cannot discriminate against any industry) such that EXIM can explicitly adopt both positive discrimination (i.e., incentives for climate-friendly exports) and negative discrimination (i.e., fossil fuel restriction and exclusion policies) based on climate considerations.
• Explicitly prohibit it from supporting fossil fuel projects, including companies with value chains that significantly rely on fossil fuels.
• Require it to provide more information about its lending practices, such as the criteria used to evaluate loan applications, the terms of the loans, and the identities of the borrowers.