International public financing for fossil fuel projects fell by as much as 78% last year across a coalition of 35 countries, according to a report released Tuesday by the International Institute for Sustainable Development (IISD) and partner NGOs Oil Change International and Friends of the Earth U.S.
The group of nations, which includes Germany, the United States, and several major economies, had pledged at the 2021 UN climate talks to end support for overseas coal, oil, and gas projects by the end of 2022 under the Clean Energy Transition Partnership (CETP). The deal was meant to redirect export credits, development finance, and aid toward renewable energy.
Before the pact, governments pumped billions into fossil fuels abroad, often undermining climate targets while locking poorer nations into carbon-heavy infrastructure. From 2019 to 2021, overseas fossil financing averaged more than $20 billion annually.
Why It Matters
The cuts show the pact is working, but researchers warn the progress is fragile. “Multilateral cooperation on climate and energy is more fragile than ever,” the report stated, noting that reduced fossil fuel financing has not yet been matched by a surge in renewable energy investment.
By 2024, international fossil funding dropped between $11.3 billion and $16.3 billion compared to pre-agreement levels.
However, CETP members including Germany, Switzerland, and the U.S. still approved $10.9 billion in new fossil projects since 2023.
The U.S. formally withdrew from the coalition, citing energy security and trade priorities, raising doubts about long-term global cooperation.
Future Outlook
Campaigners argue that unless loopholes are closed, countries could backslide amid geopolitical shocks and trade disputes. The IISD report called for stricter transparency rules, firmer timelines for phasing out fossil subsidies, and binding commitments to scale up clean energy finance especially for developing countries most in need.
With information from Reuters.
