International call to stop Sace’s support to fossil fuels

On the occasion of the Finance in Common summit, hosted by Cassa Depositi e Prestiti, ReCommon and Oil Change International, with the support of 44 Italian and international civil society organisations, wrote to Mario Draghi to ask for his personal commitment to ensure that SACE stops financing fossil fuels projects that add fuel to the fire of the climate crisis.

The Italian export credit agency – of which the Prime Minister was president in the ‘90s – is one of the biggest public financiers of fossil fuel projects, and in recent years has increased its support for oil & gas projects and companies. Since the Paris Agreement was signed, at least 20% of its portfolio has gone to the oil & gas sector promoting its global expansion: in five years SACE has guaranteed more than USD 18 billion for new fossil fuel projects.

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International call to stop Sace’s support to fossil fuels
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SACE will soon make public the approval of significant support for exporters involved in the giant Arctic LNG-2 project, while the French government is considering to distance itself from it because of its climate impact. SACE has also approved guarantees for the Coral South and Mozambique LNG projects and approval of guarantees for Rovuma LNG: gas mega-projects that are causing negative impacts for both the environment and the people of Mozambique are pending. The preliminary assessment for support to the East African Crude Oil Pipeline (EACOP) pipeline, which would cut through Uganda and Tanzania for 1,443 kilometres, is also underway.

SACE’s continued support for new fossil fuel projects is incompatible with the achievement of the goals set by the Paris Agreement. Last week the International Energy Agency reconfirmed in its World Energy Outlook that there can be no investment in new fossil fuel supplies in order to meet the goal of keeping global warming below 1.5°C.

«SACE has always been one of the pillars on which the so called “Sistema-Italia” rests, and in the aftermath of the pandemic its role has become even more central, choosing which companies and sectors to support through its programmes» comments Simone Ogno of ReCommon, «A support that has most often gone to the usual known ones, the Italian fossil fuel industry giants, and now the government has entrusted it with the keys to the Italian Green Deal: a disconcerting paradox» he adds.

The UK government – which shares the COP26 chairmanship with Italy – has already announced its decision to end international public support for fossil fuels, including export finance. In addition, the UK and the European Investment Bank are seeking to launch a joint statement with other governments and public financial institutions to achieve a halt to public funding for fossil fuels at COP26.

«If PM Draghi takes the 1.5°C warming limit seriously, he would put an immediate end to new export finance and other forms of public support for fossil fuel projects. The science is crystal clear that there cannot be any more investments in new fossil fuel projects in a 1.5°C scenario. Italy should join the UK and the EIB in committing to end public finance for fossil fuels and increase clean energy finance at COP26», concludes Laurie Van der Burg of Oil Change International.

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