Rome, 04.11.2024 – One week before the start of COP29 in Baku, Azerbaijan, ActionAid Italy, Focsiv, Laudato Si’ Movement, ReCommon and WWF Italy – with the support of Both Ends, Counter Balance, Friends of the Earth U.S., Oil Change International, The Corner House – call once again on the Italian government to work for ending international public financing of fossil fuels, only in favour of public investment for a just energy transition.
The request recalls the responsibilities deriving from the commitments made by Italy with the Paris Agreement (COP21) and during the subsequent Climate change conferences, especially with the Clean Energy Transition Partnership (CETP) of 2021 (COP26)[1] – which concerns public financial institutions – and in line with the transition away from fossil fuels sanctioned by COP28 in Dubai[2]. Already last year, Italian civil society organisations, supported by 29 organisations from the African continent, addressed the government with a similar appeal[3], unfortunately without receiving a response yet.
As pointed out by the International Institute for Sustainable Development (IISD) in its report Out With the Old, Slow With the New[4], international public financing of fossil fuels by CETP signatories is declining: in 2023, the original signatories allocated a total amount of USD 5.2 billion for fossil fuels, a decrease of between USD 10 and 15 billion compared to the 2019-2021 annual average.
Italy, despite the progress made with the decrease in volumes financed by Cassa Depositi e Prestiti (CDP) and SACE, continues to be the number one public financier of fossil fuels in Europe and the fifth globally, as revealed by the publication Public Enemies: Assessing MDB and G20 international finance institutions’ energy finance[5], edited by Friends of the Earth U.S. and Oil Change International. Hoping that this European primacy will be relinquished as soon as possible, the figure is also confirmed by Both ENDS, Counter Balance and Oil Change International in their joint EU ECA fossil fuel phase-out tracker[6], which focuses on European export credit agencies, including SACE.
These international works show that several CETP signatories, countries that have historically been very active in financing fossil fuel projects abroad, have fulfilled their COP26 commitment by implementing effective policies affecting their public financial institutions. These include the UK, France, Canada and, albeit with room for improvement, Germany and Spain.
However, a decrease in international funding for fossil energy sources has not translated into an increase in financial support for clean energy. In 2023, the original CETP signatories supported clean energy projects abroad for a total amount of USD 21.3 billion, down from USD 26 billion in 2022. This trend suggests the need for improved policies and more ambitious targets to meet commitments. IISD emphasises that more transparency on targets is needed at the international level to support renewable energy or energy efficiency, in line with the goals taken last year at COP28. So far, only six financial institutions have announced quantified clean energy targets[7].
It is desirable that clean energy financing should put people and communities’s needs at its core, without exacerbating the debt situation of countries in the Global South, and for this reason mostly disbursed in the form of grants and by increasing the share of official development assistance[8]. A debt situation often caused precisely by investments in fossil fuels and by the contracts that energy multinationals agree with the governments of exporting countries, with clauses that give priority to private profits rather than to the balance of public finance[9], to the investments needed to fight poverty and inequality, and to compensation for loss and damage caused by climate change.
According to the Italian civil society organisations, ending international public financing of fossil fuels would also benefit a fairer, more equitable and transparent implementation of certain government programmes, starting with the Italian Climate Fund and the Mattei Plan for Africa.
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Nina Pušić, Senior Climate Finance Strategist at Oil Change International:
«Italy has utterly failed its COP26 Glasgow promise to end international fossil fuel finance. It continues to pump billions into new oil and gas projects. By refusing to implement science-based policies, Italy’s public financial institutions, like SACE, are risking a habitable future and undermining the credibility of Europe’s climate goals.»
Marius Toost, Senior Policy Advisor at Both ENDS:
«Despite having signed the CETP in Glasgow in 2021, Italy is one of the few European countries that is not honouring its commitments. Italy should do as it promised – stop its public support for fossil fuel projects without delays and exceptions.»
[1] https://cleanenergytransitionpartnership.org/the-statement/
[2] https://unfccc.int/news/cop28-agreement-signals-beginning-of-the-end-of-the-fossil-fuel-era
[3] https://www.actionaid.it/informati/press-area/governo-interrompa-finanziamenti-pubblici-internazionali-progetti-fossili; https://www.focsiv.it/basta-finanziamenti-pubblici-internazionali-per-lestrazione-fossile/; https://laudatosimovement.org/it/news/appello-al-governo-italiano-in-vista-di-cop28/; https://www.recommon.org/il-governo-interrompa-i-finanziamenti-pubblici-internazionali-a-progetti-fossili
[4] https://www.iisd.org/publications/report/countries-underdelivering-fossil-clean-energy-finance-pledge
[5] https://www.oilchange.org/publications/public-enemies-assessing-mdb-and-g20-international-finance-institutions-energy-finance/
[6] https://www.bothends.org/en/Whats-new/News/EU-ECA-fossil-fuel-phase-out-tracker-reveals-EU-Member-States-lagging-commitment-to-Paris-Agreement-goals-in-export-credit-policies/
[7] Netherlands Development Finance Company (FMO) (Netherlands), Bpifrance (France), Agence Française de Développement (AFD) (France) and Belgian Investment Company for Developing Countries (BIO) (Belgium) have monetary targets for clean energy, while CDP (Italy) has a goal stated in terms of GW of renewable energy capacity. KfW (Germany) has a target for investments in clean power generation to reach 100% of total investments in energy, but no monetary target is set.
[8] https://campagna070.it calls on the Italian government to commit to a reform of the international financial system and to plan to achieve at least 0.7% of gross national income for official development assistance.
[9] https://eccoclimate.org/it/litalia-e-la-crisi-del-debito-quali-implicazioni-per-il-partenariato-con-lafrica/
