Foreign aid for fossil fuel projects quadrupled in a single year

With clean air projects receiving just 1% of aid, activists say nations ‘cannot continue polluting practices at expense of climate stability’

Foreign aid for fossil fuel projects quadrupled in a single year, a report has found, rising ​​from $1.2bn in 2021 to $5.4bn in 2022.

“This shocking increase in aid funding to fossil fuels is a wake-up call,” said Jane Burston, CEO of nonprofit the Clean Air Fund, which conducted the research. “The world cannot continue down this path of propping up polluting practices at the expense of global health and climate stability.”

International public funding “does not come close to meeting the scale of the challenge” and often does not reach the most affected people, said Adalberto Maluf, national secretary of the urban environment and environmental quality in Brazil, which holds the G20 presidency and will host the Cop30 climate summit next year.

“Even as countries pledge to reduce their emissions, increase their climate change ambitions and transition away from fossil fuels, the figures tell a different story,” he said. “It doesn’t have to be this way.”

The report found the top five funders of fossil fuel projects between 2018 and 2022 were the Islamic Development Bank, Japan International Cooperation Agency, the Asian Development Bank, the European Bank for Reconstruction and Development, and the International Finance Corporation, the private sector arm of the World Bank.

The G20 group of nations have made pledges to phase out “inefficient” fossil fuel subsidies as far back as 2009. In 2022, the G7 group of nations agreed on stronger language to end taxpayer funding to projects that create energy by burning coal, oil and gas.

While some fossil fuel aid goes to projects that lack clean alternatives even in rich countries, such as making fertilisers or cement, they also include projects in the energy sector for which renewable sources are readily available. The cost of capital for clean energy projects in poor countries is more than double that in rich ones, according to the International Energy Agency, with high upfront costs and poor loan terms forcing poor countries to keep burning fossil fuels.

The report precedes a climate summit in Azerbaijan in November, in which negotiators hope to agree new financial promises.

The Clean Air Fund called on negotiators not to neglect air quality. Outdoor air pollution kills 4 million people each year, but clean air projects receive just 1% of foreign aid, the report found.

“Tackling air pollution is essential – not only for protecting our climate, but for safeguarding public health,” said Burston. “The stakes couldn’t be higher.”

Cover photo: By The Guardian