Biden Urged to Make Export-Import Bank Stop Fueling Climate Crisis

Climate advocates on Wednesday formally urged the Biden administration to instruct the United States' export credit agency to stop financially supporting activities that are fueling the climate emergency.

"Over the last two centuries, human-caused greenhouse gas emissions have led to global warming of 1.1ºC above preindustrial levels by 2020 and caused detrimental changes in Earth's climate," Friends of the Earth (FOE) and the Global Law Alliance for Animals and the Environment wrote to U.S. Secretary of State Antony Blinken.

Stressing the threat that global heating poses to "our planet and its biodiversity" as well as "human rights, national security, and global financial stability," the pair warned that "greenhouse gas emissions must be cut in half by 2030 if warming is to be limited to 1.5ºC, the limit necessary to avoid the worst impacts of climate change."

Their letter calls on Blinken to "make a determination pursuant to the Chafee Amendment in the Charter of the U.S. Export-Import Bank... that EXIM should deny applications for financial support for all activities and projects whose life-cycle emissions intensity substantially contributes to greenhouse gas emissions and the climate crisis."

As the letter lays out:

EXIM is an independent federal agency that facilitates the export of U.S. goods and services in order to support the employment of American workers. EXIM provides loans, guarantees, insurance, and credit to American exporters, providing funding when "private sector lenders are unable or unwilling to" and helping to make U.S. exports competitive against foreign exports. In fiscal year 2023, EXIM approved more than $8.7 billion in direct loans, loan guarantees, and insurance. EXIM's total portfolio exposure as of September 2023 was more than $34 billion. Major industrial sectors supported by EXIM include oil & gas (24%), manufacturing (20.2%), and power projects (8.2%)—all of which are significant contributors to greenhouse gas emissions. In just a four-year period, from 2017 to 2021, EXIM financed $5.78 billion for fossil fuel projects alone. EXIM's financial support is backed by the full faith and credit of the U.S. government.

Erica Lyman, a law professor and director of the Global Law Alliance at Lewis & Clark Law School, explained in a statement that "administrations in the past have utilized the Chafee Amendment when national interests hang in the balance, and the catastrophic impacts of climate change are among the worst human rights, environmental, and national security challenges we face."

"The administration now has an important opportunity to continue to stand by its climate commitments to end federal funding for overseas fossil fuel projects," Lyman added.

Green groups including FOE have repeatedly sounded the alarm about EXIM's actions since President Joe Biden—who campaigned on various climate pledges—took office in 2021, including its October decision to fund the Liwathon oil tank project in Estonia and its March move to provide a $500 million loan for oil and gas expansion in Bahrain.

"Although President Biden has taken significant steps towards lowering greenhouse gas emissions, EXIM has refused to implement the president's commitment to end government support for fossil fuel projects abroad in nearly all circumstances," the letter states. "Instead, it continues to provide hundreds of millions—and sometimes billions—of dollars each year towards activities and projects whose life-cycle emissions intensity substantially contributes to high greenhouse gas emissions."

"EXIM's decision to continue providing this financial support undermines the administration’s commitments to reducing greenhouse gas emissions and fighting climate change," the letter argues. "The president should use the Chafee Amendment to force EXIM to stop its harmful financing decisions that run counter to U.S. national interests and policies."

FOE president Erich Pica emphasized that "a commitment from President Biden is meaningless without requisite action."

"This is where the rubber meets the road," he said. "If President Biden's climate commitments are to be taken seriously, his administration must take immediate, meaningful steps that stop EXIM from supporting polluting industries."