Norway keeps promise to end international finance for fossil fuels, boosting hopes of OECD deal tomorrow

The Norwegian government today published its policy to align its financing with the Clean Energy Transition Partnership (CETP, sometimes called the Glasgow Statement), fulfilling a promise it made a year ago to end the use of Norwegian government finance to fund fossil fuel projects abroad.

At the COP28 UN climate summit in Dubai, Norway signed the Clean Energy Transition Partnership, committing to end its international public finance for fossil fuel projects within a year. Recent research shows the CETP is working, with most signatories eliminating or considerably reducing their international fossil fuel financing. Collectively, signatories cut their international public finance for fossil fuels by up to two thirds since signing the agreement, a drop of USD 15 billion a year. Norway’s new policy will contribute to this progress.

Norway’s new policy will end the government’s public finance for fossil fuel projects overseas, which largely comes from its government export credit agency, Eksfin – although the policy does not appear to address the role that Eksfin plays in providing financing to the Norwegian state oil company, Equinor. Between July 2021 and June 2023, Eksfin provided between NOK 8.78 billion and 10.98 billion ($749 – 993 million) for fossil fuel projects. In 2023, Eksfin provided NOK 3.7 billion ($334 million) in support for the controversial Sakarya oil and gas field in Turkey. Phase 1 of the Sakarya field, which Eksfin helped to enable by providing Norwegian government backing, is expected to emit 140 million tonnes of CO2 over its lifetime, approximately equivalent to the annual emissions of 37 coal plants.

While Norway’s climate policies are in the spotlight for both national and international critique in many other areas – not least its status as one of only five Global North governments responsible for a majority of the entire world’s planned expansion of new oil and gas fields through 2050 – the publication of the Norwegian CETP policy is important progress. Norway must build on this progress to ensure a comprehensive approach to phasing out oil and gas in line with the 1.5C temperature rise limit.

The publication of Norway’s policy helps increase momentum for a global, binding deal that can end $41 billion a year in oil and gas export financing at the OECD, where Norway will be among countries partaking in final negotiations tomorrow (Tuesday, 10th December). With the EU, US, UK, Canada, Norway, Australia and New Zealand all supporting fossil fuel restrictions a deal is within reach. This would free up significant sums in public money for clean energy instead.

A deal would be difficult to undo by any one country, making this a last opportunity for President Biden to reach a ‘Trump-proof’ climate deal. With Norway aligning its financing with the CETP, this creates a further incentive for Norway and other CETP countries to create binding OECD rules restricting export finance for fossil fuels from all OECD countries, creating a ‘level playing field’ for trade. Reportedly, Korea and Turkiye are the last countries that still need to be convinced to support the agreement.

Adam McGibbon, Campaign Strategist at Oil Change International, said:
“Norway’s decision to honor its pledge to end international oil and gas financing is a crucial domino falling at exactly the right moment. Tomorrow’s OECD negotiations represent a once-in-a-generation opportunity to redirect $41 billion in annual oil and gas export finance toward cleaner energy. With Trump looming on the horizon, this could be our last chance to lock in climate progress that would be difficult to reverse.

“Prime Minister Støre must now urgently contact his Korean and Turkish counterparts, the last holdouts at the OECD, to encourage them to ensure a historic deal is reached that helps accelerate the energy transition and secures a liveable planet for all.”