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The OECD Fails to Agree on Ending Support for Fossil Fuels

Despite months of negotiations, OECD countries failed to reach an agreement to restrict public support for fossil fuel industries, highlighting key divergences between nations.

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On the brink of a major political shift with the imminent inauguration of climate skeptic Donald Trump as President of the United States, discussions led by the Organization for Economic Cooperation and Development (OECD) on gradually ending public support for fossil fuels have failed. This inability to reach a consensus underscores ongoing tensions among the organization’s member countries. Negotiations, initiated in mid-November 2024, aimed to progressively phase out public support, including export credit agency guarantees and loans, for the oil and gas industry. This initiative, championed by the European Union, the United Kingdom, and Canada, faced strong opposition from the United States, derailing collective efforts for comprehensive reform.

The Stakes of Public Support

According to data provided by climate NGOs, export credit agencies play a critical role in financing fossil fuel projects. Between 2012 and 2022, they reportedly supported over 80% of new liquefied natural gas (LNG) export terminal projects, significantly contributing to the expansion of this industry. These public funds, criticized by environmental advocates, hinder global efforts toward energy transition. The OECD’s official statement acknowledged this failure while leaving the door open for future negotiations. “This issue can be revisited in the future,” said the Paris-based organization, without specifying a timeline. Meanwhile, it encouraged willing countries to independently adopt stricter measures.

A Symbolic Failure with Broad Implications

The lack of consensus within the OECD occurs in an international context marked by growing momentum for climate change mitigation. For the European Union and its allies, this failure represents a strategic setback, particularly in the face of nations less inclined to reduce support for industries considered economic cornerstones. The implications of this failure may also influence national and international policies in the years to come. The stance of the United States, combined with other hesitant nations, could stifle the momentum needed to achieve global climate goals, including those outlined in the Paris Agreement.

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