Canada’s long-awaited plan to end public funding for international fossil fuel projects is finally here and, despite some loopholes, it represents a major milestone, environmental groups say.
the guidelinesannounced by Minister of Natural Resources Jonathan Wilkinson on December 8, fulfills Canada’s commitment to 2021 Glasgow Declarationin which almost 40 countries and institutions committed to using public resources to support a clean energy transition and to end international financing of fossil fuels without ceasing by the end of 2022.
The commitment only applies to undiminished fossil fuel projects, those that do not use technology to capture greenhouse gas emissions when oil, coal or gas is produced. Endless or not, all fossil fuels create planet-warming pollution when burned, and there’s no way to capture the greenhouse gas emissions that come out of a tailpipe.
The policy contains exemptions for natural gas, hydrogen produced from fossil fuels, and carbon capture, utilization and storage (CCUS) technology, among others.
Whether this policy is “implemented with integrity to really close the door on those exceptions” remains to be seen, said Julia Levin, national climate program manager for Environmental Defence. National Observer of Canada.
“The conditions attached to the exceptions are really strict,” Levin said. For example, one of the three conditions for a natural gas exemption requires that there be no viable renewable alternative, and there is almost always a cheaper, viable renewable alternative, he added.
The guidelines also state that any project receiving public funding must be aligned with a path consistent with limiting global warming to 1.5C, and the science is clear that new fossil fuel projects are incompatible with that goal. In theory, this should keep fossil fuels in the ground.
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The natural gas exemption “is a big pill to swallow” and emblematic of the immense pressure the Canadian government always receives when it comes to tackling oil and gas lobbying in this country, said Eddy Perez, director of climate diplomacy. Climate Action Network International. .
The groups will continue to fight the natural gas and CCUS exemptions, but by far the biggest concern is the national security exceptions, Levin said.
This waiver “allows for support of projects for national security reasons, including ensuring the energy security requirements of Canada, an ally, or other recipient country deemed important to Canada’s national interests, on a case-by-case basis,” say the guidelines. Other signatories to the Glasgow Declaration do not have this wide loophole, and Russia’s invasion of Ukraine could provide an easy justification, Levin said.
Canada’s long-awaited plan to end public funding for international fossil fuel projects is finally here and, despite some loopholes, it represents a major milestone, environmental groups say. #cdnpoli #FossilFuelSubsidies
The new policy goes into effect on January 1 and applies to all federal departments, agencies and Crown corporations. Hardest hit will be Export Development Canada (EDC), a Crown corporation and prolific financier of fossil fuels that provided up to $18 billion for oil and gas companies by 2022 and just $790 million for clean energy. according to to an analysis by Environmental Defense.
The policy will redirect $2.5 billion of EDC’s fossil fuel funding toward implementing climate goals, and Natural Resources Canada says Crown Corporation “plans to continue increasing its annual funding for clean technology with the goal of increasing investment from 6,300 million dollars in 2021 to 10 billion dollars by 2025.”
As EDC shifts public funding from fossil fuels to clean technology, projects must be conducted in ways that respect and uphold the rights of Indigenous Peoples, are led by people, align with a climate-secure future, and focus the health and safety of communities. Perez emphasized.
“Today’s decision really helps show that with the right amount of pressure, the resistance from civil society, from experts, from members of parliament, that kind of effort is worth it,” Perez said.
The next step? Address public funding of fossil fuels at home.
The bulk of public funding remains for domestic fossil fuels, Levin said. The federal government has committed to “phasing out and streamlining inefficient fossil fuel subsidies” by 2023 and ending domestic fossil fuel financing, but the latter has no timetable attached and today’s release did not offer next steps on that commitment.
“But this sets us up well, for a really strong phase-out of domestic public financing in the very near future,” Levin said.
Natasha Bulowski / Local Journalism Initiative / National Observer of Canada