No more Aussie dollars to fund overseas fossil fuel projects

Dubai: Australia has taken a major step on the path towards the phase-out of fossil fuels, joining 39 nations in a commitment to end international finance for climate polluting projects.

Joining the US, the UK, Germany and Pacific neighbours like Fiji, Australia on Tuesday signed the statement for a clean energy transition, more commonly referred to as the Glasgow Statement, vowing to end the spending of Australian dollars to fund overseas fossil fuel projects.

The commitment signed at the UN global climate summit in Dubai was applauded by clean energy advocates, who said it would bolster Australia’s experience in leveraging international sources of finance-backing clean energy projects.

COP28 began in Dubai last week, with more than 100,000 registered attendees.Credit: AP

Minister for Climate Change and Energy Chris Bowen, who will arrive in Dubai on Thursday for the second week of the conference, said the commitment followed “a decade of denial and delay,” insisting Australia could now be taken seriously as an international investor in clean energy.

“Signing up to the CETP [Clean Energy Transition Partnership] demonstrates Australia’s ambitions to play an active role in building a net-zero economy, while aligning our international investments with the goals of the Paris Agreement,” he said in a statement.

Advocates working the sidelines of the COP28 summit said Australia’s decision to sign the clean energy agreement was significant because as one of the world’s top exporters of coal and natural gas, it sends a strong message to other nations.

“This is another powerful example of global climate leadership that no longer will Australian dollars fund overseas fossil fuel projects,” said Richie Merzian, former Australian climate negotiator and international affairs manager of the Smart Energy Council.

Minister for Climate Change and Energy Chris Bowen is headed for Dubai on Thursday to represent Australia in the global climate summit.Credit: Alex Ellinghausen

“Australia has had a reputation of backing fossil fuels...but by supporting green projects overseas we are also building demand for Australian renewable and clean energy projects.”

Merzian said the next step must be to get rid of Australia’s domestic fossil fuel subsidies, which are in the ballpark of $11 billion, and reorienting that money towards clean energy projects.

Echoing the remarks, Greenpeace Australia Pacific’s Dr Susie Byers said the move must now translate into action at home.

“It’s time for Australia to turn the tap off on the billions of taxpayer dollars poured into the fossil fuel industry every year and to stop approving new fossil fuel projects.”

The so-called Glasgow statement takes its name from the original agreement which countries first signed at the COP26 summit that was hosted in Scotland in 2021.

Norway also signed the agreement in Dubai this week, meaning a majority of countries on the OECD working group on export credits have now signed.

Export credit agencies are still the biggest financiers of fossil fuels, said Luke Fletcher, executive director of Jubilee Australia, so Australia and Norway signing on shows there is growing momentum.

“G20 export credit agencies financed fossil fuels to the tune of US$33.5 billion a year. So, the more G20 countries and industrialised countries who sign on to this, the more public financing for fossil fuels will be phased out,” said Fletcher, who is also a visiting fellow of the UNSW School of Social Sciences.

One of the most contentious areas of negotiation between nations at COP28 is the language of the final agreement and whether it calls for a “phase out” or “phase down” of fossil fuels to maintain global warming at 1.5 degrees.

Participants in the talks told Agence France Presse on Monday that Australia is among developed countries, like the US, Canada and Norway who are defending the 1.5C goal but with less ambitious paths out of fossil fuels.

Merzian said the Glasgow Statement signalled Australia’s willingness to do more than ever before in terms of committing to a world beyond fossil fuels, which was “the real test of success for this COP.”

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