Bolder Export Credit Policies Are Needed to Ensure the Energy Transition

Historically, export credit agencies (ECAs) have played a crucial role in financing energy projects by de-risking investments for private lenders. Their influence is massive, comparable to that of multilateral development banks. A team of researchers specialized in climate finance examined whether they are slowing down or speeding up decarbonization. Their study revealed a clear trend: ECAs are slowly pivoting towards renewable energy, but fossil fuel projects still receive a large share of support, despite international climate commitments. While some European countries are leading the shift, many others – such as China, Japan and South Korea – still lag behind. Among the reasons are the sometimes narrow mandates of ECAs – boosting national companies abroad – due to lack of political will, and the fragmented global policy landscape. Only by reforming export finance through cooperation at the international level will the energy transition progress.

For years, Export Credit Agencies (ECAs) have been key players in global trade finance, providing state-backed loans, insurance and guarantees to support national exporters. But their role in the energy transition is now under scrutiny. While some ECAs have made strides in shifting finance away from fossil fuels, many remain deeply entangled in financing oil, gas and even coal — the most carbon intensive fuel. A vast study of ECA-backed energy deals led by a team of researchers underscores this reality. ECAs are major enablers of energy infrastructure worldwide, and they continue to support fossil fuels even as international pledges like the Glasgow Statement call for the phasing out of international fossil fuel financing. So, what’s holding them back from making a full transition? 

The researchers' study shows that, in 2013, only 9% of ECA energy commitments went to renewable energy technologies (RETs). By 2023, that share had jumped to over 40%. While this suggests a significant shift, the total dollar amount of fossil fuel financing remains high.

Certain ECAs, particularly those in Europe, have made stronger commitments to “greening” their portfolios, while others — like those in Japan, South Korea and China — continue to support fossil fuel infrastructure.

Breaking down financing patterns reveals important nuances:

1. Coal financing has nearly vanished among rich-nation ECAs, following the adoption of international restrictions. However, some non-OECD countries continue to finance coal projects, particularly in emerging economies.
2. Oil and gas projects still dominate ECA commitments, especially in the early stages of production and transportation. Even as financing for coal declines, oil and gas deals receive billions in state-backed support.
3. Wind energy leads the charge in renewables financing, with large offshore projects securing significant ECA backing. Solar and hydrogen projects, while growing, still lag behind.

One of the most striking findings of this research is that ECA-backed renewable energy investments are overwhelmingly concentrated in high-income countries. Developing nations — where clean energy investment is most needed — receive little support, a trend driven by the high perceived financial risks, and a lack of strong policy incentives. 

Why do some ECAs lead in the energy transition while others lag behind? A key factor is their mandate and political will of their respective governments. Most ECAs are designed primarily to promote national exports and domestic job creation, with little regard for climate or sustainability objectives. This narrow focus has made it difficult for ECAs to pivot away from fossil fuels, even when their governments have pledged to do so.

Some countries, however, are starting to rethink this approach. In the UK and the Netherlands, studies have shown that shifting export finance from fossil fuels to renewables can actually create more domestic jobs. ECAs in countries that have integrated climate goals into their mandates or policies — like those in the Export Finance For Future (E3F) coalition — are leading the way in shifting finance toward renewables.

But without clear and binding international rules, many ECAs cite their mandates as an excuse to continue financing fossil fuels. For example, the Export–Import Bank of the United States (EXIM) has justified continued oil and gas support under its “non-discrimination” clause, even though the US government under the Biden Administration pledged to end international public finance for fossil fuels. 

A fragmented policy landscape creates loopholes. When one country’s ECA pulls out of fossil fuel financing, others may step in to fill the gap. This “free-rider” dynamic may weaken the impact of national-level climate commitments, and underscores the need for stronger international cooperation.

The most important global policy framework for ECAs is the OECD Arrangement on Officially Supported Export Credits, which already includes restrictions on coal financing. But negotiations to expand these rules to oil and gas have stalled, despite pressure from climate advocates and progressive governments. Former US President Joe Biden’s administration attempted to push for stricter rules in late 2023 but failed to secure agreement from key countries like South Korea and Turkey.

Reviving global dialogue on ECA climate policy beyond the OECD is crucial. Without a coordinated approach, fossil fuel-dependent economies will continue to resist change, and financing for clean energy will remain unevenly distributed. 

Here are three key recommendations for policymakers to accelerate the transition:

Redefine ECA mandates: National governments should integrate climate and sustainability objectives into their ECA policies, ensuring that export finance aligns with broader climate commitments.

Expand international agreements: Strengthening the OECD Arrangement on Officially Supported Export Credits to include oil and gas restrictions would create a level playing field and prevent countries from undermining each other’s progress.

Improve financing mechanisms for developing countries: High capital costs and political risks make it difficult for emerging economies to attract clean energy investment. ECAs could help by offering financial support and lower-cost loans for renewable energy projects in developing countries.

Ultimately, ECAs are a powerful but underutilized tool in the fight against climate change. If policymakers take bold action to reform export finance, these institutions could become catalysts for a just and rapid energy transition. But without stronger mandates and international cooperation, they risk being a barrier rather than a solution.

The impact of ECAs depends on whether governments align their mandates and policies with climate goals. Redirecting finance from fossil fuels to renewables, expanding support in developing economies, and strengthening international agreements, could make ECAs a driving force in decarbonization.  

1. The share of renewable energy in ECA-backed deals has increased significantly, but fossil fuel support remains dominant, with major disparities across countries.
2. European ECAs with clear climate policies are leading the transition, while others continue to back large fossil fuel projects especially in poorer nations.
3. A global framework to coordinate ECA policies could accelerate the shift to clean energy, but political and economic obstacles remain.

Authors and methodology

Igor Shishlov is Affiliate Professor of climate economics at HEC Paris and Managing director at the Perspectives Climate Research; Philipp Censkowsky is a PhD candidate in organization theory at HEC Lausanne and a research associate at Perspectives Climate Research; Paul Waidelich is a Post-doctoral researcher and Bjarne Steffen a Professor at ETH Zurich. In a broad study covering the decade 2013 to 2023, they analyzed commercial data from 921 energy deals backed by ECAs from 31 countries.