The fossil-fuel-promoting agency that Biden seems powerless to stop

By Sara Schonhardt | 02/27/2024 06:24 AM EST

The Export-Import Bank’s investments in overseas oil and gas projects have continued even after advisers backed by the president voiced concern about the impact on climate change.

A man walks past the Export-Import Bank of the United States.

The Export-Import Bank's financial support of fossil fuel projects "does not reflect administration policy," the White House said. Jacquelyn Martin/AP

The federally created body that promotes U.S. exports is continuing to finance fossil fuel projects abroad — even after advisers aligned with President Joe Biden’s climate goals pointed out those investments’ risks.

Five people with firsthand knowledge of discussions inside the U.S. Export-Import Bank described a sense of frustration among members of the organization’s climate council that the agency continues to invest in projects that run counter to the president’s policies. Those include oil and gas development in Bahrain and an Indonesian oil refinery that received a $100 million loan.

The bank, known as EXIM, is an independent federal agency focused on creating jobs and boosting American competitiveness by promoting U.S. exports. It provides financing such as federally backed loans or guarantees to projects that might struggle to get private sector investments. It created the climate council at Biden’s urging in 2021.


Several council members repeatedly voiced concerns over the incongruity between the bank’s financing of fossil fuel projects and U.S. climate policy, according to several of the people who were granted anonymity to speak about sensitive information. Some advisers have also argued during council meetings that the bank is assuming that investments in fossil fuel infrastructure will lead to long-term benefits, such as jobs, at a time when the U.S. and other countries have agreed to shift away from oil, natural gas and coal.

“I think it really comes down to transparency about the jobs created and the opportunities for long-term exports,” one person said. “Can you look at the public information and be able to justify that? I don’t think so, and that’s the real frustration.”

Concern about the bank’s fossil fuel investments have reached the highest levels of government, with Biden voicing disagreement over the Indonesian project. That investment came after the U.S. had vowed during 2021’s global climate talks to end public finance for overseas fossil fuel development by the end of 2022.

A spokesperson for the White House National Security Council said the administration “stands by its commitment to end new direct public support for the international unabated fossil fuel energy sector,” referring to power plants and other facilities that don’t capture their climate pollution.

“Ex-Im made an independent decision to move forward with this financing under its authorities, and its decision does not reflect administration policy,” Adrienne Watson, the NSC spokesperson, told POLITICO’s E&E News via email.

EXIM spokesperson Elizabeth Lewis said in an email that the agency “seeks to align with the administration’s climate agenda while still complying with EXIM’s statutory requirements, including the charter prohibition against discrimination based solely on industry, sector or business, and its mission to support U.S. jobs.”

EXIM staff members are “actively working” to update the agency’s environmental due diligence procedures, added Lewis, noting that “any change to EXIM’s charter must be passed through Congressional action.”

The bank’s support of oil and gas projects has sparked criticism from activists and some officials who say it’s undermining Biden’s pledge to stop funding international fossil fuel projects.

“Unfortunately, I think that EXIM has worked in defiance of Biden and his climate agenda,” said Kate DeAngelis, senior international finance program manager at the environmental group Friends of the Earth.

A council is born

The climate council is one of several subcommittees created to provide guidance to EXIM on its policies and programs. Yet in many ways the council is symbolic.

It has no authority over EXIM’s decisions, and it is not allowed to provide advice on specific projects, said one of the five people who are familiar with its operations. The bank also limits the amount of information it gives to the council, including how it assesses the climate impacts of an investment.

“The problem for the climate council is that it’s not able to give advice, so why have it?” said one person.

DeAngelis described the climate council as a form of “greenwashing.”

“It allows EXIM to say, ‘Look, we have this climate advisory council, we care about the climate.’ When, meanwhile, they can basically just completely shut them out.”

The EXIM spokesperson said the climate council serves as an advisory group “of external stakeholders selected to advise EXIM on a volunteer basis and without voting authority.”

Anexecutive order Biden issued just after taking office calls on EXIM and other agencies, such as the State and Treasury departments, to “promote ending international financing of carbon-intensive fossil fuel-based energy.”

Months later, the White House announced that EXIM was creating the climate council to offer advice on how to “support U.S. exporters in clean energy, foster the transition to a low-carbon economy, and create clean U.S. jobs.”

The council now stands at 17 members after two prominent climate experts stepped down before the bank’s board voted to move the Bahrain project forward. The New York Times first reported the resignations.

A strategic tool

Council members are a mix of experts on issues related to climate, finance and industry. They apply to serve a one-year term and meet several times during the year — though some are more active than others and opinions vary on how receptive the agency has been to the council’s input. A sixth person with firsthand knowledge of the council’s work said some members are less opposed to the bank’s decisions on fossil fuels because they view the clean energy transition as a long-term challenge.

EXIM Chair Reta Jo Lewis, a Biden appointee, has called the expertise offered by various advisory committees, including the climate council, invaluable.

“The recommendations that are borne from these committees shape the way EXIM functions as we navigate an ever-evolving global landscape while supporting the priorities of the Biden-Harris Administration and furthering our mission,” she said in a statement following EXIM’s annual conference last October.

In a2022 competitiveness report published last June, the climate council suggested that EXIM update its financial assessments with “climate-related stress testing” over the life of the project and its financing. (Some climate impacts may only emerge after the loan has ended.)

It also recommended adding climate risk assessments to the credit review process and provided guidance on how EXIM could increase the number of clean energy projects in the pipeline. A year earlier, the council urged EXIM to develop a climate action plan with a net-zero target and better monitor and report its climate-related investments.

None of those recommendations has yet been adopted.

EXIM did authorize a $900 million loan to Angola last year for a solar power project. But according to Oil Change International it has funded roughly the same amount of fossil fuel financing since the end of 2022, when the U.S. pledge to end public support for overseas fossil fuel projects would have kicked in.

The bank voted to advance the Bahrain project, which would drill hundreds of new oil and gas wells to help the country’s state-run petroleum company expand its dwindling production, three months after almost 200 countries agreed to move away from fossil fuels at the Dubai climate talks in December. It also came in the wake of the Biden administration’s decision to pause approvals of new natural gas export facilities.

EXIM could boost U.S. investments to tackle climate change, as one of the few agencies capable of extending finance internationally.

But it has consistently defended its oil and gas investments by referring to its congressional mandate, which prevents the bank from denying financing or implementing policies that discriminate “based solely on the industry, sector or business that the application concerns.”

The bank’s charter sets a goal of allocating 5 percent of its annual funding to renewable energy, energy efficiency and energy storage exports. Oil and gas accounted for 26 percent of EXIM’s investments in 2021, according to a 2023 report by Oxfam and Perspectives Climate Research.

Politics also play a part.

EXIM has been targeted by conservatives for elimination, and for years Republicans prevented its board from achieving a quorum needed to approve projects valued at more than $10 million. That pressure, along with its limited mandate, has influenced the decisions made by a board split between Democratic and Republican appointees.