Germany Considers €1.2B Fossil Fuel Support, Risks Undermining 2021 Finance Pledge

Germany, despite its 2021 commitment under the Clean Energy Transition Partnership (CETP) to end taxpayer-backed financing of fossil fuel projects overseas, continues to approve substantial public funding for such projects, risking a dilution of its climate pledge. Research by Oil Change International and ClientEarth highlights Germany's significant role in backing fossil fuel projects abroad, with nearly EUR 1.2 billion under consideration for support, and criticizes the weak implementation and loopholes in Germany's 2023 policy guidelines for fossil fuel finance. Domestically, Germany is advancing new gas extraction projects, including a joint Dutch-German venture near the Wadden Sea, which faces opposition from environmentalists and local communities concerned about climate targets and ecological impacts. This push for fossil fuel development comes amid Germany's efforts to secure energy supplies after Russia's invasion of Ukraine, even as the European Union plans to ban new Russian gas imports from 2026, a move that is creating internal divisions among member states. Meanwhile, global gas markets anticipate a surge in LNG supply that could lower prices substantially, potentially increasing gas demand and delaying renewable energy adoption, with significant implications for energy transitions in Europe and Asia. These developments collectively underscore the complex challenges Germany and Europe face in balancing energy security, climate commitments, and economic interests.