With prioritising international collaborations to deploy clean energy technology, the United States government agencies have been ordered by the Biden administration to immediately restrict financing carbon-intensive fossil fuel projects overseas, as per the United States diplomatic cables.
As seen by Reuters, the cables say that keeping the executive order that was issued at the beginning of the year and was aimed at ending American financial support of coal and carbon-intensive energy projects overseas in view, the US government engagements should possibly reflect the goals set in.
What are these goals?
According to one of the above-cited cables, the entire goal focus of the policy is backed with an objective of ensuring that the vast majority of U.S. international energy engagements shall promote advanced innovative technologies, support net-zero transitions, boost U.S. cleantech competitiveness, and promote clean energy but except in rare cases where there are compelling national security, development/energy access benefits or geostrategic, and no viable lower carbon alternatives accomplish the same goals.
As those projects which possibly have the greenhouse gas intensity above a threshold lifecycle value of 250 grams of carbon dioxide per kilowatt-hour and includes oil, gas or coal, the policy hence defines “carbon-intensive” international energy engagements.
What stands as a reason?
While on the other hand, allowing federal agencies to engage in coal generation only if the project demonstrates full emissions capture or is part of an accelerated phaseout, any US government financing with regards to the overseas coal projects that does not capture or only partially captures carbon emissions are banned by this policy.
carbon-intensive projects are either crucial to deliver energy access to vulnerable areas or geostrategic reasons while they are also deemed to be needed for national security and these two stand as reasons why it exempts carbon-intensive projects.
Along with being reiterated in multilateral forums such as the G7 meeting in France in August and the U.N. climate summit in Scotland in the fall, the goals set by the administration in earlier executive orders and policy guidances have been formalised by the policy already.
It was pledged by the Biden administration along with other 40 states and five financial institutions to end the new international finance for unabated fossil fuel energy by the end of 2022, sparing a few limited cases. The pledge was taken at the United Nations climate talks in Scotland.
As per some environmental groups, although the long advocated policy is a step in the right direction yet it creates loopholes that could undermine its goals.