The Biden administration has put a halt to new government financing for coal plants and other carbon-intensive projects in foreign countries, marking a dramatic policy shift aimed at combating climate change and accelerating renewable energy globally. The broad mandate, which could affect billions of dollars in annual funding as well as diplomatic and technical support, is the first of its kind. Bloomberg News received a cable sent to U.S. embassies late last week that described the decision.
Significant exceptions are included under the policy, such as for pressing national security issues, foreign policy considerations, or the necessity to extend energy access in vulnerable areas. It also doesn’t apply to ongoing projects, such as those that the US has backed in the past. Nonetheless, the policy shift could have a significant impact on a number of potential foreign projects, including terminals in Eastern Europe and the Caribbean that would receive natural gas shipments from the United States.
It also excludes other, gentler forms of government assistance, such as diplomatic and technical assistance, which benefits developers of pipelines, liquefied natural gas terminals, and other projects in other countries. Our foreign energy involvement will focus on promoting sustainable energy, developing breakthrough technologies, increasing US clean-tech competitiveness, and providing funding and technical assistance to promote net-zero transitions around the world.
The move exemplifies how the Biden administration has prioritised combating climate change as a top policy priority. Nonetheless, the strategy provides a significant opportunity for China, which is keen to invest and finance energy projects all over the world, frequently with sums that the US has been unable to match.