The Biden administration on Monday said it would vote against decisions by the World Bank and other multilateral development banks to fund most projects that would develop fossil fuels.
The announcement was released in guidance that said the U.S. would oppose new coal-based projects and would also oppose most oil-based projects — with a few exceptions.
The U.S. will still offer support for some natural gas projects and is also open to carbon capture projects in which emissions from burning fossil fuels are captured and stored instead of being released into the atmosphere.
“Today, the United States takes bold, proactive steps to address the climate crisis by working with our international partners to establish a clear path to end Multilateral Development Banks’ support for fossil fuels except in exceptional circumstances while helping developing countries build a strong and sustainable future,” Treasury Secretary Janet Yellen said in a statement about the new guidance.
Multilateral development banks provide funding for economic projects in developing countries meant to promote growth.
Some environmental groups were unsatisfied with the guidance, arguing that it did not go far enough to eliminate fossil financing.
“The Treasury guidance leaves loopholes for continued fossil fuel financing that are so big, you can drive an LNG ship through them,” Luisa Galvao, International Policy Campaigner at Friends of the Earth U.S., using an acronym ot reference liquified natural gas.
The new guidance states that the administration will make “limited” exceptions to its opposition to financing oil projects, including by funding projects in crisis situations.
For natural gas, the guidance said that the administration will oppose financing production, but may support its transportation and distribution.
For coal, the guidance said the country would consider supporting decommissioning projects if they don’t extend the life or capacity of a coal plant.
The guidance also said that the U.S. will oppose intermediaries where it can say that funds will be used for activities that are inconsistent with its current approach and will also oppose policy operations that directly support such activities.
Coal is a more carbon intensive fuel than oil or gas, but all three contribute planet-warming emissions.