Canada’s export development bank is taking fire for what a watchdog group calls a “disappointing” set of 2030 emission reduction targets for its lending activities.
Export Development Canada (EDC)’s idea of a response to the global climate emergency is a 15% cut in its financing for oil and gas exploration and extraction by 2030, Bloomberg reports. Since at least 2018, a cascade of international studies and analyses have called for a minimum 45% reduction in global greenhouse gas emissions by that date.
EDC also aims to shift 3% of its 2020 fossil investment from oil to gas and reduce emissions in its airlines portfolio by 37% per passenger kilometre travelled—at a time when the airline industry is intent on rapidly increasing passenger travel.
EDC maintains it has taken a “science-based approach to setting its 2030 sector targets, starting with two sectors representing a significant share of its financing portfolio and associated emissions: airlines and upstream oil and gas.” The agency says it has also “significantly” increased its sustainable finance investments.
“Fundamentally, global net zero emissions will require an orderly transition away from fossil fuels,” the agency states [pdf] in a background paper. “However, our target does not imply an end to EDC support for Canadian oil and gas producers. Rather, we will support our customers in preparing for a future in which demand declines. We also see an opportunity to support producers in lowering operational emissions associated with production during the transition away from fossil fuels.”
The EDC backgrounder indicates oil demand falling faster than gas, adding that gas “may play a role in supporting energy demand during the transition to net zero.”
“Meeting our targets can only be achieved in partnership with Canadian companies,” EDC President and CEO Mairead Lavery said in a release. “This means meeting companies where they are, working to understand their business, and encouraging and supporting them in their own climate journeys.”
Julia Levin, national climate program manager at Environmental Defence Canada, called the new EDC targets a disappointment.
“For years, the Crown corporation has been fueling climate disaster by providing billions each year to oil and gas companies,” she said in a statement. “The only responsible thing to do is to end public financing to the fossil fuel sector—but even as people are fleeing their homes and dying from climate disasters, Export Development Canada has put forth weak promises that fail to really decrease fossil fuel financing.”
The plan also “buys into the debunked myth that fossil gas is a ‘transition’ fuel, instead of directing investment to genuine climate solutions,” Levin added.
At last year’s COP 26 climate summit in Glasgow, Canada committed to phase out new direct public financing for unabated fossil fuel projects by the end of this year—a promise that was supposed to include EDC. “However, of the $743 million already provided to oil and gas companies this year by Export Development Canada, up to $230 million is for companies operating internationally,” Levin said.