41 Global Civil Society Organizations Urge South Korea to End Opposition to OECD Fossil Fuel Investment Restrictions 

October 21, 2024 (SEOUL) Ahead of next month’s OECD negotiations on export finance for fossil projects, where countries will discuss restricting fossil fuel export finance not aligned with Paris Agreement goals, 41 global civil society organizations are calling for South Korea to end its opposition to the much-needed proposal ahead of COP29. Building upon the OECD agreement to end export credit support for unabated coal-fired power plants in 2021, the upcoming meeting will evaluate the possibility of expanding restrictions to cover oil and gas finance.  

South Korea is the second-largest public financier of overseas fossil fuel projects, averaging $10 billion annually in the decade leading up to 2022. Despite committing to carbon neutrality by 2050 under the Paris Agreement, South Korea continues to invest heavily in fossil fuel projects abroad, contradicting its climate pledges. 

Coverage by Bloomberg and Korean media has revealed South Korea’s public financial institutions, the Export-Import Bank of Korea and the Korea Trade Insurance Corporation, as key opponents to the fossil finance restrictions. Due to the fossil-fuel interests of these agencies, which are funded by taxpayer dollars, South Korea, alongside Türkiye, has been pushing back on the OECD proposal, going against the majority in favor of the restrictions. 

The open letter is addressed to South Korea’s Minister of Strategy and Finance Sang-mok Choi, Minister of Trade, Industry and Energy Deok-geun Ahn, Export-Import Bank President Hee-sung Yoon, and Korea Trade Insurance Corporation President Young-ji Jang, urging them to cease obstructing the proposal, which is stalling negotiations.  

In the run-up to COP29, South Korea’s lack of cooperation in the negotiations to amend Article 6 of the OECD Export Credit Agreement risks branding the country as a global “climate villain” hindering other nations’ efforts to align their overseas investments with the Paris Agreement targets in response to the climate crisis.  

Image caption: 41 global climate groups are calling for South Korea to urgently address its fossil fuel export finance.

Quotes: 

Dongjae Oh, Head of Gas at Solutions for Our Climate (SFOC): “By refusing to limit its financing of fossil fuel projects, South Korea jeopardizes global efforts to mitigate climate change impacts, not just its own climate target. Its actions are leading the world away from a sustainable future and closer to climate catastrophe. South Korea must be part of the global movement to transition away from the fossil economy, rather than serving as a lifeline for a declining industry with taxpayer’s money.” 

Nina Pusic, Senior Climate Finance Strategist, Oil Change International: “9 out of 11 OECD countries have already publicly committed to ending international public finance for fossil fuels. Laggards like South Korea risk slowing down other countries' efforts to reach an agreement to end oil and gas financing at the OECD by the end of the year, but there is no time for delay. To keep 1.5 C within reach, all OECD countries must agree to end all financing for fossil fuels now, and shift this finance to fund a just energy transition to renewables.” 

Erin Ryan, Senior International Campaigner at Solutions for Climate Australia:  “South Korea's international fossil finance is a pillar upholding Australia's planet-wrecking expansion of coal and gas. KEXIM's decision to withdraw financial support for the Barossa gas carbon bomb was the right call for people and planet, but it can't be a one-off: the Government of South Korea needs to come to grips with the reality that the world has agreed to transition away from fossil fuelled energy systems, and stop blocking global efforts to turn that commitment into action.”

Yeonho Yang, Climate and Energy Campaigner at Greenpeace: “The Korean government's opposition to the amendment to Article 6 of the OECD's Export Credit Agreement irresponsibly supports the fossil fuel energy industry, which is contrary to the global climate crisis. Furthermore, with the country's renewable energy generation share at 9%, far behind the OECD average of 34%, the government's energy industry policy of building new LNG plants domestically, including the Yongin Semiconductor Cluster, risks decreasing the global competitiveness of Korean companies. We strongly urge the Korean government to immediately end public financing of fossil fuels and implement a renewable energy transition policy.”  

ENDS.  

Solutions for Our Climate (SFOC) is an independent non-profit organization that works to accelerate global greenhouse gas emissions reduction and energy transition. SFOC leverages research, litigation, community organizing, and strategic communications to deliver practical climate solutions and build movements for change.  

For media inquiries, please reach out to:   Kate Kalinova, International Communications Officer, kate.kalinova@forourclimate.org