EXIM Bank’s Environmental Critics Miss the Mark

The Export-Import Bank of the United States (EXIM) helps advance climate solutions and enhance global energy security by providing financing for qualified energy projects ranging from renewables to natural gas to nuclear energy. Its support for such projects strengthens the U.S. economy and supports American jobs, helps reduce emissions, increases access to affordable and reliable energy globally, and advances U.S. diplomatic interests.  

Recently, however, some have attacked EXIM for its support of natural gas projects in a misguided effort to kill U.S. support for any fossil fuel projects. These critics are off base. Here’s why.   

About EXIM 

America’s official export credit agency, EXIM was established by Congress in 1934 to support U.S. jobs by facilitating the exports of U.S. goods and services. EXIM helps U.S. companies compete globally, access new markets, and spread American democracy to countries around the world.  

An independent agency, EXIM’s Congressional charter prescribes specific statutory and policy conditions for supporting transactions around the world. These are primarily based on U.S. content in an export contract, the unavailability of private finance, and whether support is necessary for U.S. exporters to compete against foreign government financing.  

EXIM Funds Environmentally Beneficial Projects 

The agency has supported a broad suite of American energy and environmentally beneficial technologies, equipment, and resources for export around the world. Between FY2022 and FY2023, EXIM authorizations supporting environmentally beneficial goods and services increased nearly tenfold, from $176 million to over $1 billion. In fact, EXIM’s authorization for U.S. renewable energy exports and services totaled $907.9 million in FY 2023, a 1,572% increase from the $54.3 million authorized the prior year.  

EXIM’s critics are missing or ignoring several important facts. For starters, the agency’s congressional charter includes prohibitions against denying applications or “implementing policies that discriminate against an application based solely on the industry, sector, or business…,” explicitly with regard to specific energy sources or generation. Also, the reality is that project developers apply to EXIM after they have already decided to pursue a project. The question is typically not whether a project will go forward but who the international partner will be—the U.S. or another foreign government.

More importantly, however, those attacking EXIM ignore or deny the critical role natural gas plays in advancing the energy transition and enhancing global energy security. Since 2005, the U.S. has led the world in emissions reductions due mostly to the U.S. electricity sector’s switch from coal to natural gas for power generation.  EXIM support for natural gas projects in other countries, therefore, enables them to replicate the U.S. experience to reduce emissions by displacing or avoiding higher emitting sources.  

At COP28 last December, nearly 200 countries agreed to the UAE Consensus, which recognizes that “transitional fuels can play a role in facilitating the energy transition while ensuring energy security” and that efforts to achieve net zero by 2050 must be done “in a just, orderly and equitable manner.” EXIM support for natural gas projects is entirely consistent with these principles, helping countries reduce dependence on higher emitting sources while advancing access to affordable, reliable energy.  

For example, EXIM’s bipartisan, independent Board of Directors recently approved a $500 million loan guarantee for a natural gas field development program in Bahrain. Importantly, EXIM included additional measures in the transaction to reduce GHG emissions, “including implementation of leak detection and gas recovery systems, on-site solar energy production to directly reduce the carbon footprint associated with grid-supplied electricity, elimination of higher emitting process equipment, and elimination of all non-emergency flaring.” Had EXIM declined to support the project, such environmental provisions may well have been excluded from alternative financing arrangements. This project is also expected to support more than 2,000 U.S. jobs. 

Helping America Compete 

EXIM support is also valuable for U.S. businesses competing against Chinese state-backed financing. It provides our partners and allies a choice between financing based on U.S. domestic content or the predatory lending associated with China’s Belt and Road Initiative. This is especially important for developing countries such as Mozambique, Guyana, and Papua New Guinea, which are most in need of investment to advance their economic development and provide citizens with access to affordable, reliable energy. EXIM’s loan guarantee for a major natural gas project in Mozambique, for example, would unlock opportunities for U.S. businesses in Africa while supporting nearly 17,000 jobs in eight states. 

When it comes to advancing climate solutions, enhancing energy security, and supporting American jobs, we’re glad the Export-Import Bank is fulfilling its mission. 

About the authors

Martin Durbin

Martin (Marty) Durbin is president of the U.S. Chamber of Commerce’s Global Energy Institute (GEI). Durbin leads GEI’s efforts to build support for meaningful energy action through policy development, education, and advocacy, making it a go-to voice for commonsense energy solutions.

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