International fossil fuel project finance from countries in the Clean Energy Transition Partnership (CETP) in 2024 was down by 78pc — or by $11.3bn-16.3bn — from 2019-21 levels, according to a report led by think-tank the International Institute for Sustainable Development (IISD).
But only a fifth of these funds are redirected to international clean energy projects, the report said.
Under the CETP, signed in 2021 on the sideline of Cop 26 in Glasgow, 40 countries and jurisdictions pledged to end international public finance for fossil fuels by the end of 2022. Countries include Canada, Germany, the UK, Germany, Italy, the Netherlands and Denmark. The US left the alliance in February 2025.
"Excluding support from the US, the decline is even more pronounced: an up to 81pc drop in international public finance for fossil fuels," from the CETP countries, IISD said. Norway and Australia joined the partnership in 2023 and had until the end of 2024 to implement the agreement.
"Countries that commit to first-mover initiatives like this can deliver real results quickly," said IISD senior policy advisor Natalie Jones.
The report found 10 of the 17 high-income alliance members have fully aligned their energy finance policies with the pledge. But less than a fifth of the funding removed from fossil fuels has been redirected into international clean energy, with the CETP countries increasing their financial support for clean energy projects by only $3.2bn compared with 2019–2021, before the partnership was signed.
"Most of this clean energy finance is flowing to high- and upper-middle-income countries or advanced economies rather than low-income countries," the report said, recommending countries adopt targets for scaling up clean energy finance without burdening developing countries with additional debt. The top five recipient of CETP signatories' clean energy finance were Romania, Spain, Italy, France, and Germany, according to the report.
Backsliding
Risks of backsliding on the overall CETP pledge remain.
Germany, Italy, Switzerland, the Netherlands, Canada and Finland have yet to fully comply with the agreement. Italy provided $3.7bn in international fossil fuel finance in 2023-24, while Germany and Switzerland approved fuel projects for a total of $1.5bn and $1.4bn respectively in the same period, according to the report.
The report noted that before the US pulled out of the CETP in February, the country provided $3.2bn in fossil fuel finance in 2023-24.
"Amid trade wars and rising geopolitical tensions, the progress on CETP implementation and broader multilateral co-operation on climate and energy are more fragile than ever," the report said, noting that under pressure from US president Donald Trump, EU countries could end up using public finance institutions to "facilitate energy purchases".
The EU signalled it intended to buy $750bn of energy from the US through to 2028 as part of a trade agreement. It made no clear purchase commitments.
By Caroline Varin
