May 28, 2020

Russia Bankrolling Fossil Fuel Industry by nearly USD 3 Billion a Year

New report updates analysis of international public finance for energy projects

WASHINGTON, D.C. – A new report released today by Oil Change International and Friends of the Earth U.S. reveals that Russia has been providing at least RUB 191 billion (USD 2.97 billion) in public finance to oil, gas and coal projects since the Paris Climate Agreement. As detailed in the report, Russia’s international public finance institutions  — Export Insurance Agency of Russia (EXIAR) and VEB-RF (formerly Vnesheconombank) — make it the fifth largest fossil fuel supporter after China, Canada, Japan, and Korea. Russia was also the top ‘recipient’ of fossil fuel finance with RUB 680 billion in annual support for oil and gas from China and Italy among others.

G20 countries altogether have been providing at least RUB 5.0 trillion (USD $77 Billion) a year – more than three times what they are providing to clean energy.

The report’s findings underscore the message from a letter sent to First Deputy Prime Minister Andrei Belousov from representatives of 15 organizations, including Greenpeace Russia and Fridays For Future. In this letter they urged the Russian Government to adhere to green principles when restoring the economy, saying that continuing to support the oil and gas industry is a strategic mistake. The COVID-19 crisis has exposed the vulnerability of the Russian oil-dependent economy. The reduction in transport fuel consumption and global business downturn along the supply chain brought down world oil prices, highlighting the financial precarity of countries whose economies are excessively dependent on oil production and export.

Investing either in diversified renewable energy sources or in the monopoly of fossil fuels are two main ways of economic development present in the modern world.

The first is a socially just way of development, the second is a dead end, right into the abyss of social and economic crisis. Looking at the results of this study, it seems like the Russian government has chosen the second path. Would politicians be ready to be held accountable to the public for this choice, when in a few years the need for oil and gas becomes obsolete? Would citizens be ready to accept these steps into the abyss? Now, voters need their politicians to opt for renewable energy, climate and social justice. Otherwise, the future looks very unclear.” – said Svitlana Romanko, Managing Director of in Eastern Europe, Caucasus and Central Asia.

“Russia must immediately halt on-going fossil fuel subsidies and, especially, stop subsidising coal production. Burning fossil fuel leads to air pollution which causes thousands of additional deaths every year and also increases the mortality rate of covid19. It also undermines the Paris agreement and efforts to combat climate change,” said Vladimir Slivyak, co-chairman for Russian environmental group Ecodefense.

“This crisis has shown that we should develop renewable energy, a circular economy and implement other measures to achieve the goals of the Paris Agreement. Now Russia has a chance to revise development priorities and avoid not only economically unprofitable fossils but environmental risks. We already can see the consequences of climate change in the form of environmental disasters in Russia. At the same time precious territories of northern Russia (including the lands of indigenous peoples and protected areas) are being given to the oil companies for drilling,” – said Vasily Yablokov, climate team leader, Greenpeace Russia.

“Despite the ratification of the Paris agreement, Russia continues to be a country with a fossil fuel economy. Such myopic decisions of Russia to continue supporting the fossil fuel industry might lead in the future to a huge economic crisis, from which the country’s residents will suffer the most,” said Victoriia Rudenko, Climate Secretariat of Friends of the Earth Russia. “The state needs to urgently review its priorities, take a course on economic diversification and just energy transition, support sustainable initiatives and the citizens – not oil and gas corporations.”

“In the world of climate emergency it is too late to negotiate whether we need to phase out fossil fuels. However, some countries are still living in oblivion, created by decades of enormous profits and scepticism in regards to science. The world is experiencing devastating effects of climate change right now, and Russia can play an important role to make it better. Fossil fuel industry is the past. Governments must admit it and divest from dirty energy in order to have a future.” – said Olga Boiko, CAN EECCA coordinator.

“The fossil fuel industry knows its days are numbered. It is using the COVID-19 crisis as cover to redouble their efforts to secure the massive new government funding they need to survive,” said Bronwen Tucker, research analyst at Oil Change International. “Russia’s money must instead support a just transition from fossil fuels that protects workers, communities, and the climate — both at home and beyond their borders. Instead of bankrolling another major crisis — climate change — Russia should invest in a resilient future.”

“Russia continues to subsidize the fossil fuel industry as it makes bad decisions that hurt people and the planet,” said Kate DeAngelis, senior international policy analyst at Friends of the Earth U.S. “Fossil fuel projects are already worsening the COVID-19 crisis by generating air pollution that worsens the disease’s impacts. Russia has an opportunity to reflect and change its financing so that it supports clean energy solutions that will not exacerbate bad health outcomes and put workers at greater risk.”

Utilizing data from Oil Change International’s Shift the Subsidies database, the report analyzes support coming from the export credit agencies (ECAs) and development finance institutions (DFIs), as well as the multilateral development banks (MDBs) that G20 countries control. It does not include billions more in direct subsidies for the industry through tax and fiscal subsidies. Some of the key findings include:

  • Support for fossil fuels has not dropped since the Paris Agreement was made. Russia’s public finance for fossil fuels from EXIAR and VEB-RF for 2016 to 2018 more than doubled compared to 2013 to 2015 showing that they are far from aligning their financing with what is necessary to limit warming to internationally-agreed 1.5°C limit.
  • Development finance institutions (DFIs) have not supported a transition away from fossil fuels. G20 DFIs provided RUB 1.6 trillion (USD 24.9 billion) annually for fossil fuels and $521 billion (USD 8.1 billion) annually for clean energy. VEB-RF provided RUB 115 billion per year to fossil fuel projects, making Russia the second largest DFI contributor to fossil fuels after China.
  • Most of this finance flowed to wealthier countries. Nine of the top fifteen recipients were high or upper-middle income countries by the World Bank classifications. Five were lower-middle income, and only one low-income.

The report, entitled “Still Digging: G20 Governments Continue to Finance the Climate Crisis,” can be found here. In addition to the authoring organizations, the report has also been endorsed by Climate Action Network Eastern Europe, Caucasus and Central Asia (CAN-EECCA) where EECCA is on the Board.


Friends of the Earth fights to protect our environment and create a healthy and just world. We speak truth to power and expose those who endanger people and the planet. Our campaigns work to hold politicians and corporations accountable, transform our economic systems, protect our forests and oceans, and revolutionize our food & agriculture systems.

Oil Change International is a research, communication, and advocacy organization focused on exposing the true costs of fossil fuels and facilitating the coming transition towards clean energy.