To put it in perspective, that drop translates into roughly 11.3 to 16.3 billion U.S. dollars less public money being channelled into fossil fuel projects overseas by those governments. When the United States, which withdrew from the partnership in February 2025, is excluded, the decline is even sharper at about 81%, according to data from the IISD and Argus Media.

The Clean Energy Transition Partnership was launched at COP26 in Glasgow in 2021 by a coalition of 35 countries and five public finance institutions. Their goal was to end international public finance for fossil fuel projects and move that money toward clean energy. The new IISD report suggests that this commitment is beginning to reshape how governments think about global energy finance.

This is not a small adjustment. It could be a game changer. For many years, governments across the world supported oil, gas, and coal projects through development finance and export credits. Now a large group of them appears to have drawn a line in the sand. The report argues that the era of public money fuelling fossil projects abroad may be coming to an end, at least for these countries.

The climate implications are significant. Fossil fuel infrastructure tends to lock in carbon emissions for decades, making every new project a long term obstacle to achieving the goals of the Paris Agreement. Cutting off public finance helps reduce that risk. However, the report also highlights a critical imbalance. While fossil fuel finance has fallen dramatically, clean energy finance is not increasing at the same pace.

In 2024, members of the Clean Energy Transition Partnership raised their renewable energy finance by only 3.2 billion U.S. dollars compared with the 2019 to 2021 average. That means less than one fifth of the money previously used for fossil fuels has been redirected into renewables. The shift away from fossil fuels is real and substantial, but the follow through into clean energy remains slow.

A mix of factors explains the steep decline in fossil fuel finance. The first is the partnership’s own policy commitment, a coordinated international pledge to end fossil finance abroad by the end of 2022. Public pressure has also grown, as voters and activists demand consistency between climate promises and financial actions. Economic reasoning plays a role too. Fossil projects are increasingly viewed as risky assets, vulnerable to changing regulations, volatile prices, and competition from cleaner technologies. Global coordination among countries adds peer pressure, helping governments stay on track.

Several caveats remain. The 78% reduction is based on data from Clean Energy Transition Partnership members only, and many non signatory countries still fund fossil projects overseas. The slow increase in clean energy spending means that while the old tap has been closed, the new one is not fully open yet. Some governments have left exceptions for gas projects described as transitional, and the withdrawal of the United States raises concerns about possible backsliding.

The transition also has to be fair. Many fossil fuel financed projects are located in developing nations, where access to affordable and reliable energy remains a major challenge. The shift toward renewables must ensure these countries are not left behind. Moreover, while public finance is declining, private banks and investors continue to back fossil fuels. The IISD warns that without broader alignment, public progress could be overshadowed by private inertia.

Why should you care about this shift? Because it affects energy prices, climate stability, and global politics. When governments reduce fossil fuel subsidies and investments abroad, they help limit new emissions, create openings for clean technologies, and reshape the world’s energy future. For emerging economies, this change could determine whether their next power plants are solar fields or gas terminals.

The road ahead calls for ambition. Governments in the Clean Energy Transition Partnership are urged to scale up clean energy finance to at least 42 billion U.S. dollars in emerging markets, ensure full transparency about where funds go, and close any loopholes that allow backdoor fossil finance. Supporting developing countries with technology and fair financing will also be crucial to make this transition inclusive.

The headline figure of a 78% drop in public money for international fossil fuel projects marks genuine progress. It shows that international climate pledges can work when countries act together. Yet the story is only half written. The clean energy surge that should follow this decline has yet to truly arrive.

Photo by:Aleksey Zhilin from Getty Images