Australia is being urged to change course and end taxpayer-funded investment in fossil fuel projects.
Ahead of climate talks in Cairo, campaigners are calling for the Albanese government to join a group of countries that last year pledged to end international public financing of coal, oil and gas development.
Australia is one of the largest recipients of international public investment in fossil fuels, according to a report by Oil Change International and Friends of the Earth US.
Government-backed finance helps to take risk out of new projects, making it more attractive for private sector financiers to invest, and trading partners remain keen to lock in supplies of Australian gas and coal.
The Glasgow Statement, signed last year by 39 countries and organisations including the United States and Canada, could redirect billions of dollars to clean energy investment.
Joining them would signal Australia is serious about ending its "wrecking role" in international efforts to tackle climate change and limit this type of public finance, campaigners say.
But the energy crisis caused by Russia's invasion of Ukraine creates opportunities for the oil and gas industry to "falsely cast fossil fuels as a still-viable path to energy security", the report issued on Tuesday warns.
Luke Fletcher, head of the independent Jubilee Australia Research Centre, said Australia could tip the balance in favour of clean energy and climate action.
"Joining this initiative also presents an opportunity for Australia to strengthen its international climate diplomacy, which could aid any future Australian bid to host a United Nations climate conference," he said.
Public finance from Australia's export credit agency was also heavily in favour of fossil fuels, the report found.
More than two-thirds (67.7 per cent) went to fossil fuels between 2019 and 2021 and about one-fifth (19.3 per cent) to clean energy, with the rest listed as "other".
Jubilee says taxpayers are supporting some of the most polluting projects in Australia, including the Ichthys LNG project, Carmichael rail to service the Adani coalmine, Santos' Gladstone liquefied natural gas (LNG) project and Glencore's Wiggins Island coal export terminal.
Australia is also building what could be the world's dirtiest offshore LNG project, the Barossa project, with the help of overseas public finance from South Korea and Japan, the report says.
Developer Santos says Barossa is one of the world's lowest cost, new LNG supply projects and will provide a competitive edge as supplies tighten, but a court challenge hangs over the project.
The wealthy countries most responsible for historic and current greenhouse gas emissions are urged to move "first and fastest" to phase out their fossil fuel production.
Japan, Canada, Korea, and China have been the "worst offenders" during the past 10 years, providing most government finance for fossil fuel projects, the report found.
Meanwhile France, Brazil, and Germany are leaders in backing clean energy.
But three-quarters of clean energy public finance in the Group of 20 rich nations has flowed to each other rather than to lower-income countries.
Australian Associated Press
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