Amid the pain and suffering caused by the Covid-19 pandemic, the fossil fuel industry has been lobbying hard for deregulation and sucking up public money. The industry felt the effects of economic shutdown—carbon-intensive aviation and automotive industries have been hit with planes grounded and factories closed, and in April, the price of oil was briefly below $0—but while climate mobilisations like youth strikes and Extinction Rebellion lost momentum, the companies responsible for climate injustice were hustling to make the pandemic work for them.
The fossil fuel industry already receives considerable support from governments. In the G20, the UK and Russia have provided the most direct transfers of funds and tax reductions and exemptions, and despite fossil fuel divestment campaigns over the last decade aiming to marginalise the industry from political life, the UK, Canada, Germany, Italy, India, South Africa, and South Korea all increased public finance for fossil fuels in the form of loans, guarantees, and state investment between 2014 and 2018.
For an industry driven by a relentless pursuit of profit, though, and unconcerned by the devastating consequences, even that was not enough. The recent ‘Polluters Profiting From Pandemic Bailouts’ report from Fossil Free Politics exposed the scale of the fossil fuel industry’s influence over economic recovery plans across Europe, and its capture of public money made available to keep key sectors of the economy afloat.
In Italy, gas infrastructure firm Snam and lobbyist Confindustria jointly published a report arguing that investment in fossil fuel energy infrastructure would drive economic recovery and decarbonisation. Their recommendations included directing half of investments until 2030 to fossil fuels, especially gas. Confidustria took the pandemic as an opportunity to lobby for the simplification of environmental impact assessment procedures as part of the recovery response, too.
In France, gas companies including Engie, GRTgas, and Téréga lobbied against environmental and climate regulations, successfully delaying the abolition of a tax advantage for non-road diesel.
In Portugal, António Costa Silva, the chief executive of fossil fuel company Partex, was appointed to write the country’s economic recovery plan. He previously criticised the government for blocking new oil and gas exploration in the Algarve. The plan gave considerable recovery funds to hydrogen gas, a fuel promoted as ‘clean’ by the industry.
At EU-level, lobby group BusinessEurope (advised by Shell, BP, ExxonMobil and Total) wrote to the European Council in March demanding deregulation and delays to initiatives which would ‘increase costs for companies’. Fossil fuel lobbyists met with top-level officials 25 times between 23 March and 25 May, promoting deregulation and support for fossil fuels ahead of the Next Generation EU Covid-19 recovery package. 30% of the package’s €750 billion was committed to climate action, but lobbying effectively weakened criteria for what counts as ‘green’. There is scope for public funds to go to gas infrastructure with associated carbon-capture and storage (CCS) with lobbyists still pushing for fossil gas to be counted as sustainable.
European financial institutions have long supported fossil fuel expansion, including through the European Commission’s Projects of Common Interest initiative. Greenpeace analysis shows that since the pandemic began, the European Central Bank (ECB) has injected over €7.6 billion into fossil fuels. The ECB’s Pandemic Emergency Purchase Program has bought corporate debt in the form of bonds, including for Shell and Total. Now that the bank has a clear stake in in getting its money back, it is incentivised to promote policies which help fossil fuel companies to be profitable – and therefore to continue extracting. Decisions made today in response to the pandemic are locking economies into decades of future emissions, just as we need to begin decarbonisation.
Why has fossil capital been so successful in taking advantage of the pandemic? The industry has, over decades, secured its position at the core of the global political economy. Right now, allowing fossil fuel companies to crash would mean allowing the global energy system to collapse. The industry uses this relationship of dependency to its advantage in moments of crisis by pushing for a weakened regulatory environment based on the idea that its own financial success is indistinguishable from wider economic success, or ‘recovery’, in this case.
This cycle can only hold if the priority is recovery of an unhealthy status quo. Desperation to ‘return to normal’ after the pandemic’s upheaval has obscured what ‘normal’ represents – normality is the reproduction of the same conditions which caused the pandemic, and our experience of it as a disaster: deforestation, the livestock industry, austerity, and privatisation. Normality is continuing to facilitate the extraction of fossil fuels, dragging us deeper into climate catastrophe. It means letting private companies evade accountability as they profit from harm to workers and the world.
The Left and the climate movement need to stop letting crises go to waste, because the fossil fuel industry certainly doesn’t. There have been plenty of calls for ‘green recovery’ or to ‘build back better’ during the pandemic, but we’ve lacked the militant strategy, grassroots power, and political leadership to really force the government’s hand.
There will be more and more crises in the coming decades – pandemics, climate shocks, or otherwise. It’s time we used them to expose the culpability of the fossil fuel industry in their production. It’s time we used our power to force a reckoning in which we break our dependency on fossil fuels with a transformation that rapidly decarbonises and puts the economy into the hands of the public.
When fossil fuel lobbyists ask for deregulation, we should demand that fossil fuel assets be nationalised to accelerate dismantling of the industry. When fossil fuel lobbyists ask for public money, we should demand that those funds are invested in a program of new green jobs across the economy, and a strong public sector to deliver the energy transition vital to keeping our planet alive.