Santa Marta pushes for fossil fuel phaseout- but steps short of fresh finance commitments

The event, hosted by Colombia and the Netherlands was launched amid growing frustration about the failure to commit to fossil fuel phaseouts during the COP summits, which rely on consensus for decision making.

Describing themselves as “coalition of the willing”, participating nations, which also included the UK, France, Germany and Australia, but not the biggest emitters, US and China, recognised that fossil fuels pose a systemic source of economic and financial instability.

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France in particular made the headlines with a renewed pledge to phase out coal by 2030, oil by 2045 and gas by 2050.

While the event took place against the context of record-high oil and gas prices fuelled by the war in Iran, participating nations emphasised their commitments to scale up clean energy as a source of economic resilience.

“Santa Marta delivered a new way of making climate progress by bringing together a group of nations from both the Global North and the Global South, from the major economies of the G20 and the most vulnerable small island states. What unites these front-running nations is the willpower to work through the tough and necessary imperative of transforming the global energy system together” said Nick Robins, senior director finance and private sector at the World Resources Institute.

Financing the energy transition emerged as a key theme of the event, Robins shared: “Governments and financial experts focused on reducing the cost of capital, expanding concessional finance from multilateral development banks and increasing flows of long-term private capital. The driving desire to rebuild stability has led to a new focus on the positive role that central banks can play in enabling the transition through monetary and prudential policy.”

Carla Leal, market director – Latin America at CDP, commented: “The Santa Marta Conference already stands out as an important moment, both for the transparency with which critical themes were addressed and for the clear focus on delivery. In particular, it underscored the need to move beyond carbon lock-in and fiscal constraints that limit public investment, and towards stronger national capacity to finance and deliver the transition, backed by territorial just transition plans and workforce development.”

While no new financing commitments were made at the event itself, delegates discussed scope for phasing out fossil fuel subsidies, a controversial item which often did not make it onto the official COP agenda. In 2024 alone, governments spent more than five times as much on fossil fuel subsidies compared to clean energy projects, as new analysis from IISD shows.

In 2024, the fossil fuel industry received $1.2trn in support compared to $254bn on clean energy the IISD released at the summit. Moreover, subsidies tend to spike when oil prices rise, with fossil fuel subsidies in 2022 hitting $1.7trn, the IISD said.

“Energy crises hit low- and middle- income households hardest, eroding purchasing power and forcing difficult trade-offs between essentials such as food, transport, and heating. Yet governments have repeatedly responded to price spikes with broader fossil fuel support, especially subsidies, that are costly, inefficient, and often poorly targeted. Over time, these measures deepen fiscal pressure, reinforce fossil fuel dependence, and leave households exposed to the next shock”, Angela Picciariello, senior researcher at IISD said.

Rather than investing new funds, governments could cut back on such subsidies, redirecting the savings to the clean energy sector instead, summit participants argued.

The Netherlands is part of a coalition of 17 countries working to remove fossil fuel subsidies. At the same time, the country also plans to expand its offshore gas production in response to the current energy crisis, highlighting the conflicting interests for many of the summit’s participants.

Ireland and Tuvalu were announced as co-hosts of the 2027 Second Conference on Transitioning Away from Fossil Fuels, with the conference set to take place in Tuvalu.

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