The US Export-Import Bank is backing off a plan to lend $99.7 million for an oil refinery expansion in Indonesia, after warnings the support would violate a pledge made by President Joe Biden to stop steering public dollars to foreign fossil fuel projects.

Directors of the credit agency had been set to vote Thursday on the plan, which would help boost gasoline production by 101,000 barrels per day at the PT Kilang Pertamina Balikpapan Petroleum Refinery. But the proposed financing was yanked from the ex-im bank board’s meeting agenda on Wednesday after an outcry from environmental activists, who say approval would be a betrayal of Biden’s commitments to combat climate change.

“In order to be responsive to recent stakeholder inquiries, the project in question has been removed from the agenda,” said Export-Import Bank spokesperson Sean Bartlett. “It will be held for further board action until ex-im can have these important additional conversations.” 

The president campaigned on promises to accelerate the shift toward clean power and signed sweeping climate legislation into law, but his administration also has approved several fossil fuel ventures — including ConocoPhillips’s Willow oil development and natural gas exports from Alaska — that have called his green credentials into question. 

Biden vowed to curb public funding of foreign fossil fuel projects in an executive order issued during his first week in the White House. Later, at the 2021 UN Climate Summit in Glasgow, he signed a pledge with 33 other nations to halt direct public support for unabated international fossil fuel projects by the end of 2022.

Thursday’s vote would have been the first major ex-im bank decision on a fossil fuel project since Biden took office, making it critical for signaling the administration’s approach to foreign energy projects, said Kate DeAngelis, international finance program manager for the environmental group Friends of the Earth US.

“We hope that this means that ex-im has reconsidered financing this oil refinery given the high risk of fires and local environmental pollution,” DeAngelis said Wednesday by email. “Ex-im should adhere to the Glasgow commitment and end its support for such fossil fuel projects and instead assist Indonesia and other countries in a just energy transition.”

A spokesperson for PT Pertamina didn’t immediately comment. The Indonesian refinery expansion is part of a broader plan by Pertamina to upgrade refineries and boost refining capacity across the archipelago — one the company says will help make “more environmentally friendly” products. 

Oil industry analysts and advocates say the world will need petroleum-based fuels for years to come. Upgrades at Indonesian refineries also could lead to more efficiency while enabling more biofuel production and supplying fuel needed in the region. The facility’s gasoline and other refined products are expected to be consumed domestically.

Separately, Indonesia is seeking to curb greenhouse gas emissions from its electric sector following a landmark $20 billion deal with the US and Japan to shift away from coal-fired power.  

According to a government notice, the proposed $99.7 million loan would support the export of roughly $63.9 million in US equipment and services to upgrade and expand the refinery. 

The increased gasoline output would lead to more greenhouse gas emissions, an outcome environmental groups Friends of the Earth US and Wahana Lingkungan Hidup Indonesia argued is inconsistent with the Biden administration’s climate goals.

Shruti Shukla, international energy advocate with the Natural Resources Defense Council, said supporting the project is incompatible with the International Energy Agency’s warning that the window for avoiding the most catastrophic consequences of climate change is closing — and renewable energy deployment must rapidly increase to curtail planet-warming emissions.  

“We are at the stage where we need to pick and choose winners from a climate standpoint,” Shukla said. “We know the answers: We know what’s cheaper, we know what’s cleaner. To use the limited public financing that’s available for dirtier projects is indefensible.”