March 8, 2025 - The Trump administration has abandoned a multibillion-dollar initiative to help other countries shift their economies from coal to clean energy, raising questions about the program’s ability to survive without American support.

The U.S. and other wealthy nations sealed deals in recent years with South Africa, Indonesia and Vietnam under so-called Just Energy Transition Partnerships, an effort orchestrated in part by John Kerry, the climate envoy for former President Joe Biden, to prompt coal-using countries to reduce their climate pollution.

Withdrawing from the agreements, which were funded through a mix of loans and grants, aligns with President Donald Trump’s priorities to halt foreign aid for programs related to equity and the environment. Trump has a long record of rejecting the basic principles of climate science.

The partnerships were jettisoned to comply with Trump’s executive order named Putting America First in International Environmental Agreements, according to a spokesperson for Treasury Secretary Scott Bessent, whose department oversaw the climate agreements.

“We have informed the respective governments of those countries,” said the spokesperson, who declined to be named. “The United States will continue to engage with partner countries on energy and investment issues of common interest.”

Global coal use hit a record high in 2024, and is expected to plateau over the next few years, according to the latest report from the International Energy Agency. While most developed economies have seen their use of coal peak, the agency found that demand for coal in fast-growing developing countries, such as Indonesia and Vietnam, is expected to continue as electricity demand accelerates.

The move is the administration’s latest effort to sever international climate cooperation following Trump’s Day One action to yank the U.S. out of the Paris climate agreement, the global deal to slow the rate of rising temperatures.

The decision thrusts the coal initiative into uncertainty. South Africa’s Department of International Relations said in a statement that it will “evaluate the implications of the US withdrawal” on the agreement.

A German official called the United States’ move “regrettable.”

“At the same time, we are convinced that the work of the Just Energy Transition Partnerships can be continued successfully,” Jochen Flasbarth, Germany’s state secretary in the Ministry for Economic Cooperation and Development,, said in a statement.

Germany, which is now co-leading the Indonesia deal with Japan, said it will move forward on the three agreements. Other partners include the United Kingdom, France and Denmark.

The first Just Energy Transition Partnership, or JETP, was launched at the COP26 global climate talks in 2021 as a new way to finance climate action in nations with emerging economies and a high reliance on fossil fuel energy.

Under that deal, the U.S. and its partners pledged $8.5 billion to help wean South Africa off coal, the world’s most polluting fuel, by investing in renewable energies. The U.S. pledged $1 billion, largely in the form of loans from the U.S. International Development Finance Corporation.

When the $20 billion Indonesia deal landed in 2022, the U.S. and Japan agreed to oversee it with investments from Canada and several European nations. A coalition of banks committed to provide half the promised financing.

Since then, the partnerships have faced challenges.

The deals revolve largely around loans, with some grants and technical assistance. They also involve an array of actors, including donor nations, multilateral development banks and the private sector. And they require buy-in from officials in the recipient country.

That can be tough in a place like Indonesia, where coal provides around 60 percent of electricity generation. Many coal plants are still years away from retirement and the country has few policies to support renewable deployment. It’s also planning to bring new coals plants online to power industries such as mineral processing.

The Indonesia government should strengthen its commitment to lead and take more responsibility for implementing its investment plan and policy reforms to meet the JETP’s goal, said Fabby Tumiwa, executive director of the Institute for Essential Services Reform, a Jakarta-based think tank. The other partner countries, meanwhile, should fill the gap left by the U.S., he said.

But doing so won’t be easy, particularly since it comes as other nations like the United Kingdom have cut their aid budgets, potentially threatening their ability to provide the same level of funding.

U.S. political heft was also an important component of the partnerships.

“Having the U.S. at the table was undoubtedly a core consideration for host countries as they considered engaging in a just transition process,” said a person familiar with the agreements who was granted anonymity for fear of reprisals.

News of the U.S. exit came on the same day American officials attended a summit in Washington focused on energy access in Africa, where an “all of the above” approach to energy was a theme.

“You may wonder, ‘Is that a code for carbon?’ And yes, it’s code for carbon; there are no restrictions on any kind of energy,” said Troy Fitrell, a senior official at the State Department’s Bureau of African Affairs.