Granted it’s still early in 2022, but signs are emerging that the amount of financing going to coal-related projects is running at a rate that’s more than double last year’s pace.
With the first quarter coming to a close, banks (mostly based in China) have helped coal companies raise $9.9 billion via loans and bond sales, according to data compiled by Bloomberg. For comparison, the number was closer to $4.4 billion during the first three months of 2021.
While the biggest chunk of the coal money is being accumulated for Chinese coal endeavors, the increase nevertheless runs counter to all the global banking sector chatter about its supposed commitment to helping the world cut dangerous emissions. And there’s no more dangerous fossil fuel than coal—the single largest source of global temperature rise.
“It’s amazing that the numbers are so big,” said Alison Kirsch, research and policy manager at Rainforest Action Network, which published its 13th annual “Banking on Climate Chaos” report Wednesday.
The world’s 60 largest banks have helped raise about $4.6 trillion — in total — for oil, gas and coal companies since the Paris climate agreement was announced at the end of 2015, according to Rainforest Action, citing Bloomberg data among other sources.
How is it possible in 2022 that “banks are still financing coal?” Kirsch said.Bankers put coal in “the penalty box” in 2015 when they started drawing a line around mining of the combustible, black-sedimentary rock, she said. Since then, it looks like coal got back out on the ice. The data show coal financing close to doubled in 2017 and has remained elevated ever since.
Coal power needs to be phased out by nations in the Organization for Economic Cooperation and Development and the European Union by 2030—and by 2040 in the rest of the world—to meet the goals of the Paris Agreement, Kirsch said, citing reports from the United Nations and Climate Analytics.
Increasing coal investment makes this more difficult.
Some banks seem to be trying. HSBC Holdings Plc promised earlier this month to “phase down” its exposure to fossil fuels, sending a warning to oil and gas clients. The bank said it will look at updating its wider financing polices, including those for conventional and unconventional oil and gas, methane emissions and environmentally critical areas such as the Arctic and Amazon.
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