![](images/Logos/Bloomberg.png)
Bankers still love
coal add to trade
![](images/images_03_30_2022/Pic1.png)
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. “Why, in 2022, are
banks
still financing coal?”
Bankers put coal in “the penalty box” in 2015 when they started
drawing a line around mining of the combustible, black-sedimentary
rock, Kirsch 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.
As for coal, HSBC said in December that
it plans to stop financing the industry by 2040. And
despite HSBC’s large China presence, the bank has done little in
recent years to help coal miners raise money through the debt markets,
Bloomberg data show.
Instead, the leaders in this area have been lenders such as China
Securities, an affiliate of Citic Securities, and Industrial Bank Co.,
a mid-sized Chinese bank based in Fuzhou.
The main conclusion from the Rainforest Action publication is that
runaway funding for fossil-fuel extraction and infrastructure is
“causing climate chaos and threatening the lives and livelihoods of
millions.” Citing Bloomberg data among its sources, Rainforest Action
reported that the world’s 60 largest banks helped provide about
$4.6 trillion to oil, gas and coal companies since the Paris climate
agreement was announced at the end of 2015.
And notably, the inability of bankers to cut off the spigot to coal is
“just horrible,” Kirsch said.
The conversation around coal has been growing since Vladimir Putin
launched his war on Ukraine. Europe relies on natural gas
from Russia, and the war has prompted nations, including Germany, to
consider keeping open their coal
plants.
“The big picture here is this is a moment to rapidly uptick the
movement toward renewables, and instead,
the opposite is happening,” Kirsch said. “We aren’t
accelerating the transition.”
Rainforest Action, which along with other climate-focused nonprofits
including BankTrack, Reclaim Finance and Sierra Club, has developed
scores for banks.
Not too surprisingly, those that rank among the lowest have been
lenders that extend the most funding to fossil fuels, namely JPMorgan
Chase & Co. and Citigroup Inc.
Wells Fargo & Co. has rated among the world’s top fracking
banker and Barclays Plc has placed at the bottom of the pack in
Europe. As for coal, Industrial Bank has been among the biggest
bankers of mining.
“It’s pretty stark,” Kirsch said. “It’s past the time for every bank
in every country to immediately end their support for the expansion of
coal mining and power.”
![](images/images_03_30_2022/pic2.jpg)
A coal depot near a power station in
Jiaxing, Zhejiang province, China, on Friday, March 11.
China plans a massive increase in coal mining, a move that
will dramatically reduce its reliance on imports and deal
a blow to its near-term climate actions.
Photographer: Qilai Shen/Bloomberg
Bloomberg Green
publishes Good Business every week, providing unique insights
on ESG and climate-conscious investing.
Like getting the Green Daily newsletter? Subscribe to
Bloomberg.com for
unlimited access to breaking news on climate and
energy, data-driven reporting and graphics, Bloomberg Green
magazine and more. You can read today’s newsletter on the web
here. |
|
Here’s what else you need to know in Green
![](https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iWdSeOC_FE1M/v1/-1x-1.jpg) |
Damage is set to worsen if the region fails to adapt to
higher temperatures and extreme weather events.
|
|
![](https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iDavRXbdXx.g/v1/-1x-1.jpg) |
Government officials said they will likely miss their 2025
goals.
|
|
![](https://assets.bwbx.io/images/users/iqjWHBFdfxIU/iSSofMLqWXg0/v1/-1x-1.jpg) |
The plan doesn’t have enough money behind it, according to
the head of an automakers’ group.
|
|
Green Play Ammonia™, Yielder® NFuel Energy.
Spokane, Washington. 99212
www.exactrix.com
509 995 1879 cell, Pacific.
exactrix@exactrix.com
|