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Australia’s last of four big banks has said it will stop funding thermal coal projects as the country’s major trading partners seek to cut emissions, forcing the industry to look to foreign lenders for new ones. funds.
ANZ Bank announced Thursday that it will stop lending to existing coal-fired power plants and mines by 2030 in order to reduce the carbon footprint of its loan portfolio. It said it would also immediately stop funding new projects, increase lending to the renewable energy sector and introduce emission reduction targets for funding provided to its 100 largest customers.
The move by Australia’s fourth largest bank in terms of market capitalization follows similar steps by the Commonwealth Bank of Australia and Westpac, which want to stop funding coal by 2030. The National Australia Bank will stop funding coal. thermal coal by 2035.
This follows the decisions of the Rio Tinto and BHP mining groups to go out thermal coal in response to increasing investor pressure on climate change.
In recent weeks, Australia’s three biggest thermal coal customers have announced plans to decarbonize their economies and achieve net zero emissions. South Korea and Japan want to do it by 2050 and China by 2060.
“This is good old-fashioned risk management. . .[this week]we’ve seen announcements from some of our larger coal markets, for example, like Japan. We just can’t sit back and ignore this, ”said Shayne Elliott, CEO of ANZ.
Australia’s A $ 20 billion thermal coal industry is under pressure due to Covid-19, the price of the country’s high-quality coal has fallen by about a quarter since January. But it also faces a more existential challenge due to global efforts to reduce greenhouse gas emissions, as outlined in the Paris climate agreement.
Australian banks have started reducing their exposure to thermal coal, with ANZ’s outstanding loans to industry falling to A $ 500 million in September, from A $ 1.7 billion in 2015. Suncorp and QBE, two large insurers, have also indicated that they will neither insure nor finance new coal projects from 2030.
As a result, Australian coal miners have increasingly sought funding from overseas. Whitehaven, which has a market cap of AU $ 1 billion, operated Japanese and Chinese lenders for loans. Indian conglomerate Adani Group has said it will rely entirely on its own resources to fund the controversial Carmichael project in Queensland.
ANZ’s move away from coal – the most polluting fossil fuel – has drawn criticism from the Australian Conservative government. David Littleproud, Australian Minister of Agriculture, informed customers Thursday to avoid banks that “are imposing crippling new carbon targets” on Australian farm families and industries.
Australia has not set a date for reaching net zero emissions. Scott Morrison, Australian Prime Minister, this week raise the shoulders a call from his British counterpart Boris Johnson in Canberra to take “bold action” against climate change.
“Australia will set our policies here. Our policies will not be defined in the UK, they will not be defined in Brussels, they will not be defined in any part of the world but here, ”Morrison told reporters.
Dan Gocher, climate director at the Australasian Center for Corporate Responsibility, said Australian banks’ move was a symbolic moment for the fossil fuel industry and underlined how the country’s government is isolating itself from its partners sales representatives and its own business community.
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