Report: Gaslighting: Financing fossil gas power is leading Europe’s energy transition astray

5 April 2023

Decarbonising electricity production by 2035 in Europe is a crucial lever for limiting global warming to 1.5°C. There is still a long way to go in terms of fossil fuel phase-out in the power sector. 217 GW of gas plants must be phased out by 2035. But over the past four years, financial institutions have acted against this transition.

Since 2019, banks have supported the European gas power industry and its development by over US$314 billion, led by La Caixa Group, BNP Paribas, and Mitsubishi UFJ Financial in terms of financial services. Only three of the 25 most involved banks apply some restrictions to the sector – and even then these are too weak to stop expansion and support gas phase out.

As of November 2022, investors held US$200 billion in Europe’s main gas power producers and developers through publicly listed debt and equity, led by BlackRock. Investors are severely lacking gas power sector policies, with only one of the top 25 investor supports having any type of policy.

Barring swift action by financial institutions to radically restrict their financial services to gas power in Europe, they could contribute to the development of more than 63 GW of additional gas power capacity. Unless these assets are closed before the end of their lifetime, they will create massive carbon lock-in in Europe,  placing a 1.5°C trajectory out of reach.