Metallurgical coal financing: time to call it off

Keeping the 1.5°C climate target within reach requires decarbonizing the economy as a whole. So far, the principal efforts made by financial institutions to support the move away from fossil fuel dependency have been directed at the supply side and, to some extent, power generation. On the other hand, sectors on the demand side have been neglected. Steel, which depends on coal for its production, is one such sector.  

For years, the absence of technological alternatives to coal for steelmaking has led banks and other financial institutions to overlook the issue of metallurgical coal in the policies they have adopted since COP21. However, technologies now exist to produce fossil-free steel and are ready for rollout. These developments make deep decarbonization of the steel sector possible.  

Immediate action to stop metallurgical coal expansion is absolutely necessary for adherence to a 1.5°C trajectory. The case for its phaseout is made even more pressing given that any new projects would not only considerably increase carbon emissions but would release huge quantities of methane into the atmosphere.  

This report exposes the financial institutions behind metallurgical coal expansion and analyzes the metallurgical coal coverage in their policies. Recommendations for the concrete first steps that can be taken by financial institutions are given at the end of the report. 

Disclaimer:

BNP Paribas indicated to Reclaim Finance a few hours before the report release they had adopted exclusion commitments regarding metallurgical coal projects. They will no longer provide financial services to metallurgical coal mining projects.

This information can be found on BNP Paribas’ Sector Policy – Mining.

The report METALLURGICAL COAL FINANCING: Time to call it off  has been updated to take into account BNP Paribas’ recent commitments.