Frozen Gas, Boiling Planet: How the support of banks and investors to LNG fuels a climate disaster

Reports

5 December 2024

In light of the surge in Liquefied Natural Gas (LNG) terminals over the past few years, Reclaim Finance sought to assess which financial institutions are behind the massive boom in LNG. While the International Energy Agency has stated for two years in its Net Zero Emissions by 2050 scenario that new LNG export terminals are unnecessary in a 1.5°C pathway, this report analyzes which banks and investors are pouring billions of dollars into the largest LNG developers and their new terminals. Additionally, through an evaluation of the climate commitments and policies of the 30 largest banks and 30 biggest investors backing LNG expansion, we realized that none of them have put an end to all financial services for LNG expansion.

Key findings:

0 GT
of greenhouse gas emissions could be emitted by 63 new export terminals by the end of the decade
  • LNG developers plan to massively expand their operations, with 156 new LNG terminals planned by 2030. This includes 63 new export terminals, which could emit an estimated 10 gigatonnes of greenhouse gas emissions by the end of the decade.
  • The 400 banks analyzed in this report provided US$213 billion for LNG expansion from 2021 to 2023, while the 400 investors assessed have contributed to the LNG boom through US$252 billion in exposure to LNG expansion as of May 2024.
  • US and Japanese banks are at the forefront of LNG expansion, with Mitsubishi UFJ Financial Group claiming the top spot, and JP Morgan, SMBC, and Bank of America ranking among the top 10 banks financing LNG development between 2021 and 2023. European banks are responsible for more than a quarter of LNG expansion support, with Santander, ING, Crédit Agricole, HSBC, Intesa Sanpaolo, and BPCE all in the top 30 global banks. Bank support for LNG expansion has intensified, with financing increasing by 25% between 2021 and 2023.
  • In May 2024, US investors accounted for 71% of the total investment in LNG expansion, with BlackRock, Vanguard, and State Street leading the way. These three together are responsible for 24% of all investments in LNG expansion.
  • Only seven players — all European banks—out of the top 30 banks and top 30 investors address LNG in their sector policies, and none are doing so effectively.

Reclaim Finance is urging banks and investors to adopt comprehensive policies to stop providing financial support to the developers of all new LNG projects, and to primarily stop financing export terminals.