{"id":35373,"date":"2024-12-18T01:01:05","date_gmt":"2024-12-18T00:01:05","guid":{"rendered":"https:\/\/reclaimfinance.org\/site\/?p=35373"},"modified":"2024-12-18T09:54:23","modified_gmt":"2024-12-18T08:54:23","slug":"banks-urged-to-refuse-mufgs-call-to-finance-papua-lng","status":"publish","type":"post","link":"https:\/\/reclaimfinance.org\/site\/en\/2024\/12\/18\/banks-urged-to-refuse-mufgs-call-to-finance-papua-lng\/","title":{"rendered":"Banks urged to refuse MUFG\u2019s call to finance Papua LNG"},"content":{"rendered":"

Copublished with Centre for Environmental Law and Community Rights Inc. (CELCOR), Papua New Guinea, Japan Center for a Sustainable Environment and Society (JACSES), Friends of the Earth Japan, Jubilee Australia Research Centre, ActionAid Australia, Market Forces, Reclaim Finance<\/p>\n<\/div>

18 December – Thirty-one civil society organisations are raising the alarm about financing for a new LNG project in Papua New Guinea, following the news that Japanese bank MUFG has taken on the lead role seeking finance for the project (1). The NGOs have written to private and public banks urging them not to finance the project, which is being developed by TotalEnergies, ExxonMobil, Santos and JX Nippon.<\/p>\n<\/div>

MUFG, which was recently discovered to have taken on the lead role, replaces the French bank Cr\u00e9dit Agricole, which withdrew<\/a><\/span> from the project earlier this year following criticism over the climate, biodiversity and human rights impacts. MUFG is the biggest supporter<\/a><\/span> of LNG expansion globally, providing more than US$10 billion across 90 deals in 2023 (2).<\/p>\n

MUFG\u2019s involvement comes after the Final Investment Decision for the project was postponed until late 2025, due to rising costs and major international banks\u2019 reluctance to provide finance.<\/p>\n

Campaigners are targeting 27 banks and lenders (3), highlighting the financial risks<\/a><\/span> facing the Papua LNG project (4), as well as the climate risks which they say will\u00a0 jeopardize banks\u2019 commitments to keep global warming below 1.5 C.<\/p>\n

Eleven banks, including the French bank BNP Paribas and the Commonwealth Bank of Australia have so far ruled out financing for the project (5), which will involve 9 production wells, a 320 km onshore and offshore pipeline, and 4 electric liquefaction trains. Campaigners warn that exploitation of the gas will result in over 220 million tons of CO2 emissions<\/a><\/span> (scope 3), equivalent to the annual emissions of Bangladesh and its 169 million inhabitants.<\/p>\n<\/div><\/div><\/div>

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MUFG\u2019s decision to step in as financial advisor for the controversial Papua LNG project, abandoned by French banks, underscores its glaring risk management failures. By supporting a project that violates the Equator Principles and which does not appear to have obtained the free, prior and informed consent of Indigenous communities, MUFG reveals its disregard for its own commitments to responsible financing.<\/em><\/p>\n<\/div>

Eri Watanabe, Japan Energy Finance Campaigner at Market Forces<\/strong><\/p>\n<\/div><\/div><\/div>

Papua LNG is one of 156 planned LNG terminal projects, which if built, could collectively unleash a massive 10 gigatonnes of climate-wrecking greenhouse gas emissions, and undermine efforts to limit global temperature rise below 1.5 C (6).<\/p>\n

Banks have provided significant backing, pouring US$213 billion into LNG expansion between 2021 and 2023, with US and Japanese banks the biggest supporters, providing more than US$51 billion and US$30 billion for LNG expansion respectively. This support comes despite the fact that many of these banks, including MUFG, have committed to achieve net zero emissions by 2050 (7).<\/p>\n<\/div><\/div><\/div>

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While global financial institutions pivot away from oil and gas to align with the 1.5\u00b0C pathway, MUFG and Mizuho doubled down on LNG expansion financing, inviting global criticism. MUFG and other global banks must join European and Australian banks in rejecting the Papua LNG project and commit to ending financing for oil, gas, and unnecessary LNG infrastructure.<\/i><\/em><\/p>\n<\/div>

Eri Watanabe, Japan Energy Finance Campaigner at Market Forces<\/strong><\/p>\n<\/div><\/div><\/div>

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People in Papua New Guinea deserve clean energy and a sustainable economy. PNG has already identified renewable energy projects that could dramatically expand energy access for everyday people. We don\u2019t need fossil gas and 95% of Papua LNG\u2019s gas will be sent overseas. The climate crisis is hurting our people, our lands, our livelihoods. We are not fooled by the false promises of fossil fuels. Banks must not finance this project. If they do they risk being knowingly complicit in human rights, climate and environmental harms.<\/i><\/em><\/p>\n<\/div>

Peter Bosip, executive director of the Papua New Guinea NGO, the Centre for Environmental Law and Community Rights (CELCOR)<\/strong><\/p>\n

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It is time banks woke up to the climate impacts of LNG expansion. Banks must act on their commitments to net zero and switch their investments out of fossil fuel projects and to sustainable energy.<\/i><\/em><\/p>\n<\/div>

Antoine Bouhey, campaigner at Reclaim Finance<\/strong><\/p>\n<\/div><\/div><\/div>

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Signatories to this open letter include groups from PNG, Japan, South Korea and other parts of Asia. This signals resistance to Papua LNG across the supply and investment chain – from the place where fossil gas will be extracted, to its intended locations of finance and gas reselling, to the end markets likely targeted for its gas. This reflects the depth of human rights, climate and biodiversity concerns. It forewarns financiers that they may risk legal or non-judicial complaints, damages claims or other financial risks if they fail to heed these warnings.<\/i><\/em><\/p>\n<\/div>

Shona Hawkes, Director Land and Environmental Justice, Jubilee Australia Research Centre<\/strong><\/p>\n<\/div><\/div><\/div>

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Contacts:<\/h2><\/span>
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