Australia’s ANZ bank to end new gas, oil lending

  • Market: Crude oil, Emissions, Natural gas
  • 09/05/24

Australia-based bank ANZ has updated its oil and gas policy, with it to no longer provide direct financing to new or expanding upstream oil and gas projects.

The bank declared its new policy as part of its 2024 half-year results released on 7 May, saying it would also decline to integrate new customers primarily focused on upstream oil and gas.

ANZ said that while it believes gas plays a "material and important part in meeting Australia's current energy needs and will do so for the foreseeable future", it will instead collaborate with energy customers to help finance their transition away from fossil fuels.

The bank has a 26pc greenhouse gas (GHG) emissions reduction by 2030 goal and committed in 2020 to exit all lending to companies with exposure to thermal coal, either through extraction or power generation by 2030 as part of lending criteria to support the 2015 UN Paris climate agreement target of net zero GHG emissions by 2050.

ANZ has however promised to consider exceptions on a case-by-case basis, if any national energy security issues arise.

Australia's banks have been under sustained pressure by environmental groups to exit lending to fossil fuel projects, as upstream gas firms also face shareholder rebellions over climate action plans. But Australia's federal government has conceded gas will likely be needed post-2050 as a firming power source for renewables and industrial feedstock for some sectors.

But investment in upstream exploration has been extremely low in recent years, with imports of LNG likely in southern Australia from about 2026 to meet demand for industrial users and power generation.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News

S Africa's ANC, DA agree to form government


14/06/24
News
14/06/24

S Africa's ANC, DA agree to form government

Cape Town, 14 June (Argus) — South Africa's African National Congress (ANC) and Democratic Alliance (DA) political parties today agreed to form a government while the first sitting of the new parliament was underway. The agreement, which includes the Inkatha Freedom Party (IFP), paves the way for ANC leader Cyril Ramaphosa to be re-elected president. The parties will assume various positions in government broadly in proportion to their share of seats. The government of national unity (GNU) agreement is the result of two weeks of intense negotiations after the ANC lost its long-held majority in the national election on 29 May. It secured 40.2pc of the vote, and the centre-right, pro-market DA retained its position as the official opposition with 21.8pc. The deal scuppers the possibility of an alliance between the ANC and the two largest left-wing parties, MK (uMkhonto weSizwe) and the Economic Freedom Fighters (EFF), which credit ratings agency Fitch warned could pose risks to macroeconomic stability . MK party unseated the EFF in the election to come third, winning 14.6pc of the vote. The EFF secured 9.5pc, and the IFP came a distant fifth with 3.85pc. The MK and EFF are populist parties that campaigned on agendas including wide-scale land expropriation without compensation, nationalisation of economic assets — including mines, the central bank and large banks and insurers — halting fiscal consolidation and aggressively increasing social grants. The GNU parties agreed the new administration should focus on rapid economic growth, job creation, infrastructure development and fiscal sustainability. Other priorities include building a professional, merit-based and non-partisan public service, as well as strengthening law enforcement agencies to address crime and corruption. Through a national dialogue that will include civil society, labour and business, parties will seek to develop a national social compact to enable South Africa to meet its developmental goals, they said. The GNU will take decisions in accordance with the established practice of consensus, but where no consensus is possible a principle of sufficient consensus will apply. By Elaine Mills Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Little progress on UN carbon markets at Bonn talks


14/06/24
News
14/06/24

Little progress on UN carbon markets at Bonn talks

Bonn, 14 June (Argus) — Negotiations in Bonn, Germany, on the future UN carbon markets closed yesterday evening with little progress, five months before the UN Cop 29 climate conference in Baku, Azerbaijan, in November. Negotiation texts on carbon market rules under both Article 6.2 and 6.4 of the Paris climate agreement, passed at the end of the Bonn UN climate talks, still included a range of options and a significant amount of bracketed text, which marks as yet undecided wording. Disagreement persists on issues touching on the registries for credits under both mechanisms, information disclosure requirements along the credit-generating process, and the timing and scope of credit authorisation, including the extent to which this authorisation might be revoked. One proposed option would allow host countries to transfer Article 6.4 emissions reductions credits that have been authorised, and therefore become so-called internationally transferred mitigation outcomes (Itmos), to the international or national registries for activities in the more informal market segment under Article 6.2. Some parties, including the US, were heard to oppose this option on grounds of "integrity", given that Article 6.2 is based on bilateral agreements between states and not strictly speaking a carbon crediting mechanism. Another option in the Article 6.2 negotiation text, upheld by several potential host countries, allows either participating party "to change and/or revoke the authorisation of Itmos at any time". One option also calls for bilateral agreements themselves to be subject to authorisation, not just the Itmos generated subsequently. Switzerland, a frontrunner on Article 6.2, has adopted the approach of authorising the actual co-operative agreements. Environmental non-governmental organisation Carbon Market Watch (CMW) today commended the stronger focus on the crucial role of transparency during the Bonn talks, with negotiating parties tasking UN climate arm the UNFCCC with developing a code of conduct on "treating and reviewing" information they classify as confidential about their trade agreements, although it remains to be seen how ambitious the code of conduct will be, CMW said. On the UNFCCC-regulated market mechanism under Article 6.4, which will broadly replace the clean development mechanism under the Kyoto Protocol, there is hope that the supervisory body will solve outstanding issues in the meetings it has lined up before Cop 29. These include the methodologies underpinning permitted credits and how to deal with credits generated by carbon removal activities. The Bonn talks also saw a push for a verdict on the eligibility of carbon credits generated by emissions avoidance activities. But countries ended up sticking to the position agreed at Cop 28 to postpone a decision on the issue until 2028. "Completing the remaining elements on Article 6 in Baku will unlock further funding for national climate plans and adaptation," the UNFCCC said today. By Chloe Jardine Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Low-CO2 biofuel feedstock imports to rise: USDA


13/06/24
News
13/06/24

Low-CO2 biofuel feedstock imports to rise: USDA

New York, 13 June (Argus) — A new US tax credit kicking off next year that is more generous for fuels that produce fewer greenhouse gas emissions will likely spur more imports of low-carbon feedstocks, the US Department of Agriculture (USDA) said in a report this week. A raft of government incentives, including the federal renewable fuel standard and low-carbon fuel standards (LCFS) in states like California, has already spurred a boom in renewable diesel production, upping demand for feedstocks that can be used to make the fuel. The US was a net soybean oil importer for the first time ever in 2023 because of strong demand from domestic refineries, and the value of US imports of animal fats and vegetable oils more than doubled from 2020 to 2023 according to the report. That trend could become even more pronounced next year as the Inflation Reduction Act's 45Z tax credit, which offers up to $1.75/USG for sustainable aviation fuel and up to $1/USG for other fuels like renewable diesel, comes into force. The credit can only be claimed for fuel produced in the US, likely cutting biofuel imports and sending more feedstocks that would have been refined abroad to the US instead, the report says. The 45Z credit will also be more generous to fuels with lower carbon intensity, upping demand for waste feedstocks like used cooking oil that already fetch greater discounts in LCFS programs. Fast-rising imports of China-origin used cooking oil have already frustrated some agricultural groups, which lose out if there are more ample supplies of waste feedstocks. The report says that while soybean oil was the "crucial feedstock" allowing for the recent growth in US renewable diesel, its share of the feedstock mix has been trending downwards because of competition from lower-carbon feedstocks and lower-cost canola oil from Canada. While soybean oil exports have plunged because of the renewable diesel boom, they could recover slightly if refineries increasingly turning to waste feedstocks cuts into US soybean oil's current premium over global vegetable oils. The report adds that soybean oil's role in renewable diesel production is also at risk from rising supplies of soybean meal, which is produced alongside oil at crush plants and where the global demand picture is less clear. "Based on global demand for soybean meal, soybean oil cannot continue to fuel renewable diesel production growth at current rates during the next few years without major changes to global soybean meal demand, shifts in exporter market shares, or lower supplies in other exporting countries," the report says. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Renewable natural gas not ‘major’ for climate: Chevron


13/06/24
News
13/06/24

Renewable natural gas not ‘major’ for climate: Chevron

New York, 13 June (Argus) — The growth of renewable natural gas (RNG) production is great news for the climate, but "to say that it is having a major impact by itself is difficult," the president of Chevron's global gas division said this week at an industry gathering. The US oil major, which has invested in RNG facilities in California , Michigan and elsewhere in recent years, has also boosted its conventional gas production on the heels of a crude-focused acquisition of a Denver-based producer. "I don't want to get called out (for) greenwashing or whatever because the volume is just very small compared to the overall portfolio," Chevron gas division president Freeman Shaheen said at the Northeast LDC Gas Forum in Boston, Massachusetts. Advocates for RNG hail the fuel, comprising methane from landfills and animal waste projects that is processed into pipeline-quality gas, as a boon for the climate. This is not only because its use displaces conventional natural gas produced in hydrocarbon drilling — so-called ‘fossil gas' — but because its production takes methane that would have been released directly into the atmosphere and burns it as fuel, releasing CO₂ — a less potent greenhouse gas — instead. But RNG today comprises just 0.5pc of the North American gas market. Even with continued policy support and technological development, Wood Mackenzie projects it will grow to just 4 Bcf/d (113mn m³/d), or 3pc of the market, by 2050. This is why some policymakers, such as Massachusetts' utilities regulatory, have rejected gas distributors' calls to decarbonize the gas system with RNG. The energy industry simply has not invested enough in RNG over the past several decades for it to reach the scale needed to play a bigger role in cutting emissions, Shaheen said. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Generic Hero Banner

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more