Australian bank ANZ to exit all coal lending by 2030
Australian bank ANZ will exit all lending to companies with exposure to thermal coal either through extraction or power plants by 2030, as part of its new lending criteria to support the 2015 Paris climate agreement target of net-zero greenhouse gas (GHG) emissions by 2050.
ANZ, which is one of four banks that dominate the banking sector in Australia, will no longer finance any firms that have more than 10pc of their total revenue from thermal coal activities, the bank said.
The Melbourne-based bank will only lend to renewable projects and low-carbon gas projects by 2030 and will discuss with its customers that have more than 50pc of their revenue from thermal coal about diversification strategies by 2025. "We will cap limits to customers that do not meet this expectation and reduce our exposure over time," ANZ said.
The tightening of the lending criteria to the thermal coal industry follows ANZ's previous stance unveiled last year of lending only to new customers that have less than 50pc of their revenue from thermal coal and not financing the construction of any new conventional coal-fired power plants. It also marks a shift from when the bank first unveiled its thermal coal lending policy in 2015, when it said it would consider financing new coal-fired power stations only if advanced technology and higher-quality thermal coal were used.
ANZ was the last of Australia's four largest banks to commit to exiting lending to thermal coal activities, with fellow Australian bank Westpac pledging to neither lend money nor invest in the thermal coal mining industry from 2030.
Australia is the world's second-largest exporter of thermal coal. The sector faces more headwinds now that Australia's four largest banks will no longer lend for new thermal coal mine developments or expansions of existing mines. Australia's three largest coal customers have also all committed to net-zero emissions by 2050 for Japan and South Korea and 2060 for China. These three countries took around three-quarters of Australia's thermal coal exports in calendar 2019.
ANZ will finance the construction of large-scale office buildings only if they are highly energy efficient and the bank will source 100pc of the electricity consumed by its operations from renewable sources by 2025 to help with the transition to a less emissions-intensive economy, it said.
Related news posts
Ayala’s South Luzon coal plant eligible for retirement
Ayala’s South Luzon coal plant eligible for retirement
Manila, 24 April (Argus) — Early decommissioning of coal-fired power plants in the Philippines has advanced with utility Ayala Energy's 246MW South Luzon Thermal Energy eligible for the US-based Rockefeller Foundation's coal to clean credit initiative (CCCI). The Rockefeller Foundation is a non-profit philanthropic group that creates and implements programmes in partnership with the private sector across different industries aimed at reversing climate change. Ayala has been working with the foundation to further shorten South Luzon's operating life from an original decommissioning date of 2040 to 2030. Doing so could result in the reduction of up to 19mn t of carbon emissions, Ayala said. An assessment by the Rocky Mountain Institute, the technical partner of the foundation for its energy-related projects, found that an early retirement date of 2030 instead of the original retirement date of 2040 could yield positive financial, social and climate outcomes. But decommissioning by this date will require carbon finance. Carbon financing will need to cover costs associated with the early retirement of the power plant's power supply contract, costs associated with 100pc clean replacement of the plant's power generation, plant decommissioning and transition support for workers affected by the plant's early closure, Ayala said. Ayala's listed arm ACEN welcomed the plant's eligibility for the CCCI programme, as its retirement is part of the company's goal to have its power generation portfolio composed solely of 100pc renewable sources by 2025. The Philippines' Department of Energy (DOE) said if successful, the pilot programme could serve as a basis for the development of other early retirement efforts as part of the country's plan to reduce carbon emissions. The DOE is seeking the early decommissioning of coal-fired power plants older than 20 years with a combined total capacity of 3.8GW by 2050, as part of the Philippines' transition to clean energy. By Antonio delos Reyes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US-led carbon initiative misses launch date
US-led carbon initiative misses launch date
Houston, 23 April (Argus) — The Energy Transition Accelerator (ETA), a global initiative to use voluntary carbon market revenue to speed the decarbonization of developing countries' power sectors, has missed its planned Earth Day launch but continues to prepare for doing business. At the Cop 28 climate conference in Dubai last year, the initiative's leaders said they hoped to formally launch the program on 22 April 2024 . That didn't happen, but the program's leaders last week announced that the US climate think tank Center for Climate and Energy Solutions will serve as the ETA's new secretariat and that former US special presidential envoy for climate John Kerry will serve as the honorary chair of an eight-member senior consultative group that will advise the ETA's design and operations. The ETA plans to spend 2024 "building" on a framework for crediting projects they released last year. ETA leaders said the initiative could ultimately generate tens of billions of dollars in finances through 2035. The ETA also said the Dominican Republic had formed a government working group to "guide its engagement" as a potential pilot country for investments and that the Philippines would formally participate as an "observer country" rather than as a direct participant immediately. The ETA is still engaging Chile and Nigeria as potential pilot countries too, the initiative told Argus . The ETA is being developed by the US State Department, the Rockefeller Foundation, and the Bezos Earth Fund and would be funded with money from the voluntary carbon market. The initiative's ultimate goal is to allow corporate and government offset buyers to help developing countries decarbonize their power sectors through large projects that accelerate the retirement of coal-fired power plants and build new renewable generation. As of now, the ETA's timeline for future changes and negotiations with countries and companies is unclear. The program's goals are ambitious, especially at a time when scrutiny of some voluntary carbon market projects from environmentalists has weighed on corporate offset demand. By Mia Westley Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan’s Higashidori No.1 reactor faces further delays
Japan’s Higashidori No.1 reactor faces further delays
Osaka, 23 April (Argus) — Japanese utility Tohoku Electric Power has confirmed a further delay in reinforcement works at its 1,100MW Higashidori No.1 nuclear reactor, with its completion date unknown. The postponement in restarting the Higashidori reactor in northern Aomori prefecture would encourage Tohoku to secure replacement thermal fuels — such as LNG and coal — for an extended period, although the company is planning to resume another reactor in September. Tohoku previously aimed to complete the reinforcement work at Higashidori in the April 2024-March 2025 fiscal year. But the company needs more time to clear all the procedures for the assessment of basic earthquake ground motions and tsunamis, and to prepare for the plant inspection. It is still unclear when the company will complete the safety measures. The Higashidori reactor is undergoing inspections by Japan's nuclear regulation authority (NRA), based on stricter safety rules following the 2011 Fukushima nuclear disaster. The reactor will need to pass the safety checks and secure approval from local governments before restarting. Tohoku has three commercial reactors, including two at Onagawa in Miyagi prefecture and the Higashidori No.1 reactor, of which it applied to restart two. The 825MW Onagawa No.2 reactor has already cleared the NRA's safety inspections and obtained permission from local authorities to restart. The company is now planning to restart the Onagawa No.2 reactor in September . The possible return of the Onagawa No.2 reactor will help Tohoku reduce consumption of thermal fuels. The company used 2.76mn t of LNG in April-December 2023, up by 12pc from a year earlier, in the absence of all its nuclear reactors. But its coal consumption fell by 12pc to 5.68mn t during the period. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Colombia's electricity woes add to unrest against Petro
Colombia's electricity woes add to unrest against Petro
Bogota, 22 April (Argus) — Colombians took the streets of major cities and towns across the nation on Sunday to protest mainly against health, pension and labor changes, but potential power outages are also creating discontent. Authorities estimated that about 250,000 Colombians marched in widespread protests, sparked by changes in healthcare. Congress in April had rejected President Gustavo Petro's proposals in the sector, and the government the next day seized the two largest private-sector health insurers. Protesting healthcare workers say the government did this to implement changes through a back channel. "Regulatory noise and risk are likely to remain high amid announcements, proposals, and measures [that do not require congressional approval], aimed at changing the game's rules in strategic sectors," brokerage Credicorp Capital said. Colombians also protested being on the verge of electricity rationing like that in neighboring Ecuador as hydroelectric reservoirs remain at record-low levels. Several unions and other associations have long warned the Petro administration to take measures to offset the effects of the El Nino weather phenomenon. Electricity distributors last year called for allowing bills for energy purchased on the spot market to be deferred and for loosening price index rules, among other proposals. The national business council sent at least three letters to the president on the issue. At least nine separate letters calling for preparation to prevent blackouts were sent to the president and ministers. Several actions were only recently implemented . "There are no risk of electricity rationing in Colombia," former energy minister Irene Velez said in 2023. "We do not understand why some people are interested in generating panic." Government weather forecasts also overestimated rainfall expected for March, leading hydroelectric plants to use more water in the reservoirs than they otherwise would have, said director of the thermoelectric generation association (Andeg) Alejandro Castaneda. Reservoir levels stood at 29.5pc today, rising thanks to rains since 19 April, up from 28.75pc on 18 April. Electricity rationing is set to begin when reservoirs drop below 27pc, according to grid operator XM. By Diana Delgado Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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