Banks’ 2023 fossil fuel funding rises to $705bn: Study

  • : Coal, Natural gas
  • 24/05/13

Fossil fuel financing by the world's 60 largest banks rose to $705bn in 2023, up by 4.8pc from $673bn in 2022, with the increase largely driven by financing for the LNG sector.

This brings the total funding for fossil fuels since the Paris agreement was signed in 2015 to $6.9 trillion.

The 15th annual Banking on Climate Chaos (BOCC) report was released on 13 May by a group of non-governmental and civil society organisations including the Rainforest Action Network and Oil Change International, and it analyses the world's 60 largest commercial and investment banks, according to ratings agency Standard and Poor's (S&P).

Funding had previously dropped in 2022 to $673bn from $742bn in 2021, but this was because higher profits for oil and gas companies had led to reduced borrowing.

JPMorgan Chase was the largest financier of fossil fuels in 2023 at $40.9bn, up from $38.7bn a year earlier, according to the report. It also topped the list for banks providing financing to companies with fossil fuel expansion plans, with its commitments rising to $19.3bn from $17.1bn in 2022.

Japanese bank Mizuho was the second-largest financier, increasing funding commitments to $37bn for all fossil fuels, from $35.4bn in 2022. The Bank of America came in third with $33.7bn, although this was a drop from $37.3bn a year earlier.

Out of the 60 banks, 27 increased financing for companies with fossil fuel exposure, with the rise driven by funding for the LNG sector — including fracking, import, export, transport and gas-fired power. Developers have rallied support for LNG projects as part of efforts to boost energy security after the Russia-Ukraine war began in 2022, and banks are actively backing this sector, stated the report.

"The rise in rankings by Mizuho and the prominence of the other two Japanese megabanks — MUFG [Mitsubishi UFG Financial Group] and SMBC [Sumitomo Mitsui Banking] — is a notable fossil fuel trend for 2023," the report said.

Mizuho and MUFG dominated LNG import and export financing, providing $10.9bn and $8.4bn respectively, to companies expanding this sector. Total funding for the LNG methane gas sector in 2023 was $121bn, up from $116bn in 2022.

Financing for thermal coal mining increased slightly to $42.2bn, from $39.7bn in 2022. Out of this, 81pc came from Chinese banks, according to the report, while several North American banks have provided funds to this sector, including Bank of America.

Some North American banks have also rolled back on climate commitments, according to the report. Bank of America, for example, had previously committed to not directly financing projects involving new or expanded coal-fired power plants or coal mines, but changed its policy in late 2023 to state that such projects would undergo "enhanced due diligence" and senior-level reviews.

The report also notes that most banks' coal exclusions only apply to thermal coal and not metallurgical coal.

Total borrowing by oil majors such as Eni, ConocoPhillips, Chevron and Shell fell by 5.24pc in 2023, with several such as TotalEnergies, ExxonMobil and Hess indicating zero financing for the year.

The BOCC report's finance data was sourced from either Bloomberg or the London Stock Exchange between December 2023 and February 2024.

UK-based bank Barclays, which ranks ninth on the list with $24.2bn in fossil fuel funding, said that the report does not recognise the classification of some of the data. Its "financed emissions for the energy and power sectors have reduced by 44pc and 26pc respectively, between 2020-23," it said.

In response to its increase in financing for gas power, "investment is needed to support existing oil and gas assets, while clean energy is scaled," the bank said.


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24/06/14

S Africa's ANC, DA agree to form government

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.

Renewable natural gas not ‘major’ for climate: Chevron


24/06/13
24/06/13

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.

UK political parties repeat existing stances on energy


24/06/13
24/06/13

UK political parties repeat existing stances on energy

London, 13 June (Argus) — The two main UK political parties have set out their plans, including on energy and climate change, with just three weeks until the general election. Energy security and the cost to consumers is a recurring theme for both, but the manifestos present some marked differences in approach to the energy transition. Both the incumbent Conservative and opposition Labour parties doubled down on existing positions in their respective manifestos. The Conservative party said that it remains committed to the UK's 2050 net zero emissions target, but promises a "pragmatic and proportionate" route. The party's manifesto guarantees "no new green levies or charges while accelerating the rollout of renewables". The UK's net zero goal is legally-binding, and was passed with significant cross-party support under a Conservative government in 2019. The Conservatives have been in power since 2010, and fielded five prime ministers in that time. Recent polling data show a substantial lead for Labour, which performed well at local elections in May. Labour placed strong focus on the opportunity the transition offers, saying that it would place the UK at the "forefront of climate action by creating the green jobs of the future at home and driving forward the energy transition on the global stage". The party has committed to zero-carbon power by 2030, although it would "maintain a strategic reserve of gas power stations to guarantee security of supply", it said. The Conservative manifesto reiterates the party's plans to build new gas-fired power plants. The party had previously committed to a decarbonised power grid by 2035, in line with a G7 pledge, although that is not mentioned in its manifesto. The two main parties clearly diverge on their approaches to North Sea oil and gas production. The Conservatives aim to keep the windfall tax — which effectively results in a 75pc rate — on oil and gas producers in place "until 2028-29, unless prices fall back to normal sooner". Labour confirmed plans to lift the rate to 78pc and run the tax until the end of the next parliament, which is likely to be mid-2029. Labour is also clear that it "will not revoke existing licences" in the North Sea, but it will not issue any new licences — for oil, gas or coal. The Conservatives restated the party's aim to legislate for annual North Sea licensing rounds . Both parties back nuclear energy, including small modular reactors — though those are unlikely to be operational until after 2030. And both pledge to cut planning bureaucracy and tackle grid connections. Labour's plans to "double onshore wind, triple solar power, and quadruple offshore wind by 2030" would result in installed capacity of 31GW, 48GW and 59GW, respectively, from a baseline of end-2023. The Conservatives' target to triple offshore wind by the end of the next parliament would put installed capacity at 44GW in 2029 — below the 50GW target for 2030 set in 2022 — while it said it supports solar and onshore wind in some circumstances. Finance in focus Both parties are keen to pull in private-sector investment, while Labour took up an original Conservative pledge to "make the UK the green finance capital of the world". And both pledge to address the cost of energy for consumers — Labour through local power generation projects and home insulation upgrades, and the Conservatives by ruling out any further "green levies". The latter plans to reverse London's expansion of the ultra-low emissions zone — originally planned by Conservative then-mayor and later prime minister Boris Johnson. Labour said that it would restore a phase-out date of 2030 for new internal combustion engine cars — which prime minister Rishi Sunak in September pushed back to 2035 . On an international level, both parties mention climate leadership at summits such as UN Cops. The Conservatives pledged to "ring-fence" the UK's climate finance commitments, while Labour committed to restore development spending to 0.7pc of gross national income "as soon as fiscal circumstances allow". By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

TTF front-month trades at highest since December 2023


24/06/13
24/06/13

TTF front-month trades at highest since December 2023

London, 13 June (Argus) — The Netherlands' TTF front-month gas price was trading near the highest level since last year this morning and afternoon as LNG supply outages contribute to market tightness. The price traded at €36.12/MWh ($38.88/MWh) on the Intercontinental exchange at 15:00 London time today. If the price holds around this level until the close it would be the highest front-month assessment since 8 December 2023. The contract opened at €35.43/MWh on the exchange, up from Argus' Wednesday assessment of €35.20/MWh, and climbed in the morning on the news of an extended shutdown at an Australian LNG terminal. Operations at Chevron's 8.9mn t/yr Wheatstone LNG export terminal in Australia may be disrupted for several weeks , the firm announced today. Loadings from the terminal have been halted since 10 June because of unplanned maintenance. The outage was previously expected to last until 14 June and disrupt delivery of 3-4 cargoes, but could now last until 19-26 June, according to market sources and loading schedules. Although Europe rarely imports cargoes directly from Australia, the reduction in deliveries to northeast Asia will mean prices in that region have to increase to attract more Atlantic-basin cargoes, pulling up the TTF at the same time. Quantities of US LNG on the water have risen sharply since mid-May according to Vortexa data, despite no incentive for floating storage, suggesting that more vessels are taking the longer route to deliver cargoes to northeast Asia ( see US LNG on the water graph ). The Wheatstone shutdown comes on top of a second quarter of planned and unplanned outages at other export terminals. High utilisation rates at terminals mean any downtime translates directly into lower deliveries than expected and contributes to LNG market tightness. The US' 33mn t/yr Sabine Pass terminal may be undergoing maintenance this month, based on reductions in feedgas deliveries. An unplanned outage last month cut deliveries from Australia's 15.6mn t/yr Gorgon terminal, while Peru's 4.4mn t/yr Peru LNG terminal is down for two weeks of maintenance. In addition to LNG supply disruptions, unplanned constraints at Norwegian offshore infrastructure at the beginning of this month removed supply from the European market and pushed up prices. A crack in a pipeline in an offshore hub discovered on 2 June caused a shut-in at the Nyhamna processing plant. The cut in gas production from connected fields over the five days that it took for the plant to restart was equivalent to 2-3 LNG cargoes. Although Norwegian gas production and global LNG loadings have been lower than previously expected, demand in Europe remains muted. Stocks in the EU are higher than ever for the time of year, while industrial demand remains low. Temperatures have held well below normal in much of western Europe since the beginning of the month. Heating demand has been higher than normal for the period, but the weather is already so warm that conditions much cooler than normal can only spur small increases in heating demand. Gas-fired generation was weak in May as increased renewables capacity, strong nuclear output and low aggregate demand cut into the incentive for power sector gas burn. By Rhys Talbot TTF front-month US LNG on the water, mn t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Forecast heatwave for Japan’s Tohoku to boost power use


24/06/13
24/06/13

Forecast heatwave for Japan’s Tohoku to boost power use

Osaka, 13 June (Argus) — An unusual heatwave may hit north Japan's Tohoku region in the second half of June, which would encourage utilities in the area to maximise available thermal power units to meet expected increased electricity demand for cooling. The Japan Meteorological Agency on 13 June published its forecast that the Tohoku area, along with south Japan's Okinawa region, will experience extremely high temperatures for this time of the year over 19-27 June with more than a 30pc probability of this occurring. The short-term outlook follows Tohoku having already faced tighter electricity supplies this week because of hotter than normal weather and the absence of nearly 5GW of thermal power capacity, comprising 2.85GW of coal-fired and 2GW of gas-fired capacity, for maintenance checks and repairs. The reduced coal-fired capacity includes the unexpected and extended shutdown of the technical problem-affected 1GW Haramachi No.2 unit, which is expected to be off line over 21 May-29 July, according to a power plant operational status notice by the Japan Electric Power Exchange (Jepx). Tohoku utilities lifted coal-fired generation to an average of 4.08GW during 10-12 June, up by 3pc from a week earlier, according to nationwide transmission system operator the Organisation for Cross-regional Co-ordination of Transmission Operators (Occto). Gas-fired output rose by 9pc to average 4.03GW, while oil-fired generation increased by 25pc to average 138MW during the period. Utilisation of coal-fired and gas-fired generation units reached an average of 78pc and 65pc respectively across 10-12 June, with oil-fired units at 23pc, according to an Argus survey based on Occto output data and operational power capacity provided by Jepx. Occto has ordered the Tepco Power Grid to supply electricity to the Tohoku Electric Power Network to avoid possible outages in the Tohoku area. Tohoku plans to secure up to 550MW for 3.30-5pm and 500MW for 5-8pm Japan time on 13 June. This followed Occto's similar order to Tepco to send to Tohoku up to 300MW for 6-7pm on 11 June and 300MW for 5.30-7pm on 12 June. The power reserve level in the Tohoku area was 2.82pc for 5.30-6pm on 13 June, below a minimum 3pc level necessary for any emergencies such as a spike in peak power demand and an unexpected shutdown of power plants. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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