Banks Funded $385 Billion to Coal Sector Since 2021

At COP26 held in Glasgow in 2021, 197 countries agreed to phase down coal and many of the world’s largest commercial banks made pledges to decarbonise their portfolios.

However, in the past three years, commercial banks have channelled over $385 billion to the global coal industry, with China alone contributing $248 billion, according to a new research published by Germany’s Urgewald and 23 NGO partners, which examined the development of commercial banks’ financial flows to coal companies since Glasgow.

“We were hoping to at least see a consistent downward trend, but the annual breakdown of our data shows that while coal financing dropped from $132 billion in 2022 to $123 billion in 2023, it shot back up to $130 billion in 2024. It’s as if Glasgow never happened,” Katrin Ganswindt, Director of Financial Research at Urgewald, said.

Proposals for new coal are quickly losing ground as renewables and especially solar have become the cheapest option for building new power plants in almost every country in the world. Although the pipeline of new coal projects is rapidly dwindling, the existing coal plant fleet of over 2,100 GW is not, and its continued emissions are bringing us ever closer to disastrous climate tipping points.

“The coal party is over, but most banks still refuse to leave the dance floor,” Ganswindt said.

A whopping 92% of the $385 billion commercial banks channelled to the coal industry between 2022 and 2024 came from the banks including in China ($248 billion), the US ($51 billion), Japan ($21 billion), Europe ($20 billion), and Canada ($12 billion).

US Banks

Since 2022, US banks increased their support for the coal industry by over $4 billion, with a financing peak in 2023. The top five coal banks in the US are Bank of America ($6.8 billion), JPMorgan Chase ($5.1 billion), Citigroup ($4.8 billion), Wells Fargo ($4.5 billion) and Jefferies Financial Group ($4 billion).

Canada

Canada’s commercial banks have provided $12.3 billion to the coal industry. The country’s top coal financiers are Scotiabank with $3.3 billion, followed by Royal Bank of Canada ($2.9 billion), Toronto-Dominion Bank ($2.7 billion), Bank of Montreal ($1.6 billion), and Canadian Imperial Bank of Commerce ($1.3 billion).

Europe

European banks have funded $20 billion to the coal industry and they include Barclays from the UK ($4 billion), Deutsche Bank from Germany ($2 billion), BNP Paribas from France ($1.5 billion), UBS from Switzerland ($1.3 billion) and Santander from Spain ($0.9 billion).

While the annual coal financing volumes of BNP Paribas, Santander and UBS have steadily decreased since 2022, Deutsche Bank and Barclays have stepped up their support for the industry.

In 2024, Deutsche Bank’s coal financing was 151% higher and that of Barclays was 20% higher than in 2022. This is in stark contrast to UBS, which decreased its coal financing by 76% over the same time period.

“Barclays and Deutsche Bank need to urgently roll back their coal financing and tighten the revenue thresholds in their policies. The earlier energy companies and the finance industry transition, the easier the change. And the earlier we bring down emissions, the higher our chances of avoiding a breakdown of our climate system,” Ganswindt said.

China

While Chinese commercial banks provided marginally less finance to the coal industry in 2024 than in 2022, they remain the biggest coal bankers worldwide and channelled over $248 billion to the industry since 2022.

Out of the top five Chinese coal banks, the Industrial and Commercial Bank of China (ICBC) was the only bank, whose annual coal financing was lower in 2024 than in 2022. The other 4 top banks stepped up their support for the industry since 2022, whereby CITIC showed the biggest increase with almost $5 billion since Glasgow.

Japan

Japanese commercial banks provided over $21 billion to the coal industry but the annual numbers, however, show a clear reduction trend. In 2024, Japanese coal financing was at $5.9 billion, down from $8.7 billion in 2022 – a decrease of almost 32%.

The steepest decrease in 2024 came from the SMBC Group and Nomura, which each provided almost $600 million less to the coal industry than in 2022.

“Japanese banks still lack credible transition plans and have yet to adopt policies that are in line with the Paris Climate goal. Especially Mizuho and Mitsubishi UFJ need to stop dragging their feet. Their portfolios read like a who is who of companies that are resisting a transition. Mizuho and Mitsubishi UFJ must adopt firm coal phase-out commitments without loopholes,” said Ayumi Fukakusa, Director of Friends of the Earth Japan.

SE ASIA

With the collapse of large parts of Southeast Asia’s coal plant pipeline, coal financing by many of the region’s domestic commercial banks has significantly declined. Coal financing from banks in Malaysia and Thailand is now less than half than it was in 2022, and coal financing by the Philippine commercial banks decreased by 96% since COP26 in Glasgow.

Indonesia’s banks are, however, the exception and have almost tripled their coal financing since 2022 from $1.4 billion to $4 billion. This is largely due to the fact that over 13 GW of new coal power capacity are still planned in Indonesia.

“Our findings are a call to action for asset owners, financial regulators and civil society organizations who realize that financing coal puts our economy, the financial system and us all at risk. Investors need to reconsider their investments in the banks that are keeping coal alive. Regulators need to curtail financial flows that increase systemic risk,” Ganswindt said.