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Australia’s Westpac Banking to stop thermal coal financing by 2030

May 04, 2020


Financing a thermal coal project in Australia just got a little bit harder after Westpac Banking Corp. said it would exit the sector by 2030, leaving Australia and New Zealand Banking Group Ltd. as the last of the country’s big four yet to commit to dropping the most polluting fuel.

Australia is the world’s second-biggest thermal coal exporter, generating A$26 billion ($16.6 billion) in export revenue in the year to end-June 2019, but it has become increasingly difficult to bring new resources on stream as financial institutions across the globe bow to pressure from shareholders and climate groups to avoid coal investments.

Westpac has already reduced its total coal exposure to A$700 million and said in its climate action plan on Monday that it would not establish relationships with any new thermal customers. The bank would continue to finance metallurgical coal, while backing initiatives that reduce the steel industry’s dependence on the fuel.

“We continue to evolve our sustainable finance approach, recognizing the role financial institutions can play in facilitating the transition to a low carbon economy,” Westpac said in the report. It has also set a target of A$3.5 billion in new lending to climate change solutions over the next three years.

Commonwealth Bank of Australia and National Australia Bank Ltd. plan to be out of thermal coal by 2030 and 2035 respectively, while ANZ has said that it expects its involvement to decline, but has not set an official exit date. Japanese banks, among the world’s biggest lenders to coal power developers, are also starting to pare back their exposure, albeit at a slower pace, leaving the industry to turn elsewhere in search of funding.

[James Thornhill]

More: Coal loses backing from another big bank

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