2023-04-17 13:00:00
European banks, and in particular French banks, have pledged to reduce the financing of companies involved in the production of fossil fuels. While coal-fired power plants are less and less financed, gas-fired power plants are still massively financed by banks, according to an international coalition of NGOs. The sector has received nearly 300 billion euros in loans and bank guarantees since 2019.
Growing financial commitment to the fossil fuel sector
Despite the climate objectives and the need to reduce the consumption of hydrocarbons, French banks continue to invest massively in fossil fuel producerswhen they are regularly singled out for this.
Coal-fired power plants in Europe are increasingly underfunded, yet natural gas-fired power plants used to generate electricity continue to receive massive funding.
An Intergovernmental Panel on Climate Change points out that public and private funding for fossil fuels is always more important than funding for climate change mitigation and adaptation.
Africa, a playground for fossil fuel investments
According to a report by the American NGO Global Energy Monitor, 245 billion dollars of investment would be planned for the construction of liquefied natural gas terminals, gas pipelines and power stations in Africa.
The organization warns of the huge risk of stranded assets that these investments might represent, due to the fact that much of this gas is intended to alleviate Europe’s short-term energy crisis resulting from the Russian invasion of Ukraine.
The main financiers of fossil fuels in Africa
A report published by the German NGO Urgewald with a collective of African, European and international associations reveals that in 48 of the 55 African countries, oil, gas and coal companies are exploring new fossil energy reserves. African countries are calling for measures that would finally be implemented.
These companies also build new infrastructure associated with this exploitation, such as oil pipelines, gas pipelines or liquefied natural gas terminals. French banks are among the main financiers of these polluting energy projects in Africa.
Disconnected from climate goals
These massive investments in fossil fuels are in total contradiction with the declarations of good intentions of companies and States on the ecological transition. Eight years following the Paris agreement, they continue to finance global warming more than the solutions to limit it.
Inverted priorities
- Financing fossil fuels: Despite the commitments made in the Paris agreement, French banks continue to invest massively in fossil fuel producers.
- Investments in Africa: Many polluting energy projects benefit from the financial support of French banks, particularly in Africa.
- Risk of stranded assets: The majority of these investments might become unnecessary and costly if African countries decide to turn to more environmentally friendly alternatives.
Solutions for a real ecological transition
In order to reverse the trend and really engage in the ecological transition, French banks and other financial players must review their investment strategies. Here are some suggestions to initiate this change:
- Stop funding fossil fuel projects: Banks must stop supporting companies and projects that have a negative impact on the environment.
- Investing more in renewable energies: It is essential to increase investments in clean and sustainable technologies to accelerate the energy transition.
- Collaborate with governments and international organizations: Financial actors must work in close collaboration with public authorities and international institutions in order to put in place adequate regulations and incentives for ecological transition.
- Promote transparency: Banks must be transparent regarding their investments and their impact on the environment.
Faced with the climate emergency, it is imperative that French banks and other financial players take their responsibilities and truly commit to the ecological transition. Investments in fossil fuels only make global warming worse, and it is time to direct funding towards sustainable solutions for the future of our planet.
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