Global banks' financing for coal increased against the trend: COP26 commitments fell short, with over $385 billion invested in three years.

Analysis from multiple non-profit organizations shows that over the past three years, global banks have invested over $385 billion in the coal power industry, with an increase in funding flow from the previous year (2023). At the 26th United Nations Climate Change Conference (COP26) held in Glasgow in 2021, governments from nearly 200 countries agreed to gradually reduce coal usage, and many large commercial banks globally committed to decarbonize their investment portfolios. However, four years later, these commitments have had no impact on the flow of funds. "It's as if the Glasgow summit never happened," said Katrin Ganswindt, Financial Research Director at Urgewald, a German non-profit organization involved in the analysis. According to the International Energy Agency data, coal, as the most polluting source of energy, accounts for over two-thirds of global electricity production. If coal-fired power plants continue to operate as they are currently, it would lead to global temperatures surpassing the 1.5-degree Celsius target set in the Paris Agreement. The report from Urgewald pointed out that while the number of new coal projects is decreasing, the size of existing coal-fired power plants has not reduced. Closing coal-fired power plants prematurely is not an easy feat, especially in developing countries where these plants are often newly built. It requires not only readily available clean energy alternatives but also compensation for the funders during this transition. Meanwhile, measures to shut down coal-fired power plants early have been repeatedly hindered by political, financial, and other obstacles, leading to significant delays in progress. The return of Donald Trump to the White House further boosted the coal industry. Earlier this year, he signed a series of measures aimed at expanding domestic coal production and consumption in the United States. Data from Urgewald shows that Chinese banks are the largest providers of coal-related financing, injecting nearly $250 billion into the industry between 2022 and 2024. U.S. banks, including Bank of America, JPMorgan Chase, and Citigroup, followed closely behind. The report also mentioned that JPMorgan Chase, headquartered in New York, saw the largest increase in investment in the coal industry, with a growth of nearly 400% in funding over three years. In Europe, Barclays and Deutsche Bank had the highest coal financing amounts during the same period. A spokesperson for Deutsche Bank stated that in the past decade, the bank has reduced its involvement in high-carbon industries, with emissions related to coal mining loans and investments decreasing by 42% in 2024 compared to 2021. After initially taking actions to reduce coal financing, some banks have relaxed restrictions on the coal industry in recent years. By the end of 2023, Bank of America no longer committed to not funding new thermal coal mines but instead required strengthened reviews before financing. Last year, Macquarie Group, headquartered in Sydney, loosened financing regulations for coal used in steel production. Overall, out of the top 99 banks globally, only 24 have set plans to gradually phase out coal financing by 2040 - the deadline for climate safety set by the International Energy Agency. Many of these banks' plans only focus on coal for electricity generation, overlooking the more polluting coal used in steel production. They argue that coal for steelmaking is crucial for the infrastructure needed for energy transition, but this distinction ignores the market's trading patterns. Barry Tudor, CEO of Australian mining company Pembroke Resources Limited, stated that the reevaluation of the coal industry by some banks has started to have an impact. Between 2020 and 2022, the number of institutions willing to finance the Olive Downs coal project in Queensland reduced from about 20 to around 3. Now, this trend is starting to reverse. "Institutions have realized that things are far from being as simple as black and white," Tudor said.