High Class European Banks Say ‘No, Thank You’ to Dirty Coal

Photo by Shandchem. Some rights reserved.

A short and sweet Environment and Climate Change Bulletin from Linklaters last week tipped us off to an interesting development in power plant financing, but left us thirsty for more details.

According to the global law firm, several international banks (including the likes of HSBC, BNP Paribas, Crédit Agricole, Standard Chartered and F&C Asset Management) have worked together with non-profit think-tank, The Climate Group, to develop guidance on the financing of new coal-fired power plants (CFPPs).

“[T]o limit dangerous climate change, coal-fired power generation needs to be substantially decarbonised by 2050,” starts off the guidance. “Financial Institutions (FIs) can help accelerate the uptake of the best available CFPP technologies by adopting policies that stipulate emissions intensity ceilings that become progressively lower between now and 2050.”

Specifically, the code recommends that banks not provide financing for plants with an “emissions intensity” above 850g of carbon dioxide per kilowatt hour in developing nations, and 550g CO2/kWh in developed countries.

According to the Financial Times, HSBC and BNP each recently issued their own policies prohibiting the financing of new coal plants with emissions above certain levels (here and here, respectively), and The Climate Group reports that the others institutions involved will be also be developing policies in line with the recommendations from the guidance.

Will such a superb idea catch on in America? Linklaters remains skeptical: “While European commercial banks may consider following suit, this is likely to be a much less palatable for US and Asian banks.”

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: