Big banks not out of fossil fuel business yet

The Maules Creek coal mine,

Ahead of to the 2015 Paris Climate Change Conference, Australia’s Big Four banks made public commitments to take action on climate change.

NAB committed to $18 billion in “financing activities” over 7 years to 2022 to help reduce climate change and “support the transition to a low carbon economy”. The bank offered its first formal position on preventing 2°C warming, saying the “financial sector has an important role to play in assisting the transition to a low carbon economy, through both the energy we purchase directly and through financing”.

“Finance will be provided to our customers to undertake climate change mitigation such as renewable energy and energy efficiency including low carbon property, low emission transport, and climate change adaptation activities,” it said.

The Commonwealth Bank of Australia said moving to limit warming to 2°C “will require a transition from traditional economic models”, and the bank would “play a role in supporting the transition to a low carbon economy”.

Since then, a concerted campaign, spearheaded by activist group, has been directed at the banks to convince them to act and divest from fossil fuels.

The primary focus on the proposed Adani coalmine in Queensland’s Galilee Basin was ultimately successful: all of Australia’s banks have now said they will not provide finance to this project. But an equally controversial new coal project has succeeded in attracting finance from three of the Big Four.

Environmental activists have waged a concerted campaign to oppose Whitehaven Coal’s Maule’s Creek coalmine, in the Leard State Forest near Gunnedah in NSW.

The fight to protect the Liverpool Plains was waged by the local Gomeroi people, the Maules Creek Community Council, Lock the Gate, Greenpeace,, the Nature Conservation Council of NSW, The Wilderness Society and others. The campaign ultimately failed and the mine began operations in July 2015.

In May, the NSW Environment Protection Authority (EPA) issued the mine with a $15,000 fine for failing to minimise or prevent air pollution from truck movements on haul roads. The EPA’s Adam Gilligan said it had received a number of complaints about excessive dust coming from the mine, especially in early mornings.

With Whitehaven Coal reporting a 24% rise in annual production from the Maules Creek mine and an after tax profit of $405.4 million from its overall operations in the area, the penalty imposed by the EPA is but a speck of coal dust, not capable of irritating.

The Maules Creek mine was recently upgraded to the EPA’s highest environmental risk category, making it one of NSW’s three dirtiest mines. The company is also planning to expand its Vickery coalmine, which the local community is resisting due to grave concerns over environmental impacts.

In spite of their stated commitment to act on climate change, the big banks are still prepared to underwrite new coal.

Market Forces reported: “ANZ, NAB and Westpac in August arranged a $1 billion, two year extension to a corporate financing deal for Whitehaven. This deal will help fund Whitehaven’s dirty operations through to the middle of 2021.

“To be clear, Whitehaven is a pure play coalminer, meaning its only business is digging up and selling coal. So any corporate finance is going to be used to push us closer to runaway climate change, and continue to damage the environment and endanger communities.”

Whitehaven’s environmental record is appalling. Environmental Justice Australia has published documents revealing that all four of Whitehaven’s coalmines in north west NSW breached their licence conditions most years between 2010 and 2016 by exceeding coal dust pollution levels and polluting waterways.

Despite this, three of Australia’s biggest banks are still happy to support this deadly coal company.

Since the big banks committed to the fight to limit global warming to less than 2°C in late 2015, ANZ, Commonwealth, NAB and Westpac have lent a combined $17 billion to the coal, oil and gas industries.

The banks’ direct financing of coal projects has dried up since they made their climate change commitments. But they are still making corporate financing deals, like the $1 billion deal for Whitehaven, which allows fossil fuel companies to expand their toxic operations and threaten to push us beyond the 2°C warming limit and into an ecological holocaust.

Like the article? Subscribe to Green Left now! You can also like us on Facebook and follow us on Twitter.