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HSBC helped oil and gas industry raise $47bn despite net-zero pledge

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Original article by Josephine Moulds republished from The Bureau of Investigative Journalism under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

The bank’s work for businesses expanding production of fossil fuels is a stark contrast to its climate change promises

Every year business and world leaders jet into Davos to discuss climate change and other global issues at the World Economic Forum. And every year they are met with vigorous accusations of hypocrisy. Those accusations may well be levelled at the executives from HSBC – one of the world’s top funders of fossil fuel expansion – as they mingled with their peers in the pretty Swiss ski town this week, discussing how to develop a long-term strategy for climate, nature and energy.

HSBC says delivering a net-zero global economy is “a pillar of our strategy as a business”. In December 2022, the bank made the shock announcement that it would stop financing new oil and gas fields. Environmental campaigners celebrated, with the responsible investment charity ShareAction saying the decision set “a new minimum ambition for all banks committed to net zero”.

But on the same day, HSBC bankers started selling shares in the refining business of Saudi Aramco, one of the most aggressive expanders of oil and gas. An investor in HSBC told the Bureau of Investigative Journalism that the bank’s policy has been cleverly worded to allow it to fund some of the world’s biggest polluters while boasting about its green credentials.

An analysis of Refinitiv data by TBIJ has found that in the year since HSBC’s new policy was announced, the bank has helped raise more than $47bn (£37bn) for companies that are expanding the production of oil and gas, despite dire warnings from scientists that this will push the world beyond its survivable limits.

Fatih Birol, executive director of the International Energy Agency, told ITV News: “In the world, if we make large scale oil, gas and coal development, we cannot reach our 1.5 degrees target, full stop.” He said if a bank is serious about aligning its business with net zero, it cannot continue to fund companies developing new oil and gas fields.

Andrew Harper, chief responsibility officer at Epworth, an investment manager that holds HSBC shares, said: “[HSBC’s] policy, which is supposed to act as a safety net for the climate, is by design letting the bank circumvent its pledges by allowing them to adhere to the letter rather than the spirit of what they’re claiming.

“As investors, we’re not going to be fooled by the marketing, by the pledges, by these policies. We want to see real change and for them to seriously end new fossil fuel financing, no loopholes. Anything short of that is the bank trying to dupe its key stakeholders.”

HSBC said its policy allows the bank to continue providing finance “at a corporate level” and its approach “is based on the latest science for achieving net zero and follows the UN-backed approach for climate target setting and net zero alignment for banks”.

New projects, no problem

In its feted policy, HSBC notes that global demand for oil and gas to 2050 is “more than met by existing [oil and gas] fields”. It says the bank will therefore no longer provide finance for “new oil and gas fields and related infrastructure whose primary use is in conjunction with new fields”.

However, that has not stopped HSBC from funding companies that are exploiting new oil and gas fields, and providing the necessary infrastructure to do so.

In the first half of last year, HSBC, with other banks, helped the UAE’s state oil and gas company, Adnoc, raise $3.2bn from selling shares in its gas and logistics businesses. Adnoc will receive a further cash boost of $3bn in hefty dividends from Adnoc Gas.

Separately, HSBC helped arrange a $3.2bn loan for Borouge 4, a petrochemicals plant that will be a key customer for Adnoc’s gas, and was described by its project director as “an enabler of Adnoc’s growth strategy”.

Scientists agree that we cannot develop any new oil and gas fields if we are to limit global heating to 1.5C. Adnoc plans to increase oil production by 25% between 2023 and 2027, however, which would dramatically overshoot these limits.

Last year, Adnoc rubber stamped the exploitation of a vast new gas field off the UAE coast, which threatens a vital habitat for sea cows. Burning the gas Adnoc plans to extract from this field would produce 30m tonnes of carbon dioxide per year – more than Denmark’s annual emissions.

HSBC has similarly close ties with Saudi Arabia’s national oil company. The share sale for Saudi Aramco’s refining business, Luberef – which HSBC bankers were working on as it unveiled its new oil and gas policy – raised $1.3bn. After the share sale, Saudi Aramco remains a 70% shareholder of Luberef and has management control of the business.

A couple of months later HSBC bankers helped raise $3bn in bonds for Greensaif, a company set up for the sole purpose of taking a stake in Saudi Aramco’s gas pipelines business, alongside Saudi Aramco, which retained the controlling stake.

And in another wildly successful share offering, HSBC helped raise $1.2bn for Ades Holding, which provides oil drilling rigs primarily to Saudi Aramco, among other oil and gas expanders in the region. Adnoc and Saudi Aramco declined to comment.

Adnoc is investing heavily in offshore expansion in the United Arab Emirates Giuseppe Cacace/AFP via Getty Images

HSBC rejected the suggestion that its policies allow for financing that is at odds with a net zero transition. “Net zero-aligned scenarios require continued, though declining, financing of fossil fuel supplies to meet energy demand, security, and affordability during the transition.”

The bank said its policy makes clear that it will continue to provide finance for companies with transition plans that align with its climate commitments. “HSBC’s approach is to engage with our major oil and gas clients on their targets and transition plans, and to align our oil and gas financing portfolio to a 2030 net zero aligned financed emissions target.”

Transition plans

Saudi Aramco, the world’s biggest polluter, does not appear to be preparing for a transition away from fossil fuels. The company expects to grow oil production by 8% by 2027, and increase gas production by up to 60% by 2030. Last year UN experts sent a letter of concern to Aramco – and its banks, including HSBC – saying its ongoing expansion of fossil fuel production threatens human rights by worsening climate change.

HSBC has chased business in the oil-rich Middle East and was last year named the region’s best bank for financing by Euromoney. Julian Wentzel, HSBC’s head of global banking in the region, told the magazine: “We have been at the nucleus of every major deal in the region, providing the full suite of banking services to our valued partners.”

Ed Matthew, campaigns director of think tank E3G, told TBIJ: “There’s a complete conflict between [HSBC’s] ambition to be at the heart of Middle Eastern oil and gas development and their commitment to start to pull out of fossil fuel financing globally.

“They can’t have their cake and eat it. Either they’re serious about delivering on the Paris Agreement or they’re not. At the moment, they’re putting short-term profits ahead of a habitable planet.”

Aggressive fossil fuel expansion

HSBC also funded oil and gas businesses far beyond the Middle East. In December, the bank helped arrange a $5bn loan for TransCanada Pipelines, which is among the top companies in the world expanding infrastructure for oil and gas, according to the Rainforest Action Network. (TC Energy, which owns TransCanada Pipelines, said: “Sustainability is foundational in everything we do.”) A few weeks later, the bank helped secure a $4.7bn loan for Occidental Petroleum, which is buying a Texas oil driller to expand its operations in the biggest shale field in the US.

In Europe, HSBC was among the banks that arranged a $3.3bn loan for Eni, the Italian oil and gas expander. Eni announced last year that it plans to increase its oil and gas extraction by 3-4% a year until 2027.

Experts have praised HSBC’s oil and gas policy for prohibiting funding for infrastructure linked to new oil and gas fields, in addition to the projects themselves. But the bank has continued to raise money for companies involved in the frantic building of export terminals for natural gas on the US southern coast.

The expansion of gas drilling and export in the region has been described as a “carbon bomb” – if all the planned projects are built, the associated annual emissions would outstrip those of Russia. Last year, HSBC, together with a slew of other banks, helped arrange loans worth $14.3bn for two of the companies building gas export hubs in the region.

HSBC was also among a group of banks to arrange loans worth $6bn for Baker Hughes, which provides oilfield services and equipment to oil and gas companies around the world. It helped raise a further $790m in share sales for oil drilling services companies Saipem and Nabors during the year.

At Davos there has been plenty of debate about how to limit global heating to 1.5C but campaigners fear it will remain just that. “Davos has always been a lot of talk and not much action,” said E3G’s Matthew. He would like to see stricter regulation of fossil fuel funding. “We can’t just leave it in the hands of banks, we need stronger action by governments and central banks to help prevent these investments. They need to introduce penalties for banks which are continuing to finance fossil fuel expansion.”

Header image: A liquified natural gas terminal on the Texas Louisiana border in the United States. Credit: The Washington Post via Getty Images.

Reporters: Josephine Moulds
Environment editor: Robert Soutar
Impact producer: Grace Murray
Deputy editor: Chrissie Giles
Editor: Franz Wild
Production editor: Frankie Goodway
Fact checker: Alice Milliken

This reporting is funded by the Sunrise Project. None of our funders have any influence over our editorial decisions or output.

Original article by Josephine Moulds republished from The Bureau of Investigative Journalism under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

Continue ReadingHSBC helped oil and gas industry raise $47bn despite net-zero pledge

The cruise industry says LNG is a climate solution. It’s not

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https://www.climatechangenews.com/2023/09/26/the-cruise-industry-says-lng-is-a-climate-solution-its-not/

A cruise ship docked in the Port of Miami, Florida, USA (Pic: Anthony Quintano/Flickr)

…

LNG is a fossil fuel whose use is not consistent with the Paris Agreement 1.5C temperature goal. It consists primarily of methane, an extremely powerful greenhouse gas (GHG), which has climate impacts over 80 times greater than carbon dioxide over a 20-year period. Methane leaks into the atmosphere across the full production lifecycle of LNG, and once on the ships, the unburned gas escapes from the smokestacks into the air.

Despite the devastating frontloaded climate impact of methane, to date policymakers have been slow to address its use in regulation, and public awareness of the issue is low. This gives cruise companies the latitude to invest in LNG as an alternative fuel – and they have done so with gusto.   

Why do cruise companies love LNG? 

There are some benefits to LNG on paper: in the short term it reduces air pollution and CO2 emissions when burned, compared to standard shipping fuel. This has led to some of the world’s biggest cruise companies (including Carnival Corporation & plc and MSC Cruises and Royal Caribbean Group) to portray their cruises as sustainable, and their newest ships “clean”, “green” and “eco-friendly”.

Across the industry, company webpages are littered with references to LNG superimposed on images of idyllic blue seas, thriving coral reefs, and green forests. Most of us aren’t specialists in the climate impacts of differing fuel compositions, and it’s easy to be taken in.  

But the reality is that these adverts are a very effective smokescreen for the fact that the true climate effect of LNG is likely worse than if the companies had stuck with dirty heavy marine fuel oil.  

…

Protest placard reads Greenwash detected
Protest placard reads Greenwash detected

https://www.climatechangenews.com/2023/09/26/the-cruise-industry-says-lng-is-a-climate-solution-its-not/

Continue ReadingThe cruise industry says LNG is a climate solution. It’s not

Fossil Fuel Firms ‘Building Bridge to Climate Chaos’

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North Sea oil rigs in Cromarty Firth, Scotland. Credit: joiseyshowaa (CC BY-SA 2.0)
North Sea oil rigs in Cromarty Firth, Scotland. Credit: joiseyshowaa (CC BY-SA 2.0)

Original article by JAKE JOHNSON republished from Common Dreams under Creative Commons (CC BY-NC-ND 3.0).

An updated database shows that more than 1,000 oil and gas companies around the world are planning to expand their planet-wrecking infrastructure.

More than a thousand fossil fuel companies around the world are currently planning to build new liquefied natural gas terminals, pipelines, or gas-fired power plants even as scientists warn that fossil fuel expansion is incompatible with efforts to prevent catastrophic warming.

That’s according to an updated database released Wednesday by Urgewald and dozens of partner groups. Described as the most comprehensive public database on the fossil fuel industry, the Global Oil & Gas Exit List (GOGEL) covers 1,623 companies that are operating in the upstream, midstream, or gas-fired power sector and collectively account for 95% of global oil and gas production.

More than a thousand fossil fuel companies around the world are currently planning to build new liquefied natural gas terminals, pipelines, or gas-fired power plants even as scientists warn that fossil fuel expansion is incompatible with efforts to prevent catastrophic warming.

That’s according to an updated database released Wednesday by Urgewald and dozens of partner groups. Described as the most comprehensive public database on the fossil fuel industry, the Global Oil & Gas Exit List (GOGEL) covers 1,623 companies that are operating in the upstream, midstream, or gas-fired power sector and collectively account for 95% of global oil and gas production.

According to the 2023 GOGEL, 96% of the 700 upstream oil and gas companies in the database are exploring or actively developing new oil and gas fields, projects that Urgewald said “severely jeopardize efforts to limit global temperature increase to 1.5 °C.”

Nearly 540 companies in the database are collectively planning to produce 230 billion barrels of oil equivalent (bboe) over the short term, the database shows.

“The seven companies with the largest short-term expansion plans are Saudi Aramco (16.8 bboe), QatarEnergy (16.5 bboe), Gazprom (10.7 bboe), Petrobras (9.6 bboe), ADNOC (9.0 bboe), TotalEnergies (8.0 bboe) and ExxonMobil (7.9 bboe),” Urgewald noted. “These seven companies are responsible for one-third of global short-term oil and gas expansion.”

The database also shows that fossil fuel companies are planning to expand global LNG capacity by 162%, a significant threat to critical climate targets. A United Nations-backed report published last week warned that fossil fuel expansion plans are “throwing humanity’s future into question.”

Urgewald pointed specifically to the LNG boom in the U.S., which the group said is “cementing its position as the world’s largest export hub for LNG” with 21 new export facilities planned along the Gulf Coast. Those facilities account for more than 40% of worldwide LNG expansion documented in the GOGEL database.

“Most of the fossil gas that will be exported from these terminals stems from the Permian Basin, the heart of the U.S. fracking industry,” Urgewald observed.

The updated database shows that nearly 80 companies—including Exxon, Chevron, and BP—are currently operating in the Permian Basin, located in the U.S. Southwest.

Climate campaigners and experts have also sounded alarm over Calcasieu Pass 2 (CP2), a planned $10 billion LNG export hub that would ship up to 24 million tons of gas annually once it is completed.

“The fossil fuel industry wants to pave undeveloped wetlands all along the coast with LNG facilities like NextDecade Corporation’s Rio Grande LNG Terminal, Rebekah Hinojosa, a member of the South Texas Environmental Justice Network said Wednesday. “Besides their environmental implications, these plans violate Indigenous sacred lands, and people working in fishing, shrimping, and eco-tourism risk losing their jobs. Our communities refuse to be sacrificed for the fracking industry’s dirty gas exports.”

Original article by JAKE JOHNSON republished from Common Dreams under Creative Commons (CC BY-NC-ND 3.0).

Continue ReadingFossil Fuel Firms ‘Building Bridge to Climate Chaos’

Greenpeace Protests ‘Shock Doctrine’ by Blockading New TotalEnergies LNG Terminal

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Greenpeace activists paint "Gas kills" on the hull of the Cape Ann.
Greenpeace activists paint, “Gas kills,” on the hull of the Cape Ann.
 (Photo: Jean Nicholas Guillo/Greenpeace)

Original article by OLIVIA ROSANE republished from Common Dreams under Creative Commons (CC BY-NC-ND 3.0). 

Gas companies “cynically used… the Russian invasion of Ukraine to frighten governments into massive, unneeded investment into and expansion of fossil gas imports and infrastructure,” one campaigner said.

As part of the Global Fight to End Fossil Fuels, activists from Greenpeace France attempted to block a new TotalEnergies liquefied natural gas terminal [tanker] from entering the port of Le Havre Monday morning.

Kayakers paddled between the port entrance and the tanker carrying the terminal—the Cape Ann—and wrote “Gas kills” in white paint along its side, Reuters reported.

“This LNG terminal is yet another blatant example of ‘shock doctrine,’ where gas operators shifted their public messaging and lobbying from ‘energy transition’ to ‘energy security’ and cynically used the opportunity after the energy supply concerns triggered by the Russian invasion of Ukraine to frighten governments into massive, unneeded investment into and expansion of fossil gas imports and infrastructure,” Greenpeace France oil, transport, and ocean campaigner Hélène Bourges said in a statement.

ation unit did arrive at the port in Western France Monday morning, TotalEnergies told Reuters.

But the Greenpeace activists argue its arrival contradicts French President Emmanuel Macron’s 2022 promise to make France the first major nation to abandon the fossil fuels driving the climate emergency. What’s more, the gas is mostly U.S. shale gas, obtained by fracking—a method banned in France because of the harm it does to the global climate and the health and environment of local communities.

The activists in kayaks carried banners reading “Total: shale dealer,” “Macron: shale dealer,” and “End Fossil Crimes.”

Members of Scientists in Rebellion also came to Le Havre to support the action.

“This LNG terminal is a sham that responds neither to the crisis nor to energy sovereignty and pushes us into a scenario of climate chaos,” the group wrote on X, formerly Twitter.

Greenpeace challenged the narrative that increased LNG is necessary to help France and the rest of Europe meet their energy needs in the wake of Russia’s invasion of Ukraine. In a report copublished in June with Disclose, Greenpeace France pointed out that the country’s existing LNG terminals did not use their maximum capacity in 2022 and were underutilized during the first half of 2023.

“If France really suffered from a gas supply crisis in 2022 that was severe enough to justify the new floating terminal in Le Havre, it’s surprising that the capacities of existing terminals, particularly the ones at Dunkerque and Fos Tonkin, were underutilized,” the report authors wrote.

“This summer’s extreme weather events have highlighted the urgency of moving away from fossil fuels.”

Instead, they argued that the LNG increase was the result of lobbying from the oil and gas industry.

“The only beneficiaries of the LNG gas infrastructure in Le Havre are TotalEnergies, the operator of the floating terminal, and its shareholders, whose private interests and gains prevail over climate action and people’s health, with the complicit support of the French government that granted an unprecedented legal preferential regime to set up this operation,” Bourges said in a statement.

Greenpeace’s action followed a summer of deadly heatwaves, fires, and floods and a global mobilization to end fossil fuels from September 15-17.

“This summer’s extreme weather events have highlighted the urgency of moving away from fossil fuels,” Greenpeace France wrote on social media.

The group said it had two demands for Macron: to prevent the new terminal from being used and to kill any other fossil fuel projects under consideration.

Original article by OLIVIA ROSANE republished from Common Dreams under Creative Commons (CC BY-NC-ND 3.0). 

Continue ReadingGreenpeace Protests ‘Shock Doctrine’ by Blockading New TotalEnergies LNG Terminal

‘A Death Sentence’: Green Groups Decry G7 Support for More Gas Investments

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Original article by Jessica Corbett republished from Common Dreams under Creative Commons (CC BY-NC-ND 3.0).

Activists with masks of Group of Seven leaders protest fossil fuels. (Photo: 350.org Japan/Friends of the Earth Japan/Oil Change International)

“Energy security can only be achieved by rapidly and equitably phasing out fossil fuels and transitioning to renewable energy, not locking in deadly fossil fuels and lining the pockets of oil and gas executives,” said one critic.

Since Group of Seven leaders on Saturday put out a wide-ranging communiqué from a Japan-hosted summit in Hiroshima, climate action advocates from G7 countries and beyond have blasted the statement’s support for future investments in planet-heating gas.

The statement comes after G7 climate, energy, and environment ministers were criticized for their communiqué from a meeting in Sapporo last month as well as protests around the world this week pressuring the summit’s attendees to ditch fossil fuels and “deliver a clear and just renewable energy agenda for a peaceful world.”

To meet the 1.5°C goal of the Paris climate agreement, the new statement commits to “accelerate the phaseout of unabated fossil fuels so as to achieve net-zero in energy systems by 2050 at the latest” along with “the elimination of inefficient fossil fuel subsidies by 2025 or sooner.”

“The G7 must stop using fossil fuels immediately—the planet is on fire.”

The statement also highlights that last year, G7 nations—Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States—pledged to end “new direct public support for the international unabated fossil fuel energy sector, except in limited circumstances,” though as recent analysis shows, some are breaking that promise.

The communiqué then endorses liquefied natural gas (LNG) as a solution to “the global impact of Russia’s war on energy supplies, gas prices and inflation, and people’s lives,” referencing the invasion of Ukraine:

In this context, we stress the important role that increased deliveries of LNG can play, and acknowledge that investment in the sector can be appropriate in response to the current crisis and to address potential gas market shortfalls provoked by the crisis. In the exceptional circumstance of accelerating the phaseout of our dependency on Russian energy, publicly supported investment in the gas sector can be appropriate as a temporary response, subject to clearly defined national circumstances, if implemented in a manner consistent with our climate objectives without creating lock-in effects, for example by ensuring that projects are integrated into national strategies for the development of low-carbon and renewable hydrogen.

“The G7 energy outcome correctly diagnoses a short-term need for energy security, then promotes a dangerous and inappropriate lock-in of fossil gas that would do nothing to address this need,” responded Collin Rees, United States program manager at Oil Change International (OCI). “Energy security can only be achieved by rapidly and equitably phasing out fossil fuels and transitioning to renewable energy, not locking in deadly fossil fuels and lining the pockets of oil and gas executives.”

After accusing the summit’s attendees of “using the war as an excuse,” deflecting blame for current conditions, and neglecting Global South countries disproportionately suffering from the climate crisis, Max Lawson, head of inequality policy at Oxfam, declared that “the G7 must stop using fossil fuels immediately—the planet is on fire.”

https://twitter.com/fossiltreaty/status/1659916321373450241?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1659916321373450241%7Ctwgr%5Eb17559f0413070eae9b0a43ff6c3f060a4da7d30%7Ctwcon%5Es1_c10&ref_url=https%3A%2F%2Fwww.commondreams.org%2Fnews%2Fg7-hiroshima-japan-gas-climate

Greenpeace International global climate politics expert Tracy Carty also demanded a swift end to fossil fuels, charging that “G7 leaders’ endorsement of new fossil gas is a blunt denial of the climate emergency” which dooms “current and future generations.”

Gerry Arances, executive director of the Philippine Center for Energy, Ecology, and Development, similarly argued that “the endorsement of increased LNG deliveries and investment in gas in the G7 communiqué is no mere backsliding—it is a death sentence being dealt by the G7 to the 1.5°C limit and, in consequence, to the climate survival of vulnerable peoples in the Philippines, Southeast Asia, and across the world.”

“Unless they genuinely put forward the phaseout of all fossil fuels, Japan and all G7 nations spout nothing but lies when they say they have aligned to 1.5°C,” he continued. “They cannot claim to be promoting development while subjecting our people to decades more of pollution and soaring energy prices. We reject this notion of a development powered by fossil fuels.”

Looking to the United Nations Climate Change Conference (COP28) planned for later this year, Arances added that “Japan and G7 leaders should already be warned that civic movements will not tire in pushing back against fossil fuels and false solutions and in demanding a renewable energy transition.”

“Civic movements will not tire in pushing back against fossil fuels and false solutions and in demanding a renewable energy transition.”

Other campaigners also specifically called out the Hiroshima summit’s host—including Ayumi Fukakusa, deputy executive director at Friends of the Earth Japan, who asserted that the country “has used the G7 presidency to derail the global energy transition.”

“Japan has been driving the push to increase gas investments and has been promoting its so-called ‘green transformation’ strategy,” Fukakusa said of a “greenwashing scheme” featuring hydrogen, ammonia, nuclear, and carbon capture and storage technologies.

OCI Asia program manager Susanne Wong agreed that given the nation’s promotion of gas expansion and technologies to prolong the use of coal, “this year’s G7 is revealing Japan’s failure of climate leadership at a global level.”

“Activists mobilized 50 actions across 22 countries this week to demand that Japan end its fossil fuel finance and stop driving the expansion of gas and other fossil-based technologies,” Wong added. “Japan will continue to face intense international scrutiny until it stops fueling the climate crisis.”

Groups from other G7 countries also called out their political leaders. Petter Lydén, head of international climate policy at Germanwatch, said, “Most likely, the German chancellor, Olaf Scholz, has been a driving force behind the weak language on gas, which is a serious blow to Germany’s international credibility on climate.”

Citing sources familiar with summit negotiations, The New York Timesreported Saturday that “Britain and France fought the German effort” while U.S. President Joe Biden was caught between defending his climate agenda and “aiding other United States allies intent on increasing their access to fossil fuels.”

OCI’s Rees said the that “this betrayal continues a disturbing turn by President Biden and Chancellor Scholz from rhetorically committing to climate leadership to openly boosting fossil fuel expansion. History will not look kindly on world leaders who accelerate the pace of fossil fuel buildout in the face of worsening climate crisis.”

Original article by Jessica Corbett republished from Common Dreams under Creative Commons (CC BY-NC-ND 3.0).

Continue Reading‘A Death Sentence’: Green Groups Decry G7 Support for More Gas Investments