Top Australian banks restrict lending to carbon intensive projects

By slowing down lending for carbon-intensive projects, leading Australian banks are increasing their efforts to reduce carbon emissions and align themselves with global climate goals.

Commonwealth Bank of Australia, the country's largest lender, announced on Wednesday that it plans to reduce carbon emissions associated with loans and investments for thermal coal mine customers to zero by 2030.

National Australia Bank (NAB), the top business lender in Australia, announced on Wednesday that it would not finance thermal coal mining clients or projects.

The Labor Party, which is in power in Australia, aims to increase renewable energy to 82% by 2030. This will be an increase from the current 40%. They also want to reduce carbon dioxide emissions by 43% compared to 2005. The party's long-term vision is a system of mostly renewable energy, anchored by flexible gas generation and batteries.

National Australia Bank intends to maintain its current stance, as it had not provided corporate loans to thermal coal mine customers, or project financing for thermal coal mine assets, by September 2023.

The lender also announced 12 decarbonisation goals, including those for power generation, the thermal coal, oil and gas industries, and that it would increase financing to renewable-powered generators.

Commonwealth Bank of Australia highlighted the challenges Australia faces in replacing coal-fired electricity stations with renewable energy, as large-scale projects for renewable energy and transmission take longer to be operational.

CBA stated that despite coal-fired generation becoming less attractive commercially, some planned retirements of coal-fired generators are being deferred to ensure reliable power for Australia's electrical grid.

(source: Reuters)