ANZ to Stop Lending to Australia’s Largest Coal Port Due to Exposure to Fossil Fuels | Banking
ANZ decided to stop lending money to Australia’s largest coal port, the Port of Newcastle, after the adoption of new policies last year which prohibit it from entering into new financing agreements for customers highly exposed to fossil fuels.
The bank, which was part of a syndicate of lenders, decided not to participate in the refinancing of hundreds of millions of dollars owed by the port, Guardian Australia confirmed.
However, another union member, NAB, has agreed to fill the void under a deal that market sources say ties the port to a program to cut its carbon emissions.
Financial institutions are increasingly considering the risk of lending to fossil fuel-intensive companies in their investment decisions.
This reflects an expectation that governments and the private sector will step up the pace of emission reductions in order to meet the goals of the Paris climate agreement. Several big savings, including United States, China, the EU and Japan have raised their climate targets in recent months.
The port already has an ongoing emissions reduction program from its own operations and plans to build a container terminal that would help reduce its dependence on coal exports, which account for around 95% of traffic.
However, the future of the project is uncertain as it is required to pay its competitors, the Port of Kembla and Port Botany, a royalty for each container it ships above a threshold.
The fee requirement was part of an agreement reached by the NSW government in May 2013 to privatize Kembla and Botany.
He is being sued in a federal court litigation initiated by the Australian Competition and Consumer Commission against the buyer of Kembla and Botany, Ports NSW, which alleges the deal is anti-competitive and renders development unprofitable container terminal in Newcastle.
NSW Ports, which paid $ 5.1 billion for the two ports, said he “will vigorously defend the procedure.”
The withdrawal of ANZ from the Port of Newcastle union was first reported by the Australian Tuesday. The bank declined to comment.
In October, the bank said it would stop lending to its biggest customers unless companies can demonstrate the carbon transition by this year. He said he aimed to support efforts to achieve net zero emissions by 2050 and that he would no longer lend to new commercial customers with more than 10% exposure to thermal coal.
The announcement enraged national deputies. Agriculture Minister David Littleproud called for a boycott of the bank and the Deputy Prime Minister, Michael mccormack, claiming the plan was a “signal of virtue” that would harm farmers.
Queensland MP George christensen later said he would attempt to launch an investigation through the trade and investment growth committee to find out how climate change had an impact on banks lending decisions. The investigation has not yet been confirmed, with national and liberal MPs disagreeing on its possible prosecution.
Dan Gocher, of the Australasian Center for Corporate Responsibility, said on Tuesday that ANZ’s Port of Newcastle decision was about risk management and that the climate crisis posed a clear financial risk. “They are not there to support businesses through thick and thin, they are there to make money,” he said.
Emma Herd, chief executive of the Climate Change Investors Group, said irreversible change was occurring in the economy as large financial institutions incorporated the risk posed by climate change into their decisions.
She called on governments to work with the private sector to ensure that the “inevitable transition” is managed smoothly to protect workers and diversify economies in emissions-intensive areas. “Pretending that this transition is not happening will not help foster the new investment opportunities needed to bolster our national prosperity,” she said.
A spokesperson for the NAB said the bank could not comment on specific customers. “NAB is focused on being a financial partner with its customers, helping to adapt and improve the sustainability of their businesses through innovation and expertise in national and global markets,” he said. she declared.
“We strive to serve customers well and help communities thrive – this requires a long-term, sustainable approach to decision making. “
A spokesperson for the Port of Newcastle said it is focused on sustainability.
“We work with responsible lenders who are keen to help companies like PON become more sustainable and diversify,” he said. “This is crucial for a business that supports our local, regional and national economies. “
The port is owned half by the Infrastructure Fund, which also owns airports, power and rail assets, and half by Hong Kong-listed conglomerate China Merchants Port Holdings Company, which has ports around the world.
In January alone, it exported 13.9 million tonnes of coal. Its second largest export was wheat, at just 238,000 tonnes.