Paris-based global bank BNP Paribas announced that it will no longer provides financing to projects dedicated to the extraction of metallurgical coal, adding a new element to its efforts to align its financing and investment activities with its net zero commitments.
Metallurgical coal is a key ingredient in steel manufacturing, powering the blast furnaces used in the steelmaking process, and contributing most of the industry’s carbon footprint, with combustion of metallurgical coal responsible for over 3,000 megatonnes of CO2 in 2021, according to the Transition Pathway Initiative.
The new pledge, forming part of an updated sector policy on the Mining industry, adds to BNP Paribas’ commitment to not provide any financial product or services to projects dedicated to thermal coal extraction, or to infrastructure projects dedicated to thermal coal.
The new policy follows the bank’s announcement earlier this year that it will also end its direct financing for new oil and gas fields, as well as recent commitments to reduce financing for oil extraction and production by more than 80% and for gas extraction and production by over 30% by 2030, and to transition 80% of its energy financing activities to the production of low carbon energies by that date as well.
In a statement announcing the new coal policy, BNP Paribas said:
“BNP Paribas recalls that since 2020 it has been committed to a path towards a complete exit from the financing of the entire value chain of companies linked to thermal coal by 2030 in Europe and in the OECD countries, and by 2040 in the rest of the world.”