This week ANZ announced that it would no longer provide direct financing to new or expanded oil and gas fields, new liquefied natural gas (LNG) export plants, and won’t bank any oil and gas company not already on their books. The announcement means that all big four Australian banks, ANZ, Commonwealth Bank, NAB, and Westpac have now ruled out project finance for all new (greenfield) oil and gas fields. 

Through this announcement, ANZ has committed to not finance the Papua LNG project! Papua LNG is a giant new gas project being developed by notorious climate wreckers, TotalEnergies, Santos, and ExxonMobil. ANZ has been on the receiving end of months of pressure from customers, shareholders and civil society organisations from Papua New Guinea (CELCOR) and across the world, all concerned that this climate laggard bank would once again directly fund a new gas project.

This latest commitment from ANZ is a testament to all of our collective pressure, and another clear demonstration that together we have what it takes to make our banks live up to their climate commitments. The commitment also finally brings it into line with its domestic peers, after years of being behind on oil and gas project finance restrictions (and even now ahead of CommBank and NAB on restricting finance to LNG export plants). However, one thing this update makes glaringly apparent is that ANZ has chosen to leave the door open to financing climate wrecking companies.

Battle won, but more to be done.

While ANZ walking away from directly funding oil and gas extraction is a welcome development, the reality is that project finance only covers a small portion of its overall lending to the fossil fuel industry. Corporate finance accounted for 72% of ANZ’s lending to fossil fuels from 2016-2022, and the bank has poured over $8.1 billion into companies with fossil fuel expansion plans during that time. With bonds also playing an increasingly important role in funding fossil fuel companies, it’s absolutely essential that ANZ rules out corporate finance and bonds to companies with expansion plans.

ANZ had a chance to do just that last year when it released its climate disclosures in November 2023, and fell woefully short. This latest commitment, seemingly out of nowhere, shows that change is possible at ANZ. It’s now up to us to build on this momentum and push ANZ to address all of its financial support to the expansion of fossil fuels. 

Tide is turning on new oil and gas projects

ANZ’s decision does send a message to climate-wrecking oil and gas companies like Santos and Woodside: your new and expanded upstream oil and gas projects are becoming unbankable. Just weeks ago, Woodside set a world record by having 58% of its shareholders vote against its climate plan, due in no small part to its reckless oil and gas expansion strategy. 

We’ve seen the impact our campaigns and theory of change has on projects like Papua LNG, which has seen a final investment decision (approval) significantly delayed because of a lack of willing bankers. PNG’s Petroleum & Energy Minister, Kerenga Kua, remarked in December 2023 that the fossil fuel finance space has changed significantly in the last decade. “There was a time not long ago when investment undertaken by ExxonMobil or TotalEnergies in a new petroleum project has always been regarded as a blue-chip investment”, but sustained, people-powered campaigning for climate action has “impacted on the ability of the banks to finance a project like this.”

As a sign of the changing times, Papua New Guinea’s first gas export project, PNG LNG, secured the largest project finance deal in history in 2010. Its successor project, Papua LNG, is now having immense difficulty getting commitments from major international banks.

TAKE ACTION! Tell ANZ to rule our finance for companies expanding fossil fuels!

This article was originally published on Market Forces' website here.