South-East Asia (SEA)’s gas expansion plans, if realized, would result in a significant increase in fossil infrastructure. This would trap economies in a dangerous fossil lock-in, a completely unnecessary fatality for a region whose renewable capacities are as promising and competitive with their fossil counterparts. While advocated as developmental opportunities, gas and Liquefied Natural Gas (LNG) have the opposite effect on the health and wellbeing of local communities. Reclaim’s analysis shows that European banks have poured a total of US$20.8 billion to the top SEA upstream and midstream gas developers from 2021 to 2024 with HSBC, Barclays, ING and Natixis/BPCE spearheading the financing trend.

South-East Asia is experiencing a downright fossil gas boom: There are currently 54 gas extraction projects under development or field evaluation (1). According to the Philippine organization Center for Energy, Ecology and Development (CEED), a total of 135.6 GW of new gas power capacity is currently in development – more than doubling its current gas power installed capacity (2) alongside 16.7 million tons per annum (mtpa) of LNG export and 80.9 mtpa of LNG import terminals (3) – which represent an increase of 33% and 164% compared to the current South-East Asian installed export and import LNG capacities respectively (4). While regional banks finance the largest chunk of the upstream and midstream gas expansion, European banks also play a significant role.

Which European banks are financing SEA’s gas expansion?

Between 2021 and 2024, the 20 biggest European banks granted a total of US$20.8 billion to the top SEA gas developers, according to Reclaim Finance’s recent analysis (5).

Source: Banking on Climate Chaos 2025

HSBC clearly leads the way with a total of US$4.6 billion between 2021 and 2024, while Standard Chartered, Barclays and UBS make for the last triplet with financial support in the billions with US$1.6 billion, US$1.2 billion and US$1.1 billion respectively. While these numbers are horrendously high, an inexcusable trend is the recent increase in financing from 2023 to 2024 from HSBC, Barclays, Natixis/BPCE, BBVA, Santander, and particularly ING, given their recent policy change (see below).

Source: Banking on Climate Chaos 2025

How is this possible with all the banks analyzed having commitments to achieving net-zero emissions by 2050? One reason is that gas and LNG have successfully been branded as a climate-friendly alternative to coal, despite the existing evidence for its devastating impact on climate (6). The other reason being banks’ weak policies on excluding financing to upstream and midstream gas expansionists. In fact, Barclays, ING, BPCE, and HSBC all have some restrictions on financing LNG, but exclusively on the project finance level. According to the Banking on Climate Chaos (BOCC) report however, most of the financing provided by banks to fossil fuel companies is granted at corporate level, while only 7% of the financing comes in the form of project finance. Therefore, implementing exclusion policies for the companies developing new gas fields and affiliated infrastructure needs to be a priority for effective climate action.

• Standard Chartered for instance continues to actively encourage its clients to expand LNG and gas operations, claiming that LNG/gas reduced their emissions (7). It only has exclusion policies for gas coming from the Arctic, and no commitment regarding new conventional gas fields nor the companies developing them.
• HSBC last updated its gas policy in February 2025. It now restricts direct support for new gas fields and the associated midstream infrastructure, whereas the companies developing them remain unaffected by its policy.
• The gas policy of BPCE’s Corporate and Investment Bank Natixis only excludes financing to LNG export terminals that process more than 25% of fracked gas. They don’t have any exclusion policy for upstream gas. In fact, among French banks, the BPCE Group stands out: according to the BOCC, it is the only French bank to have increased its financing for new oil and gas fields since 2021. As a result, it has become the leading French bank in financing the upstream expansion of fossil fuels.
• Since September 2024, ING excludes financing LNG export projects from the year 2026. The Dutch bank will also exclude from its corporate general-purpose financing companies active exclusively in upstream oil & gas that continue to develop new fields. This is a significant first step, but unfortunately – as this research undoubtedly portrays – the change has little impact on the banks’ financial behavior. This is due to the fact that the new policies do not apply to integrated companies or majors, which are responsible for over 70% of upstream oil & gas expansion globally, nor to companies responsible for new LNG projects.

Is more gas and LNG really beneficial for local communities in SEA?

Fossil gas is frequently promoted as a climate-friendly ‘transition fuel’ that delivers benefits to local communities, particularly in its liquefied form, LNG. However, growing evidence contradicts this narrative. LNG actually exacerbates the climate crisis: Fossil gas is composed of methane, a greenhouse gas 83 times more potent than CO2 over 20 years. While combusting gas emits about half as much CO2 as coal, methane leaks unavoidably occur throughout the entire supply chain. LNG and gas projects also inflict severe environmental harm on ecologically sensitive regions, such as the Mekong Delta in Vietnam—one of the world’s richest deltas — and the Coral Triangle, a vital biodiversity hotspot in SEA (8). European banks who finance gas extraction and liquefaction in these areas seriously threaten local communities that rely on the ecosystems for their livelihoods.

Despite industry claims, LNG development rarely brings prosperity to local populations. An in-depth report on LNG infrastructure on the U.S. Gulf Coast concludes that “LNG development tends to steer economic benefits (jobs, tax base, and public school funding) away from the communities it harms the most. Generally, having oil and gas and petrochemical plants next door has not brought economic prosperity to fenceline communities” (9). Instead, communities near fossil fuel facilities often experience a rise in social, economic, and health challenges, with fewer resources available to address them.

In middle-income countries, the oil and gas industry is also marked by widespread use of contract labor under precarious working conditions. The number of contract workers in the industry is growing more rapidly than in other sectors, largely due to the industry’s need for flexibility in navigating frequent boom-and-bust cycles (10). The high-paying jobs such as managerial and engineering roles are typically not filled by residents, but by outside professionals who constitute a small portion of the workforce (11). Moreover, employment opportunities are limited; a typical LNG terminal, once operational, employs fewer than 400 people (12).

Eventually, the oft-repeated promises of prosperity, social development, and employment used by LNG developers and their financiers to justify continued financing of gas infrastructure are misleading.

What are the alternatives to LNG expansion?

There are uncountable reasons for why LNG is not a viable option to replace coal: high costs resulting in higher household energy bills (13), volatile markets and thus unstable supply jeopardizing social stability (14), health hazards and the increasing risk of stranded assets are but a few examples. In the case of South-East Asia, the argument against LNG is a pragmatic one: according to the Global Energy Monitor, the combined renewable potential of solar and wind power in the region is 131 times higher than the electricity output of its current gas power projects in development (15). In terms of cost competitiveness, energy consultancy Wood Mackenzie projects that by 2030, renewables in the Asia Pacific will be one-third cheaper than fossil fuels (16). Consequently, alternatives that are both economically and environmentally viable exist abundantly in South-East Asia. All that European banks need to do now in order to cease this opportunity is to put their money where their mouth is. Standard Chartered and HSBC are already among the top financiers of renewable energy in the region (17), now they have to stop financing the region’s destruction in parallel.

According to the International Labour Organization (ILO), around 1.2 billion jobs worldwide depend directly on a stable and healthy environment (18), meaning that the expansion of the fossil fuel industry poses a significant risk to global employment. The few jobs created by fossil fuel projects cannot offset the potential scale of losses resulting from environmental degradation. In contrast, the ILO projects that full implementation of the Paris Agreement could yield a net gain of 18 million jobs globally by 2030, with employment in renewable energy rising from 4.6 million to 22 million and fossil fuel jobs declining from 12.6 million to 3.1 million (19). This transition underscores the urgent need for targeted investment in workforce development and support programs to help oil and gas workers move into new roles within the clean energy economy.

A swift and decisive break from fossil fuels is not only possible in South-East Asia — it’s non-negotiable. If Barclays and HSBC are truly serious about hitting net-zero by 2050 despite bailing out of the NZBA; if BPCE/Natixis and ING actually intend to turn their net-zero promises into reality; and if Standard Chartered genuinely believes in its own purpose of “doing the right thing” — then it’s time to draw a hard line: no financial services for companies expanding their gas business, full stop. Instead, banks must channel massive capital into renewable energy projects that will power the region’s future. Propping up fossil fuel expansionists is incompatible with climate commitments — and ending that support is the first, urgent test of credibility. Only then can banks help build sustainable, safe, and dignified livelihoods for thriving, resilient societies.

Notes:

1. Calculation made by Reclaim Finance based on Rystad Energy Ucube. 
2. International Energy Agency (IEA), Southeast Asia Energy Outlook 2024, 2024.  
3. CEED, Southeast Asia at a crossroads: Deterring SEA’s fossil future with renewables, November 2024. 
4. Global Energy Monitor, Asia Gas Tracker, 2025. 
5. The companies are composed by the ones developing the 20 largest upstream gas projects that are currently under development or field evaluation in the region – representing 83% of upstream short term gas expansion in SEA -, as well as the ones involved in in the gas pipelines under construction or proposed (16 projects) and in the LNG export terminals under construction or proposed (5 projects). 
6. Intergovernmental Panel on Climate Change (IPCC), Climate Change 2021: The Physical Science Basis, 2021. 
7. Standard Chartered, Annual Report 2024, 2024.  
8. Global Energy Monitor, Southeast Asia ramps up gas extraction plans but uncertainty remains, April 2025.  
9. Robert D. Bullard Bullard Center for Environmental and Climate Justice, Liquefying the Gulf Coast: A cumulative impact assessment of LNG buildout in Louisiana and Texas, May 2024.  
10. World Resources Institute, Just transitions in the oil and gas sector: Considerations for addressing impacts on workers and communities in middle-income countries, January 2023. 
11. ibid.  
12. Sierra Club, Tax Breaks Force Gulf Communities to Subsidize the LNG Industry, December 2024.  
13.  Zero Carbon Analytics, Increasing gas imports will raise electricity prices in the Philippines, July 2025.  
14. See Reuters, LNG tankers divert to Europe from Asia after Russia halts supplies to Austria’s OMV, 18th November 2024. 
15. Global Energy Monitor, Southeast Asia’s Energy Crossroads: The cost of gas expansion versus the promise of renewables, May 2024.  
16. Wood Machenzie, Battle for the future 2023: Asia Pacific power and renewables competitiveness overview, February 2024. 
17. CEED, Southeast Asia at a crossroads: Deterring SEA’s fossil future with renewables, November 2024. 
18. International Labour Organization (ILO): Greening with jobs, 2018. 
19. ibid.  

Re-published from the original press release on the Reclaim Finance website here.