BANKS DODGY DEALS CAMPAIGNS
Sections
Banks Dodgy Deals Campaigns
Our campaigns
Banks and Climate
Banks and Human Rights
Banks and Nature
Our projects
Tracking the NZBA
Banks and Russia
Banks and Steel
Tracking the Equator Principles
Tracking the PRBs
Find a Better Bank
Banks and the OECD Guidelines
Media
News Publications
Raiffeisen Out! Bank.Green End Coal Finance Plastic Banks Tracker Defund TotalEnergies Financial Exclusions Tracker Equator-Complaints.Org Don't Buy into Occupation Banks & Biodiversity Forests & Finance Drop JBS StopEACOP Fossil-Free Finance
BankTrack
About BankTrack Organisation Our team Our board Our annual reports Funding and finances Guiding principles Our history BankTrack in the media Team up with us Our privacy policy Donate Visit us
Successes Contact BankTrack
Donate Mailing list Facebook Twitter Linkedin Login
Home › Partner news ›
Partner News

The banks financing dirty steel

The world’s major banks continue to support the largest and most polluting steel producers
2024-03-26 | Paris, France
By: Reclaim Finance
Contact:

Cynthia Rocamora, Industry Campaigner at Reclaim Finance, +33781336160 

Helen Burley, International Media, Reclaim Finance, +44 7703 731923

Casting iron at ПАО "Тулачермет", 18 August 2017. Photo: Afedchenko via Wikimedia (CC 4.0)
2024-03-26 | Paris, France
By: Reclaim Finance
Contact:

Cynthia Rocamora, Industry Campaigner at Reclaim Finance, +33781336160 

Helen Burley, International Media, Reclaim Finance, +44 7703 731923

Despite the crucial need to decarbonize the steel sector, which is one of the biggest sources of industrial emissions, the world’s major banks continue to support the largest and most polluting steel producers. They provided US$429 billion to the 100 biggest producers between 2016 and June 2023, according to a new Reclaim Finance report, which highlights the key role that banks can play in decarbonizing the sector (1). Yet many of the biggest steel producers plan to continue using fossil fuels for steel production, even though the International Energy Agency’s projections for limiting global warming to 1.5°C say new steelmaking processes are critical. Reclaim Finance is calling on the banks to urgently adopt policies to restrict their support for steel production from metallurgical coal and to finance the production of fossil-free steel.

Steel is an essential material in industrial production and everyday life, but it is also the biggest industrial source of CO2, due to the use of metallurgical coal in the blast furnaces where it is produced (2). Given that demand for steel will continue to grow (3), it is crucial that this sector is decarbonized to limit global warming to 1.5°C, and it is also possible given that new technologies, notably based on green hydrogen, exist. According to studies, the steel sector could be almost entirely coal-free by the early 2040s (4).

"Continuing to finance the production of steel from coal is both a climatic and a financial risk. Demand for carbon-free steel is growing and technologies are becoming increasingly competitive. Supporting the production of carbon-free steel, particularly from green hydrogen, is therefore a real opportunity for banks. They must join the transition and adopt robust policies to support the shift towards a low-carbon steel sector" said Cynthia Rocamora, industry campaigner at Reclaim Finance

Currently, just one bank globally – the Dutch bank ING – has made a commitment for the steel sector, and this is only at project level (6). Reclaim Finance says that the adoption of policies is even more urgent given that more than half of the projects planned worldwide by steel-producing companies, such as ArcelorMittal and the Korean company POSCO, will use metallurgical coal (7).

"We cannot address climate change without eliminating coal from steel production. Most banks globally already recognise that coal has no future in energy, they need to wake up to the reality that it has no future in steel either, and stop wasting money on it. Investments made this decade will determine whether companies keep burning metallurgical coal in their blast furnaces for decades to come, completely derailing climate action, or if they prudently transform to green technologies." said Caroline Ashley, director at SteelWatch

ArcelorMittal, which in early 2024 announced investments to decarbonize its Dunkirk site with the help of the French government (8), still produces 70% of its steel from blast furnaces using coal. The company, which is one of the steel producers receiving the most financial support from BNP Paribas, Crédit Agricole, Société Générale and HSBC (9), still plans to continue developing blast furnaces and to extend the life of existing furnaces. This runs counter to the projections of the International Energy Agency, which states in its Net Zero Emissions scenario that to achieve net zero, emissions from the steel sector must be reduced by 90% by 2050, meaning there is an urgent need to produce steel without fossil fuels.  

Reclaim Finance calls on the banks to adopt strong commitments to restrict their financing to steel produced using metallurgical coal, and to not finance new blast furnaces or extend the life of existing blast furnaces or to support the companies developing them. Reclaim Finance is also calling on the banks to commit to increasing their support for low-carbon technologies, such as green hydrogen.

Notes:

  1. Reclaim Finance, Steeling our Future – The banks propping up coal-based steel, March 2024
  2. The iron and steel sector is responsible for 11% of global carbon dioxide emissions, (source: Global Efficiency Intelligence, Steel Climate Impact: An International Benchmarking of Energy and CO2 Intensities, April 2022)
  3. IEA, Iron and Steel Technology Roadmap, October 2020
  4. Agora Industry, 15 insights on the global steel transformation, June 2023
  5. 354 banks provided US$ 429 billion to the 100 largest steel producers. The policies and financing of the 50 largest banks have been analyzed in this report.
  6. ING’s policy is only at the level of financing new unabated blast furnace projects or relining existing blast furnaces. A robust policy would involve extending financing restrictions to the corporate level. For more information see: Reclaim Finance, Decarbonizing steel: ING first bank to act, January 2024
  7. Global Energy Monitor, Pedal to the Metal 2023, July 2023
  8. Emmanuel Macron welcomed “a historic agreement (…) signed with ArcelorMittal to electrify the Dunkirk blast furnaces”. In February 2024, ArcelorMittal said it could not use green hydrogen in its European plants, despite receiving billions of euros in subsidies from the European Union to install infrastructure for this purpose, because the green steel that would be produced would not be competitive on international markets.
  9. BNP Paribas, ING, Société Générale and UniCredit participated in a revolving credit facility with a total value of US$2.2 billion for ArcelorMittal, providing an estimated US$ 156 million each (according to the Profundo attribution method).

This press release was originally published on Reclaim Finance's website here.

Banks

Agricultural Bank of China

China
Active

Axis Bank

India
Active

Banco Santander

Spain
Active

Bank of America

United States
Active

Bank of China

China
Active

Bank of Communications

China
Active

Bank of Montreal (BMO)

Canada
Active

Barclays

United Kingdom
Active

BNP Paribas

France
Active

China CITIC Bank

China
Active

China Construction Bank

China
Active

China Development Bank

China
Active

China Everbright Bank

China
Active

China Merchants Bank

China
Active

China Minsheng Bank

China
Active

Citi

United States
Active

Commerzbank

Germany
Active

Crédit Agricole

France
Active

Deutsche Bank

Germany
Active

Goldman Sachs

United States
Active

HSBC

United Kingdom
Active

Industrial and Commercial Bank of China (ICBC)

China
Active

Industrial Bank

China
Active

ING

Netherlands
Active

Intesa Sanpaolo

Italy
Active

JPMorgan Chase

United States
Active

KB Financial Group

South Korea
Active

Mitsubishi UFJ Financial Group (MUFG)

Japan
Active

Mizuho Financial Group

Japan
Active

Morgan Stanley

United States
Active

Ping An Bank

China
Active

PNC

United States
Active

Postal Savings Bank of China

China
Active

Royal Bank of Canada (RBC)

Canada
Active

Shanghai Pudong Development Bank

China
Active

Société Générale

France
Active

Standard Chartered

United Kingdom
Active

State Bank of India

India
Active

Sumitomo Mitsui Financial Group

Japan
Active

UniCredit

Italy
Active

Wells Fargo

United States
Active

Bank of Beijing

China
On record

Bank of Ningbo

China
On record

Credit Suisse

Switzerland
On record

Hua Xia Bank

China
On record
Dodgy Deals

Burns Harbor steel plant

United States
Project
Active
Iron and Steel Manufacturing

Burns Harbor steel plant

United States
There are no active project profiles for this item now.

ArcelorMittal

Luxembourg
Company
target
Iron and Steel Manufacturing | ...

ArcelorMittal

Luxembourg

Nippon Steel

Japan
Company
active
Iron and Steel Manufacturing | ...

Nippon Steel

Japan

POSCO Holdings

South Korea
Company
active
Iron and Steel Manufacturing | ...

POSCO Holdings

South Korea
There are no active company profiles for this item now.
Sections
Banks Dodgy Deals Campaigns
Our campaigns
Banks and Climate Banks and Human Rights Banks and Nature
Our projects
Tracking the NZBA Banks and Russia Banks and Steel Tracking the Equator Principles Tracking the PRBs Find a Better Bank Banks and the OECD Guidelines
Media
News Publications
Raiffeisen Out! Bank.Green End Coal Finance Plastic Banks Tracker Defund TotalEnergies Financial Exclusions Tracker Equator-Complaints.Org Don't Buy into Occupation Banks & Biodiversity Forests & Finance Drop JBS StopEACOP Fossil-Free Finance
BankTrack
About BankTrack Organisation Our team Our board Our annual reports Funding and finances Guiding principles Our history BankTrack in the media Team up with us Our privacy policy Donate Visit us
Successes Contact BankTrack
Vismarkt 15
6511 VJ Nijmegen
The Netherlands
Contact@banktrack.org
Donate Mailing list Facebook Twitter Linkedin
©2023 BankTrack
BankTrack is a registered charity in the Netherlands (ANBI) - RSIN 813874658
Find our privacy policy here

Stay up to date

Sign up now for all BankTrack's news


Make a comment

Your comment will be reviewed, before being posted