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Banks and liquefied natural gas (LNG)

Banking on Climate Change 2020 - Liquefied Natural Gas. Photo: Rainforest Action Network (RAN)

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Banking on Climate Change 2020 - Liquefied Natural Gas. Photo: Rainforest Action Network (RAN)

Link to LNG policy table

Link to LNG exclusion table

What is LNG?

The global production of liquified natural gas (LNG) has taken a sharp increase in recent years. LNG is natural gas that is purified and then liquified by cooling to about -160°C. The gas can then be transported over sea, after which it is re-gasified and fed to the local gas pipeline infrastructure. This way, the gas that is produced in locations distant from pipelines or where pipelines cannot be constructed can still make it to the market.

Proponents of LNG often claim that the burning of the resulting gas causes half the climate impact compared to burning coal. However, the climate impact is much higher when the entire lifecycle of LNG is considered, including production, the very energy-intensive liquefaction, shipping and re-gasification. Furthermore, since LNG consists predominantly of the powerful greenhouse gas methane, leakages of only 2-3%, which analysts easily foresee, will make LNG as bad for the climate as coal. The environmental impact of drilling for gas, the LNG carriers and LNG terminals is also enormous. The dredging and waste disposal of LNG facilities takes a heavy toll on public health and often destroys the local ecosystem.

Banks and LNG

The severity of the climate crisis requires that banks must urgently take steps to disengage from financing all business activities and projects that continue the world's reliance on fossil fuels. Banks must therefore end support for all new LNG projects and implement a full phase-out for financing LNG projects in line with the Paris climate agreement.

The world’s biggest financiers of LNG are Morgan Stanley and Citi, both having financed the LNG sector with around USD 8 billion since signing of the Paris Climate Agreement (2016-2020).

Bank policies on LNG are assessed below. These assessments follow the methodology of our Banking on Climate Chaos 2021 report, published in March 2021. The details section in the table contains further detail on the exact scoring per bank, as well as an overview of relevant policies.

See here for banks' exposure to the LNG sector in 2016-2020.

Bank policy scores on LNG

BankLast update

Country

Score

Ranking

Details

Agricultural Bank of China

2021-03-24

CHN

Laggard

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China

Profile

Score

Laggard

20210324

Last update: 2021-03-24

Explanation

Total: 0 points out of 18

See: Policy scores Excel sheet

ANZ

2021-03-24

AUS