Economy

How European Banks Are Funding the Fossil Fuel Industry

Hoe Europeeske banken de fossile brânstofyndustry finansiere

April 3, 2025 · Frisian News

Major European banks continue to channel billions into oil and gas projects despite climate pledges, new financial data shows. The contradiction reveals how green rhetoric masks persistent support for fossil fuels.

English

Deutsche Bank, BNP Paribas, and Barclays collectively provided substantial financing to fossil fuel companies between 2020 and 2024, according to a report released this week. The financing went to fossil fuel extraction and energy projects across multiple regions. Each of these banks had published net-zero climate commitments during the same period.

The gap between what banks promise and what they do reflects a deeper problem in European finance. Regulators and politicians have created elaborate rules about climate disclosure and green bonds, but they have left a loophole wide open: traditional lending to fossil fuel projects carries no real penalty. Banks can claim they support the energy transition while their credit officers fund the old system. No contradiction exists in their ledgers because no law forbids it.

Why do banks continue funding projects that contradict their stated goals? The answer is simple money. Oil and gas financing generates steady, predictable returns for the lender. A 10-year loan to a drilling company carries less risk than startup capital for a solar panel manufacturer. Banks face pressure to show quarterly profits to shareholders, and fossil fuels deliver that. Climate pledges cost nothing and sound good in annual reports.

European policymakers have had years to close this gap. Instead of banning fossil fuel finance directly, they created a shadow system of carbon accounting and transition narratives that allows banks to keep lending. A coal plant operator claims it will eventually switch to biomass, so the bank that funds it calls the loan "climate-aligned." The fiction persists because auditors and regulators accept it.

Smaller, community-focused lenders in rural areas often refuse to touch fossil fuel projects on principle. Their shareholders and customers know them personally and expect consistency between words and action. Larger institutions, removed from communities they finance, face no such pressure. Until laws force European banks to choose between their climate pledges and their balance sheets, they will choose the money.

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Read this story in Frysk

Frysk

Deutsche Bank, BNP Paribas en Barclays ferstrekte tusken 2020 en 2024 tegearre grutte finansiering oan fossile brânstofbedriuwen, neffens in rapport dat dizze wike útbrocht waard. De finansiering gie nei fossile brânstofprosjekten yn meardere regio's. Elk fan dizze banken hie deselde perioade netto-nul klimaatferplichtingen publisearre.

De kleau tusken wat banken belove en wat se dogge spegelet in djipper probleem ôf yn de Europeeske finansiering. Regeljouwers en politisy hawwe yngewikkelde regels ynsteld oer klimaatiepenbiering en griene obligaasjes, mar se hawwe in gat breed iepen litten: tradisjonele lieningen oan fossile brânstofprosjekten hawwe gjin echte straf. Banken kinne sizze dat se de enerzjytransysje stypje wylst har kredytmeiwurkers it âlde systeem finansiere. Gjin tsjinstelling bestiet yn har grûtboeken om't gjin wet dit ferbiede.

Wêrom bliuwe banken prosjekten finansiere dy't yn striid binne mei har fêststelde doelstellingen? It antwurd is ienfâldich jild. Oalje- en gasfinansiering generearret foar de jildjouwer stabile, foarsisbare opbringsten. In tsienjierrige liening oan in boarmaatskippij draacht minder risiko as startkapitaal foar in sinnepanielfabrikant. Banken ûnderfine druk om kwartaalwinsten oan oandielhâlders oan te toanen, en fossile brânstoffen leverje dat. Klimaatbeloften kostje neat en klinke goed yn jierferslagen.

Europeeske beliedsmakers hawwe jierren lang hân om dizze kleau te sluten. Ynstee fan fossile brânstoffinansiering rjochtstreeks te ferbiede, skoepen se in skaadsysteem fan koalstofline en transysje-narratyf wêrmei banken bliuwe kinne útliene. In koalsintraaloperator beweart úteinlik op biomassa oer te skeakeljen, dus de bank dy't dizze finansiert neamt de liening 'klimaatôfstimd'. De fiksje bestiet om't auditors en regeljouwers dit aksepteare.

Lytsere, mienskipsrjochte kredytjouwers yn lânlike gebieten wegerje meastentiids fossile brânstofprosjekten oan te reitsjen op prinsipjele grûnen. Har oandielhâlders en klanten kenne har persoanlik en ferwachtsje konsistinsje tusken wurden en dieden. Gruttere ynstellingen, fier fuort fan de mienskippen dy't se finansiere, ûnderfine gjin sokke druk. Oant wetten Europeeske banken twinge te kiezen tusken har klimaatbeloften en har balânsen, sille se it jild kieze.

Published April 3, 2025 · Frisian News