Banks Channeled $385 Billion into Coal Sector Since COP26

Massive Bank Funding to Coal Sector Undermines COP26 Pledges

Global banks injected over $385 billion into coal power since the 2021 COP26 climate summit. This defies earlier promises to cut financing for carbon-heavy industries. Despite pledges from nearly 200 governments and major banks, coal-related funding continued to grow last year.

Urgewald and other nonprofits analyzed the flows and found little progress. “It’s as if Glasgow never happened,” said Katrin Ganswindt, director at Urgewald.

Coal still ranks as the world’s most-polluting energy source. It generates over one-third of global electricity, according to the International Energy Agency. Continued operations at coal plants risk breaking the Paris Agreement’s 1.5°C limit.

Developing nations face unique barriers. Many of their coal plants are new and vital to economic stability. Without fast alternatives and investor compensation, these countries struggle to transition.

Coal Financing: China and US Lead the Way

Chinese banks led the world in coal financing, pouring nearly $250 billion into the industry from 2022 to 2024. This underscores China’s reliance on coal despite global clean energy momentum.

US banks came second, providing more than $50 billion. Leading financiers included Bank of America, JPMorgan Chase, and Citigroup.

Private firms also expanded coal investments. Jefferies Financial Group grew its coal portfolio by nearly 400% in three years. In Europe, Barclays and Deutsche Bank topped coal finance volumes.

Deutsche Bank reported a 42% drop in coal-related emissions since 2021. However, many banks walked back earlier coal restrictions. For example, Bank of America eased its ban on new thermal coal mines in late 2023.

Macquarie Group also softened its policies on financing coal used in steelmaking. These shifts reflect a broader trend—banks now view some coal projects as essential to energy transition infrastructure.

SuperMetalPrice Commentary:

Global banks continue to fund coal heavily, weakening the world’s climate commitments. Although some institutions report emission cuts, broader financing trends still support fossil energy. This undermines clean transition goals, especially as demand rises for low-emission technologies. Until banks align capital with climate targets, the energy transition will face slow progress and market uncertainty. Investors must demand accountability, and policymakers need to reinforce financial discipline around coal exit plans.