Fossil Fuel Financier Mizuho Restricts Coal Financing
Mizuho Financial Group, the world’s ninth-largest fossil fuel financier, recently announced its new policy that restricts coal financing. Mizuho is the top lender to fossil fuel companies among Japanese banks, financing $16.8 billion in projects. The bank’s new policies will come into effect from June 2020.
The new policy contains too many exceptions
With the new policy, Mizuho will not “provide financing or investment which will be used for the new construction of coal-fired power plants.” However, there are exceptions. Business to which the bank already committed financing before the new policy is excluded. A proposed coal-fired plant deemed essential to a country’s “stable energy supply” and will contribute to greenhouse gas emissions reduction by replacing a power plant is another exception.
Mizuho’s new policy deals with both the investment and financing of coal mining, namely completely excluding any project using mountaintop removal to mine coal. Yet, coal mining employing other methods is open for financing. All that the new policy states is that the bank will conduct “a thorough examination of the impacts on the environment, industrial safety and health, and other areas.”
One of the weakest areas in the new policy is in oil and gas. When it comes to financing oil and gas projects, Mizuho merely states that it will provide a “thorough examination of the impacts on the environment and of the potential for conflicts with indigenous peoples or local communities.” In other words, the bank will still finance oil and gas projects.
350.org expresses concern over the exceptions in the new policy, including that it may allow Mizuho to finance the coal-fired power project Vung Ang 2 in Vietnam, whose total project cost is estimated at $2.2 billion. The project will impact both the environment and local livelihoods, according to Bank Track. Constructing the plant and the coal ash that will impact local farmland. The emissions from the power plant will cause health problems and destroy aquatic ecosystems. Vietnam can supply enough energy to meet its electricity demand from renewable energy, Bank Track contends, so “there is no need for this plant.”
Crédit Agricole’s coal financing policy is a better alternative
Crédit Agricole, the second-largest bank in France, has a better coal financing policy, which completely phases out thermal coal financing. The bank’s policy stipulates that the bank will “stop working with corporations currently developing or planning to develop new thermal coal capacities along the entire value chain (mining, production, utilities, and transport infrastructures).”
“Crédit Agricole is to be congratulated for no longer messing about, and the stipulation that its coal clients must spell out how they intend to actually close their operations is crucial here,” said Greig Aitken, coal campaigner at BankTrack.
Coal must be phased out to achieve a 1.5-degree world
“Phasing out coal from the electricity sector is the single most important step to get in line with 1.5 degrees Celsius,” declares Climate Analytics. To achieve a 1.5 degrees world, global coal emissions should peak in 2020 and global coal use in electricity generation must decrease by 80 percent below 2010 levels by 2030. All coal-fired power stations need to be shut down by 2040. Burning coal accounts for 46 percent of worldwide carbon dioxide emissions and 72 percent of total GHG emissions from the electricity sector. If plans to build up to 1200 new coal-fired stations globally occur, the GHG emissions from them would cause global temperatures to increase by more than five degrees Celsius by 2100.
Japan is flying in the proverbial face of climate change wisdom. The world’s sixth-largest emitter of GHG emissions, more than half of its electricity emissions in 2016 came from coal. The country plans to add 18 gigawatts of new and additional coal power plants to its current 45 GW, and five GW of that is already under construction. If Japan succeeds in building that amount of coal-fired generation, it will exceed its Paris Agreement emissions budget by almost 300 percent, according to Climate Analytics.