BNP Paribas to end financing fossil projects, but not fully

By Al Mayadeen English
Source: Agencies
11 May 2023 15:23

The French bank says its announcement comes in line with its 2030 plan to reduce investments in gas and oil projects by 80 percent.

The BNP Paribas logo seen at a branch in Paris, France, February 4, 2020 (Reuters)

BNP Paribas announced that it will stop financing projects to extract natural gas or oil as criticisms against the institution grew over climate protection, the French banking giant said on Thursday.

Nonetheless, BNP did not dismiss options to finance companies that conduct such projects, as long as the funding is not directly funneled into fossil fuel extraction operations.

The bank said in a statement that it is "no longer providing any financing dedicated to the development of new oil fields," despite having already claimed this policy since 2016.

BNP is phasing out financing to non-diversified oil exploration and production" companies as part of its 2030 strategic plan - which includes reducing investments in nonrenewable energy exploration by 80% until then.

In its aim to reform policies to adapt to the International Energy Agency's 2050 net zero carbon emissions, BNP announced it will be regulating its investments in cement, steel, and aluminum production.

The bank plans to limit the intensity of emissions of steel by 25%, aluminum by 10%, and cement by 24% by 2030.

Net zero 2050

An agreement has been reached in April by EU lawmakers and member state governments to speed up "green" aviation fuels at airports in an effort to cut carbon emissions.

The agreement includes a minimum of 2% sustainable aviation fuel, made from biofuel, synthetic, or recycled fuel derived from waste gases and plastic and then mixed into used kerosene. The preliminary deal is due to take off in 2025 and rise to 70% by the year 2050.

This is part of the EU's target to reach a net carbon-neutral future and pertains to the EU's carbon market including sea and air transport.

Aviation emissions in Europe have seen a 5% increase between 2013 and 2019, which decreased after the Covid-19 pandemic measures. Now that the measures are lifted, and aviation traffic is on the rebound,

The European Parliament and the European Council are required to formally adopt the deal before it is ratified as a new EU law.

The biggest nation emitting CO2 is China, which has vowed to reduce emissions to net zero by 2060, followed by the US which has a long-term plan of reaching net zero by 2050.