With love from HSBC: A curious loophole may allow HSBC to remain invested in the construction of 73 proposed coal plants, despite the bank's public support for the Paris Agreement | Photo: Thetimes.co.uk

HSBC’s asset management arm may finance 73 new coal plants despite Paris pledge

New research by Centre for Research on Energy and Clean Air (CREA) suggested that the asset management arm of HSBC Bank was free to hold equity in firms that plan to build 73 new coal plants across Asia and Africa. This is despite the bank’s pledge to phase out coal power globally by 2040, and the equity is held as part of a loophole that bizarrely exempts its asset management arm from its larger climate commitments. However, while the air pollution from the planned coal capacity could cause up to 18,700 deaths a year, HSBC has countered criticism by saying that it partly invests in index funds that “include fossil fuel firms”, even though it has pulled out of direct exposure to the coal industry. 

IEA calls for “radical” shift in global energy systems in major new report 

A new report by the International Energy Agency (IEA) called for a “radical” shift in global energy systems to reach the collective target of net-zero emissions by 2050. Titled “Net-zero by 2050: A roadmap for the global energy sector”, the report envisions renewable energy outpacing coal power within the next five years and oil and gas by 2030 by using this year as the starting ground to end any further investments into new fossil fuels projects. The report also sets out 400 milestones for the world to be powered “predominantly by solar and wind”, and says that the net-zero emissions (NZE) by 2050 scenario would give the world a 50% chance of containing global warming to below 1.5 deg C. 

Curiously, however, while the new report urges a move away from fossil fuels and emphasises “stringent cuts to non-CO2 greenhouse gases”, the executive director of the IEA recently also endorsed India’s plans to use natural gas under a Strategic Partnership Framework between the IEA and the government of India. 

ADB to stop financing fossil fuels where cost-effective alternatives exist  

The Asian Development Bank (ADB) announced in a draft policy update that it would stop financing new coal power and oil and gas exploration and production, in a move that could significantly reshape much of Asia’s financial support for fossil fuels. The bank financed $42.5 billion in fossil fuel projects across much of South Asia between 2009-19, but the new announcement does not specify a firm timeline for the pullout. Instead, the bank said that it would choose to support cleaner, cost-effective alternatives, unless there was none available for a particular geography. 

JP Morgan to reduce operational carbon intensity of oil & gas investments by 35% 

JP Morgan Chase bank — the world’s largest financier of fossil fuels — vowed to reduce the operational carbon intensity from its oil and gas investments by 35% by 2030, and doing so would include capping methane emissions and cutting down on flaring. The bank also promised to switch its fleet of vehicles to EVs by 2025, and source 70% of its power from renewables by the same year. However, the emphasis on operational intensity of emissions means that the bank could still invest in projects that increase the overall emissions of greenhouse gases, even though it may provide up to USD 2.5 trillion for enhanced climate action. 

Indonesia’s largest utility to stop building new coal capacity — after 35GW of proposed plants

Indonesia’s largest utility, Perusahaan Listrik Negara (PLN), pledged to stop building any new coal capacity and pivot to renewables instead, even though it would still go ahead with the 35GW of proposed capacity. The capacity was green-lighted in the country’s 2015 national energy plan, where coal is by far the dominant source of power, and critics have said that it would lock Indonesia into coal dependence for an additional 40 years. PLN had previously stated that up to 16GW of new coal capacity would come online by 2030, but it now plans to invest in co-firing, where biomass would be burned along with coal to reduce the latter’s usage by 20-50%. However, IRENA has cautioned that its climate effectiveness would depend upon “where the biomass came from”.

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