Australian banks defend coal exit

(Global Trade Review, London, 28 July 2021) Australia’s banks have defended their decision to exit the thermal coal sector and pushed back against suggestions from government lawmakers that they be forced to extend financing to fossil fuels. A flurry of exits from thermal coal businesses that began mainly among European banks and export credit agencies has since spread to Asia. Economies such as South Korea and Japan, which are major buyers of Australian coal and natural gas, have now set ambitious carbon reduction targets ahead of the COP26 summit in Glasgow in November. Australia is the world’s largest coal exporter by value, and coal miners are expected to post bumper profits during the full-year reporting season for listed companies in August. The decision has angered lawmakers in the ruling conservative coalition, many of whom represent communities where coal mines and their supply chains are major employers. Submissions to an inquiry on financing for Australian export industries, launched earlier this year by a parliamentary committee on trade and investment and focusing almost exclusively on thermal coal, included suggestions that the government force banks to lend to any business that is operating legally.