National Australia Bank says it will stop lending for new thermal coal mining projects, becoming the first major Australian bank to phase out support for the sector.
In a statement on Thursday, the bank said it would no longer back new thermal coal mining investment, but would continue to support customers across mining and energy, including those with existing coal assets.
NAB has already cut its exposure to coal mining finance from nine to five per cent since 2016, but the majority (83 per cent) of what it does support comprises thermal coal.
While the bank will continue to finance coal projects already on its books, NAB corporate and institutional banking chief customer officer Mike Baird says an orderly transition to a low-carbon Australia is critical for the economy and for continued access to energy sources.
“NAB supports the transition to a low carbon economy and the delivery of secure, reliable and affordable energy,” Mr Baird said.
Executive director at environmental investing lobby group Market Forces, Julien Vincent, said that while NAB’s fossil fuels-to-renewables ratio was clearly the best among Australia’s big four lenders, the bank did still favour non-renewable power generation.
“We do need to see NAB doing the same thing on coal-fired power. To stop funding the fuel source but not the fuel use would be a gross inconsistency,” Mr Vincent said.
NAB on Thursday said that since 2003 the bank had arranged $6.2 billion in renewable energy project financing and is the leading arranger of renewable finance in the Australian sector.