Tens of billions from Japanese banks keeping coal-based steel on life support
Tokyo, 3 October, 2024 – Japan’s largest banks, including Mizuho, Sumitomo Mitsui Bank Corporations (SMBC), Mitsubishi UFJ, and Japan Bank of International Cooperation (JBIC), continue to support the most polluting steel producers, with over USD37 billion provided to ArcelorMittal, Kobe Steel, Nippon Steel and others between 2016 and June 2023.
The research from Reclaim Finance, Steeling our future: The banks propping up coal-based steel (1), shows that Banks have a critical role to plan in financing the transformation: by refusing to support companies planning to expand coal-based steel capacity, or those planning to extend the life of their coal-based assets. Instead, they should support companies developing fossil-free steel.
“Continuing to finance the production of steel from coal is both a climatic and a financial risk. Demand for carbon-free steel is growing and technologies are becoming increasingly competitive. Supporting the production of coal-free steel, particularly from iron directly reduced with green hydrogen, is therefore a real opportunity for banks. Coal-based production facilities will end up as stranded assets. The only safe bet for our carbon-constrained future is on truly green steel,” said Cynthia Rocamora, Reclaim Finance industry campaigner.
Limiting global warming to 1.5C means OECD countries like Japan need to eliminate coal in steel production by 2030 (2), and with 59% of Japanese blast furnace capacity reaching end of life this decade (3), now is the time for steelmakers to be transforming to truly clean production methods.
“We cannot address climate change without eliminating coal from steel production. Investments made this decade will determine whether companies keep burning metallurgical coal in their blast furnaces for decades to come, completely derailing climate action, or if they prudently transform to green technologies. Most banks globally already recognise that coal has no future in energy, they need to wake up to the reality that it has no future in steel either, and stop wasting money on it,” said Caroline Ashley, SteelWatch Director.
Reclaim Finance calls on the banks to adopt strong commitments to restrict their financing to steel produced using metallurgical coal. This involves adopting policies to not finance new blast furnaces or extend the life of existing ones and not to support the companies carrying out such projects. Reclaim Finance is also calling on the banks to commit to increasing their support for low-carbon technologies, such as green hydrogen.
###
Link to the Japanese Report: https://reclaimfinance.org/site/wp-content/uploads/2024/09/Steeling-our-future_JP240731.pdf
For media inquiries, please contact:
- Koh Matsuki
Inquiries for Japanese press (Japan)
[email protected]
+818043958529 - Cynthia Rocamora
Industry Campaigner, Reclaim Finance (France)
[email protected]
+33 7 81 33 61 60 - Helen Burley
International Media Relations, Reclaim Finance (UK)
[email protected]
+44 7703 731923
Notes:
- Reclaim Finance, Steeling our Future: The banks propping up coal-based steel, March 2024. Japanese translation now available in September 2024.
- SteelWatch, Sunsetting Coal in Steel Production, June 2023.
- Based on the 2024 updates of GEM Global Steel Plant and Blast Furnace Trackers, Japan currently has 23 blast furnaces (92.8 Mtpa capacity in total) which are either in operation or mothballed. Among them, considering a 20-year lifetime and known dates of previous relinings, 13 blast furnaces (54.5 Mtpa capacity in total) are to reach end of life by 2030 included.
- Reclaim Finance is a non-governmental research and campaigning organisation. It was founded in March 2020 by Lucie Pinson, winner of the Goldman Environmental Prize in 2020, and aims to make finance work for the climate. Website: https://reclaimfinance.org/site/en/home/
For all media queries, please contact [email protected]
