Big Banks Won’t Finance Australian Coal Project That Threatens the Great Barrier Reef
A plan to expand one of the world’s largest coal export terminals has environmental consequences so potentially dire that even Wall Street is backing away from the project.
Citigroup, J.P. Morgan, and Goldman Sachs have joined five major European banks in ruling out financing Australia’s Abbot Point coal export expansion project.
What’s got some of the world’s biggest financing firms backing away from investing in Abbot Point? Damage to the iconic Great Barrier Reef, for starters.
The plan requires 3 million cubic meters of sediment to be dredged from the ocean to make room for larger ships at the port, destroying marine habitat and bringing more ship traffic to the World Heritage–listed Great Barrier Reef—home to the largest stretch of coral reef on the planet and more than 1,500 fish species.
“But it’s not just that,” said Rainforest Action Network Program Director Amanda Starbuck. “In building up this coal terminal, what they’re doing is unlocking the gates to the Galilee Basin and turning Australia into the world’s biggest coal exporter.”
In July, Australia’s conservative government green-lit the $15.5 billion Carmichael project, one of the world’s largest coal mines. The annual carbon emissions from coal that could be unearthed from mines in the state of Queensland would exceed the greenhouse gas spew of 52 nations, according to a Greenpeace estimate.
Six other massive mines on the drawing board would together become the world’s seventh-largest emitter of greenhouse gases.
In letters sent to RAN, J.P. Morgan, Goldman Sachs, and Citigroup said they did not plan to invest in the Abbot Point project.
"Specific to Abbot Point, we will not finance any project or initiate loans where the specified use of proceeds would significantly convert or degrade a critical natural habitat," a Goldman Sachs letter states.
Indian conglomerate Adani Group needs to raise $15 billion to $20 billion to fund the expansion of the Abbott Point coal terminal. In a statement to The Wall Street Journal, Adani revealed U.S.-based Morgan Stanley’s role in selling part of Adani’s stake in Abbot Point.
“Morgan Stanley Australia are Adani’s advisers on the potential partial sale of Adani’s existing terminal at Abbot Point,” the company said. “Any partial sale of Adani’s current holdings at the port would—far from a withdrawal from the port—in fact be used to deliver the port’s expansion.”
The statement came after Morgan Stanley wrote a letter to RAN on Oct. 20 confirming it would not finance the expansion of Abbot Point. J.P. Morgan, Goldman Sachs, and Citigroup did not reply to requests for comment.
RAN commended the banks for backing away from financing the Abbot Point project, but not their history of financing the coal and oil industry.
“We’ve been talking to the banking sector about these practices, and there needs to be a stop in underwriting some of the biggest contributors of climate change,” Starbuck said. “Some banks are talking about LEED-certified buildings they’re financing and starting renewable energy projects but, at the same time, continuing to underwrite and finance coal and oil industry.”
“There needs to be a shift in capital, or you’re just financing the challenges you say you’re trying to address,” she added.
Australia is the world’s second-largest coal exporter, and if the new mines are developed, the country could take the top spot. RAN began fighting the port expansion plans more than a year ago, when the World Wildlife Fund and other conservation groups balked at the hasty environmental approvals granted by the federal government.
"What they're trying to do is rely on previous assessments that were made in relation to offshore dumping," Mackay Conservation Group coordinator Ellen Roberts told the Australian Associated Press.
Starbuck said RAN hopes the expansion project fails completely “and the coal stays locked in the ground and the reef stays intact,” she said.