HSBC, Europe's biggest bank, has announced that it will no longer provide project finance for new tar sands projects, including the construction of any tar sands pipelines. It intends also to reduce its ‘exposure’ to existing tar sands projects overall in time.
HSBC’s move, disclosed in its new Energy Policy, is the most recent in a series of decisions by international financiers to distance themselves from the tar sands pipeline projects in North America. French banks BNP Paribas and Natixis, insurance and investment giant Axa, as well as Dutch bank ING, and Sweden’s largest pension fund, AP7, all made similar announcements in 2017.
Oil from tar sands is one of the most carbon-intensive fuels because of the amount of energy needed to extract it. It is estimated that the proposed Keystone XL pipeline in Canada could potentially add nearly a million barrels of oil per day to current capacity, as well as an estimated 175 million tonnes of carbon dioxide per year.
Commenting on the announcement, Annie Leonard, executive director of Greenpeace USA, said: “The world has changed dramatically since these controversial tar sands projects were first proposed. In the US, we’ve seen record floods, hurricanes and wildfires super-charged by climate change. We’ve also seen a powerful, diverse, and growing movement step up to stop new fossil fuel infrastructure like the Keystone XL pipeline. This move by HSBC is the most recent indication that the financial community has begun to see the increasing risk in funding pipelines. We now expect banks like the US giant JPMorgan Chase and Barclays, who have backed tar sands pipelines in the past, to cease their funding of these dirty projects.”
Greenpeace is now calling on Barclays, the only other major UK-based bank providing loans for tar sands pipelines, to rule out financing new tar sands pipelines in North America.