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[SYDNEY] Australia's ANZ Banking Group plans to lend at least US$7 billion to projects that will cut greenhouse gases, ending backing for new coal-fired power plants that don't use advanced technologies to reduce carbon dioxide emissions.
The move by ANZ, the smallest of Australia's "Big Four" lenders, to provide A$10 billion (S$10.1 billion) to a low-carbon economy over the next five years was announced on Tuesday. Amid growing calls to reduce carbon emissions, the country's three other major banks could follow suit, tightening financing conditions for Australia's coal industry. "We understand some of our stakeholders view our financing of fossil-fuel industries as a material risk and in direct conflict with our stated position on the need to reduce greenhouse gas emissions," ANZ said in a statement.
The bank said it would also strengthen due diligence processes to lending to coal mining, transportation and power generation. Though the smallest of Australia's four major lenders, ANZ has the biggest exposure to the country's fossil-fuel industry.
Coal remains by far the most important fuel for power generation globally with a share of around 40 per cent of all inputs. Australia's four largest banks alone have lent more than A$36 billion to fossil fuel projects in Australia since 2008, according to environmental group Market Forces.
Green groups are increasingly fighting coal projects around Australia, calling on banks not to provide loans citing potential damage to the climate and the Great Barrier Reef.
In August, Standard Chartered and Commonwealth Bank of Australia walked away from the multi-billion dollar Carmichael coal project, being developed in Queensland by Indian conglomerate Adani Mining. National Australia Bank has also reportedly ruled out funding to the project.