Bank of America Set to Expand Its Energy Transition Business

Bank of America is looking to expand its business related to the energy transition, boosting carbon trading, and power and natural gas markets trading, senior executives have told Bloomberg.

Banks in the United States and Europe are looking to boost exposure to trading products and financing projects that are deemed of key importance to the energy transition.

Bank of America (BofA) will hire people for trading roles as client demand for energy transition-related products is rising.

The U.S. banking giant is already expanding its exposure to power and natural gas markets and in trading of environmental products, George Cultraro, Global Commodities Head at Bank of America, told Bloomberg.

Gas is also seen as a “transition fuel” by BofA and the bank is betting on gas trading, too, according to Brett Orlando, Managing Director and Global Head of Commodities Transition at Bank of America.

There is also “significant growth in compliance market trading, particularly in the EU,” with the carbon pricing and the EU’s carbon border adjustment mechanism (CBAM), Orlando told Bloomberg.

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Moreover, BofA’s institutional clients are also increasingly interested in index trading products that include key battery metal commodities, the executive noted.  

Major banks are also financing various decarbonization projects and initiatives with the so-called ‘transition finance’.

Last month, UK banking giant Barclays signaled it is looking to avoid claims of greenwashing with a new set of guidelines about what ‘transition finance’ is and how its new transition finance team should apply it.

In February, Barclays revised its Climate Change Statement saying that it would no longer provide project finance, or other direct finance to energy clients for upstream oil and gas expansion projects or related infrastructure.

The bank will also impose restrictions for new energy clients engaged in expansion of oil and gas, as well as restrictions on non-diversified energy clients engaged in long lead expansion. Barclays is putting additional restrictions on unconventional oil and gas, including Amazon and extra heavy oil.    

By Tsvetana Paraskova for Oilprice.com

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