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France’s biggest bank, BNP Paribas, said on Thursday that it would no longer provide any financing for the development of new oil and gas fields regardless of the financing methods, as part of its energy transition goals.
The French bank will not provide any financing for the development of new oil fields, including project financing, reserve-based lending, and Floating Production Storage and Offloading (FPSO) projects.
BNP Paribas will phase out financing to non-diversified oil exploration and production players (independent oil companies) which is intended to support oil production.
The bank also pledged to reduce its financing of oil exploration and production by 80% by 2030.
BNP Paribas is also committed to reducing financing for natural gas exploration and production by more than 30% by 2030 compared to a September 2022 baseline.
The commitments of the French bank are the latest from a European bank on reducing exposure to the fossil fuels sector.
Under pressure from ESG trends and shareholders, some banks have announced in recent months tougher rules on the financing of fossil fuels.
ING, for example, is further restricting financing to the oil and gas industry, reducing the volume of traded oil and gas it finances and no longer financing midstream infrastructure for new oil and gas fields, the Netherlands-based bank said earlier this month. Last year, ING said it would aim to grow new financing of renewable energy by 50% by year-end 2025 and would no longer provide dedicated finance to new oil and gas fields.
Barclays has said it will no longer provide financing to oil sands companies or oil sands projects and tightened conditions for thermal coal lending in an updated policy, which fell short of announcing overall pledges or targets in funding oil and gas.
In the U.S., Citigroup, Bank of America, and Wells Fargo are also under pressure from activist shareholders and environmental groups to wind down or phase out financing for fossil fuels.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.