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Climate campaigners have urged the international banking sector to revisit policies on metallurgical coal, after ING became the first major lender to restrict financing for coal used in the production of steel. 

The Amsterdam-headquartered bank unveiled an updated net zero strategy last month, bringing in pledges to reduce upstream oil and gas funding to nil by 2040 and to triple its funding for renewable energy by 2025. 

Also part of the renewed strategy is a policy on metallurgical, or coking, coal, specifically when used in steel smelting. 

“The steel industry cannot do without this type of coal yet, but ING is taking steps to support the decarbonisation of this sector, including measures to lower our exposure to coking coal,” the strategy says. 

Measures include a promise not to provide dedicated finance to support new coking coal mines or the expansion of existing mines.  

For bank clients already operating coking coal mines, ING says it will ask them “to explain to us how they plan to align with 1.5°C goals” by 2050, as set out in the Paris Agreement. 

It will also no longer enter into financing agreements for new unabated blast furnaces used to produce steel, nor for extending the life of existing facilities. 

The decision has been cheered by Cynthia Rocamora, an industry campaigner at Paris-headquartered NGO Reclaim Finance, which has long pressured banks to cut financing for coking coal. 

“Not only has ING become one of the first financial institutions to include met coal in its energy policy, it is also the first major bank to include steel facilities in this policy, making it a leader in decarbonising this industry,” she says. 

Julia Hovenier, banks and steel campaigner at BankTrack, adds: “ING’s new policy should send a clear message to steelmakers around the world: metallurgical coal’s future is dead.” 

In November last year, Reclaim Finance criticised lenders’ stance on metallurgical coal in steelmaking, noting the practice is responsible for 11% of carbon emissions globally. 

It said that between 2016 and 2023, banks provided more than half a trillion dollars in support to the 50 largest producers of metallurgical coal, focusing instead on excluding thermal coal from their portfolios. 

The International Energy Agency said in late 2023 it expects demand for coal to drop in the next three years, based on existing energy policies, but that global consumption will remain “well over” the levels needed to achieve the goals of the Paris Agreement. 

Reclaim Finance’s Rocamora says ING should now “strengthen its ambition and extend its commitments beyond project financing to restrict corporate financing to companies with met coal expansion plans”. 

BankTrack adds that by restricting finance only to unabated blast finances, the lender “leaves room for inadequate decarbonisation technologies such as carbon capture, utilisation and storage, which may not deliver emission cuts quickly enough”. 

Rocamora adds the banks that in 2022 signed up to a set of sustainable steel principles – Citi, Crédit Agricole, Société Générale, Standard Chartered and UniCredit, as well as ING – should now follow the Dutch lender’s example. 

The principles, developed in partnership with non-profit research organisation RMI, included a pledge to record and report emissions data related to their steel sector financing activity, including revolving credit facilities, export finance transactions and working capital arrangements. 

At the time, the signatories held a combined portfolio of around US$23bn in lending to the steel sector, RMI said, warning that “emissions are set to rise significantly if we continue with business as usual”. 

When contacted by GTR, Crédit Agricole says it announced an acceleration of climate commitments last month, including a pledge to reduce the intensity of carbon emissions per tonne of steel produced by 26% by 2030, compared to 2020. 

The bank will also engage in dialogue with clients not aligned on its 1.5°C goals, steer its steel portfolio towards its most ambitious customers, and develop project financing for low-carbon steel production technology, the announcement says. 

Representatives from Citi, Standard Chartered and UniCredit declined to comment when contacted. Société Générale did not respond.