Banks are financing the fossil fuel industry’s next growth strategy
SkimNews Take
By channeling record fossil fuel financing into petrochemicals and plastics rather than refining, banks are shifting emissions exposure from energy markets—where renewables compete—into materials supply chains where low-carbon alternatives remain scarce.
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- Rainforest Action Network found the world's top 65 banks contributed $508 billion to fossil fuel expansion in 2025 — a 27% increase since 2024 and the highest annual total since at least 2016.
- Center for International Environmental Law found big banks provided at least $591 billion in loans and underwriting to the world's top 15 petrochemical companies from January 2019 through June 2025, with $252 billion directly attributable to petrochemical activities (roughly the size of New Zealand's $279 billion GDP).
- All six of the US's largest banks abandoned the Net-Zero Banking Alliance in 2024–2025, precipitating the coalition's complete shutdown in October 2025; HSBC, Santander, NatWest, Royal Bank of Canada, and Scotiabank have since weakened or scrapped their decarbonization targets.
- Bank of America, Citigroup, JPMorgan Chase, and Mizuho Financial ranked among the top banks increasing fossil fuel financing in 2025, per RAN, and are also among the top funders of petrochemical activities per CIEL — while several European banks have begun scaling back.
- The International Energy Agency projects petrochemicals will account for more than one-third of oil demand growth through 2030 and nearly half by 2050, exceeding projected demand growth from aviation and shipping combined.
- As of 2020, petrochemicals' annual greenhouse gas emissions reached 1.9 billion metric tons — more than twice the combined emissions of aviation and shipping, according to CIEL.
- Fredric Bauer of Lund University said the petrochemical industry shows signs of "structural decline" — canceled projects, credit downgrades, and price shocks — yet companies keep investing because they "do not respond to conventional market signals."
Why it matters: Fossil fuel companies are explicitly repositioning around petrochemicals to survive declining oil demand, and banks are funding the pivot rather than walking away from it. The 27% jump to $508 billion in a single year — concentrated at Bank of America, Citigroup, JPMorgan Chase, and Mizuho — finances decades-long infrastructure like LNG export terminals and 127 planned new polyethylene plants, locking in fossil fuel dependency long after transportation demand peaks.
