The headquarters of Deutsche Bank in Frankfurt am Main
Photo: dpa/Arne Dedert
Almost two years ago, Deutsche Bank proudly announced that it was a member of the Net Zero Banking Alliance. The international banking initiative has committed itself to no longer earning money from investments in fossil fuels by 2050. “Banks will play a crucial role in the fight against climate change, and the establishment of the Net Zero Banking Alliance is an important step towards rapid and coordinated action,” announced Deutsche Bank boss Christian Sewing at the time.
Actually, Germany’s largest money house is on the way to climate neutrality. In 2016 it financed fossil fuel companies and projects with around 21 billion US dollars, in 2021 it was only around 9.3 and last year 7.4 billion US dollars that flowed into climate-damaging energy production. If it weren’t for the financial institution’s involvement in the currently booming liquefied natural gas (LNG) business. From 2021 to 2022, Deutsche Bank nearly tripled its funding here from $340 million to $907 million, according to the Banking on Climate Chaos report released Thursday by nongovernmental organizations. This makes Deutsche Bank the world‘s eleventh largest financier of LNG projects.
In total, the world‘s 60 largest financial banks funded the coal, gas and oil business with $5.5 trillion from 2016 to 2022, according to the report. In 2022 alone, 673 billion US dollars flowed in the context of syndicated loans and securities issues. US banks are particularly strong in the business of financing fossil fuel companies. They were responsible for 28 percent of the financing volume in 2022.
Since the Paris Agreement, which aims to limit global warming to 1.5 degrees Celsius, the US bank JPMorgan Chase has been the largest financier for the fossil energy business with a volume of 434 billion US dollars. Two US banks also land in second and third place: Since the beginning of 2016, a total of almost USD 333 billion has flowed through the Citi Group and USD 328 billion through Wells Fargo. The largest German financier is Deutsche Bank, which has ranked 31st since 2016 with a volume of USD 96 billion. National numbers two and three are Commerzbank (almost 15 billion) and the cooperative DZ Bank (almost two billion).
“Coal, oil and gas companies that continue to develop new fossil sources or expand infrastructure are working against the Paris climate goals,” comments Katrin Ganswindt from the German environmental and human rights organization Urgewald on the report. Banks must finally say goodbye to energy companies that are not prepared to fundamentally change their destructive business model.
The reason why Deutsche Bank rose to become one of the top financiers of LNG projects is a $750 billion loan to finance a new LNG terminal in the United States. The Plaquemines LNG terminal in the US state of Louisiana is intended to create new export capacities for the particularly controversial fracking gas. The capacity is 24 megatons per year, which corresponds to the greenhouse gas equivalent of 31 coal-fired power plants or 26.3 million cars, as the US environmental protection organization Sierra Club criticizes.
Deutsche Bank is not the only local company supporting the construction of the Plaquemines terminal. According to the German Environmental Aid, the Landesbank Baden-Württemberg (LBBW) and the energy group EnBW are also involved. Accordingly, LBBW has provided loans of over EUR 568 million and EnBW has contractually committed to purchasing the fracking gas by 2046.
The liquefied gas sector has boomed in the wake of the Russian invasion of Ukraine. Last year, the 30 largest companies expanding in LNG received $22.7 billion from the 60 banks surveyed in the report. This is an increase of almost 50 percent compared to 2021 (15.2 billion).