Banking giant HSBC rules out financing controversial Keystone XL pipeline
Greenpeace calls on banking giants JPMorgan Chase and Barclays to rule out tar sands pipeline funding
April 20, 2018
(London) HSBC, Europe's biggest bank, has today confirmed that it will no longer provide project finance for new tar sands projects including the construction of any pipelines.
This policy would exclude HSBC from providing project financing for the Keystone XL and Line 3 Expansion pipelines.
HSBC’s move, disclosed in its new Energy Policy, is the most recent in a series of decisions by international financiers to distance themselves from the controversial pipelines in North America. French banks BNP Paribas and Natixis, and insurance and investment giant Axa, as well as Dutch bank ING, and Sweden’s largest pension fund, AP7, all made similar announcements in 2017. 
Greenpeace which has been campaigning globally for banks to end their support for tar sands pipeline companies is now calling on banking giants JPMorgan Chase and Barclays, (the only other major UK-based bank providing loans for tar sands pipelines), to rule out financing new tar sands pipelines in North America.
Oil from tar sands is one of the most carbon-intensive fuels on the planet because of the large amount of energy needed to extract it. The proposed pipelines are key to the expansion of the tar sands fields in Alberta, Canada. Estimates show Keystone XL alone could potentially add nearly a million barrels of oil per day to current capacity, as well as an estimated 175 million additional tonnes of CO2 per year. 
Annie Leonard, Executive Director of Greenpeace USA, said:
“The world has changed dramatically since these controversial tar sands projects were first proposed. In the US, we’ve seen record floods, hurricanes and wildfires super-charged by climate change. We’ve also seen a powerful, diverse, and growing movement step up to stop new fossil fuel infrastructure like the Keystone XL pipeline. This move by HSBC is the most recent indication that the financial community has begun to see the increasing risk in funding pipelines. We now expect banks like the US giant JPMorgan Chase and Barclays, who have backed tar sands pipelines in the past, to cease their funding of these dirty projects.”
Commenting on the announcement, John Sauven, Executive Director of Greenpeace UK said:
“This latest vote of no-confidence from a major financial institution shows that tar sands are becoming an increasingly toxic business proposition. It makes no sense to expand production of one of the most polluting fossil fuels if we are serious about dealing with climate change in a post-Paris world. HSBC has got the message. Now Barclays need to decide if it wants to be the only UK bank offering project finance to tar sands pipelines.”
HSBC has previously participated in revolving credit facilities for TransCanada (the company building KXL) and Enbridge the company building the Line 3 expansion.
HSBC has also ruled out funding new coal fired power stations all around the world with the exception of three countries – Bangladesh, Indonesia and Vietnam where funding may continue until 2023.
Hindun Mulaika of Greenpeace South East Asia said:
“By ruling out new coal funding by the end of 2019 in many countries, HSBC has taken a step in the right direction. However, by singling out Indonesia, Vietnam and Bangladesh as exceptions to their coal policy, they are creating a loophole in the countries that are most aggressive in their coal power planning and condemning their citizens to a lifetime of air pollution impacts. HSBC must close this loophole as soon as possible and turn their financial support to accelerating a transition to clean energy.”
- BNP Paribas In October 2017 announced a decision to no longer finance “pipelines that primarily carry oil and gas from shale and/or oil from tar sands,” and will sever “business relations with companies that derive the majority of their revenue from these activities.” Dutch bank ING confirmed in June that its oil sands policy excludes financing tar sands pipelines. Sweden’s largest pension fund, AP7, announced that it will divest from TransCanada on the grounds that its proposed pipelines in Canada and the US were incompatible with the Paris Agreement. In December 2017 Natixis pledged to no longer fund “exploration and production projects concerning oil extracted from tar sands; infrastructure projects (pipelines, terminals and others) primarily devoted to transporting or exporting oil extracted from tar sands or companies whose business primarily relies on exploiting oil extracted from tar sands”, and insurance and investment giant Axa announced the “divestment of over Euro 700 million from the main oil sands producers and associated pipelines, and the discontinuation of further investments in these businesses” and no longer providing insurance to tar sands or associated pipeline businesses.
- Greenpeace has published a report for banks and their shareholders outlining the financial and reputation risks that banks could face in arranging and providing finance for companies intending to build tars sands pipelines. See Figure 1 on page 3 for estimated additional greenhouse gas emissions per year resulting from proposed tar sands pipelines
- On Wednesday the controversy over Justin Trudeau’s support for tar sands pipelines followed him to the Commonwealth Heads of Government meeting in London, where the Canadian High Commission was rebranded ‘Crudeau Oil HQ’ and blockaded with a 30m pipeline. Since March, weeks of ongoing peaceful direct actions in British Columbia against the Trans Mountain Expansion tar sands pipeline have resulted in the arrests of about 200 people.
- HSBC’s new energy policy is available at http://www.hsbc.com/news-and-i