Major Banks Accelerate Fossil Fuel Financing
The relationship between major banks and the fossil fuel industry is under renewed scrutiny as new research reveals a significant increase in bank-financed investment in fossil fuels, particularly as the industry pivots toward petrochemicals. The focus_keyword for this analysis is fossil fuel financing, a trend that has drawn concern from environmental groups and regulators alike.
Banks Backtrack on Climate Commitments
Over the past two years, more than a dozen leading banks have reversed or weakened their climate pledges, with the six largest U.S. banks withdrawing from the Net-Zero Banking Alliance in the run-up to the 2025 presidential inauguration. This exodus led to the alliance’s collapse in October, followed by other global lenders such as Royal Bank of Canada, HSBC, NatWest, and JPMorgan Chase either scaling back or eliminating their decarbonization targets.
Despite earlier commitments to reduce emissions, these institutions are now intensifying their fossil fuel financing activities. Not only are they supporting traditional oil and gas extraction, but they are also funding the industry’s pivot to plastics, fertilizers, and other petrochemical products—sectors projected to drive future oil demand.
New Reports Highlight Surge in Investment
According to two recent reports, bank investment in fossil fuel expansion is at its highest in nearly a decade. An analysis by the Rainforest Action Network (RAN) and partner organizations found that the world’s 65 largest banks contributed $508 billion to companies expanding fossil fuel development in 2025. This marks a 27% increase from the previous year and is the largest amount since at least 2016.
Meanwhile, a study by the Center for International Environmental Law (CIEL) reported that between 2019 and mid-2025, major banks provided the top 15 petrochemical companies with at least $591 billion in loans and underwriting. Of this, $252 billion was directly linked to petrochemical activities, underscoring the sector’s growing importance in global fossil fuel financing.
Petrochemicals: The Industry’s New Growth Engine
Oil giants such as Exxon Mobil, Shell, and Saudi Aramco have increasingly invested in petrochemicals by acquiring stakes in plastics and chemical companies and retrofitting refineries to shift production. The International Energy Agency forecasts that plastics, agrichemicals, and related products will account for more than a third of oil demand growth by 2030 and nearly half by 2050.
As Ximena Banegas, a plastics campaigner at CIEL, notes, petrochemicals are not just another revenue stream for oil companies—they represent a deliberate strategy to sustain demand for fossil fuels as transportation and energy systems decarbonize.
Concentration of Investment and Environmental Risks
The RAN report identified Bank of America, Citigroup, JPMorgan Chase, and Japan’s Mizuho Financial as leading funders of fossil fuel expansion. All 65 banks surveyed increased their funding for new oil and gas exploration, with the largest growth seen in transportation projects like pipelines and LNG terminals. These investments can lock in methane gas use for decades, raising concerns about long-term climate impacts.
CIEL’s findings also show a surge in petrochemical finance in 2024, with 127 new polyethylene projects expected to come online globally between 2025 and 2030. The environmental consequences are significant: As of 2020, petrochemicals were responsible for 1.9 billion metric tons of greenhouse gas emissions annually, more than double the output of aviation and shipping combined.
Calls for Reform and Regulatory Action
Advocacy groups, including CIEL, are urging banks to halt fossil fuel financing for new petrochemical facilities, particularly those producing virgin plastics and fossil-fuel-based fertilizers. They also advocate for banks to require clients to adopt credible transition plans that align with the goal of limiting global warming to 1.5 degrees Celsius.
Allison Fajans-Turner, a senior campaigner at RAN, argues that voluntary sustainability pledges have proven ineffective, highlighting the need for stronger regulation. She suggests that governments should require banks to better integrate climate risks into lending decisions, which could have far-reaching effects on which projects receive funding.
Joel Tickner, a professor of public health and sustainable chemicals, points out that fossil fuel companies have benefited from decades of subsidies and financial support. Redirecting some of these funds toward green chemistry and sustainable materials could help drive the transition away from fossil fuels.
The Road Ahead for Bank-Fossil Fuel Relations
The upward trend in fossil fuel financing demonstrates that, despite warnings about climate change and market risks, major banks continue to prioritize profits over environmental responsibility. As investment becomes more concentrated among a few large banks, especially in North America and Japan, the pressure mounts for regulators and policymakers to enforce stricter standards and promote greener alternatives.
With global demand for oil shifting toward petrochemicals, the financial sector’s choices will play a pivotal role in shaping the future of energy and environmental policy.
This article is inspired by content from Original Source. It has been rephrased for originality. Images are credited to the original source.