A report by German environmental organization Urgewald found that banks based in the United Kingdom have emerged as Europe’s largest financial backers of the coal industry. The research tracked lending and underwriting activity from 744 commercial banks worldwide to companies operating throughout the coal sector between 2022 and 2025.
UK-based banks provided $8.3 billion in coal financing during this period, substantially exceeding contributions from German banks at $4.9 billion and French banks at $3.4 billion. The financing flows from Britain’s banking sector represented a 17% increase over the four-year span, contrasting sharply with a 46% reduction among EU banks collectively. Two major UK financial institutions drove much of this growth: Barclays increased its coal financing by 34% to reach $1.6 billion by 2025, while HSBC more than doubled its coal financing from $200 million to $414 million.
The findings are particularly significant given that these increases occurred after the 2021 Glasgow climate conference where world leaders committed to “phasing down” coal consumption. Both institutions have made public commitments to climate action and net-zero targets. HSBC responded by noting its commitment to phase out financing for thermal coal-fired power and mining by 2030 in developed markets and 2040 elsewhere, citing a 94% reduction in financed emissions from thermal coal mining between 2020 and 2024. Barclays stated it finances diversified energy companies in transition and has provided over $300 billion in sustainable and transition finance in recent years.
Globally, the research revealed a complex picture regarding coal financing trends. Total bank financing for coal remained relatively flat at approximately $117 billion annually between 2022 and 2025. However, significant geographic divergences emerged, with Chinese banks accounting for 62% of global coal finance at $289 billion—an 8% increase—and US banks raising their coal financing by 23% to $67 billion. Indonesian banks increased their coal funding by 64%. Meanwhile, EU, Taiwanese, Malaysian, and Thai banks all reduced their coal exposure. Urgewald’s director stated that clear coal policies could effectively reduce capital flows to the industry, but warned that progress in some regions was being offset by increased financing elsewhere.
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