10 July 2019
The French banks behind RWE’s destruction
by Lorette Philippot, Les Amis de la Terre France / Friends of the Earth France
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RWE, Europe’s number one climate enemy
German energy company RWE is the largest polluter in Europe. Its coal-fired power plants emit more than 100 million tonnes of CO2 per year, the equivalent of the cumulative emissions of Sweden, Switzerland and Portugal [1]. We estimate that the air pollution they generate is already responsible for 1,880 premature deaths and 1,320 hospitalizations each year [2].
400 km from Paris, in the Rhineland, the coal giant exploits the world’s largest deposit of lignite – the dirtiest form of coal. The Hambach and Garzweiler open-pit mines cover an area of 75 km2, more than the size of the city of Lyon, and supply two of the continent’s five most polluting power plants, Neurath and Niederaussem [3].
A bet against the UN Paris Agreement
While complying with the UN Paris Agreement requires that Europe get out of coal by 2030 [4], RWE is determined to keep its coal mines and power plants running as long as possible and well beyond that date, whatever the cost to the climate, the environment and people.
In December 2018, Matthias Hartung, former CEO of RWE’s electricity division, stated that “the lignite era is not over” [5]. This position has since been consistently reaffirmed by the group’s management. Following the publication of the German Coal Commission’s report in January 2019, RWE officials claimed that an exit from coal in 2038 would come “far too early” for the company [6], when this date is actually far later than climate science advocates. RWE has since, in the wake of prolonged local and civil society protests, indicated that it is willing to comply with a 2038 government mandated phase out, expecting large sums in compensation from the public purse for any closures. It has at the same time made very clear that it will continue with its destructive mining that will destroy villages in the short term, unwilling to await the implementation of the German coal phase out. It also made clear at its May Annual General Assembly that it is against a 2030 phase out. In the meantime, RWE is pursuing an aggressive litigation strategy against climate protesters, escalating the situation further. These public statements leave little doubt about RWE’s assumed role against the coal exit in Germany and Europe, and against the achievement of the objectives of the Paris Agreement.
More coal at the cost of whole villages
While RWE finally had to abandon its project to build a new BoA+ power plant in the Rhine region two months ago [7], and while its plans to expand the Hambach mine were temporarily suspended by a German court in October 2018 [8], its plans for the Garzweiler mine have never been more topical.
To continue to extract and burn coal, RWE empties and razes villages on the edge of the mine one after the other, evicting thousands of people who have lived there for generations from their homes without their consent. While in recent decades, some 40 villages have already been swallowed up by RWE’s lignite mines, five are still threatened with extinction for the production and consumption of lignite.
The latest, the village of Immerath, is being completely wiped off the map. The next on the list is Keyenberg, a 1000-year old village, whose boundaries are just 500 metres from the huge open-pit mine and whose disappearance is scheduled within three years. At a time when the closure of all coal infrastructure is a vital priority, destroying lives for lignite is unjustifiable.
BNP Paribas and Société Générale, the French banks behind the RWE disaster
These destructive activities could not be carried out by RWE without the valuable support of financial actors. In France, BNP Paribas and Société Générale each granted 133 million euros in financing to RWE between 2016 and 2018 [9]. At the beginning of 2019, when climate mobilisations reached record levels, BNP Paribas and Société Générale opted to renew their contributions to a 5 billion euro credit line for RWE [10].
Unfortunately, RWE is not an isolated case… BNP Paribas and Société Générale respectively granted 4 and 2.4 billion euros to the 120 most aggressive companies engaged in the development of new coal-fired power plants between 2016 and 2018, i.e. in the three years following the adoption of the UN Paris Agreement [11]. They are also among the top 10 financiers of Europe’s most coal-dependent utilities.
At the beginning of June, Crédit Agricole published an ambitious new policy on the coal sector. In particular, it has undertaken to exclude companies that are developing in coal or that do not have a plan to shut down their assets in line with a coal exit by 2030 in Europe and OECD countries; by 2040 in China; and by 2050 in the rest of the world [12]. This commitment covers RWE, with whom the French bank has committed to no longer do business. This announcement came at a time when other private financial actors had already publicly distanced themselves from the German coal giant [13].
On the contrary, the BNP Paribas group itself has only a rather weak coal policy, even though some of its subsidiaries, including BNP Paribas Asset Management and BNP Paribas Cardif, have gone further in excluding coal from their investment portfolios [14]. Its CEO Mr. Bonnafé continues to state that RWE is engaged in a profound process of transformation, to justify its renewed support, when the aggressive methods used by this customer to block a Paris compliant, socially just exit of coal testifies to the contrary [15].
Societe Generale has made new announcements on coal at its annual general meeting in May 2019, but these remain well below best practices and at this stage very vague on the fate of RWE [16].
BNP Paribas and Societe Generale are therefore seriously behind schedule and must make a choice: continuing to be the bankers of the coal industry and the consequences for the climate, environment, humanity and its reputation; or starting a real exit of the sector, implying they drop RWE now and all the companies which still bet on this energy of the past.
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[1] https://beyond-coal.eu/data/
[2] https://beyond-coal.eu/last-gasp/
[3] http://ieefa.org/wp-content/uploads/2018/10/Lignite-Retreat_RWE-Hambach_October-2018.pdf
[4] https://climateanalytics.org/media/climateanalytics-coalreport_nov2016_1.pdf
[7] https://news.rwe.com/rwe-cancels-plans-for-boaplus-project-at-niederaussem-site/
[8] Following a legal recourse from Bund, Friends of the Earth Germany, the Münster Regional Administrative Court decided that RWE was not allowed to deforest the Hambach Forest until this recourse was examined.
www.la-croix.com/Economie/Monde/justice-allemande-suspend-deboisement-foret-Hambach-2018-10-05-1200974010
[9] Financial data researched by Profundo. https://beyond-coal.eu/wp-content/uploads/2019/05/foolsgold_final.pdf
[10] Two revolving credit facility of 3 billion and 2 billion euro were renewed to RWE at the beginning of 2019 by 27 banks, including BNP Paribas and Société Générale.
[13] The Norwegian investor Storebrand for example publicly denounced RWE’s activities, after having put an end to its relationships with the German utility.
https://www.storebrand.no/en/asset-management/rwe-shares-are-risky
[14] https://www.amisdelaterre.org/Climat-BNP-Paribas-Asset-Management-montre-la-voie.html
[15] https://beyond-coal.eu/wp-content/uploads/2019/05/BNP-Paribas-letter_EuropeBeyondCoal.pdf