Global banks have kept coal financing near $117 billion a year since the COP26 climate summit in 2021 despite sharp reductions by European lenders and some Asian banks, according to new research from German non-profit Urgewald.
The group tracked loans and underwriting from 744 commercial banks to companies across the thermal coal value chain, finding they provided $467 billion between 2022 and 2025. Chinese banks accounted for 62% of that total, or $289 billion, followed by US banks with 14% and Japanese lenders with 6%.
“Coal financing is not disappearing – but it is concentrating in banks and markets where coal policies are either missing or weak,” Urgewald director Heffa Schücking said.
The figures point to an increasingly divided banking sector five years after governments agreed in Glasgow to accelerate coal’s phase-down and financial institutions made high-profile net-zero commitments. Banks with tighter coal restrictions have generally cut exposure, while rising financing from China, the US and several Asian markets has offset those reductions.
EU-headquartered banks reduced annual coal financing by 46% to $2.6 billion in 2025 from $4.8 billion in 2022, with most lenders that had meaningful exposure at the start of the period cutting support.
UK banks moved in the opposite direction, increasing coal financing by 17%. Barclays provided $5.7 billion over the four years, the most among European banks, while its annual financing climbed 34% to $1.6 billion. HSBC more than doubled its annual financing to $414 million.
NatWest cut its coal financing by half after pledging in 2021 to phase out coal lending in the UK by 2024 and globally by 2030.
Several Asian banking markets also recorded steep declines. Malaysian banks reduced coal financing by 88% to $92 million in 2025 after four of the country’s largest lenders adopted coal restrictions between 2020 and 2022. Financing from Thai banks fell 74%, while Taiwanese banks cut support by 53%.
Indian lenders reduced coal financing by 19% to $2.8 billion despite the country retaining the world’s second-largest pipeline of new coal power projects. Urgewald noted India added 88 GW of solar and wind capacity over the past two years compared with 14 GW of new coal capacity.
Financing shifts
Japan’s decline proved less consistent. Coal financing fell to $5.9 billion in 2024 from $8.7 billion two years earlier before rebounding to $6.8 billion in 2025.
Mizuho Financial Group, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group accounted for 80% of Japanese coal financing over the four-year period, while many smaller Japanese banks reduced their exposure.
China remained by far the largest source of bank financing for coal, with annual support rising 8% to $75 billion in 2025 from $69 billion in 2022. Nearly all of that financing went to domestic companies, according to Urgewald.
CITIC led Chinese lenders with $38 billion in financing over the period, followed by China Merchants Bank at $22 billion and Industrial Bank Company at $18 billion.
US banks increased annual coal financing by 23% to $16.7 billion from $13.6 billion. Bank of America raised its financing 62% to $2.3 billion, JPMorgan Chase increased support 45% to $2.2 billion and Wells Fargo recorded a 59% increase to $1.9 billion.
Indonesia also posted a 64% increase to $2.3 billion as domestic banks helped fill financing needs in a coal sector increasingly avoided by international lenders with restrictive policies.
South Korean banks recorded the largest percentage increase among the markets highlighted by Urgewald, more than doubling financing to $1.75 billion in 2025 from $830 million in 2022. Much of the growth was linked to state power company KEPCO, which still relies heavily on coal and fossil gas.
Urgewald argues the divergence shows bank coal policies are increasingly shaping where financing remains available as some institutions retreat and others expand.
The group is urging investors and regulators to focus on lenders whose coal exposure continues to grow rather than viewing the industry’s broadly flat global total in isolation.
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