UK banks provided $8.3bn to coal companies over 2022–2025 as European lending fell 46%

UK banks provided $8.3bn in loans and underwriting support to coal companies between 2022 and 2025, even as European banks cut back lending to the sector by some 46% over the same three years, according to a new report from the environmental campaign group Urgewald that Net Zero Investor covered first. Barclays and HSBC in particular increased their exposure, and Urgewald gives the $8.3bn as a UK aggregate, naming the two banks without dividing the sum between them; which of the two carries how much of it is left open. The report's framing is that UK lenders are moving increasingly out of step with the continent.

The same report counts underwriting from 744 commercial banks to companies operating across the coal value chain and puts the global total at an estimated $467bn over the three-year period, a little over $155bn a year across the banks surveyed. Measured against that, the UK's $8.3bn comes to under 2%, or a little under $2.8bn a year, though the ratio is approximate rather than like-for-like: the UK figure covers financing to coal companies, the global one covers companies across the value chain, and those populations do not match.

Urgewald's director, Heffa Schücking, reads the divergence as concentration rather than retreat, saying the money is landing with banks and markets whose coal policies are missing or weak. On her account, UK banks have no standing to claim climate leadership while their support for companies operating across the coal value chain is rising, and she argued that Barclays and HSBC should account for financing that runs counter to the European trend.

UK lenders have heard the argument before. In 2020 a coalition of investors including Amundi, Man Group, Sarasin & Partners, Folksam and Brunel Pension Partnership filed a climate resolution at HSBC and withdrew it after the bank committed to phasing out financing of coal-fired power and thermal coal mining, by 2030 in the EU and OECD and by 2040 globally. The same coverage indicates Barclays has faced comparable investor pressure over the years, without setting out that history in detail.

Those commitments were drawn around narrower ground than the lending count covers. HSBC's phase-out takes in coal-fired power and thermal coal mining, a smaller set of activities than the coal value chain its financing is now measured against, and its two deadlines split by jurisdiction, which gives a global coal book a decade more runway than a European one. Over the same three years, bank credit to the sector contracted on the continent and expanded in London.

Read together, the two figures describe a market reallocating rather than closing. A 46% continental reduction is consistent with a broad retreat by European lenders; a rise in the UK is consistent with the business moving to lenders that have kept the door open. That is Schücking's concentration argument in numerical form, and the coverage does not name the European banks doing the cutting.

The demand picture supplies the commercial case for keeping the book open. Global coal demand is expected to increase this year, according to IEA forecasts released earlier this month, with higher oil and gas prices, coal's relative insulation from a crisis it largely sidesteps because the fuel does not tend to move through the Strait of Hormuz, rising production in major economies including China, and strong El Niño conditions all pointing the same way in Asia, where countries such as India and Vietnam rely on coal for cooling. Coal is also the most carbon-intensive fossil fuel, releasing significantly more carbon dioxide per unit of energy than oil or gas, which is what places the lending in political play.

Visibility comes from the campaign side rather than from bank disclosure. A loan to a coal company does not arrive with the framework documents, second-party opinions and milestone-linked pricing that labeled transition products carry; it enters the public record because an organization such as Urgewald goes looking. That is an observation about disclosure rather than about any single bank, and it is why a count spanning 744 lenders and a value chain takes the place of loan-level figures in this argument.

Whatever the next count shows, it will cover a year in which the IEA expects coal demand to rise on higher oil and gas prices, Chinese production gains and El Niño-driven cooling load in Asia, conditions under which the commercial case for keeping a coal book open strengthens rather than weakens. Against that, the pledges the campaign measures UK lending against reach out to 2030 and 2040, horizons over which no comparable tally yet exists. Whether the split between London and the continent survives the nearer of those tests is not yet known.