CALGARY — Frankfurt-based Deutsche Bank is joining a lengthening list of European lenders and insurance companies that say they won't back new oilsands projects.
The German bank said Monday its new fossil fuels policy will also prohibit investing in projects that use hydraulic fracturing or fracking in countries with scarce water supplies, and all new oil and gas projects in the Arctic region.
It says its ban on oilsands financing, effective immediately, will include exploration, production, transport or processing, seemingly including oilsands pipelines and upgraders or refineries.
The move was criticized by Ben Brunnen, vice-president of oilsands for the Canadian Association of Petroleum Producers in Calgary.
"Canadian oil and natural gas is sustainably developed in one of the most highly regulated jurisdictions in the world and the energy sector is the county's leading investor in environmental protection and innovation," he said in an emailed statement.
"Attempts to stifle Canadian production by restricting financing can have only one effect; countries with lower environmental standards — and in many cases lower social, human rights and governance standards — will fill the void."
He said an investment in Canadian energy is "a sustainable choice."
Two years ago, Europe's largest bank, HSBC Holdings plc, announced it would no longer offer financial services for new oilsands projects or pipelines, a move that led to producer Suncor Energy Inc. vowing to end all business with HSBC, including in its conventional oil operations in Europe.
"Deutsche Bank's updated fossil fuel policy is the latest warning shot telling us that doubling down on coal, oil and gas will sink our economy while destabilizing the climate," said Greenpeace Canada campaigner Keith Stewart on Monday.
"We still have time to protect the workers, communities and regions currently dependent on oil as we navigate this shift and ensure that all Canadians prosper in the new low-carbon economy."
Deutsche Bank also said it will stop financing and capital markets transactions involving coal mining by 2025 after achieving a goal last year to reduce its loan exposure to coal-fired power plants by 20 per cent. It said it won't finance any new coal power plants.
The moves are part of a commitment to align its credit portfolios with the greenhouse gas reduction goals of the Paris Agreement, the bank said.
This report by The Canadian Press was first published July 27, 2020.
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