Why banks should refrain from financing new gas power plants

The document argues that financing new gas-fired power plants is incompatible with climate goals because gas is not a viable transition fuel, demand is peaking, and future conversions to hydrogen or CCUS are unrealistic. It calls on global banks to adopt specific power sector policies that exclude new gas financing and establish a 6:1 energy supply financing ratio in favor of sustainable alternatives by 2030.

• Gas is not a viable transition fuel for decarbonizing the power sector because methane leaks in the supply chain have a warming potential 83 times greater than CO2 over 20 years, contributing to approximately 30% of global temperature increases since the Industrial Revolution.
• Building new gas plants is inconsistent with demand trends, as the IEA expects peak demand for fossil gas to occur before 2030 across all scenarios, including the Stated Policies scenario (STEPS).
• Justifications for new gas plants based on future conversion to hydrogen, biogas, biomethane, or the addition of carbon capture (CCUS) are considered unrealistic due to the gap between fossil gas consumption and available alternative fuel volumes, as well as the high cost and lack of supply chains for hydrogen.
• Current global bank climate strategies are insufficient because they lack detailed power sector policies; of the top 60 global banks assessed in the Sustainable Power Policy Tracker, none have published a policy to stop financing new gas plants and increase support for sustainable power.
• To align with net-zero trajectories, banks should adopt robust power policies that include stopping direct and indirect financing of new gas plants and committing to an energy supply financing ratio of 6:1 by 2030.

APA

Martin, L. (2025). Why banks should refrain from financing new gas power plants. Reclaim Finance. https://reclaimfinance.org/site/en/2025/03/17/why-banks-should-refrain-from-financing-new-gas-power-plants/

Chicago

Martin, Léo. Why banks should refrain from financing new gas power plants. Reclaim Finance, 2025. https://reclaimfinance.org/site/en/2025/03/17/why-banks-should-refrain-from-financing-new-gas-power-plants/.

Wikipedia

{{cite press release |last1=Martin |first1=Léo |title=Why banks should refrain from financing new gas power plants |publisher=Reclaim Finance |date=17 March 2025 |url=https://reclaimfinance.org/site/en/2025/03/17/why-banks-should-refrain-from-financing-new-gas-power-plants/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{martin2025why, author = {Martin, Léo}, title = {{Why banks should refrain from financing new gas power plants}}, publisher = {Reclaim Finance}, year = {2025}, month = mar, url = {https://reclaimfinance.org/site/en/2025/03/17/why-banks-should-refrain-from-financing-new-gas-power-plants/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }