Royal Financial institution of Canada has emerged as the most important financier of the fossil gas trade in 2022, knocking JPMorgan from the highest spot, as Canadian banks more and more tackle the function because the “lenders of final resort” for controversial carbon-intensive initiatives.

An annual report on fossil gas financing by a coalition of marketing campaign teams organised by the Rainforest Motion Community discovered that RBC prolonged $42.1bn in funding to fossil gas firms and initiatives in 2022, together with $4.8bn for tar sands. Scotiabank, one other Canadian financial institution, additionally appeared within the record of the highest 10 financiers.

The researchers mentioned Canadian banks have been changing into the backstop for fossil gas financing, probably selecting up the slack for financing initiatives and firms shunned by lenders in Europe. Canadian banks have offered $862bn to fossil gas firms because the signing of the Paris Settlement, the research discovered.

Richard Brooks, local weather finance director at Stand.earth, an environmental group concerned within the analysis, mentioned it was “obscene that [RBC] is now the world’s dirtiest banker for fossil fuels”.

“RBC is shifting in fully the flawed path, dragging our local weather ambitions backwards and positioning Canadian banks as fossil fuels’ lenders of final resort,” he added.

RBC and Scotiabank didn’t reply to a request for remark.

The report comes because the function banks play in driving world warming by means of the financing of carbon-intensive firms and initiatives faces intense scrutiny. It discovered that 43 of the banks, together with RBC and JPMorgan, have been a part of the Web Zero Banking Alliance, whose members have dedicated to take motion on local weather, whereas 49 had pledged web zero emissions.

The analysis discovered that fossil gas financing from the world’s 60 largest banks hit $673bn in 2022, down 16 per cent from the earlier 12 months. The determine was the bottom complete between 2016 and 2022, however this was due to “uncommon geopolitical and financial situations, not shifts in financial institution coverage”, mentioned the report.

Oil and gasoline firms will not be investing as aggressively in new manufacturing as they have been a decade in the past, however within the wake of Russia’s conflict on Ukraine final 12 months and the next vitality disaster, many oil and gasoline firms reported report earnings, and a few oil majors similar to ExxonMobil and Shell requested for no financing from banks in 2022.

The analysis discovered that 30 firms seeking to develop their liquefied pure gasoline operations sought to virtually double the financing in 2022 in contrast with 2021, as nations similar to Germany ramped up using LNG as a substitute of gasoline from Russia.

Maaike Beenes, marketing campaign lead for banks and local weather at BankTrack, known as the choice by banks to spice up their financing for LNG prior to now 12 months irresponsible.

“These gasoline initiatives will be unable to deal with Europe’s short-term vitality wants or scale back family payments — as a substitute they’ll lock us into dependence on fossil fuels for many years,” she mentioned.

US banks continued to dominate fossil gas financing, accounting for greater than 1 / 4 of all financing between 2016 and 2022. JPMorgan was the second greatest financier of fossil fuels final 12 months, with $39.2bn in financing, after topping the record for six years.

JPMorgan mentioned it offered financing “throughout the vitality sector”, which included “supporting vitality safety” serving to shoppers transition to cleaner enterprise fashions.

Different US banks on the record included Wells Fargo, Financial institution of America and Citigroup. Citi and Wells Fargo declined to remark, whereas BofA didn’t reply to a request for remark. A number of Japanese banks additionally appeared within the high 10.

The 60 banks channelled $150bn final 12 months into the highest 100 firms increasing fossil fuels investments, the report mentioned.

Though some banks had fossil gas financing insurance policies in place, these typically didn’t cowl fairness and bond underwriting, and sometimes focused particular mission finance however didn’t apply to common company financing, it discovered.