Wall Street just won’t stop financing the fossil fuel industry’s expansion

This story was originally published by Grist and is reproduced here as part of the Climate Desk collaboration.

For the past two years, more than a dozen major banks have been not only reneging on their climate commitments, they’ve been actively making the crisis worse. 

In 2024 and 2025, during the leadup to President Donald Trump’s second inauguration, all six of the nation’s largest banks abandoned the Net-Zero Banking Alliance, a voluntary climate coalition, precipitating the Alliance’s complete shutdown in October. Since then, others including Royal Bank of Canada, Scotiabank, HSBC, NatWest, Santander, and JPMorgan Chase have either weakened or scrapped their decarbonization targets.

Now, new evidence shows banks are ramping up spending on fossil fuels. Beyond helping companies extract more oil and gas, they are bankrolling the industry’s pivot to plastics, fertilizers, and other petrochemical products.

Two reports released earlier this month illustrate the trend. An analysis from the Rainforest Action Network (RAN), and other environmental groups found the world’s top 65 banks contributed $508 billion to companies expanding fossil fuel development in 2025. That’s a 27 percent increase since 2024, and more than any other year since at least 2016, based on the organization’s past analyses.

The second report comes from the nonprofit Center for International Environmental Law. It found that, between January 2019 and June 2025, big banks gave the world’s top 15 petrochemical companies at least $591 billion in loans and underwriting. Some of that benefited integrated oil and gas corporations; the amount CIEL could directly attribute to petrochemical activities was $252 billion. (For context, New Zealand’s GDP is about $279 billion.)

Together, the reports suggest that large financial institutions are enabling a long-term viability strategy for the fossil fuel industry, one in which declining demand for oil and gas in energy systems and transportation is offset by a boom in petrochemicals. Indeed, in recent years oil majors including ExxonMobil, Shell, and Saudi Aramco have invested heavily in that field by, among other things, acquiring majority stakes in plastics and chemical companies and retrofitting oil refineries to accommodate a shift in production.

These investments reflect projections from the International Energy Agency that plastics, agrichemicals, and other petrochemical products will account for more than one-third of the growth in oil demand through 2030, and nearly half of it by 2050—much more than other sectors like aviation and shipping. 

“Petrochemicals are not just a general growth area for fossil fuel companies,” said Ximena Banegas, a plastics campaigner for CIEL and the author of the organization’s report. “They are a deliberate and pivotal strategy to ensure that we continue using fossil fuels.”

Bank of America, Citigroup, JPMorgan Chase, and the Japanese bank Mizuho Financial were among the top banks increasing financing for fossil fuel expansion last year, RAN’s analysis found. All 65 banks it analyzed boosted funding across the board for new oil and gas exploration, transportation, and refining. But the largest growth by far was for transportation—including new pipelines and capital-intensive LNG export terminals, which can create a decades-long commitment to using methane gas. 

“It’s overall disappointing,” said Allison Fajans-Turner, a senior energy finance campaigner for RAN. “Banks are unfortunately continuing to put profits over responsible societal action.” She noted that fossil fuel financing is becoming more concentrated among a smaller number of large banks, primarily those based in North America and Japan, as several European banks have begun to scale back funding.

RAN’s report didn’t look directly at financing for the production of petrochemicals, but some of its findings indicate growing interest in this portion of the industry. A significant increase in loans and underwriting for coal expansion, for example, is at least partially linked to a recent spike in the number of coal-to-chemical plants planned globally—mostly in China and India. Environmental advocates say these investments risk giving coal “a new lease of life.”

Bank of America, Citigroup, JPMorgan Chase, and Mizuho Financial are also among the top funders of petrochemical activities, according to CIEL’s report. The top 15 recipients of this funding include a mix of oil and gas, agriculture, plastics, and chemical companies, such as ExxonMobil, Syngenta, LyondellBasell, and Dow.

Although CIEL didn’t compare each year between 2019 and 2025, it did notice a significant jump in petrochemical finance in 2024, the last full year examined. As evidence of the industry’s ongoing expansion, Banegas pointed to a recent report estimating that 127 new polyethylene projects will come online between 2025 and 2030. 

CIEL’s report also notes the petrochemical industry’s outsize contribution to toxic chemical pollution and global warming. As of 2020, petrochemicals’ annual greenhouse gas emissions amounted to 1.9 billion metric tons, more than twice that of aviation and shipping.

Fredric Bauer, a senior lecturer at Lund University in Sweden, has conducted similar research on petrochemical financing between 2010 and 2020. He said it’s not surprising to see continued interest in big plastics and chemicals projects, although it is perhaps counterintuitive. Despite warnings from industry analysts that the petrochemical industry is in “structural decline”—as shown by a large number of canceled or delayed projects, downgradings from multiple credit rating agencies, and the recent plastics and agrichemicals price shocks due to the war with Iran—companies keep investing because they often “do not respond to conventional market signals,” he said.

Rather than say, ‘“Oh, there’s oversupply, we should probably not invest in more supply or production capacity right now,’” their priority is “to ensure long-term markets for oil and gas.”

A coalition of advocacy groups including CIEL are calling on big banks to end their support for fossil fuel and petrochemical expansion. They’d like to see policies against financing companies building facilities to produce virgin plastics and fossil fuel-derived fertilizers. They also want banks to require clients to adopt credible transition plans to keep global warming below 1.5 degrees C, which may include targets to reduce plastics use and phase out some pesticides. 

Fajans-Turner said the upward swing in fossil fuel financing reveals the weakness of voluntary sustainability commitments and reinforces the need for regulation. She suggested that, in addition to mandating more robust decarbonization plans from financial institutions, governments should require improved incorporation of climate risks when determining a borrower’s creditworthiness. “That would actually have many downstream consequences about who gets funding and who does not,” she said.

Joel Tickner, a professor of public health at the University of Massachusetts Lowell and founder of an independent research initiative on sustainable chemicals, said it’s important that governments scale back loans and tax incentives supporting the fossil fuel industry, subsidies that amount to more than $1 trillion annually. Some of this money could help finance the development and commercialization of greener chemistry.

Fossil fuel companies “have received decades of subsidies and financial support,” Tickner said. “If we’re serious about sustainable materials, then we need to put our money where we want to go.”