World's biggest coal export terminal refinancing tied to emission targets

London, (Quantum Commodity Intelligence) - Refinancing of debt at the world's biggest coal export terminal in Australia has been made conditional on the port cutting emissions of greenhouse gases – a headline-grabbing first that does little to cut emissions from the life-cycle of burning coal for power generation.

National Australia Bank said it has provided "sustainability-linked" loans of A$515 million ($400 million), providing the port of Newcastle reduces its direct and indirect emissions from port operations and consumed electricity.

"Behaviour-based lending provides an opportunity to help our customers create greater environmental and social impact in sectors not easily diversified," David Gall, an executive with National Australia Bank said.

Specifically, the target is to keep scope 1 and 2 emissions below the 2025 trajectory level based on the port's own climate plan.

The deal involves offering a lower-cost of debt if the port meets its own goals and takes other social measures, such as boosting mental health support for workers and providing an indigenous internship program.

Green groups said the transaction was a step in the right direction, but scope 3 emissions, which would include emissions from burning the 150 million mt the port handles, were excluded from the agreement

The trend of emissions-based lending has been gathering pace in recent years, with global commodity traders, such as Louis Dreyfus Companies, refinancing debt based on its own emissions targets.