Exposing Citigroup’s massive role in the expansion of maritime fossil gas
8 October 2024- Revised and updated
Introduction
Although international shipping is often out of sight and out of mind, 90% of global trade goods are transported on oceangoing vessels. From the food we eat, the clothing we wear, the furniture in our offices and homes, our lights, electronics and so much more – the vast majority was at one point on a massive, fossil-fueled ship crossing the world’s oceans.
International shipping is one of the world’s largest climate polluters. If it were a country, it would be the world’s sixth largest climate polluter with emissions greater than Germany.
LNG-fueled vessels make that climate footprint worse – much worse. In fact, an analysis Stand.earth commissioned from the International Council on Clean Transportation (ICCT) in 2020 showed that LNG-fueled shipping is between 70-82% worse for the climate than oil-fueled business-as-usual. A subsequent real-world measurement study found that methane slip emissions in at-sea conditions from the most common type of LNG-powered ship engine was even higher than the 2020 analysis concluded 5 — 6% as measured in real-world operations vs 3.5% in the earlier modeled study.
The shipping industry is ramping up production of a new generation of liquefied natural gas (LNG)-powered ships, with fossil gas now being the most popular propulsion option for newbuild vessels. In fact, the number of LNG-powered vessels has increased 181% since 20207. The number of LNG-powered vessels in operation, excluding tankers, is expected to more than double within the next three years from current orders alone: from 469 in January 2024 to 1002 in 2027.
The buildout of LNG-powered shipping requires multi-million dollar investments for both LNG-powered vessels and LNG bunkering infrastructure.
Citi has long been one of the leading international financiers of maritime projects. On June 18, 2019, Citi became a founding member of the Poseidon Principles. With this, the bank appeared to take a leadership role in steering capital for the maritime sector towards climate solutions. Citi has also endorsed multiple other climate commitments that should preclude its involvement in financing fossil-fueled shipping projects and companies engaged in the maritime LNG buildout.
Despite this, Citi has played an instrumental role in helping secure at least $246 billion USD in financing for maritime LNG companies and projects through syndicated loan and bond underwriting deals since 2019. It would appear that Citi has used its climate commitments to obfuscate its role in financing LNG shipping, rather than use its significant clout in the maritime finance sector to catalyze increased investments in zero emission vessels and infrastructure.
Figure 1. Since 2019, Citibank has helped LNG companies secure at least $246 billion USD in financing, with 22% going to LNG project financing and a further 78% going to companies involved in maritime LNG for general corporate purposes (see definitions in the Annex). Analysis by Stand.earth Research Group based on data from IJGlobal.
