Coal trading: the hidden aspect of Switzerland’s climate policy

Lausanne/Zurich, 7. November 2022

Coal is the most polluting fossil fuel on Earth. Nevertheless, it has never been extracted and consumed as much as in 2022. In an exclusive new report, Public Eye reveals how Switzerland became the world’s foremost coal-trading hub. Since the Paris climate agreement, six years of hypocrisy have passed during which time Swiss banks have continuously filled the pockets of the coal barons. At the start of the climate conference in Sharm el-Sheikh, Switzerland must assume its responsibility as "carbon dioxide dealer" and put in place an exit plan for this profitable business.

The overcoming of the Covid pandemic, the war in Ukraine and the resulting disorder in the energy markets – everything seems to benefit coal. This re-birth of coal directly benefits Switzerland, as revealed in the report by Public Eye, which took a year of investigation. By financialising and internationalising its market, Switzerland has once again played the game cleverly – welcoming the headquarters of large mining companies since the start of the 2000s and giving rise to a veritable ecosystem of soot, from Zug to Geneva and Lugano. 245 companies are currently active in the country's coal sector. Some 40 percent of global coal is brokered through Switzerland, according to our estimates. The mining companies, which have settled their headquarters or a trading arm in Switzerland, extract in total 536 million tonnes of coal a year. Once the emissions associated with the extraction, transport and transformation into electricity are accounted for, that equates to nearly 5.4 billion tonnes of CO2 released into the atmosphere. That’s more than the annual emissions of the United States. 

Since the 2015 Paris Agreement, Swiss banks have lent USD 3.15 billion to the Swiss coal industry, data from the Dutch research agency Profundo shows. On its own, Credit Suisse provided more than half of Swiss funds allocated to this market. Among its best clients are Trafigura and Glencore, but also the Russian mining companies Sibanthracite and Suek. It’s important to mention the involvement of the cantonal banks (Zurich, Vaud and Geneva), which being publicly owned should show more respect for the political commitments made by the Swiss government. Faced with environmental pressure, new strategies were put in place: The exclusion criteria developed by the banks are formulated in such a way that large, diversified groups slip through the net of climate commitments. None of the commitments made by the Swiss banks analysed by Public Eye would actually exclude, for example, financing of Glencore’s business linked to coal. Financing is also conducted with increasing discretion: using non-constraining credit lines related to their use or “underwritings”, through which financial institutions are not obliged to include coal in their accounting. Between 2016 and September 2022, the Swiss coal industry raised a total of USD 72.9 billion from global banks. 

Climate change and the energy crisis sparked by the war in Ukraine underline the urgency to end our dependence on fossil fuels. The dominant position of Switzerland in coal trading should enable it to influence climate policy. It also implies a level of responsibility for global energy security. At the 2021 conference on climate change in Glasgow, the attending countries agreed upon phasing down coal worldwide. Switzerland advocated in favour of an even more ambitious global phase-out. But as of today, coal trade is a blind spot in the country’s climate policy. In a petition, Public Eye asks the Swiss Federal Council and Parliament to adopt measures to completely abandon this polluting business by 2030. Given the urgency of the climate crisis, Switzerland cannot rely on the promises of the multinationals enterprises any longer, as they seek to delay action in order to save their profits. 

Find more information and the report here or contact: 

Oliver Classen, Spokesperson, +41 44 277 79 06, oliver.classen@publiceye.ch

Robert Bachmann, Commodities and Finance Expert, +41 44 277 79 22, robert.bachmann@publiceye.ch

Graphics are also available for the media.