Bank financing for low-carbon energy exceeded USD 1 trillion in 2025, bringing it close to fossil fuel financing. Yet BloombergNEF data show that the global funding mix remains far from the level required for the energy transition.
Low-carbon energy financing gains ground
Before the conflict in the Middle East, and before oil and gas once again fuelled concerns and renewed interest, the energy transition had made progress on several fronts, including debt financing.
According to BloombergNEF’s latest Energy Supply Banking Ratios report, low-carbon energy financing exceeded USD 1 trillion in 2025, moving increasingly close to financing for fossil fuels.
Put simply, for every dollar directed towards oil, gas and coal, USD 0.97 went to renewable energy and nuclear power.
Is low-carbon energy financing close to overtaking fossil fuels?
What may initially look like an approaching balance, or even an imminent crossover, conceals trends that are less positive than they appear.
First, global progress remains too slow to meet international climate goals. Just over 10 years have passed since the Paris climate conference, when scientists and negotiators formally recognised the urgency of limiting global warming to 1.5-2°C to avoid its worst impacts. It has also been almost five years since the creation of the Net-Zero Banking Alliance (NZBA), through which the United Nations brought together more than 130 of the world’s leading banks to support the goal of reaching net-zero financed emissions by 2050.
Today, we know that exceeding 1.5°C of warming will be almost inevitable, while the NZBA has been dismantled. Major banking groups have left the alliance, reducing it to an advisory body.
This retreat is visible in the numbers. Although the ratio between low-carbon energy financing and fossil fuel financing has risen from 2024 to 0.97:1, it remains far below the 4:1 ratio needed for the energy transition.
The largest banks by energy supply financing volume also remain predominantly tied to high-carbon energy. Although 26 of the top 65 institutions reduced their fossil fuel financing in 2025, the sector’s banking giants collectively provided USD 906 billion to companies operating in hydrocarbons and coal, an increase of USD 64 billion, or 8%, compared with 2024.
Which banks continue to invest in fossil fuels?
Which institutions remain most heavily involved in oil and gas? JPMorgan, one of the first banks to leave the Net-Zero Banking Alliance after Goldman Sachs, ranked first for fossil fuel financing, providing around USD 61 billion compared with USD 39 billion for low-carbon energy.
Citi also ranked among the leading institutions, with USD 48 billion for fossil fuels and USD 24 billion for green energy, while MUFG provided USD 47 billion for fossil fuels and USD 29 billion for low-carbon energy sources.
By contrast, BloombergNEF writes: “In 2025, Bank of China maintained the highest ESBR (Equity-to-Business Ratio) among major banks, at 1.84:1, a sharp increase from 1.04:1 in 2024.”
It adds: “It is also the only bank among the top 10 to have recorded a consistent year-on-year improvement in the ratio, rising from just 0.58:1 in 2021.”
China and Europe versus North America
There is also a strong regional divergence, highlighting how challenging the financing landscape could become in the years ahead. BNEF data show China and Europe accelerating as banks increase investment in the transition, while North America continues to favour the oil and coal sectors.
The Energy Supply Banking Ratio (ESBR) measures banks’ role in arranging, underwriting and facilitating capital flows for energy through corporate bonds, loans, project finance and equity issuance. The indicator reveals a clear regional divide.
In China, the ESBR rose to 1.6:1, driven mainly by debt financing for electricity grid upgrades. In Europe, it reached 2.5:1, supported by bank financing for offshore wind.
By contrast, North America’s ratio fell to 0.5:1, driven by major transactions involving oil companies and a record USD 46 billion in financing for the coal sector.
These global financing trends also matter for Africa and Sub-Saharan Africa, where access to capital is central to energy investment and the expansion of low-carbon energy. The regional divergence identified by BNEF therefore provides an important reference point for African energy markets seeking to mobilise financing for the transition.
What happens next?
It is difficult to determine how the situation will evolve while the conflict between the United States and Iran continues. Energy supply financing is expected to keep increasing, but for now the balance is shifting towards fossil fuels.
One possibility, which would not favour the energy transition, is that banks provide very large volumes of credit to midstream companies to rapidly build alternative infrastructure.
For China and EU countries, however, electrification is expected to continue attracting investment.
