Brookfield: Coal and ESG mix like oil and water

1 minute read

Canadian asset manager Brookfield looks set to launch a multi-billion dollar climate fund, and a coal expansion making Dalrymple Bay into the world's biggest coal export facility. Brookfield’s latest USD7.5bn Global Transition Fund (‘net-zero’) fund launch seems at odds with the fact that filings reveal that Brookfield-owned Dalrymple Bay (DBI AU) is set to expand its coal operations by 15Mtpa to become the world largest export terminal. The expansion of its coal operations is named project 8x.

To be clear, 8x is an enabler of further coal mine expansions in Queensland, which already is the top provincial coal exporter of the world. Coincidentally, the government of Queensland is the other major institutional owner of DBI and is actively seeking to expand the coal mining output of the state.

We believe that there are three potential outcomes to this.

First, Brookfield could use Global Transition Fund money to pay Brookfield Infrastructure investors to move to cancel the 8x expansion and shut the thermal coal capacity at DBI. Second, Brookfield unconditionally applies its communicated climate policy in a full balance sheet approach and moves to cancel the 8x expansion and thermal coal capacity at DBI. Or finally, Brookfield continues to work for the 8x expansion and thermal coal business to continue at DBI and thus get in competition for “Most Egregious Greenwash” award of the decade.