French bank Société Générale has announced its withdrawal from the Rio Grande Liquified Natural Gas (LNG) project, planned for construction in in south Texas.
Parent company NextDecade, which plans to operate the $10bn Rio Grande LNG project, , claims that the project will be a “low carbon intensive LNG” through the use of carbon capture and storage (CCS).
However, environmental groups and local residents have campaigned extensively against the project, contributing towards Société Générale’s withdrawal on Tuesday.
In 2021 NextDecade announced that they would reach a final decision for its Rio Grande LNG project by the summer of 2023 amid extensive delays.
In the same year Société Générale committed to stopping financing American LNG with an exception for its pre-existing support for the Rio Grande project, a decision which it has now reversed.
Interest for the project faltered in 2020 as the Covid-19 pandemic led to a decrease in global energy demand, however following Russia’s invasion of Ukraine a number of European investors showed an increased interest in LNG.
“A victory for civil society”
Juan Mancias, chairman of the Carrizo Comecrudo Tribe of Texas, a local population which would be impacted by the project, said of the announcement: “Years and years of facing these banks and demanding that they step off our sacred lands and sacred sites have led us to these great victories”.
A coalition of protest groups in both France and the United States have targeted Société Générale since 2017.
A French mobilisation campaign was also established in 2017 to encourage BNP Paribas to withdraw from its advisory mandate for the nearby project Texas LNG.
BNP Paribas then committed to ceasing to do business with “companies whose principal business activity is the exploration, production, distribution, marketing or trading of oil and gas from shale and/or oil from tar sands” according to a statement.
Lorette Philippot, with Friends of the Earth France described Société Générale’s announcement as “a victory for civil society” going on to say that “it comes at a time when far too many governments and companies in Europe are rushing into US LNG, locking us into dependencies that are already costing the climate and citizens far too much.”
However, in May 2022, French utility Engie also committed to import fossil gas from the Rio Grande LNG project for the next 15 years, meaning the project is not entirely without support.
Lucie Pinson of reclaim finance said of the news: “By ending its role as financial advisor, Société Générale has finally taken the measure of the problem concerning the Rio Grande LNG project. We now hope that the bank will not be replaced by other banks such as Crédit Agricole and Natixis”.
NextDecade claims that the project will have a positive impact on the communities in the Rio Grande Valley making it “a centre for low carbon intensive energy and emissions reduction”.
However, NextDecade’s CCS plans have been criticised as greenwashing with Bekah Hinojosa a Gulf Coast campaign representative for the Sierra Club telling the Guardian that Rio Grande LNG’s proposed use of CCS “is like trying to put a Band-Aid on a bullet hole”.