A $200 billion surge in new gas infrastructure projects could unleash a “climate bomb” with emissions comparable to those of all the world’s coal power plants combined, according to a report by Reclaim Finance.

The report highlights the risks posed by an expansion of liquefied natural gas (LNG) terminals, funded by major banks, which could significantly undermine global climate targets.

Over the past two years, eight LNG export terminals and 99 import terminals have been completed, increasing global export capacity by 7% and import capacity by 19%. Looking ahead, developers plan to construct 156 new LNG terminals by 2030, including 63 export terminals and 93 import terminals.

These projects, driven by a shift from coal to gas in developing nations and the disruption of Russian gas supplies to Europe due to the Ukraine war, are fuelling concerns about their environmental impact.

The report warns that methane leaks from these facilities could result in up to 10 gigatonnes of greenhouse gas emissions by 2030, equaling the annual emissions from all operational coal power plants worldwide. Such emissions would exacerbate the global climate crisis and make achieving international climate goals even more challenging.

Justine Duclos-Gonda, a campaigner at Reclaim Finance, said: “Oil and gas companies are betting their future on LNG projects, but every single one of their planned projects puts the future of the Paris agreement in danger. Banks and investors claim to be supporting oil and gas companies in the transition, but instead they are investing billions of dollars in future climate bombs.”

The International Energy Agency (IEA) has echoed these concerns, cautioning that unchecked growth in LNG capacity could derail efforts to limit global warming to 1.5°C, as outlined in the Paris Agreement. The IEA projects that LNG capacity is on track to expand by nearly 50% by 2030, far outpacing the world’s forecasted demand for gas in all its modelled scenarios. This overcapacity risks creating a gas oversupply, which could drive down fossil fuel prices and hinder the adoption of renewable energy and energy efficiency measures.

Falling gas prices are expected to further entrench reliance on fossil fuels. The IEA predicts that the cost of gas imported into the EU will drop from a record high of over $70 per million British thermal units (MBtu) in 2022 to $6.50 by the end of the decade. This price drop could discourage investment in cleaner alternatives, jeopardising efforts to meet climate targets.

“LNG is a fossil fuel and new projects have no part to play in a sustainable transition,” Duclos-Gonda said. “Banks and investors must take responsibility and stop supporting LNG developers and new terminals immediately.”

Despite commitments by major banks to achieve “net zero” emissions in their financing portfolios, the report highlights that none have implemented specific policies to restrict funding for LNG projects. As a result, investments in these projects continue unabated, undermining the global transition to sustainable energy and putting climate goals at significant risk.