Today’s new coal phase-out announcements: an explainer

by | Nov 4, 2021

Today, the UK government published a list of 46 countries that have signed on to a Global Coal to Clean Power Transition Statement, saying (alongside other announcements on coal) that “the end of coal is in sight”.

“My feeling is this firmly moves the goal posts of ambition from stopping building new coal plants (one of the most successful actions since Paris) to actually phasing out coal altogether. Three of the top ten coal power countries have new commitments to phase out coal, all of which are in Asia, which is also where 80% of the world’s coal power is. This alone is enough to put focus on coal phase-out, and help speed up the demise of coal at a global level. Rapidly reducing coal generation this decade is one of the most important gaps, so this deal is critical to keep us anywhere close to 1.5 degrees.”

 

What is the Global Coal to Clean Power Transition Statement?

It commits signees to four points that add up to a fair transition from coal to clean electricity. A paragraph on each: (1) building clean, (2) phasing out coal, (3) stop building new coal, and (4)  ensuring the coal phase-out is a just transition. The new climate ambition is undoubtedly on the section of phasing out coal. It commits signees to phase out coal in the 2030s for major countries, in the 2040s for the rest of the world. 

First, it’s important to mention, these coal phase-out dates are not quite 1.5 degree-aligned. The IEA net zero report (as well as other reports) shows that coal power needs to be phased out by 2030 (not in the 2030s) in advanced economies and by 2040 (not in the 2040s) for the rest of the world. What’s more, it adds the words “or as soon as possible thereafter”. That, however, doesn’t mean that countries aren’t signing onto a big change.

Since 27% of the world’s CO2 emissions is from coal power alone – and coal power is where the biggest cuts need to come from – cutting coal power is where we need to bend the curve.

This agreement means that now half of the world’s coal countries now have a coal phase-out commitment. There are 70 countries in the world that still have some operational coal power plants, and these extra 11 countries (10 announced in this document, and Slovenia separately) push the total coal phase-out countries to 35, half the total.

Progress in Asia

Three of the top ten global coal power countries have now committed to phasing out coal by signing the coal to clean statement, and all are in Asia: Korea, Indonesia and Vietnam. 80% of the world’s coal generation is in Asia, so bending the curve here is essential. 

Republic of Korea: a coal phase-out in the 2030s was a surprise to many. The President only three days earlier announced a 2050 coal phase-out. It feels like this inconsistency needs some clarification from the Korean government.

Indonesia: a 2040s coal phase-out comes with caveats. Alongside their signature, they say it doesn’t cover new coal (Indonesia wants to finish building some new coal plants before its stopping altogether). Also they say coal phase-out timelines are “as part of its commitment to reach net zero by 2060”, and Indonesia will “consider accelerating coal phase-out into the 2040s, conditional on agreeing additional international financial and technical assistance”. To a cynic this deal means nothing. But momentum is there: the finance minister said she is already working out how much a 2040 coal exit would cost. And there is definitely some international funding that will be made available for Indonesia’s coal transition. That’s on top of a plan by the Asian Development Bank to retire coal plants early in Indonesia and the Philippines. And this was unfathomable just a year ago.

Vietnam: a 2040s coal phase-out seems pretty impressive on paper, so kudos to the government. The much-delayed power plan (PDP 8) will need to be rewritten to take out the coal plants that were planned and to rapidly step up the expectation of clean power to be built. Vietnam has the third biggest pipeline of coal power plants in planning. Between Vietnam – and indeed Indonesia – the number of coal power plants planned just a few years ago was mind-bending; to now be talking about a total coal phase-out is a whole new level of welcome ambition. 

Kazakhstan and the Philippines – the 15th and 17th biggest coal power generators in the world – both signed onto only one clause around just transition, but this in itself will keep discussion of coal phase-out on the table. 

Progress elsewhere

In Europe, there was a comedy of errors with Poland. The minister for the climate and environment signed it, but then immediately clarified that Poland meant 2049. Which is what Poland already had as its coal mine phase-out. Elsewhere Slovenia and Croatia announced a new coal phase-out target in the early 2030s.

Charles Moore, Ember’s Europe lead, said: 

“Today’s announcement from Poland that it will both rapidly scale up deployment of clean power generation AND leave coal phase-out until 2049 demonstrates that once again the Polish government has failed to grasp how quickly the energy landscape is shifting under its feet. These two commitments do not make any sense in the European context. Poland’s coal power plants will already be hitting the wall financially throughout the 2020s as clean power deployment accelerates around Europe – and now in Poland. It’s time for the Polish government to get real, stop playing political games and set a more realistic coal phas-eout date. Without one, planning a just transition that benefits workers and communities will be impossible.”

In Ukraine, a coal phase-out of 2035 was announced by the government. However, simultaneously DTEK, the company that owns 75% of the coal power plants announced a 2040 phase-out date, creating some confusion. Either way, as a non-OECD country, 2040 is consistent with a 1.5C pathway. Ukraine is third only to Germany and Poland in its coal capacity in Europe, so this is a big deal.

In Africa, there was good progress. 86% of Africa’s coal generation is concentrated in South Africa, but Botswana, Madagascar, Morocco, Zambia and Zimbabwe are also coal countries. Morocco only agreed to no new coal, and Botswana only agreed to phase out coal; while Zambia agreed to both. South Africa didn’t sign the ‘Coal to Clean Statement’, but the start of its phase-out of coal was announced by President Ramaphosa earlier in the week. A few other countries which do not currently have coal power –  Ivory Coast, Egypt and Senegal – promised they would build no new coal. 

Powering Past Coal

Powering Past Coal also announced new members on Energy Day. The highlight was Ukraine announcing a 2035 coal phase-out, as mentioned above. Other highlights from their great work were as follows:

  • Ukraine, Chile, Singapore, Mauritius, Azerbaijan, Slovenia and Estonia head the list of 28 new PPCA members.
  • Nearly two-thirds of OECD & EU governments are now PPCA members and on the way to phasing out coal by 2030.
  • 11 financial institutions join the Alliance today, bringing the total to 33 finance members with over USD$17 trillion in assets.
  • PPCA engagement with coal-dependent countries is further strengthened through additional subnational government and utility members from Poland, South Africa, the Philippines and the US, as well as a new partnership with the Climate Investment Funds.

Climate Investment Funds 

There was a third critical announcement today. CIF announced four countries that will benefit from international public money, through their new Accelerating Coal Transition Investment Program. Using South Africa’s coal transition agreement as a template for India, the Philippines and Indonesia, and getting international funding to them quickly will help to speed up coal phase-out

These 4 countries make up 15% of coal power globally, so this is another critical moment in the global coal phase-out story.

Sum of all the parts

The “coal to clean deal” is perhaps not quite as promised by the UK government. It’s not really a global deal because it misses so many key coal countries, and it’s also not on a 1.5 pathway. But it will shift a focus onto phasing out existing coal. Especially so in Asia where it is needed most.

I have worked on coal phase-out for 8 years now, and no coal phase-out has been one big bang. It’s been a series of 100 steps. Today many countries took a lot of steps in one go. And, perhaps even more importantly, this will encourage countries that weren’t at the table – like China and India – to be bold to take a few more steps forward that they wouldn’t otherwise have.

And that will definitely be substantive enough to edge us slightly closer towards 1.5 degrees.

 

Stay up to date with the latest announcements: see our Trello board and Twitter thread

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