Coal phase-out

Coal phase-out – global and regional perspective

Phasing out coal from the electricity sector is the single most important step to get in line with 1.5°C. How fast does coal need to be phased out in order to meet the objectives of the Paris Agreement, in light of the latest science from the Intergovernmental Panel on Climate Change (IPCC)?

Key dates

• Global coal emissions should peak in 2020;
• Global coal use in electricity generation must fall by 80% below 2010 levels by 2030;
• OECD nations should end coal use entirely by 2030;
• All coal-fired power stations must be shut by 2040 at the latest.

Details in our September 2019 report Global and regional coal phase-out requirements of the Paris Agreement: Insights from the IPCC Special Report on 1.5°C. This report is an update of our 2016 analysis Implications of the Paris Agreement for coal use in the power sector.

Focus on Asia

South and South East Asia’s growing economies can shift from their current carbon-intensive pathways to renewable energy to fuel economic growth, boost sustainable development and overcome energy poverty while avoiding life-threatening pollution and environmental degradation, according to a report by Climate Analytics presented at the Bonn climate talks on June 2019.

The report is the first to apply the insights from the Intergovernmental Panel on Climate Change Special Report on the 1.5˚C global warming limit to these regions, and shows how Asia’s energy systems can transition to zero carbon, in line with the Paris Agreement. The report also includes seven country studies – India, Pakistan, Bangladesh, Thailand, Vietnam, Indonesia and the Philippines.

Read more in our reports, ‘Decarbonising South and South East Asia’, Coal phase out and energy transition pathways for Asia and the Pacific and Shifting investment away from fossil fuels in Southeast Asia.

Spotlight on South Korea

South Korea is one of the world’s top greenhouse gas emitters and currently home to 60 coal power plant units, with seven new coal power units accounting for 7.27 GW under construction. The country is also one of the world’s largest importers of coal, next to China, India, and Japan, with Australia and Indonesia as its biggest exporters.

According to our analysis, without a change in policy, Korea’s coal power generation would exceeded power sector carbon budgets for coal in line with the Paris Agreement by 2.5 times. If the seven new coal power units currently under construction go online, then the country will exceed this carbon budget by 3.17 times.

Read more in our reports ‘Transitioning towards a coal-free society: science based coal phase-out pathway for South Korea under the Paris Agreement’, Employment opportunities from a coal-to-renewables transition in South Korea, Assessing the health benefits of a Paris-aligned coal phase out for South Korea

Spotlight on Japan

In Japan, the world’s sixth largest emitter, more than half of electricity emissions in 2016 came from coal – around 20% of its total greenhouse gas emissions – from around 45GW of coal-fired power generation capacity. Yet it is planning to add a further 18 GW of new and additional coal power plants to its existing 45GW, of which 5GW are already under construction, prioritising it over renewable energy.

If Japan builds the coal-fired generation it is planning, it will exceed its Paris Agreement emissions budget (2018-2050) by nearly 300 percent.

Investing in new coal capacity in Japan could leave investors with stranded assets, as the world moves away from coal. Many big Japanese companies have international commitments such as R100 and Science Based Targets (SBT), which could be undermined by coal. They risk losing competitiveness in the global markets as Japan invests in coal rather than the global trend towards renewable energy.

Read more in our report ‘Science based coal phase-out timeline for Japan – Implications for policymakers and investors’, produced in collaboration with the Renewable Energy Institute of Japan (report also available in Japanese).

Spotlight on Australia

Ending its dependence on coal for electricity generation by 2030 is the single most important element of Australia’s domestic contribution to global efforts to limit warming to 1.5°C and prevent the worst of climate change.

Using the latest science from the Intergovernmental Panel on Climate Change (IPCC), this report on phasing out coal in Australia finds that to fulfil its obligations under the Paris Agreement, the country, like all OECD nations, needs to phase out coal from its electricity sector by 2030.

Coal, the most climate-damaging fossil fuel, still supplies about 60 per cent of Australia’s electricity, making its grid one of the most polluting in the world and among developed economies, the report shows.

Read more in our report ‘For Climate’s Sake: Coal-free by 2030’.

Focus on the EU

The EU has over 300 power plants with 738 separate generating units (as of July 2016). These are not evenly distributed across the individual member states and those most reliant on coal are Poland, Germany, Bulgaria, the Czech Republic and Romania. Germany and Poland alone are jointly responsible for 51% of the EU’s installed coal capacity and 54% of emissions from coal.

This map was made using data from the EU coal-fired power plants database hosted and coordinated by Climate Action Network (CAN) Europe. To view a full page version of the map click the chain icon in the bottom right hand corner or click here.

According to our modelling, the EU will exceed its Paris Agreement-compatible emissions budget for coal based electricity generation by 85% in 2050 if all existing coal-fired power plants continue operating to the end of their full life span. If currently announced and planned plants are built in the coming years, this number will rise to almost 100%.

For the EU to remain within its carbon budget, member states must first shelve plans for any additional coal-fired generating capacity and secondly, must start actively shutting down currently operating units at an increased rate. Analysis suggests 25% of currently operating coal-fired power units need to be shut down by 2020, rising to 72% by 2025, before a complete shutdown by 2030.

The critical question is which criteria should determine when individual units are switched off? In our report A stress test for coal in Europe under the Paris Agreement we outline two possible strategies for how the EU could achieve a complete phase out of coal use in electricity generation, proposing a shutdown date for each coal-fired power generating unit.

Both methods evaluate units on emissions performance and profit generation potential. The first approach, the Regulator Perspective, prioritises shutting down the most carbon intensive plants first, where as the second approach, the Market Perspective, prioritises shutting down the least valuable plants in terms of revenue generation potential.

More information / Full report / Executive summary – English / Executive summary – German / Executive summary – Polish

EU coal vs air pollution regulation

Apart from being the largest source of CO2 emissions, coal combustion is also a major threat to public health globally. Pollution from coal plants is responsible for about 23,000 premature death in the EU every year. About 82% of EU, 80% German and virtually all Polish coal power plants do not comply with a new EU regulation on industry air pollution emissions standards that they need to meet by 2021. Read more

Spotlight on Germany

In our latest report, we show that Germany needs to phase coal out of its electricity sector by 2030 to meet its obligations under the Paris Agreement. This is earlier than the outgoing government’s decision to phase out coal by 2038.

Under a planned and structured coal phase out, energy security and reliability of electricity supply is not expected to be a major concern and will be manageable. As well as reduced health impacts, a coal exit from electricity generation by 2030 in Germany will bring added benefits in job creation, helping to smooth the transition to a zero-carbon energy system.

Read more and in the blog post Germany’s coal exit law, or the politics of inertia

Implications of the Paris Agreement for Coal Use in the Power Sector

This report looks into the implications of the Paris Agreement for coal fired electric generation. It shows that the Paris Agreement 1.5°C temperature limit requires a quick phase-out of coal used for electric power generation.

Read more

Impact of our work

Our coal reports underpin the global coal phase-out movement by providing science-based benchmarks to establish target coal phase-out dates that are consistent with the Paris Agreement’s 1.5°C limit.

The Powering Past Coal Alliance, launched at COP23, in its declaration refers directly to the benchmarks provided in our global coal report, to stress that the Paris Agreement requires coal phase-out by 2030 in the OECD countries and by 2050 in the rest of the world. This alliance, in which national and sub-national partners commit to phasing out existing coal power in their jurisdictions, and to introducing a moratorium on any new traditional coal power stations, aims to increase its membership to 50 by 2018.

In Europe, a number of countries and sub-national authorities have established phase-out dates consistent with the 2030 benchmark provided in our reports. The recently launched BeyondCoal European campaign, is aiming at establishing similar commitments in the remaining member states to achieve a coal phase-out in the European Union by 2030.

Expanding our work

Coal is still cheap because it does not factor in the costs of environmental and health impacts, so there is no strong market signal to phase out. Many developing countries look to coal to meet their rapidly growing energy demand due to its low price, the availability of this technology and blueprints for coal deployment, as well as financing. However, renewable energy is a low cost alternative and many countries are already well on the way in its deployment at scale, while others have a very high potential for its deployment.

We’re in the process of expanding our work on science-based coal phase out strategies into the Asia-Pacific region. A number of countries in this region are planning to significantly increase their coal capacities. Phasing out coal is a complex problem; solving it must involve many actors and it must occur on parallel with a phase-in of renewables and integration. We work with partner institutions to develop an analytical framework that encompasses not just coal phase-out but also renewables phase-in and integration, aiming to inform policymakers in developing countries.

Useful links

Investors vs. the Paris Agreement
This briefing paper summarises research Urgewald and its partners commissioned to determine which institutional investors are backing the world’s top 120 coal plant developers.

Coal Exit List
A global list by Urgewald of coal companies and subsidiaries.

Global Coal Finance Tracker
Project tracking the financial support for coal plant projects globally. Currently include only foreign financing flows from public finance institutions such as export credit agencies and development banks.

The Global Plant Tracker
Provides information on all existing coal plants of 30 MW or larger, as well as every plant proposed since January 1, 2010.

Beyond Coal
Campaign which provides data on coal in the United States.

Europe Beyond Coal
Campaign which provides data on coal in the European Union.