One-Third of Coal Could Be Phased Out By 2030: Reports

Coal has a tenacious grip on the global economy, with emissions rising by 0.9% in 2024, primarily fueled by growing consumption in China, India, and Southeast Asia. Two new reports released at COP30 outline practical actions that could accelerate on-the-ground delivery of the coal transition.

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Coal is the most polluting fossil fuel, producing 41% of the world’s fossil carbon dioxide (CO2) emissions in 2024 despite only accounting for a third of energy production. Combustion of coal also creates air pollution, contributing to thousands of deaths annually. Both businesses and governments have called for the phase out of fossil fuels – coal, natural gas, and oil – at this month’s UN COP30 climate summit in Brazil.

The Coal Transition Commission (CTC), chaired by France and Indonesia with the support of the Powering Past Coal Alliance, released two technical reports at COP30 aiming to provide governments, utilities, and financiers with solutions to retire coal projects – even younger ones – and rethink flexible operation of coal plants in emerging markets.

The first CTC report, Growing the Pipeline of Coal-to-Clean Projects, identifies around 150 gigawatts of operating coal capacity worldwide – roughly one-third of the assessed fleet – as near-term opportunities for exploring early retirement and replacement with clean energy.

“While there are still significant challenges to be overcome, we are making good progress and, if we are able to scale up the project pipeline, we should be able to significantly increase the pipeline of retirement projects before 2030,” Julia Skorupska, Head of Secretariat at the Powering Past Coal Alliance, told Earth.Org in an email.

The report examines the small number of existing coal retirement projects and outlines pathways to grow the number to a global scale. These projects, known as “coal-to-clean projects”, aim to replace coal fired power generation with renewable or other clean energy sources.

The report finds that an estimated 150 GW – representing 34% of the assessed coal fleet – exhibits significant near-term opportunity for early retirement and clean replacement, with notable opportunities emerging in East Asia, Europe, and some independent power producing coal plants among southeast Asian nations (ASEAN). 

Paradoxically, younger coal plants may be easier to retire as there are greater opportunities to refinance debt, adjust existing contracts, or tap into other revenue streams like transition credits or results-based finance to support their early retirement, according to the report.

“Private finance is expected to play a key role,” Skorupska told Earth.Org. “Some plants may be able to find ways to bring forward their retirement dates drawing purely on private finance.” For example, in the Philippines, ACEN Corporation refinanced its SLTEC coal plant to enable its accelerated retirement up to 25 years early. 

In other projects, concessional capital will be needed to make transactions viable. “The good news is that there are already a number of sources of finance that can be drawn on,” added Skorupska. “Countries can access large-scale transition support, including $1.6 billion through the Climate Investment Funds ACT programme, which is currently supporting coal to clean planning and projects in Indonesia, the Philippines, the Dominican Republic, North Macedonia and South Africa.”

High-integrity coal transition credits schemes are being developed by the Monetary Authority of Singapore’s Traction initiative and the Rockefeller Foundation’s Coal to Clean Credit Initiative.

Indonesia was identified as a key target for coal-to-clean projects. “Indonesia is actively exploring how to be a leader in the global energy transition. With credible plans for transitioning our energy system and international support to deliver on those plans, we can achieve our growth targets and reduce our emissions at the same time,” Farah Heliantina, Assistant Deputy for the Acceleration of Energy Transition at Coordinating Ministry for Economic Affairs, Indonesia, and CTC Co-Chair, said in a statement.

The second report, From Flex to Phase-out, addresses the knowledge gap that currently exists around the role of coal flexibility in coal-to-clean transitions.  In some circumstances, it concludes, operating coal assets in a flexible way could support a more rapid integration of renewables in the near term, as long as measures are in place to manage the risk of unduly prolonging coal use. The paper also concludes that flexibility is rarely a fleet-wide approach and should be seen in the context of a larger coal transition strategy.

“Phasing out coal is not only one of the most urgent challenges to keep the 1.5°C goal of the Paris Agreement within reach – it is also a key opportunity to foster sustainable growth while ensuring energy security and sovereignty. These reports show that practical solutions are emerging, which now need to be scaled up,” said Eleonoire Caroit, Minister in charge of International Partnerships, France, and CTC Co-Chair, in a statement.

In Vietnam, pilots at the Vinh Tan 4 plant have shown that flexible coal operation can technically support renewables integration.

Featured image: Tom Grundy/hongkongfp.com