Coal

Countries and regions making notable progress include: 

• In June 2023, China started operations at the Taizhou coal-fired power plant in the Jiangsu province, making it the third large-scale coal plant in the world to be equipped with carbon capture technology. 
• In 2022, two new Just Energy Transition Partnerships (JETP) were announced in Indonesia (with a budget of USD 20 billion) and Viet Nam (USD 15.5 billion) to support decarbonisation efforts, including a just transition away from coal power. 
• The Group of 7 (G7) Ministers of Climate, Energy and the Environment released a communiqué recognising the need to end the construction of new unabated coal-fired power generation, as called for in the NZE Scenario. 
• At the end of 2021, Portugal closed its last remaining coal plant, becoming the fourth country in the European Union to do so after Belgium, Austria and Sweden. 
  

In 2022 CO₂ emissions from coal-fired power plants grew by over 2% from the previous year, led in particular by increases in emerging market and developing economies (EMDEs) in Asia. Gas-to-coal switching in many regions was the main driver of this growth.  

There are currently three coal power plants fitted with carbon capture, utilisation and storage (CCUS) in operation: Boundary Dam in Canada, and the Jinjie Power and Taizhou Power stations in China. The Taizhou project only recently started operation in June 2023 and has a capacity to capture 500 000 tonnes of CO₂ each year. 

To get on track with the Net Zero Scenario, a global annual average reduction of emissions from coal-fired power plants of around 10% is needed through to 2030. 

In 2022 global coal-fired power generation rose by nearly 2%. Though the year-on-year change is far less than the 8% growth seen in 2021 as coal rebounded from Covid-19 lows, last year’s growth surpasses the nearly stagnant annual average growth seen in the five years preceding Covid-19. In absolute terms coal-fired generation continued its record-breaking streak for a second year in a row to around 10 400 TWh.  

• Asia Pacific: The largest absolute increases were in the Asia Pacific region. Extreme weather events and record-breaking natural gas prices led to higher coal use in electricity generation in the region, up nearly 3% from 2021 levels.  
• Coal-fired power generation in China grew by around 2% compared to 2021. China continues to add new coal-fired power plants to the grid, with 11 GW added in 2022, driven by energy security concerns, local economic interests, and tendency to pair dispatchable power sources with variable renewable sources.  
• In India, extreme heatwaves in the summer sharply increased electricity demand, which was primarily met by coal-fired generation. This led to a significant year-on-year increase of more than 8.5% in 2022, with a 20% increase in April through July compared to the same period in the previous year. 
• Europe: Coal-fired generation increased in the European Union by nearly 7% amid low hydropower and nuclear output.  
• United States: Despite electricity demand increasing in the United States, coal-fired generation fell by almost 8% in 2022, reversing a 15% increase in 2021. The decrease in coal output was balanced by an increase in generation from natural gas and strong growth in renewables.  

As a result, coal's share of total global generation remained around 36%. This is not on track with Net Zero Scenario, which calls for immediate reductions and a decline in unabated coal‐fired generation of around 55% by 2030 compared to 2022 levels, reducing coal to around 12% of global generation by 2030. 

Russia's invasion of Ukraine and the ongoing energy crisis have forced the European Union and individual countries to take measures to enhance security of electricity supply amid low nuclear availability and tight gas markets. The United Kingdom and several countries in the European Union have decided – or are discussing plans – to bring reserve capacity back into the market or to postpone closure dates.  

Germany accounts for most of the additional coal-fired capacity, with almost 10 GW for the 2022 and 2023 winter. In the Netherlands, the removal of the 35% production cap on coal-fired plants will add another 3.8 GW. Under confirmed plans, overall coal-fired capacity will increase by about 15% (19 GW) to 146 GW in the European Union and the United Kingdom combined. 

In January 2022, Brazil passed legislation to establish a just energy transition programme for the coal-dependent state of Santa Catarina. Under the law, Brazil will phase-out coal-fired power generation by 2040 and set out a plan to prepare the region for the coal phase-out. 

In Poland, government and mining union delegates have signed a social contract that sets out a specific timetable for discontinuing hard coal mining at each production unit by the end of 2049.  

In the Czech Republic, the European Commission approved the budget of CZK 40 billion (Czech Koruna) to transform the coal regions of Karlovy Vary Moravian-Silesian and Ústí with the aim of increasing the quality of life of its inhabitants, restoring the area, and developing clean energy.  

As of July 2022, 75 countries had agreed to phase out coal or to not develop new unabated coal power plants, collectively accounting for 20% of current coal‐fired generation. Of these countries, 31 have incorporated coal phase‐out targets with specified dates in national plans, most are in Europe, and 80% are advanced economies. They include countries with a strong reliance on coal‐fired power such as Poland, the Czech Republic and Montenegro. 

As of August 2022, only four countries had completed their phasedowns: Belgium (2016), Austria (2020), Sweden (2020) and Portugal (2021). Seven large countries with a net zero emissions target remain without a coal phasedown plan: Brazil, China, India Japan, Korea, South Africa and the United States. 

The Just Energy Transition Partnership (JETP) is a programme launched during COP26 in 2021 by France, Germany, the United Kingdom, the United States and the European Union – often called the International Partners Group – to make available the financial resources necessary to accelerate energy transitions and meet climate targets, while ensuring a just transition. 

During COP26, the International Partners Group announced USD 8.5 billion for JETP in South Africa, and the programme has since expanded to other countries. In November 2022, Japan, the United States and other partners announced USD 20 billion for JETP in Indonesia, and in December 2022 the International Partners Group announced USD 15.5 billion for Viet Nam’s JETP.  

In April 2023 the Group of 7 (G7) Ministers of Climate, Energy and the Environment released a communiqué recognising the need to end the construction of new unabated coal-fired power generation, as called for in the IEA’s Net Zero Scenario. The G7 leaders noted their intention to work with other countries to end new unabated coal-fired power generation projects world wide as soon as possible, in order to accelerate the clean energy transition in a just manner. 

Opposition to coal is not new, but in recent years an increasing number of governments have announced policies to restrict or prohibit financing for coal projects and investments. Further momentum to restrict financing for coal comes from the financial community, where many institutional investors, pension funds, banks, insurance companies and others have committed to reduce or end their involvement in coal. 

In February 2023 the Sumitomo Mitsui Banking Corporation (SMBC) announced that it will phase out project and corporate financing of coal mining projects and coal-fired power plants by 2040. Although SMBC did not specify a detailed timeline for the phase-out, it noted that this will include funding for new mines, expansion of existing mines and related infrastructure. 

• Andrew Minchener, ICSC TCP
• Eren Cam, IEA