The End of Coal is in Sight – COP26 Update
Key Contact: Natalie Jones
Key commitments from some of the world’s biggest coal users to phase out coal in favour of clean sources of energy were made at COP26. The ‘Global Coal to Clean Power Transition Statement’, signed by a host of developed and developing countries, including both major coal users and climate vulnerable nations, commits nations across the world to:
- end all investment in new coal power generation domestically and internationally;
- rapidly scale up deployment of clean power generation; and
- phase out coal power in economies in the 2030s for major economies and 2040s for the rest of the world.
This latest statement, on top of pledges made in the last year from China, Japan and South Korea, and the G20 to end overseas financing of coal power plants, could remove over 40GW of coal-fired power generation across 20 countries, which equates to around half of the UK’s power capacity.
With coal being the single largest contributor to climate change, phasing it out and delivering a rapid transition to clean energy is seen as an absolutely critical target to even begin to reach the Paris Agreement to limit global temperature rises to 1.5 degrees.
Twenty-eight new members of COP also signed up to the world’s largest alliance on phasing out coal, the Power Past Coal Alliance (PPCA). Launched and chaired by the UK, countries including Chile, Singapore and Durban have joined over 150 countries, sub-nationals and businesses, including finance partners NatWest, Lloyds Banking, HSBC and Export Development Canada. This accounts for over $17 trillion assets now committed to PPCA coal phase out goals.
These commitments follow:
- the publication of the UK’s landmark Net Zero Strategy, outlining measures to support businesses and consumers to transition to clean energy, while supporting hundreds of thousands of well-paid jobs and leveraging up to £90 billion of private investment by 2030; and
- the UK’s £576 million commitment to mobilise finance into emerging markets and developing economies to fund their green transition, including £66 million to expand the UK’s MOBILIST programme, which helps to develop new investment products which can be listed on public markets and attract different types of investors.
These commitments will drive new standards, incentives and rules, to create markets for new technologies will be imposed. This could be truly transformative for the UK energy market, provide investors with the confidence that markets for innovative technologies will be available which should could radically lower the price of clean technology and increase its use exponentially.
For information or advice on any of the topics raised, please contact our Energy Team.