Energy transition
COP28 Coal: Accelerating early retirement of unabated coal-fired power plants through transition credits
Context and challenges
Coal-based power contributes ~27% of energy and industrial production emissions1 and continues to be fundamental for energy production, making up ~30% of the global energy mix and ~60% of the energy mix in Asia.
The IPCC states that phasing out coal from the power sector is the most important step to achieve the 1.5°C target by 2030.
Simultaneously, significant capital is unrecovered in Global South coal assets, creating the need for a financing mechanism to accelerate the early retirement of coal assets.
Initiative Description
The COP28 Presidency aims to bring together public and private sector leaders to explore innovative solutions for reducing coal emissions, including the use of transition credits to finance the early retirement of unabated coal-fired power plants.
Currently, there are four main outcomes for coal phase-down to achieve at COP28 in order to accelerate the early retirement of coal:
- Establish high-integrity transition credits – a new carbon credit asset class generated through the early retirement of coal plants
- Announce advanced off take commitment(s) from national governments to purchase said credits
- Explore piloting early retirement of coal plant through transition credits in Asia and Africa
- Reinvigorate global stance with the Powering Past Coal Alliance (PPCA)
Commitments from Business & Philanthropy
Commit to advance offtake agreements by purchasing transition credits
Sign up as a member of the PPCA and commit to phase out coal by 2030 in the OECD, and by 2040 in the rest of the world
How to get involved?
- Reach out to the COP28 Energy Transition Team for more information
- Click here to start your sign-up process with the Alliance (PPCA)
- Accounting for ~9.8 Gt CO2e/year
Source: IEA | IPCC | Global Energy Monitor: Global Coal Plant Tracker, accessed August 2023 | Our World in Data: Emissions by Sector, accessed August 2023; GFANZ consultation paper, Financing the Managed Phaseout of Coal-Fired Power Plants in Asia Pacific, June 2023