COAL OVERVIEW

Coal remains a major fuel in global energy systems, accounting for almost 40% of electricity generation and more than 40% of energy-related carbon dioxide emissions.

Global coal demand is expected to remain broadly stable over the next five years, supported by robust growth in major Asian markets, according to the International Energy Agency’s latest market analysis and forecasts.

The weakness in coal demand this year results mainly from coal-fired electricity generation, which is set to experience its largest ever decline. This drop is led by US coal decline, and European players who invest into decarbonization projects of various kind ranging from hydrogen, to biomass power generator or solar pv and win.

Earlier this month, Sweden became the third European country to exit coal industry, following Belgium and Austria, shutting down its last remaining coal plant two years before the scheduled closure, signalling a strong intent to shift to renewable energy.

But while these trends will continue through 2024, the global trends will depend largely on China, where half of the world’s coal is produced and consumed.

“The region’s share of global coal power generation has climbed from just over 20% in 1990 to almost 80% in 2019, meaning coal’s fate is increasingly tied to decisions made in Asian capitals.”

Keisuke Sadamori, IEA’s Director of Energy Markets and Security

Other countries like South and Southeast Asia – such as India, Indonesia and Vietnam –are deeply relying on coal to fuel their economic growth.

Towards exit from financing coal activities

FINANCIAL COAL ACTIVITIES

Last summer 2019, the French financial institutions, through their professional federations, committed to adopt “a timetable for the overall exit from financing coal activities” by mid-2020; while Crédit Agricole, La Banque Postale Asset Management, AXA and Crédit Mutuel are the most encouraged ones by Reclaim Finance, as early adopters of policies that meet the challenges, the NGO urges other major banks to adopt the exit coal.

In its last article, Reclaim Finance is encouraging BNP (which stakes were reaching nearly US$ 9 billion to coal companies between 2017 and September 2019) to commit to the exclusion of all companies planning new coal power capacity from its financial services. This request from the activist is mainly caused by the German project of Uniper’s new 1.5 billion euro state-of-the-art coal-fired power plant (Datteln  4) which is scheduled to go on-line in mid-2020.

This project  creates internal tensions within European countries, including The Netherlands, which is committed to a coal phase out by end of 2030 (leading to leads up to 22 mln tonnes per year of carbon emissions), while 70% of its emission savings would be minimized by the increased emissions in the rest of Europe.

While, public calls are more and more actively addressed to banks to take the decision for a zero tolerance and suspend all financial services to polluting industries, sustainable finance efforts towards the energy transition of major industries must be embraced by the all financial sector

In this effort, we can highlight the participation of the Global Coal Exit List which proposes an accessible public data of key statistics on companies throughout the entire thermal coal value chain and serves as an informational source for the finance sector.

Towards exit from financing coal activities

Article : Joana Foglia

Towards exit from financing coal activities