Carbon Tracker statement on 190-strong global coalition to extinguish coal use and financing

The Global Coal to Clean Power Transition statement, signed and announced at COP26 today by a coalition of countries and major banks commits to end all investment in new coal power generation and a phase out of coal power in the 2030s for major economies and 2040s for the rest of the world.

Jonathan Sims, Carbon Tracker’s senior analyst on power and coal said:

 “Fresh country pledges to end the construction of new coal plants, which is vital if long-term climate goals are to be achievable, send a strong signal that coal is out for the count.

“New units globally would struggle to recover their initial investment if built and likely be forced to close significantly before the end of planned lifetimes. Growing recognition of this reality at both environmental and economic levels should encourage the nations with remaining new build coal plant pipelines to also abandon such plans and join the rest of the world in moving towards a clean energy future.

“For existing coal units, whilst new commitments to phasing out remaining capacity are welcome, it now falls to the nations that have agreed to this pledge to firm up these aims by identifying specific phaseout target years that are as early as possible.”

Lorenzo Sani, Carbon Tracker’s power and data analyst said:

“Business as usual is over. This latest announcement increases the likelihood that the stranded assets risk we identified in our report Taking Stock of Coal Risks launched today will materialise.

“According to our study, phasing out coal power by 2040 will leave $121 billion of stranded assets on global stock exchanges. Asian markets could pay the highest price by bearing up to 90% of the stranded asset risk that we identified, with up to $59 billion of losses on Mumbai alone. Companies will have to adopt planned phasing out schedules to retire their plants and minimise the losses for shareholders and investors.”