Today at the United Nations Climate Action Summit, the Powering Past Coal Alliance has warmly welcomed seven new members and extended its partnerships with leading finance sector initiatives.
Joining the PPCA are:
- State of New Jersey, USA
- Province of Negros Oriental, Republic of the Philippines
- Puerto Rico
- AXA Investment Managers
With these additional members, the Powering Past Coal Alliance now counts 91 members, including 32 national governments, 25 subnational governments and 34 businesses. The continued growth of the Alliance shows how governments and private sector actors are responding to the challenge laid out by UN Secretary General Guterres to curtail coal generation and end the construction of new coal plants by 2020.
Germany is the largest user of coal-fired electricity generation in Europe, with the fifth largest capacity globally. Slovakia is the first country from Central and Eastern Europe to commit to a coal phase out. New Jersey, Negros Oriental, and Puerto Rico all show how sub-national jurisdictions can take policy measures to facilitate the transition from coal to clean energy.
The announcement of new members was made at a ministerial panel event as part of the Energy Action Forum, a convening of the Energy Transition track of the UN Climate Action Summit. On behalf of the UK and Canadian Co-chairs of the Alliance, UK Minister of State for Business Energy and Clean Growth, Kwasi Kwarteng sent a message of support to the event, saying:
‘’We are delighted to see large industrial economies like Germany and Slovakia join our UK-Canada led alliance and efforts to tackle the global threat of climate change.
The UK has led the world in phasing out coal as we transition to a cleaner energy system as part of our commitment to reach net zero emissions by 2050."
Commenting on Germany’s membership of the Alliance, Environment Minister, Svenja Schulze, said:
“On Friday, the German government adopted climate action measures in all areas that will place the country back on track towards a climate-neutral economy. One important element is the phase-out of coal-fired power generation. I am pleased that Germany, too, is now strengthening the global momentum for this coal exit. We are combining the phase-out of coal with a just transition and new green jobs in the regions affected. By phasing out nuclear and coal power, we will make our energy supply more modern and advance the development of new technologies.”
Finance sector engagement
AXA Investment Managers and Schroders have joined the Alliance as signatories to the PPCA Finance Principles. Jessica Ground, Global Head of Stewardship, Schroders, welcomed their membership of the Alliance, saying:
“To tackle climate change effectively investors will need to deploy a range of actions. Engagement is one that we are particularly committed to. We are working with the Climate Action 100+ focusing on how utilities will phase out coal. Another tool is engagement with policy makers, initially in the OECD, on creating the right framework to decarbonise the economy. These actions make sense from an investment and climate perspective”
In addition, Ceres, the Institutional Investors Group on Climate Change (IIGCC) and the UK Local Authority Pension Fund Forum (LAPFF) have become official partners to the PPCA, alongside the UN-backed Principles for Responsible Investment (PRI). Together, they will work to further implement and promote the PPCA Finance Principles, which have been developed to align with The Investor Agenda and Climate Action 100+.
James Bevan, CIO at UK charity investment specialist CCLA, welcomed these new partners, saying:
“I heard about the PPCA while speaking in the UK Pavilion at the global climate negotiations in 2017 - CCLA joined in time for the first One Planet Summit in Paris the following month. Since then we’ve helped co-ordinate the development of the Finance Principles and will be allocating additional resources ahead of COP26 in Glasgow. It is fantastic to see UK-based investor bodies IIGCC, LAPFF and PRI becoming official PPCA partners this year, given the critical role coal phase out is likely to play in many country, company, and investor climate action plans for the decade ahead.”
Mindy Lubber, CEO and President of Ceres, a sustainability nonprofit organisation, said:
“As we gather in New York for the United Nations Climate Action Summit and Climate Week, it is important to remember the critical role of state-level and private sector climate action in the US. We have seen some impressive recent announcements by U.S. electric power companies on the Climate Action 100+ focus list that move them much closer to alignment with the Paris Climate Agreement. These companies should join their European peers in becoming PPCA members, taking into account that coal phase out is a key action item of The Investor Agenda.”
The Local Authority Pension Fund Forum (LAPFF) is an association of 80 UK public sector pension funds with combined assets of approximately £250 billion. It exists to ‘promote the long-term investment interests of local authority pension funds, and to maximise their influence as shareholders to promote corporate responsibility and high standards of corporate governance amongst the companies in which they invest.’
Introducing the new PPCA members
- Germany is the largest coal user in the EU. It has 45 GW of coal-fired power plants, which is the fifth largest national coal power plant fleet in the world, and close to one third of total EU coal-fired power plant capacity. Coal provided 37% of Germany’s electricity production in 2018, down from 47% in 2013.
- Germany’s national “Commission on Growth, Structural Change and Employment” reported in January 2019 with a recommendation to phase out coal by 2038. The Federal Government is currently preparing legislation and financial support measures.
- €40 billion will be allocated to regions affected by the closures, allowing for a just transition. Significant capacity of hard coal and lignite plants will be shut by 2022.
- In Germany, 27,000 people work in the coal sector, 12,000 of them in power plants and 15,000 in lignite mines. Hard coal mining in Germany has already come to an end with the closure of the last mine at the end of 2018.
- The share of renewables in the German electricity mix continues to grow, reaching 38% in 2018. During the first half of this year, renewables even produced 44% of German electricity. The Government has set a target of 65% renewables by 2030.
- Slovakia’s new President, Zuzana Čaputová has announced Slovakia will phase out coal generation and mining by 2023. Čaputová came into office in June 2019, running on a green platform.
- The Slovakian Government will invest €3 billion in the Upper Nitra region of western Slovakia to provide for a Just Transition, as set out in the “Transformation Action Plan of coal region Upper Nitra”, developed with inputs from the local community.
- In 2000, less than 20 years ago, New Jersey had ten coal plants. The state’s largest plant, B.L. England, closed in May this year and coal has declined from 10% of net electricity generation in 2010 to 1.6% today.
- New Jersey’s final two coal-powered plants will close by 2024.
- Governor Phil Murphy announced in June 2019 plans for the state to use 100% electricity from clean energy by 2050.
Negros Oriental, Philippines
- Negros Oriental has prohibited the construction or operation of any coal-fired power plants.
- Governor R. Degamo has also established a Provincial Renewable Energy Council (PREC) to promote renewable energy programs in the province.
- All previously planned coal projects have been cancelled, and there is no operating coal capacity.
Financial institutions: Schroders and AXA Investment Managers
- Fund management firms Schroders and AXA Investment Managers have joined the PPCA, as Finance Principle signatories.
- Both firms are active participants across The Investor Agenda and within Climate Action 100+.
- The PPCA Finance Principles set out a range of actions translating the PPCA Declaration into meaningful commitments for financial institutions.