28 nations, regions, financial institutions, and businesses strengthened their coal phase-out commitments by joining the Powering Past Coal Alliance (PPCA) at COP26 in Glasgow, helping to drive the change needed to “consign coal to history”.
Since its launch in November 2017, the PPCA has grown from a handful of members to 165 countries, cities, regions and businesses committed to phasing out coal power at home and supporting others in their energy transition. Thanks to the momentum for coal phase-out driven by the UK COP Presidency this year, the Alliance boosted its ranks with an annual record number of 51 new members. With 14 countries joining in the lead up to and during COP26, the Alliance now has the support of a quarter of all countries in the world.
Success is measured not only in the number of new members, but also in their ambition. The Alliance encouraged several breakthrough coal phase-out commitments that were unthinkable even a year ago. At COP26, Ukraine, the third-biggest coal consumer in Europe, joined the Alliance and brought forward its coal deadline from 2050 considered last year to 2035. Chile, which currently generates around 40% of its electricity from coal, announced that it will work together with the Alliance to bring forward its coal deadline from 2040 to 2030, while leveraging the experience of PPCA members to support a just transition. Slovenia, Croatia, North Macedonia, Montenegro and Albania became members this year making the first ever coal phase-out commitments in the Balkans, a region heavily dependent on coal.
This year, the Alliance has also welcomed its first subnational governments and utilities from Poland, Japan, South Africa and Indonesia, and increased its subnational membership in South Korea, the Philippines and the US, strengthening its influence on the transition of these coal-dependent countries. Moreover, thanks to the work of the Alliance, over US$17 trillion in assets is now committed to coal phase-out. This is expected to further increase as financial institutions seek to implement the recent swathe of net-zero goals set at the COP.
The PPCA is not only an Alliance of those who have already moved past coal or who have always had a small percentage of coal-power generation. It is also an Alliance of those who are stepping forward to tackle the transition head-on despite a huge reliance on coal, not only in terms of generation but also in terms of employment.
While, in some cases, their initial coal phase-out commitments are not yet aligned with the Paris Agreement, these are exactly the countries and organisations that need to be at the table for the global coal phase-out to succeed.
We cannot address all the challenges overnight, but becoming a member of the Alliance helps speed up the transition. PPCA membership demonstrates a serious commitment to the transition from coal to clean power. Members must commit to setting specific coal phase-out dates, ideally underpinned by government plans or legislation. The date sends a powerful signal to the economy and society about the inevitability of phase-out, which in turn, drives the energy shift.
PPCA members strive to accelerate the transition by working together and learning from each other, as many share a historical reliance on coal and have gathered extensive expertise on how to shift financial flows and ensure a just transition or transform grids and utilities. The PPCA has an ever-growing list of success stories of members who were able to increase ambition. For example, Portugal and Israel have recently brought their phase-out dates forward from 2030 to 2021 and 2025, respectively.
Finance is the engine of a transition from coal to clean energy. The PPCA puts great emphasis on the need to phase out private finance for unabated coal power, and calls upon all financial institutions to adopt the Alliance’s Finance Principles.
The current 33 finance members have pledged to stop providing new financial services that would result in new unabated coal power generation. They have also agreed to advocate for or support their clients in phasing out coal power generation or investments, including for example by supporting energy companies in designing and implementing transition plans. This is especially important for financial actors with strong presence in coal-reliant emerging markets like India, Indonesia or China, as emphasised by HSBC when joining the Alliance at the COP.
The PPCA understands the challenges this transition brings, especially for developing countries. Their commitments to the transition away from coal must be met with significant and sustained support to be achievable.
That is why the PPCA is partnering with the Climate Investment Funds, which will bring powerful policy expertise alongside climate finance to help coal-dependent economies make the transition to greener energy sources. Through this partnership we will work with countries like South Africa, Indonesia, India and the Philippines to support this transition. This is a bold vision to carry the work of the PPCA forward.
In the lead up to and during COP26, the transition from coal to clean energy has seen an advancement like never before.
PPCA success has set a path for others to follow and built the political momentum that we have witnessed at COP26 with so many countries, subnational and private sector entities accelerating their coal phase-out, cancelling coal pipelines, committing to “no new coal”, and ending international coal finance, and finally with the pledge to phase down coal included in the final agreement.
The end of coal is now in sight, but it is still not fast enough to keep global temperature increase to 1.5°C. The PPCA recognizes that the latest science is clear that new construction of unabated coal-fired power plants must stop immediately, and existing plants must be phased out completely by 2030 in the OECD, and by 2040 in the rest of the world. The Alliance will continue advocating for all countries and businesses to take action on coal phase-out in line with the Paris Agreement.