Six new members have been announced at the UN Climate Summit COP25 in Madrid, Spain this week, raising the total to 97 members. The PPCA also announced the creation of a new Finance Taskforce made up of financial institutions seeking to accelerate coal phase-out.
Joining the PPCA are:
- Province of Ilocos Norte, The Philippines,
- New Taipei City,
- Varma Mutual Pension Insurance Company,
- Caisse des Dépôts Group (CDC),
- Central Finance Board of the Methodist Church and Epworth IM,
The alliance now includes 33 national governments, 27 subnational governments and 37 businesses committed to phasing out unabated coal for electricity production.
The continued growth of the Alliance since its launch at COP23 in November 2017 demonstrates global momentum towards an exit from coal, following UN Secretary General Guterres’ calls to curtail coal power generation and end the construction of new coal plants by 2020. It sends a strong signal for ambitious climate action ahead of COP26 next year.
To date, PPCA members’ efforts have contributed to approximately 35% of the OECD’s total coal capacity now being scheduled to close, corresponding to approximately 20% of the world’s coal capacity outside of China.
Members of the Alliance are already seeing environmental, economic and human health benefits of the shift from coal to clean energy. They are committed to accelerating the transition in an inclusive way, including appropriate support for workers and communities.
“The Powering Past Coal Alliance is making a significant difference in accelerating the global shift away from the most polluting form of power generation, and doing so in a way that takes into account the legitimate economic concerns of citizens. We welcome the new members and look forward to their contributions to this important movement.”On behalf of the UK and Canadian Co-chairs of the Alliance, Jonathan Wilkinson, Canadian Minister of Environment and Climate Change said:
The new Finance Taskforce announced by the PPCA today will work alongside national and sub-national members and the Utilities and Just Transition Taskforces to accelerate the retirement of coal power generation. In addition to ensuring financial markets and policy makers have the information they need about phaseout plans and coal-financing flows, the new Taskforce will focus on generating lessons for guiding investment pathways in the critical decade ahead. The Taskforce will be officially launched at the Ceres Investor Summit on Climate Risk in March 2020.
“PPCA is a pioneering example of the multi-stakeholder innovation between governments, investors and companies that is needed to meet net zero emissions. It is critical that we accelerate the phase-out of coal-generated power and redirect capital towards a clean energy system whilst ensuring a just transition for all regions. We look forward to participating in the coal phase-out discussions in New York in March as one of PPCA’s official partners within the finance workstream.”Stephanie Pfeifer, CEO, Institutional Investors Group on Climate Change said:
“As a global investor committed to addressing climate change, we have a critical role to play in urging companies and governments to accelerate coal-use phase out through our investment, engagement and voting activities. We keenly support PPCA’s leading role in climate transition finance. This is fundamental to achieving the Paris climate goals. The urgency of progressing on this matter can not be understated.”Matt Christensen, Global Head of Responsible Investment at AXA Investment Managers said:
Alongside its growing membership, the PPCA also welcomed the think tanks Carbon Tracker Initiative and Rocky Mountain Institute as new Partner organisations. They will support PPCA members through sharing their expertise and in-depth analysis, including through Insights articles on the PPCA website. They join investor groups Ceres, IIGCC, LAPFF, and PRI, as well as a strategic partner, Bloomberg Philanthropies.
Details of new members
- Greece is the first country in Southeast Europe to have announced a coal phase out date. committing to take 4.9 GW off the grid. Lignite – the most polluting form of coal – has been the largest driver of Greece’s electricity system for many decades. However, increasing costs as well as the negative impacts on climate, health and the environment have paved the way for the country’s transition to the post-lignite era.
- Province of Ilocos Norte in the Philippines passed a resolution eliminating coal from its electric supply to preserve natural resources. It aims to transition to a hundred percent renewable energy. The PPCA membership will help the region tap into its huge renewable energy potential to meet its energy needs, making polluting coal plants unnecessary.
- New Taipei City, has committed to phasing out coal by 2023. By joining the PPCA, the city wants to encourage more national and sub-national governments across Asia to commit to a coal-free future. Phasing out coal and accelerating the transition to renewable energy is key in Asia, as the continent excavates and burns three quarters of total global stocks.
“The New Taipei City Government cooperates with environmental groups to promote being coal-free by reducing coal usage in its districts. We pursue this goal by forbidding permission for future construction of coal boilers and coal-fired combined heat and power plants (CHP). The New Taipei City Government aims to achieve sustainable prosperity for our citizens. So we are willing to join PPCA and work together for the goal of coal removal.”Mayor Hou Yu-Ih, Mayor of New Taipei City said:
- Varma Insurance is committed to exiting from investments in thermal coal in equities by 2025. It also engages with companies in an effort to accelerate the decommissioning of coal-based operations. In industries that are significantly exposed to climate related risks, such as utilities, Varma focuses its investments on companies that offer alternatives to the use of fossil-based energy. They see no future for coal-based electricity generation.
“Varma has ambitious climate targets, and as a large investor we believe it is also our duty to promote a reduction in greenhouse gas emissions and a transition to clean energy. This requires collaboration and a just transition.”Hanna Kaskela, Varma’s Director of Responsible Investment said:
- The Central Finance Board of the Methodist Church, together with its wholly-owned subsidiary Epworth Investment Management Limited, encourages all companies within the electricity generation industry to reduce greenhouse gas emissions. It also recognises the risks with investments linked to the building of new unabated coal-fired power stations, especially in developed markets.
“We have for many years pushed for companies to reduce their exposure to coal and we have excluded companies which do not practically recognise the risks to the planet associated with continuing reliance on coal for power generation. We have joined the Alliance because time is running out, urgent change is required, and stakeholders need to work together. As an investor, this initiative helps promote the transition of portfolios and markets to a lower carbon, cleaner, world.”Stephen Beer, Chief Investment Officer of the Central Finance Board of the Methodist Church, said:
- The Caisse des Dépôts is one of the founding members of the Net Zero Asset Owner Alliance, which represents investors committed to align their portfolios with a 1.5°C goal. The reduction of thermal coal combustion being one of the critical levers to steer the global economy towards this goal, the Caisse des Dépôts Group is implementing a policy that restricts financing to assets that are exposed to thermal coal. Regarding its investments in French local projects (real assets, project companies and SME), the Group pledged not to finance new production capacities of coal-based energy as early as 2015. Regarding its asset management activities, it excludes investments in companies deriving more than 10% of their turnover from thermal coal and engages with all residual companies to target coal-fired electricity production close to 0 before 2030 in the OECD, and before 2050 in the rest of the world. By 2021 no new investment will be made in companies that develop new coal-fired power plants.
- Greece’s new government committed to phasing out all coal-powered electricity production by 2028 at the UN Secretary General Climate Action Summit in September.
- Greece’s power mix has historically relied heavily on coal. 14 of Greece’s lignite-fuelled power units account for over a fifth of the country’s electricity capacity. A new lignite plant is currently being built which was supposed to operate beyond 2050.
- Apart from closing all lignite power plants by 2028, the government also targets a 35% share for renewable energies by 2030, almost doubling the current figure.
- Climate change is already having severe repercussions for Greece. The rise in sea levels threatens the country’s shores and islands, while extreme weather events have dealt heavy blows to its communities and the economy, especially its agriculture and tourism sectors.
- Greece joined 21 other EU Member States that are either already coal-free or have announced coal phase-out dates. Only six EU countries are yet to set a coal phase-out date: Bulgaria, Croatia, the Czech Republic, Poland, Romania and Slovenia.
Ilocos Norte, Philippines
- Home to the largest wind farm in South East Asia, Ilocos Norte generates more than 280MW from renewables and is touted the wind-energy capital of the Philippines.
- It was the first province in the Philippines to phase out coal in 2016 with an absolute ban on both black sand mining and coal power production.
- The province continues to invest in solar, wind and hydropower as it transitions to 100% renewables.
New Taipei City
- New Taipei City has become the third Asian member of the Powering Past Coal Alliance, after South Chungcheong Province in South Korea and Province of Negros Oriental in the Philippines.
- The City is already a member of the Global Covenant of Mayors, and by joining the PPCA demonstrates continued climate leadership.
- The Linkou coal plant is located in Taipei but sits under the authority of the central government.
- Despite South East Asia being portrayed as a major growth region for the coal industry, recent reports indicate that new power plant construction has dramatically slowed in the region. According to Global Energy Monitor, “communities are rejecting new coal due to the high levels of pollution, renewable energy technology is undercutting it in terms of quality and cost, and financial institutions are backing away fast, making funding an increasing challenge for coal proponents”.
- Varma signed the United Nations-supported Principles for Responsible Investment, a set of six principles that provide a global standard for responsible investing as it relates to environmental, social and corporate governance (ESG) factors. PRI has been an official PPCA partner since July.
- Varma has also signed this year’s policy statement from the Investor Agenda, a collaborative initiative to accelerate and scale up the investor actions that are critical to tackling climate change. Signatories of the statement called on global leaders to phase out thermal coal power worldwide by set deadlines.