Over the course of 2024 the Coal Transition Commission convened national policymakers, Multilateral Development Banks, private finance and international organisations and experts to gather the lessons from experiences of delivering transitions to date, identify the key obstacles to acceleration, and surface potential solutions. On the basis of these consultations the Secretariat produced this report, launching it at COP29 in Baku, Azerbaijan.
The report seeks to advance the collective understanding of the opportunities, challenges and potential policy solutions to hasten the transition, building on existing initiatives like the Just Energy Transition Partnerships (JETPs). It lays out the steps that need to be taken by governments, international organisations and standard setters, as well the potential supportive roles that public and private financial institutions could play to create an enabling policy environment, scale up finance for the coal-to-clean transition and build a pipeline of projects, highlighting that doing so is essential to keeping 1.5°C in reach.
The report makes a series of recommendations to accelerate the coal-to-clean transition at the speed and scale needed to get on track for 1.5°C:
- Governments will need to develop long-term power sector and just transition plans, underpinned by policymaker commitments to no new coal, plans to phase out coal power and scale up renewables, to give citizens, businesses and investors clarity and confidence to mobilise behind the transition.
- Finance for coal-to-clean transition will need to be significantly increased. Public finance providers, including Multilateral Development Banks, should continue to scale up support for these transitions, including by using their technical assistance, project preparation and catalytic capital to reward country ambition and crowd in private finance.
- Private finance will need to play a key role, and for this to happen at scale regulators could consider clarifying that investing in reducing emissions from existing coal power plants is considered transition finance, subject to appropriate guardrails and disclosures.
- In addition, given the significant costs associated with the phase-out of coal power plants and a just transition, financial structures will need to be developed that enable these costs to be covered and private investors to make reasonable returns. Governments and technical bodies should continue to develop mechanisms to blend public and private finance and should also explore further innovative solutions, including high integrity coal-to-clean carbon credits to understand their potential, risks and guardrails that may be required.
- A pipeline of priority projects should be established to accelerate implementation, focusing on early retirement and repurposing for flexibility – the two most important levers for achieving emissions reductions in a 1.5°C pathway. For this to happen, collaboration and capacity building to countries will be needed, and the Coal Transition Commission can drive this work forward.