“Coal’s Comeback: Threatening Climate Goals in Asia”
The global pipeline of coal projects has seen a significant reduction in recent years, with many countries committing to ending the construction of new coal plants. However, coal is now making a comeback in Asia, posing a threat to climate goals and the environment.
According to Lidy Nacpil, coordinator of the Asian Peoples’ Movement on Debt and Development (APMDD), the world was once on a path to ending coal, the most carbon-intensive fossil fuel. Active campaigning led to the shutdown of hundreds of coal projects globally, as well as a decrease in new coal investments. Public financial institutions and private banks also shifted their policies to wind down coal financing in favor of cheaper renewables.
Since 2015, more than half of countries with coal power have reduced or kept their operating capacity flat. The global pipeline of proposed coal power plants has seen a 76% collapse in construction from 2015 to 2021. Despite these positive trends, coal is now experiencing a resurgence, driven by demand growth in developing and emerging economies.
The failure of governments to transition rapidly to renewable energy has contributed to coal’s staying power. The energy crisis caused by the war in Ukraine led to a surge in coal and gas demand, driving prices to record levels. Asian countries increased coal production to secure energy supply, while some European countries brought mothballed coal-burning power plants back online.
The world’s top commercial banks, mainly headquartered in rich countries, are responsible for financing new coal projects in Asia. Major Asian banks are also playing a significant role in coal expansion in the region. Additionally, finance for gas build-out is being led by top commercial banks and public financial institutions.
Despite the growth of renewables, coal still holds a significant share in the power sector, with 35% of the share globally. Asia, particularly China, India, and Indonesia, accounts for over 70% of the world’s coal production. These countries are substantially increasing their coal use, despite aggressive renewables targets.
The planned expansion of gas power and coal’s resurgence will have detrimental effects on climate goals and draw investment away from renewable energy transition. Activists are calling for a fast, fair, and funded phase-out of fossil fuels to achieve a fossil-free future. The transition to renewables is crucial to meeting climate targets and ensuring a sustainable energy future.