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Group of 20 countries could make a deal to end the financing of international coal projects this week in Rome, marking the biggest step governments have taken collectively to phase out the dirtiest fossil fuel.
Such an agreement could reduce carbon dioxide emissions by 230 million tons a year, said Christine Shearer, program director at the Global Energy Monitor. That’s almost equivalent to the annual emissions of Belgium and Nigeria combined. The vast majority of the savings would come from China. As of September, it was set to back 44 of the world’s 50 planned, state-financed international coal projects.
“An agreement to end overseas coal financing at a G-20 level will be the beginning of the end of new coal plants throughout much of the world,” Shearer said. “These coal proposals were already struggling to attract financing given the poor economic outlook for new coal plants.”
The pact falls short of the U.K. and Italy’s hope that the world’s major economies would agree to phase out domestic coal use before United Nations climate talks start in Glasgow, Scotland, immediately after the G-20 meeting. But even the smaller goal of ending overseas financing wasn’t a serious possibility until Chinese President Xi Jinping told the UN General Assembly in September that his country would stop building plants abroad.
That moment was a turning point — though a lack of clarity hovers over Xi’s pledge — after months of challenging international negotiations about the future of coal. At the start of the year, the Italian government, which holds the rotating G-20 presidency, said it wanted countries to agree to put an end to burning coal unabated — which means without capturing the emissions.
While European countries are ending the use of coal at home — the U.K. plans to shut down all domestic coal plants in the next couple of years — big emitters such as the U.S. and China aren’t prepared to take that step. In June, Group of Seven leaders were asked by the U.K. to end domestic coal use. But U.S. President Joe Biden wouldn’t agree, so instead they settled on a smaller deal to stop financing new coal power plants outside their own countries.
Now the wider G-20, which includes coal-reliant China and India, potentially could reach a similar agreement. It’s an important step, but it still leaves a huge task ahead when it comes to domestic coal use.
A record-tying 38 gigawatts of coal plants were shut in 2020, led by the U.S. and Europe, but those retirements are eclipsed by the 39 gigawatts of new coal plants China plans to build. The nation commissioned more than three-quarters of the world’s new plants last year, compared with 64 per cent in 2019.
Any agreement on coal, no matter how small, still isn’t a given. The energy crisis rattling Europe and Asia has bolstered arguments from fossil-fuel proponents that the world isn’t ready to give up coal, oil and gas. It could be that the biggest polluters ultimately decide they just aren’t ready to say goodbye to the cheap and dirty fuels.
Speaking in London on Thursday morning, U.S. Special Presidential Climate Envoy John Kerry said ending coal use remained a challenge and that he hoped technologies such as carbon capture and storage would make the task easier.
“What we need is not a lot of finger pointing and screaming at countries but to ask what do we need to bring them aboard,” he said.