‘Reckless’ coal firms plan climate-busting expansion, study finds
Coal is the most polluting of all fossil fuels and investors must stop funding it, say campaigners
Hundreds of coal companies around the world are developing new mines and power stations, according to a study. The researchers said the plans were “reckless and irresponsible” in the midst of the climate emergency.
Coal is the most polluting of all fossil fuels and its use must be quickly phased out to end the climate crisis. However, almost half the 1,000 companies assessed are still developing new coal assets, and just 27 companies have announced coal exit dates consistent with international climate targets.
The new mining projects could increase the production of thermal coal, used in power stations, by more than a third, the report found. The bulk of these projects are in China, India, Australia, Russia and South Africa.
“Pursuing new coal projects in the midst of a climate emergency is reckless, irresponsible behaviour,” said Heffa Schücking, the director of Urgewald. “Investors, banks and insurers should ban these coal developers from their portfolios immediately.”
The world’s nations agreed at the UN’s Cop26 climate summit in Glasgow last November to “accelerate efforts towards the phasedown of unabated coal”. However, the International Energy Agency said in July that coal burning was set to rise in 2022, taking it back to the record level set in 2013. The rise is due in part to high gas prices as a result of Russia’s war in Ukraine, making coal relatively cheaper.
The IEA said in May 2021 that no new coal-fired power stations could be built if the world was to stay within safe limits of global heating and meet the goal of net zero emissions by 2050. Some progress is being made, with only 4% of new power capacity in 2021 coming from coal, down from about 30% in 2016. In contrast, 75% of new power came from renewables, which are often cheaper and increasingly challenge the economic viability of new coal plants.
Nonetheless, Coal India aims to double the amount of coal it mines to 1bn tonnes a year by 2025, according to Urgewald’s analysis, making it the biggest mining company on the list. “The coal mining rush is testament to the industry’s complete denial of climate reality. The writing is on the wall, but coal miners refuse to read it,” said Schücking.
The report found 476GW of new coal-fired power capacity is still in the pipeline worldwide, equivalent to hundreds of new power stations. If built, the projects would increase the world’s coal power capacity by 23%. China is responsible for 60% of all the planned new capacity.
Lidy Nacpil from the Asian Peoples’ Movement on Debt and Development said: “The world welcomed President Xi Jinping’s 2021 announcement that China would stop building new coal power plants abroad, but China needs to adopt similar measures for its domestic energy system if it wants to become an actor for a 1.5C world.”
To reach net zero carbon emissions by 2050, the IEA says, all coal power plants in rich countries must be retired by 2030 at the latest and by 2040 in the rest of the world. Urgewald found just 27 companies out of 1,064 had announced such coal exit dates. Of these, most were planning to convert to gas-powered plants or sell to another owner.
“At the end of the day, we only identified five companies with coal transition plans that could be considered Paris-aligned,” said Schücking. “The vast majority of companies still have no intention of retiring their coal assets, which are propelling us towards a climate breakdown. Delaying has become a new form of climate denial.”
The US, which has the world’s third-largest number of coal plants, has not set a national end date for its coal power, unlike the UK, France and Italy. The US would need to retire 30GW of coal-fired capacity a year up to 2030 to meet the Paris climate goals, the Urgewald report said, but only 8.4GW was closed down in 2021.
Lucie Pinson, the director of Reclaim Finance, which rates the coal policies of more than 500 financial institutions, said: “Companies won’t transition unless banks, investors and insurers rapidly stop all support for the industry’s expansion and require the adoption of closure plans.” She said 190 financial institutions still have no coal policy, 272 have weak coal policies and only 28 have effective coal exit policies.