The Glasgow Financial Alliance for Net Zero’s (GFANZ), the world’s largest financial sector grouping to support net zero, proposed on Monday the development of voluntary guidance and practical steps for financial institutions to support the financing of a managed phase-out of coal-fired power plants in Asia.
GFANZ’s Asia Pacific chapter opened consultation on guidance for financing the early retirement of coal-fired power plants in Asia-Pacific as part of a just net-zero transition.
Despite the fact that coal power usage globally likely peaked last year, rising energy demand in Asia will increase coal-fired power generation for several more years, the alliance said.
“The guidance to support the financing of the early retirement of coal-fired power plants in Asia-Pacific seeks to provide financial institutions with practical guidance to accelerate their efforts and help them meet their commitments to an inclusive and just transition to net-zero,” said Ravi Menon, Managing Director of the Monetary Authority of Singapore and Chair of the GFANZ APAC Advisory Board.
According to Mary Schapiro, Vice Chair, GFANZ,
“As this guidance takes shape, it will become a practical tool for financial institutions to support plans to wind down the use of coal, help identify and implement clean energy projects, and support them to create positive environmental and economic impact.”
Last month, the G7 leaders failed to set a date for a coal phase-out, although all agreed that coal should be phased out at some point in 2030 or soon after.
China, the largest consumer of coal in Asia, continues to build coal-fired power capacity. China is building or planning to build some 366 gigawatts (GW) in new coal generation capacity, accounting for some 68% of global planned new coal capacity as of 2022. Outside China, coal generation capacity is shrinking, with 2.2 GW getting retired in Europe last year and 13.5 GW of capacity retired in the United States—the highest rate of coal power plant retirement globally.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.