Coal is the most carbon intensive fossil fuel and phasing it out is a key step to achieve the emissions reductions needed to limit global warming to 1.5°C, as enshrined in the Paris Agreement. Most emissions from coal are in the electricity sector and, as we already have the technologies that can replace coal, phase out is a relatively cheap and easy option to reduce emissions. Our research shows coal needs to be phased out globally by 2040 to meet the commitments made in Paris.
Coal phase-out – global and regional perspective
Phasing out coal from the electricity sector is the single most important step to get in line with 1.5°C. How fast does coal need to be phased out in order to meet the objectives of the Paris Agreement, in light of the latest science from the Intergovernmental Panel on Climate Change (IPCC)?
- Global coal emissions should peak in 2020;
- Global coal use in electricity generation must fall by 80% below 2010 levels by 2030;
- OECD nations should end coal use entirely by 2030;
- All coal-fired power stations must be shut by 2040 at the latest.
Spotlight on Germany
In our latest report, we show that Germany needs to phase coal out of its electricity sector by 2030 to meet its obligations under the Paris Agreement. This is earlier than the dates discussed so far by the Coal Commission, a body established to come up with a coal exit plan by the end of 2018.
If Germany follows the Paris Agreement compatible pathway we propose here, it can also make significant steps towards meeting its 2020 emission reduction targets – something seen as impossible at the moment.
Under a planned and structured coal phase out, energy security and reliability of electricity supply is not expected to be a major concern and will be manageable. As well as reduced health impacts, a coal exit from electricity generation by 2030 in Germany will bring added benefits in job creation, helping to smooth the transition to a zero-carbon energy system.
Spotlight on the EU
The EU has over 300 power plants with 738 separate generating units (as of July 2016). These are not evenly distributed across the individual member states and those most reliant on coal are Poland, Germany, Bulgaria, the Czech Republic and Romania. Germany and Poland alone are jointly responsible for 51% of the EU’s installed coal capacity and 54% of emissions from coal.
According to our modelling, the EU will exceed its Paris Agreement-compatible emissions budget for coal based electricity generation by 85% in 2050 if all existing coal-fired power plants continue operating to the end of their full life span. If currently announced and planned plants are built in the coming years, this number will rise to almost 100%.
For the EU to remain within its carbon budget, member states must first shelve plans for any additional coal-fired generating capacity and secondly, must start actively shutting down currently operating units at an increased rate. Analysis suggests 25% of currently operating coal-fired power units need to be shut down by 2020, rising to 72% by 2025, before a complete shutdown by 2030.
The critical question is which criteria should determine when individual units are switched off? In our report A stress test for coal in Europe under the Paris Agreement we outline two possible strategies for how the EU could achieve a complete phase out of coal use in electricity generation, proposing a shutdown date for each coal-fired power generating unit.
Both methods evaluate units on emissions performance and profit generation potential. The first approach, the Regulator Perspective, prioritises shutting down the most carbon intensive plants first, where as the second approach, the Market Perspective, prioritises shutting down the least valuable plants in terms of revenue generation potential.
EU coal vs air pollution regulation
Apart from being the largest source of CO2 emissions, coal combustion is also a major threat to public health globally. Pollution from coal plants is responsible for about 23,000 premature death in the EU every year. About 82% of EU, 80% German and virtually all Polish coal power plants do not comply with a new EU regulation on industry air pollution emissions standards that they need to meet by 2021. Read more
Spotlight on Japan
In Japan, the world’s sixth largest emitter, more than half of electricity emissions in 2016 came from coal – around 20% of its total greenhouse gas emissions – from around 45GW of coal-fired power generation capacity. Yet it is planning to add a further 18 GW of new and additional coal power plants to its existing 45GW, of which 5GW are already under construction, prioritising it over renewable energy.
If Japan builds the coal-fired generation it is planning, it will exceed its Paris Agreement emissions budget (2018-2050) by nearly 300 percent.
Focus on South and South East Asia
South and South East Asia’s growing economies can shift from their current carbon-intensive pathways to renewable energy to fuel economic growth, boost sustainable development and overcome energy poverty while avoiding life-threatening pollution and environmental degradation, according to a report by Climate Analytics presented at the Bonn climate talks on June 2019.
Implications of the Paris Agreement for Coal Use in the Power Sector
This report looks into the implications of the Paris Agreement for coal fired electric generation. It shows that the Paris Agreement 1.5°C temperature limit requires a quick phase-out of coal used for electric power generation.
Expanding our work
Coal is still cheap because it does not factor in the costs of environmental and health impacts, so there is no strong market signal to phase out. Many developing countries look to coal to meet their rapidly growing energy demand due to its low price, the availability of this technology and blueprints for coal deployment, as well as financing. However, renewable energy is a low cost alternative and many countries are already well on the way in its deployment at scale, while others have a very high potential for its deployment.
We’re in the process of expanding our work on science-based coal phase out strategies into the Asia-Pacific region. A number of countries in this region are planning to significantly increase their coal capacities. Phasing out coal is a complex problem; solving it must involve many actors and it must occur on parallel with a phase-in of renewables and integration. We work with partner institutions to develop an analytical framework that encompasses not just coal phase-out but also renewables phase-in and integration, aiming to inform policymakers in developing countries.