Coal phase-out

The annual amount of coal plant capacity being retired increased into the mid-2010s.^[1] However, the rate of retirement has since stalled,^[1] and global coal phase-out is not yet compatible with the goals of the Paris Climate Agreement.^[2]

In parallel with retirement of some coal plant capacity, other coal plants are still being added, though the annual amount of added capacity has been declining since the 2010s.^[3]

Coal phase-out is an environmental policy intended to stop burning coal in coal-fired power plants and elsewhere, and is part of fossil fuel phase-out. Coal is the most carbon-intensive fossil fuel, therefore phasing it out is critical to limiting climate change as laid out in the Paris Agreement.^[4][5] The International Energy Agency (IEA) estimates that coal is responsible for over 30% of the global average temperature increase above pre-industrial levels.^[6] Some countries in the Powering Past Coal Alliance have already stopped.^[7]

China and India burn a lot of coal.^[8] But the only significant funding for new plants is for coal power in China.^[9] The health and environmental benefits of coal phase-out, such as limiting biodiversity loss and respiratory diseases, are greater than the cost.^[10] Developed countries may part finance the phase out for developing countries through the Just Energy Transition Partnership, provided they do not build any more coal plants.^[11] One major intergovernmental organisation (the G7) committed in 2021 to end support for coal-fired power stations within the year.^[12] It has been estimated that coal phase-out could benefit society by over 1% of GDP each year to the end of the 21st century,^[13] so economists have suggested a Coasean bargain in which already developed countries help finance the coal phase-out of still developing countries.^[14]

In order to meet global climate goals and provide power to those that do not currently have it coal power must be reduced from nearly 10,000 TWh to less than 2,000 TWh by 2040.^[15] Phasing out coal has short-term health and environmental benefits which exceed the costs,^[16] but some countries still favor coal,^[17] and there is much disagreement about how quickly it should be phased out.^[18][19] However many countries, such as the Powering Past Coal Alliance, have already or are transitioned away from coal;^[20] the largest transition announced so far being Germany, which is due to shut down its last coal-fired power station between 2035 and 2038.^[21] Germany is using reverse auctions to compensate coal-fired power plants for shutting down ahead of schedule.^[22] Some countries use the ideas of a "just transition", to provide with some of the benefits of transition early pensions for coal miners.^[23] However, low-lying Pacific Islands are concerned the transition is not fast enough and that they will be inundated by sea level rise, so they have called for OECD countries to completely phase out coal by 2030 and other countries by 2040.^[24] In 2020, although China built some plants, globally more coal power was retired than built: the Secretary-General of the United Nations has also said that OECD countries should stop generating electricity from coal by 2030 and the rest of the world by 2040.^[25] Phasing down coal was agreed at the 2021 United Nations Climate Change Conference in the Glasgow Climate Pact. Vietnam is among few coal-dependent developing countries that pledged to phase out unabated coal power by the 2040s or as early as possible thereafter^[26]

In 2022–2023, coal's use had risen. The IEA points out that high gas prices due to the Russian invasion of Ukraine and extreme weather events as contributors to the increase.^[27][28]

In April 2024, the G7 countries agreed to close all coal power plants in 2030–2035 unless their greenhouse gases are captured or the countries find another way to align their emissions with the 1.5 degree goal.^[29][30]