COP26: Can the World Slash Coal Use by 2030?

One of the goals of the twenty-sixth Conference of the Parties (COP26) was to get countries to phase out coal. UN Secretary-General Antonio Guterres has called for developed countries to stop using coal by 2030 and for other countries to do so by 2040.

During the conference, twenty-three countries made new commitments to do just that. Some signed onto an initiative to help developing countries, such as India and South Africa, transition away from coal. And all Group of Twenty (G20) countries pledged to stop financing new coal-fired power plants abroad by the end of the year. 

But experts say countries should do more to phase out coal and replace it with renewable energy sources in order to achieve net-zero emissions by mid-century.

Which countries use the most coal?

Coal accounts for around 30 percent of global energy consumption. Many countries still rely on the fossil fuel, particularly in Asia. 

China—the world’s top consumer and producer of coal—has continued to build coal-fired power plants domestically, contributing three-fourths of all new coal power in 2020. India—the second biggest coal consumer—still relies on cheap coal to provide electricity to millions of households and many industries, threatening its goal of achieving net-zero emissions by 2070. 

But elsewhere, coal use has been declining. Some of the countries that are currently among the top twenty coal consumers have committed to phasing it out, including Indonesia, Japan, and Vietnam. And although the United States hasn’t made an official commitment, its coal use has fallen in recent years as natural gas, which is less carbon-intensive, has increasingly been used to generate electricity instead.

Why focus on coal?

Coal burning is one of the biggest sources of greenhouse gas emissions, particularly of carbon dioxide. These gases trap the sun’s heat in the atmosphere, contributing to the rise in the world’s average temperature.

Ending coal use is critical to fulfilling the goal of the Paris Agreement, which is to prevent the world’s average temperature from rising 1.5°C. Analysts say that all countries would have to phase out unabated coal plants by 2040 for the world to have any chance of coming close to that goal.

Will pledges to stop financing coal-fired power plants abroad make an impact?

Yes, the G20 countries’ pledge to end public financing for new coal-fired power plants abroad by the end of the year is significant. Between 2018 and 2020, G20 countries provided $8 billion in public finance per year for coal projects overseas, according to a report [PDF] by Friends of the Earth U.S. and Oil Change International. (During COP26, another pledge was signed: twenty-five countries and five financial institutions committed to stop public financing for most fossil fuel projects by the end of 2022.)

But experts say there would be a bigger impact if the world’s largest economies made other coal-related commitments:

Phasing out coal domestically. The G20 pledge focuses on new plants abroad, not at home. China, the largest public financier of coal-fired power plants abroad, produces nearly ten times more coal power domestically than would be produced by plants it has funded abroad.

Ruling out exceptions. The pledges only include projects abroad that are unabated, or do not capture their carbon emissions. That means some kinds of fossil fuel projects will still be allowed. 

Limiting financing from both public and private sectors. The G20’s pledge only applies to financing from the public sector, such as funding from government-run banks and public financial institutions. It does not mention the private sector, which funds a majority of coal projects abroad, according to a 2021 report [PDF] by researchers at Boston University. The researchers found that although China is the largest public financier, private investors and commercial banks in Japan and Western countries also contribute significant financing. As of January 2021, U.S. investors collectively accounted for 58 percent of institutional investments in the global coal industry.