G7 coal exit goal puts focus on Germany, Japan and US
A G7 countries commitment to phase out "unabated coal power generation" by 2035 focuses attention on Germany, Japan and the US for charting a concrete coal-exit path, but provides some flexibility on timelines.
The G7 commitment does not mark a departure from the previous course and provides a caveat by stating the unabated coal exit will take place by 2035or "in a timeline consistent with keeping a limit of 1.5°C temperature rise within reach, in line with countries' net-zero pathways". The G7 countries are Italy — this year's host — Canada, France, Germany, Japan, the UK and the US. The EU is a non-enumerated member.
The announcement calls for accelerating "efforts towards the phase-out of unabated coal power generation", but does not suggest policy action. It calls for reducing "as much as possible", providing room for manoeuvre to Germany, Japan and the US. Coal exports are not mentioned in the communique. Canada and the US are net coal exporters.
France, which predominantly uses nuclear power in its generation mix is already scheduled to close its two remaining coal plants by the end of this year. The UK will shut its last coal-fired plant Ratcliffe in September.
Italy has ended its emergency "coal maximisation plan" and has been less reliant on coal-fired generation, except in Sardinia. The country has 6GW of installed coal-fired power capacity, with state-controlled utility Enel operating 4.7GW of this. The operator said it wanted to shut all its coal-fired plants by 2027.
Canada announced a coal exit by 2030 in 2016 and currently has 4.7GW of operational coal-fired capacity. In 2021-23, the country imported an average of 5.7mn t of coal each year, mainly from the US.
Germany
Germany has a legal obligation to shut down all its coal plants by 2038, but the country's nuclear fleet retirement in 2023, coupled with LNG shortages after Russia's invasion of Ukraine, led to an increase in coal use.
Germany pushed for an informal target to phase out coal by 2030, but the grid regulator Bnetza's timeline still anticipates the last units going offline in 2038.
The G7 agreement puts into questions how the country will treat its current reliance on coal as a backup fuel. The grid regulator requires "systematically relevant" coal plants to remain available as emergency power sources until the end of March 2031.
Germany generated 9.5TWh of electricity from hard-coal fired generation so far this year, according to European grid operator association Entso-E. Extending the current rate of generation, Germany's theoretical coal burn could reach about 8.8mn t.
Japan
Japan's operational coal capacity has increased since 2022, with over 3GW of new units connected to the grid, according to the latest analysis by Global Energy Monitor (GEM).
Less than 5pc of Japan's operational coal fleet has a planned retirement year, and these comprise the oldest and least efficient plants. Coal capacity built in the last decade, following the Fukushima disaster, is unlikely to receive a retirement date without a country-wide policy that calls for a coal exit.
Returning nuclear fleet capacity is curtailing any additional coal-fired generation in Japan, but it will have to build equivalent capacity to replace its 53GW of coal generation. And, according to IEA figures, Japan will only boost renewables up to 24pc until 2030.
The US
The US operates the third-largest coal-power generation fleet in the world, with 212GW operational capacity.
Only 37pc of this capacity has a known retirement date before 2031. After 2031, the US will have to retire coal-fired capacity at a rate of 33GW/yr for four years to be able to meet the 2035 phase-out deadline.
Related news posts
G20 seeks to ease climate funding to cities
G20 seeks to ease climate funding to cities
Sao Paulo, 21 May (Argus) — Climate funds need to make it easier for countries and especially individual cities to access resources, a G20 working group said in Brazil today. Experts, representatives of G20 member countries and financial organizations gathered in Rio de Janeiro to discuss ways to leverage financing to face extreme climate events. The two-day event was hosted by the G20 — which Brazil presides over this year — the country's finance minister, global network Finance in Common (FiCS) and the Brazilian NGO climate and society institute (iCS). Delegates agreed that climate funds — especially the green climate fund, the adaptation fund, the global environment facility fund and the special climate change fund, which will hold a combined $30bn in the next five years — need to allow better access for cities to combat climate change. That means easing bureaucracies and identifying bottlenecks, according to Ivan Oliveira, deputy secretary for sustainable development at Brazil's finance ministry. Guaranteeing funding for climate projects can take many years, Oliveira said. But "climate change requires climate funds to deliver quickly," he added. FiCS' chairman Remy Rioux — who is also the chief executive of France's development agency — pointed to the different accreditation processes for different climate funds as hindering climate financing. A single accreditation process would ease access, he added. "We will do our best to find innovative financial solutions for climate resilience and resilient infrastructure," he said. Climate projects should also be able to tap into multiple funds more easily, Oliveira said. Rioux also called for the creation of an international guarantee fund to back individual national banks should they need resources to combat climate change. Additionally, local governments should be able to deal directly with climate funds, instead of having to work through the federal government, he added. The director of Brazil's development bank Nelson Barbosa also noted that a lack of financial guarantees and exchange rate volatility hinder banks and country's ability to access climate funds. The G20 working group will present a report with suggestions to address these issues in July, in Belem — the capital of northern Para state — Oliveira said. The city will also host Cop30 in 2025. Rio Grande do Sul Brazil's federal government is discussing a line of credit to southern Rio Grande do Sul state, which has been hit by heavy rainfall and historic flooding since late April, Barbosa said. "A special line of credit will be needed for reconstruction," he said. "We already have lines for adaptation and mitigation and now we have to think about lines to take care of losses and damages. Reality has arrived, and development banks have to deal with the effects of the climate." But he did not give further specifics on the measures. On Monday, President Luiz Inacio Lula da Silva called for the creation of an international fund backed by "people that pollute the planet" to aid Rio Grande do Sul. He has in the past called on rich nations to fund global efforts to mitigate climate change. Rains in Rio Grande do Sul have left 161 people dead, 85 missing and over 581,600 people displaced, according to the state's civil defense. Rebuilding the state will cost over R19bn ($3.7bn), according to the state government. By Lucas Parolin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UK will not bank ‘surplus’ from third carbon budget
UK will not bank ‘surplus’ from third carbon budget
London, 21 May (Argus) — The UK overachieved on emissions reduction targets under its third carbon budget, but it will not carry forward the emissions ‘surplus' to the next carbon budget, the government said today. A carbon budget is a cap on emissions over a certain period. The UK's third carbon budget covered 2018-22, while the fourth carbon budget covers 2023-27. UK emissions over 2018-22 stood at 2.15bn t/CO2 equivalent (CO2e) — 319mn t/CO2e below the third carbon budget cap. Emissions on average over the period were 47pc lower than emissions in 1990 — the baseline year. "By the end of the period in 2022, UK net greenhouse gas emissions were 50pc lower than base year emissions", the government said. The country is also on track to overachieve during the fourth carbon budget, it added. "The government decision not to carry forward the surplus keeps the UK within its ambitious target with no additional headroom to emit greenhouse gases over the coming years", the government said. The UK has made progress on cutting emissions, including phasing out coal. But the surplus was largely down to external factors, including the Covid-19 pandemic, the independent advisory Climate Change Committee (CCC) found previously. The UK has a legally-binding target to reach net zero emissions by 2050. It also has targets to cut emissions by 68pc by 2030 and 77pc by 2035, both from the 1990 base level. The CCC warned in February that the government should not carry forward any surplus from the third carbon budget, to avoid weakening action on decarbonisation. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
States have duty to cut GHGs, protect oceans: Court
States have duty to cut GHGs, protect oceans: Court
London, 21 May (Argus) — States that are party to the UN Convention on the Law of the Sea (Unclos) have an obligation to reduce their greenhouse gas (GHG) emissions to protect oceans, the International Tribunal for the Law of the Sea said today in an advisory opinion. The opinion was requested by the Commission of Small Island States on Climate Change and International Law in December 2022. The tribunal found unanimously that states party to Unclos "have the specific obligation to take all measures necessary to ensure that anthropogenic GHG emissions under their jurisdiction or control do not cause damage by pollution to other states and their environment". The group of small island states welcomed the outcome, and said they saw it as a victory. Small island states are extremely vulnerable to the effects of climate change. Unclos has 169 parties — including the EU, China and almost all G20 nations. But the US — the second-highest emitter — is not a party to the convention. Countries must submit new national climate plans — known as nationally determined contributions (NDCs) — by early next year to UN climate body the UNFCCC. "Today's outcome will be instrumental to push the countries most responsible for the climate crisis to ramp up their ambition", lawyer at environmental law firm ClientEarth Lea Main-Klingst said. "And because business must follow where governments lead, companies and financial institutions are going to feel a knock-on effect from this development, too", Main-Klingst added. Similar cases, focused on climate change, are awaiting an advisory opinion or ruling from various international courts. The Inter-American Court is hearing arguments on how climate change is affecting human rights this month, while the International Court of Justice will consider a similar question later this year. The European Court of Human Rights ruled last month that signatories to the European Convention on Human Rights (ECHR) must protect their citizens from the "serious adverse effects of climate change", in a landmark ruling for climate litigation. The ocean is the world's biggest carbon sink, capturing emissions and much of the excess heat generated by GHGs. Sea surface temperatures have hit record highs in recent months, while the global temperature was in 2023 on average 1.45°C higher than pre-industrial levels , the World Meteorological Organisation said earlier this year. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia opens up ACCU method development
Australia opens up ACCU method development
Sydney, 21 May (Argus) — The Australian federal government has officially begun to accept proposals for the development of new carbon crediting project methods outside of government, as it looks to boost supply and innovation. Individuals, groups or organisations will now be able to submit method proposals for carbon abatement, which would generate Australian Carbon Credit Units (ACCUs) if approved and developed. Climate change and energy minister Chris Bowen made the announcement on 21 May during lobby group Carbon Market Institute (CMI)'s Carbon Farming Industry Forum in Cairns, Queensland. "The proponent-led model aims to encourage more innovative approaches to carbon abatement and will help to boost the supply of ACCUs to support our net zero ambition," Bowen said. The development of new ACCU framework methods has been until now led by the federal government, but this has proved "too slow," CMI's chief executive John Connor said today. None of the five new method priorities for 2022, announced in October 2021, have yet been finalised, Connor said. Opening up the method development process was one of the 16 recommendations made by an independent panel led by the country's former chief scientist Ian Chubb which reviewed the ACCU scheme in 2022-23. Proponents will need to follow a five-stage process, starting with the submission of new ideas for methods or changes to existing methods followed by an expression of interest (EOI) to the Emission Reduction Assurance Committee (Erac), the statutory body responsible for ensuring the integrity of Australia's carbon crediting framework. The Erac will accept EOIs in rounds, with the current one open until 12 July. The Erac will use triage criteria to assess EOIs, including scale of abatement, proposal complexity and whether it would incentivise innovation. The committee will publish its assessment of EOIs on a so-called method development tracker, with successful proponents moving on to the development phase. Finally, the Erac will publish draft methods for public consultation before recommending them to the climate change and energy minister. The proponent-led model announcement comes at a time of increasing concern about future ACCU supply, as the development of new methods or method variations by the Department of Climate Change, Energy, the Environment and Water (DCCEEW) has been taking longer than originally expected — partly because it has been also focusing on implementing the recommendations from the Chubb review. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more