Coal phase-out



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. The health and environmental benefits of coal phase-out, such as limiting respiratory diseases and biodiversity loss, are greater than the cost. 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. The International Energy Agency estimates that coal is responsible for over 30% of the global average temperature increase above pre-industrial levels. Some countries in the Powering Past Coal Alliance have already stopped.
China and India burn a lot of coal. But the only significant funding for new plants is for coal power in China. 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. 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, so economists have suggested a Coasean bargain in which already developed countries help finance the coal phase-out of still developing countries.
The health and environmental benefits of getting rid of coal quickly exceed the costs, but some countries still favor coal, and there is much disagreement about how quickly it should be phased out. However many countries, such as the Powering Past Coal Alliance, have already or are transitioned away from coal; the largest transition announced so far being Germany, which is due to shut down its last coal-fired power station between 2035 and 2038. Germany is using reverse auctions to compensate coal-fired power plants for shutting down ahead of schedule. Some countries are making a just transition and pensioning off coal miners early. 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. 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
In 2022–2023 coal use rose. The IEA pointed out high gas prices due to the Russian invasion of Ukraine and extreme weather events as contributors to the increase. The G7 countries have agreed to close all coal power plants by 2030–2035 unless their greenhouse gases are captured.

Peak coal

Switch to cleaner fuels and lower carbon electricity generation

Coal-fired generation puts out about twice as much carbon dioxide—around a tonne for every megawatt hour generated—as electricity generated by burning natural gas at 500 kg of greenhouse gas per megawatt hour. In addition to generating electricity, natural gas is also popular in some countries for heating. One major intergovernmental organisation committed in 2021 to end support for coal-fired power stations within the year.
The use of coal in the United Kingdom declined as a result of the development of North Sea oil and the subsequent Dash for Gas during the 1990s. In Canada some coal power plants, such as the Hearn Generating Station, switched from coal to natural gas. In 2022, coal power in the United States provided less than a fifth of its electricity, down from almost half in 2008, due to the plentiful supplies of low cost natural gas obtained by hydraulic fracturing of tight shale formations.

Coal phase-out by country

CountryPhase-out yearNotes
Australiano|not yet committed

Africa

South Africa

The country is attempting a just transition away from coal in South Africa. Three coal power plants are due to be decommissioned in 2030. Academics said in 2024 that workers in the south-west part of Mpumalanga need new jobs.

Americas

Canada

In 2014, Ontario was the first jurisdiction in North America to eliminate coal in electricity generation. The process of phasing out coal-fired power began in 2003. At that time, Ontario had a power plant capacity of 7,500 megawatts on the grid, which corresponded to a quarter of its total capacity. In 2016, the Government of Canada announced plans to phase out coal-fired electricity generation by 2030. Alberta followed up in 2024 with phasing out its last coal power plant in Genesee., only three provinces burned coal to generate electricity: Nova Scotia, New Brunswick, and Saskatchewan. Canada aims to generate 90% of its electricity from non-emitting sources by 2030. Ontario's electricity supply is now based primarily on nuclear energy and hydropower.

United States

In the USA, coal-fired power generation causes external costs of around $350 billion per year. The health damage resulting from coal-fired power generation is estimated to be 0.8 to 5.6 times the total economic benefit to the United States.
The Obama administration developed regulatory measures aimed at reducing CO2 emissions from coal combustion by 30 per cent overall by 2030, compared with 2005 levels. This would have meant the closure of hundreds of coal-fired power plants and the rapid expansion of gas-fired power plants, wind farms and solar power plants.

Asia

There is a plan to buy up coal-fired power plants in Asia in a cooperation between the private sector and development banks. Risk mitigation measures are supposed to make lower margins acceptable for investors. This will allow the capital costs to be recouped in a shorter period and the power plants to be shut down more quickly.

China

Coal is China's most important source of energy. In 2015, it accounted for 64.4% of China's total energy consumption, although this share has been declining for years as coal consumption has been growing less rapidly than that of other energy sources. In the electricity sector, coal still accounted for 83% in 2007, but by 2015, this share had fallen to 72% with the growing share of renewable energies and nuclear energy. In 2013, coal consumption in China also peaked in absolute terms, after which consumption fell. Since this decline in coal consumption was achieved despite economic growth of 7.3% and 6.9%, respectively, thereby decoupling growth from coal consumption, some researchers regard this decline as a permanent trend reversal in Chinese energy policy and an important step in global climate protection efforts.
An important motive for reducing the share of coal in China's energy balance is the significant health consequences of coal combustion. In 2013, a total of approximately 1.6 million people died in China from air pollution, a large proportion of which was caused by energy supply. This was particularly evident after the 'pollution shock' in 2013 and 2014, when hundreds of millions of Chinese suffered from severe smog and fine dust pollution, making air pollution a major economic and social issue in the country. Efforts were intensified and a series of measures were introduced to move towards a more environmentally friendly energy system. Among other things, a plan was adopted to reduce particulate matter and smog pollution; in addition, a ban on the construction of new coal-fired power plants was imposed in particularly polluted regions, and the introduction of the Euro 5 standard in the transport sector was set for 2015 in order to remove vehicles with particularly high air pollution from the roads. In 2014, 12 of 34 Chinese provinces wanted to reduce their coal consumption. While coal consumption had increased by 3.75% in 2013, it fell by the same percentage in 2015.The Euro 5 standard came into force nationwide in 2017. By 2030, the share of coal in total energy consumption is to fall from 66.6% to below 50%, while the share of renewable energies is to increase from just under 10% in 2012 to 25% in 2030. Achieving these targets would not only reduce environmental pollution but also significantly reduce greenhouse gas emissions. In northern China in particular, a significant proportion of emissions from coal combustion also come from coal heating, which is still widely used there.
As of 2020, over half of the world's coal-generated electricity was produced in China. In 2020 alone, China added 38 gigawatts of coal-fired power generation, over three times what the rest of the world built that year.
China is confident of achieving a rich zero carbon economy by 2050. In 2021, the government ordered all coal mines to operate at full capacity at all times, including holidays; approved new mines, and eliminated restrictions on coal imports. In November 2021, China reached record coal production levels, breaking the previous historic record, established in October 2021.
China's exceedingly high energy demand pushed the demand for relatively cheap coal-fired power. Serious air quality deterioration resulted from the massive use of coal and many Chinese cities suffered severe smog events.
As a consequence, the region of Beijing decided to phase out all its coal-fired power generation by the end of 2015, a plan which it implemented with the closure of the Huaneng Beijing Thermal Power Plant in 2017. Despite this, however, the city imports most of its electricity from other coal-burning areas of the country, and the Huaneng plant has been temporarily reopened several times.
General Secretary of the Chinese Communist Party Xi Jinping announced in a video message at the UN General Assembly in September 2021 that China would no longer build coal-fired power plants abroad.
In 2024 the International Energy Agency said: "Reforms should accompany coal plants in their transition from energy suppliers to providers of flexibility services. While coal plants will continue to play a key role in providing grid stability and flexibility, their contribution in terms of electricity generation will have to decline. This shift requires targeted policies that support coal plants in becoming providers of system services, such as frequency regulation and ramping support, and seasonal flexibility, to ensure a smooth transition towards a more flexible and low-carbon power system."