【Report】Urgewald releases the updated 2021 Global Coal Exit List

German NGO Urgewald released the 2021 Global Coal Exit List (GCEL) prior to the 26th Conference of the Parties to the United Nations Climate Change Framework Convention (COP26), which will start on October 31 in Glasgow, UK.

This database has been updated annually since 2017, providing detailed data on 1,030 companies and around 1,800 subsidiaries operating in the thermal coal value chain. It is the world’s most comprehensive public database on the coal industry, and is used as one of the major sources of information for institutional investors around the world to understand the risks of climate change in their portfolios.。

Following is a summary of the GCEL adapted from Urgewald’s media briefing:

49% of the industry still on expansion course
Since the Paris Climate Agreement was signed, the world’s installed coal-fired capacity has grown by 157 GW, an amount equal to the operating coal plant fleets of Germany, Russia, Japan and Turkey combined. While many new coal projects were scrapped in 2021, up to 480 GW of new coal-fired power capacity and 1,800 million tons per annum of new thermal coal mining capacity are still in the pipeline. If realized, these projects would increase the world’s coal power capacity by 23% and thermal coal production by 27%.
Out of the 1,030 companies listed on the 2021 GCEL, 503 companies are still planning to develop new coal power plants, new coal mines or new coal transport infrastructure.

Less than 5% of the coal industry has announced exit dates
Although the IPCC report warned that the world needs to speed up coal phase-out by 2030 in order to avoid overshooting the 1.5°C limit set out in the Paris Climate Agreement, only 49 of the 1,030 companies on the GCEL have announced a coal exit date. Additionally, the goals of one-third of companies are too late to achieve 1.5°C target, including major Japanese trading companies Marubeni (aiming for zero emissions by 2050) and Sumitomo Corporation (aiming to end coal-fired power generation in the latter half of the 2040s). Kimiko Hirata of NGO Kiko Network commented in Urgewald’s media release, “These exit dates are completely unacceptable as they are not compatible with the 1.5°C goal. And both companies are still constructing new coal power plants in Vietnam and Indonesia. In view of the climate emergency, this is really irresponsible.”
Only 32 companies on the GCEL have announced coal exit dates that could be considered Paris-aligned. Out of these 32 companies, 13 are from North America, 12 from Western Europe, 1 from Israel, 1 from Australia, 1 from New Zealand, 1 from Chile, 1 from the Philippines and 2 from China. No Japanese companies are included.

Selling, but not closing
In addition to inconsistent coal exit dates, the way in which companies are trying to achieve their exit is also a problem. Some companies will be exiting coal by selling their coal assets to other companies, simply passing on those assets instead of closing power plants and mines. Through this, those coal power plants and mines will continue operating, and so even though a company’s involvement in the coal business will be reduced, it will not be a substantial contribution to phasing out coal.

Suing against coal closures
As more and more countries adopt coal phase-out legislation and stricter environmental regulations, an increasing number of companies are suing governments before investor-state dispute settlement (ISDS) tribunals in order to defend their coal assets. Through such actions, companies could undermine democracy by bypassing national court rulings and making it harder than ever for governments to enforce progressive environmental legislation or to phase out coal assets.

Exchanging one fossil fuel for another
Although many countries are closing existing coal plants or cancelling new coal power projects, a significant proportion of this capacity is being replaced not by renewables, but by gas, another fossil fuel. As one example, in the US about a third of the coal plants retired between 2011 and 2019 were converted to gas plants, and similar outcomes can be seen in Asian countries. There are major concerns regarding this, as methane – a main component of fossil gas – has 86 times the warming power of CO2 over the first 20 years after it is emitted.

Are financial institutions up to the challenge?
Even though a swift coal phase-out is required, many financial institutions have not announced their coal exit policy or continue to provide financial support to companies that are still promoting new coal-related projects. Currently, many financial institutions do not have a policy to exclude coal from their investments and loan targets, and the ones that do often contain significant loopholes.

According to Urgewald’s analysis, 75% of the new coal power capacity pipeline is in 4 countries – China, India, Indonesia and Vietnam. With around 30 GW of new coal power plants under construction or development, Indonesia has the world’s 3rd largest coal plant pipeline, with Japanese companies deeply involved in multiple plans.
In addition, Vietnam is building coal-fired power plants more rapidly than any other country, and the new draft of Vietnam’s 8th Power Development Plan (PDP8) sets a target of 40 GW of coal-fired power generation capacity by 2030 and 50 GW by 2035. Companies from eight countries outside Vietnam are responsible for 64% of Vietnam’s coal-fired power plant projects. The Korea Electric Power Corporation (KEPCO) of South Korea, which is the most involved in the project, is still planning the Nghi Son 2 and Vung Ang 2 coal-fired power plants despite its announcement of a total ban on investment in foreign coal-fired power projects in 2020. These two projects are attracting international attention because of the participation of Japanese financial institutions and Japanese companies.

Japanese companies listed on GCEL2021 (8 companies with significant coal capacities)

Company	Capacity of coal power plants (MW)	Coal-fired power projects outside Japan
JERA	10547	Indonesia
J-POWER	9877	Indonesia
Tohoku Electric Power	5526	Vietnam
Kyushu Electric Power	3603
Sumitomo Corp	3031	Vietnam, Indonesia
Hokuriku Electric Power	2900
Chugoku Electric Power	2890	Vietnam
Marubeni Corp	2700	Vietnam, Indonesia

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