Mar 16, 2023
To ensure a 1.5˚C future, we must transition away from coal. But, in 2022, coal emissions grew by 243 Mt to an all-time high of 15.5 Gt, increasing faster than the annual average growth over the past decade. Why are we not on track? Several complex challenges hinder the pace of the transition so far. In developing countries, there are two major challenges: handling of stranded coal assets and ensuring a just transition for people and communities.
To provide some clarity, particularly on the topic of stranded assets, the Climate Investment Funds’ (CIF) Accelerating Coal Transition investment program convened the ‘ACT now! Technical and financial approaches for coal transition’ event on March 30, 2023 as part of the Berlin Energy Transition Dialogue 2023. The event was co-hosted by CIF, the Federal Government of Germany (BMZ) and the Powering Past Coal Alliance (PPCA) and also marked the release of the ‘ReACT: A Simplified Guide to Repurpose Coal Assets’ report.
The report provides an overview of relevant technical and financial considerations for repurposing coal assets with climate smart alternatives and inform decision makers’ policy choices. The launch event brought together key stakeholders from the private and public sectors, donor, and recipient countries, think tanks, among others to share their relevant experiences and insights on the topic. Confirmed speakers include Mafalda Duarte, CIF CEO; Germany’s Juergen Zettler, Director General at BMZ; South Africa’s Rudi Dicks, Head of the Presidency’s Project Management Office; Indonesia’s Masyita Crystallin, Special Advisor to the Minister at the Ministry of Finance; World Bank ESMAP’s Lead Energy Specialist Chandrasekhar Govindarajalu; International Energy Agency’s Chief Energy Economist Tim Gould; and Yatin Premchand, Managing Director of Black & Veatch.
Despite challenges, there is global momentum to reduce dependency on coal, notably within the framework of the Climate Investment Funds’ (CIF) USD 2.5 billion Accelerating Coal Transition (ACT) Investment program. ACT is the world’s first multilateral coal transition mechanism that offers a holistic financial toolkit to facilitate coal transition in key developing countries.
The ‘ACT now! Technical and financial approaches for coal transition’ event provided an enhanced understanding of potential technical solutions for stranded assets and discuss the strategic deployment of limited concessional finance and multilateral partnerships to better support coal dependent economies as they meet their climate ambitions.
