Members of the 30-strong UN-convened Net-Zero Asset Owner Alliance have published their position on thermal coal, calling for the cancellation of all new thermal coal projects, a phase-out of all unabated existing coal-fired electricity generation and a cessation of the financing, development and planning of further thermal coal power plants.
In its Thermal Coal Position, the Alliance says all companies in their portfolios should have a firm understanding of the wider implications for the activities, operations and projects that they are engaged in. Companies should develop their individual transition pathways towards decarbonization, guided by the following principles:
- Other than coal plants currently under active construction, no further thermal coal power plants should be financed, insured, built, developed or planned;
- There should be an immediate cancellation of all new thermal coal projects, including thermal coal plant, coal mines and related infrastructure (i.e. supplying products or services to thermal coal-based projects or business models) that are in pre-construction phase;
- There should be a phase-out of all unabated existing coal-fired electricity generation in accordance with 1.5°C pathways, as provided by the IPCC and referenced by the International Energy Agency (IEA) and Powering Past Coal Alliance (PPCA).
“Participation in activities and projects that are not aligned with these principles is incongruent with our net-zero goals and the aspirations we have in respect to the different decarbonization strategies of the companies we invest in,” the Alliance says in the Thermal Coal Position.
Alliance members will primarily aim to support companies adopt transition plans in line with members’ position through engagement. Members are able to employ an escalation strategy that may over time result in divestment if the company remains irresponsive to its demands.
Governments must focus on incentivising clean energy technologies and meeting energy needs in both developed and emerging economies with low-carbon options while supporting workers and communities impacted by the low-carbon energy transition.
“Together, investors, governments and companies all have a responsibility to act on global emissions reduction. Additional thermal coal developments for energy generation are ultimately irreconcilable with the exercise of this responsibility,” the Alliance says.