624 companies still have thermal coal expansion plans, and only seven coal power companies plan to phase-out coal by 2030 in the OECD and 2040 globally by making a full switch to renewables. These are the striking lessons of the latest version of the Global Coal Exit List (GCEL) published by urgewald in October (1). Financial institutions’ support to coal companies going in the wrong direction is significant because of the lack of any coal policy, or loopholes in such policies. Reclaim Finance calls on financial institutions to use the GCEL to build robust coal policies to stop coal development and foster a just transition out of the thermal coal sector.
Despite its impact on climate, the coal sector is still growing (2). Thermal coal production is at an unprecedented high, and the global coal power fleet grew by 30 GW over the past year alone. Overall, 216 GW of coal power capacity have been added globally since the Paris Agreement was signed. This represents more than the US’ entire current coal fleet (3).
Worst, 40% of companies listed on the GCEL are coal developers and plan to develop new thermal coal mines, coal plants or coal transport infrastructure. Among these, 376 coal mine developers still plan 2,636 million tons of thermal coal production annually, almost 35% of the world’s current thermal coal production. This list also includes 286 coal plant developers who still plan 579 GW, equal to 27% of the world’s current coal power capacity.
Financial institutions should have stopped supporting such companies years ago but so far, only 88 top financial institutions – less than 23% – have adopted a coal policy including an explicit restriction for coal developers (4). And even among the ones claiming to exclude all coal developers, important loopholes remain (5).
Coal is booming in India, and so is air pollution
India is the top coal developer country globally with 947 million tons of additional thermal coal production per year planned (Mtpa), ahead of China (873 Mtpa). When it comes to coal power, while 68% of the world’s coal plant pipeline is in China, India accounts for half the coal plants planned elsewhere.
Coal India is both the world’s largest thermal coal producer and the largest coal mine developer. Despite the fact that 83 of the world’s 100 most polluted cities are located in India, Coal India still plans to develop 90 new coal mines and mine extensions (6). The company was financed in the past few years by Indian banks, starting with State Bank of India, which still has not adopted any coal policy (7). Most of the main investors supporting Coal India are from India, Japan, South Korea and the US. Almost all of them have not adopted a coal policy either (8). And the very few who do, such as Blackrock, have loopholes big enough to allow even pure play coal mining companies such as Coal India to slip through the net.
Air pollution from fossil fuels is responsible for up to 2.18 million excess deaths per year in India, but NTPC and Adani are still planning 18 GW and 16 GW of additional coal power capacity (9). Most of the main banks that have supported these companies since 2021 are from India, except SMBC from Japan and Jefferies from the US (10). None of them has adopted a coal policy, except for SMBC, but its exclusion of coal companies only applies to new clients. Investor trust in Adani has nevertheless eroded recently, as shown by the company’s recent decision to cancel a US$1.2 billion bond due to lack of investor interest (11). The French bank Société Générale was among those planning to issue this bond (12), thanks to the loopholes in its coal policy (13).
Financial institutions must accelerate the global coal phase-out
The latest data shows that
of companies listed in the GCEL do not plan to exit the thermal coal sector.
124 companies have announced a coal phase-out date, but only 66 have deadlines aligned with climate science: a global thermal coal phase-out by 2030 in OECD countries and 2040 globally. Only seven coal power companies have the right deadlines and plan to fully replace their fossil power fleet with renewables, instead of replacing their coal plants with gas plants. This is dramatically insufficient since 21 GW of coal power capacity have been retired in 2023 while 126 GW must be retired annually in the next 17 years to reach a global full thermal coal exit in 2040.
Financial institutions have a key role to play to require their clients to adopt robust coal phase-out plans. But only 47 top financial institutions do so, with 26 who condition their financial support to such requirement. Such coal transition plans must also be made public to avoid cases where private and public information contradict each other. This was for instance the case of French bank Crédit Agricole claiming to be confident in First Energy’s capacity to accelerate its coal exit calendar thanks to private information sent by the company, while in parallel the US utility’s CEO announced a delay in its coal phase-out plan to 2040 or even 2050 potentially.
Banks have also started to integrate exceptions in their coal policies for the provision of financing for accelerated coal phase-outs, with seven international banks including HSBC and Standard Chartered mentioning this explicitly (14). This trend must now accelerate since strong coal policies should promote coal phaseouts.
While addressing the climate and health crisis has never been more urgent, it is high time for financial institutions to get serious on coal and drive the global coal exit we need. Reclaim Finance strongly encourages them to use the Global Coal Exit List as a powerful tool to implement robust coal policies by ending any financial support to all coal developers and by conditioning their financing to the adoption of comprehensive corporate coal phase-out plans.
