Exiting coal without contributing to the decarbonization of the planet is possible, and that is exactly what ENGIE does since it committed to reducing its coal business in 2015. To quicky phase-out coal from its portfolio, the French utility is replacing the problem with another: it has largely resorted to selling its coal assets and converting them to other polluting energy sources such as wood and fossil gas, instead of closing them down. Not only is this strategy not aligned with a 1.5\u00b0C trajectory, but it also lacks transparency and risks endangering ecosystems and local communities.\u00a0\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n<\/div><\/div><\/div> To limit global warming, the global coal power fleet must be shut down by 2040 at the latest<\/a><\/span>. Yet many companies, such as ENGIE, are opting for an easier way to decarbonize their portfolios: selling their coal plants. This strategy has many advantages for them: they seem to be taking decisive and swift action for the climate, while avoiding responsibility for the environmental damage caused by years of coal operations and the reconversion of workers.<\/p>\n A growing number of vocal investors and financial institutions are publicly opposing divestment as an ineffective climate strategy and promoting instead engagement as the only way to achieve change in the real world. Yet, no criticism has been heard from and no action seems to have been taken by investors regarding ENGIE \u2019s dirty coal phase-out.<\/p>\n ENGIE \u00a0has sold 16 coal plants since COP21, accounting for 60% of its total coal capacity reduction (1). To name a few, ENGIE sold four coal power plants in Germany and the Netherlands to Riverstone Holdings, a dubious private equity firm<\/a><\/span> that continues to operate them. More recently, ENGIE sold its remaining two coal plants in Brazil, Jorge Lacerda<\/a><\/span> and Pampa Sul<\/a><\/span> plants. ENGIE is currently seeking to sell its Safi coal plant<\/a><\/span> in Morocco.<\/p>\n<\/div> Selling is the main, but not the only one strategy used by ENGIE to quickly remove coal from its portfolio. The company has turned to solid biomass despite growing warnings from scientists and NGOs<\/a><\/span> that it is not a carbon-neutral fuel. In Chile, ENGIE is working on the conversion to wood of the Andina and Hornitos coal plants, which should be completed by the end of 2024 (2).<\/p>\n Also in Chile, ENGIE will convert the IEM coal plant to fossil gas<\/a><\/span>. This conversion from coal to gas is just the tip of the iceberg of a corporate climate plan that relies excessively on fossil gas under the false pretext that it is a transition fuel (3).<\/a><\/p>\n<\/div> ENGIE confirmed to investors its conversion plans in Chile more than a year ago<\/a><\/span>. However, the company has not bothered to explain how solid biomass and fossil gas for the three plants will be supplied.<\/p>\n Chile Sustentable and Biofuelwatch recently published a briefing<\/a><\/span> analyzing and questioning the conversion of the Andina and Hornitos coal plants in Chile to wood. While ENGIE states that both plants will use wood pellets or wood chips, the NGOs briefing concludes that neither option is suitable. Due to the large amount of wood needed to run the plants, the supply of wood pellets or wood chips would cause significant damage to forests and ecosystems – either in Chile or in other countries if they were imported – while creating conflict in local communities and stress in local markets (4).<\/p>\n ENGIE also needs to clarify the origin of the fossil gas it will use for the third coal plant being converted in Chile, the IEM plant, as it risks being shale gas (5) in the form of LNG from the United States (6) or transported by pipeline from Vaca Muerta in Argentina.<\/p>\n <\/a><\/p>\n<\/div> These issues highlight some of the inconsistencies in ENGIE’s transition plans. Investors engaging with ENGIE should increase pressure, as the company has clearly failed to deliver a credible and responsible exit from coal. Investors should insist that the company abandon its remaining sale and conversion plans and opt for closure. Furthermore, as ENGIE’s fake coal exit is just one element of <\/strong>an inadequate corporate climate plan<\/strong><\/a><\/span>, investors should demand more transparency and ambition in the utility’s climate plan (7). Specially, demand that it does not rely on fossil gas by falsely claiming that it is a bridge fuel. <\/strong><\/p>\n<\/div>A \u201ctoo good to be true\u201d coal exit<\/h1><\/span>
From dirty coal to dirty biomass and gas<\/h1><\/span>
Biomass and gas conversions loaded with opacity<\/h1><\/span>