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Coal addicts: G20 governments have doubled support for coal power plants, report finds

G20 governments more than doubled their support for coal power plants between 2014 and 2017, with their overall backing for coal power currently totalling $64bn a year

The governments of G20 nations more than doubled their financial support for coal power plants between 2014 and 2017, with annual spending rising from $17bn to $47bn, according to a new report published in advance of the G20 Summit in Japan later this week.

Current total investment in coal power by G20 governments amounts to at least $64bn a year, the report finds, with almost three-quarters of this funding going to coal-fired power production - the single biggest contributor to the rise in CO2 emissions that occurred through 2018.

The surge in state backing comes despite the fact the G20 has publicly pledged to phase out fossil fuel subsidies every year since 2009. It also works against the trend of declining overall investment in coal, with total investments in new coal planets falling by 75 per cent between 2015 and 2018.

Titled G20 coal subsidies: Tracking government support to a fading industry, the new study draws on research from the Overseas Development Institute (ODI), Oil Change International (OCI), the International Institute for Sustainable Development (IISD), and the Natural Resources Defense Council (NRDC), which tracked for the first time G20 governments' subsidies to coal production and consumption.

It examines G20 government support and calculates the average amount spent across 2016 and 2017, the most recent years with available data, before comparing outcomes with a previous analysis which looked at the same figures for 2013 and 2014.

"It has now been 10 years since the G20 committed to phasing out subsidies to fossil fuels, yet astonishingly some governments are actually increasing the amount they give to coal power plants," said lead author Ipek Gençsü, a Research Fellow at the ODI.

"Momentum is growing around the world for governments to take urgent action to tackle the climate crisis. Ending subsidies to coal would bring environmental, social and economic benefits to all and help set a level playing field for clean energy."

This year's G20 host Japan remains one of the largest providers of support for the coal industry, including spending at least $5bn per year on coal projects overseas. The funding comes despite Prime Minister Shinzo Abe's calls for other governments to step up their action on climate change.

"Other G20 governments may struggle to take Japan's rhetoric on climate change seriously, as this year's G20 host government continues to pour billions of dollars into propping up coal in Japan and around the world," said Han Chen, manager of international energy policy at NRDC.

"If Prime Minister Abe is serious about dealing with climate change, he should lead by example and end Japan's government-backed finance for coal."

The report identifies three main sources for the current $64bn of annual support provided by G20 governments to coal power: $28bn is provided through governments' public finance institutions such as bilateral development banks and export credit agencies; $15bn a year comes through fiscal support in budget alloactions and tax exemptions; and $21bn is invested through majority state-owned mining and utility companies.

The study warns it is likely that in many cases this G20 support has subsidised the same asset multiple times, by firstly incentivising the building of new coal infrastructure, then propping up the operations of those mines and power plants, and finally paying them to shut early.

In India, where coal-fired power has been one of the main causes of air and environmental pollution, researchers found the banking system, dominated by domestic public institutions, provides around $11bn of public finance mainly for coal-fired power production.

Researchers found that China, the world's largest consumer of coal for power generation and industry, continues to fund coal abroad with around $10bn of international public finance, mainly for coal-fired power production.

"In reality, government support to coal is much larger than our report's numbers show, because many G20 countries still lack transparency on the many ways they subsidise coal," said Ivetta Gerasimchuk, lead for sustainable energy suppliers at the IISD.

The study calls on G20 countries to end their support for coal and fulfil previous promises to end subsidies for all fossil fuels.

It echoes previous calls from investors and campaigners for governments to agree to a complete phase-out of support for coal mining and coal-fired power by 2020, while also delivering country-level plans to fossil fuel subsidies and ensure a 'just transition'.

Source: BusinessGreen