Briefing Paper

Accelerating Coal Phase Out: The OECD Context

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Coal-train-by-michael-bergmann-unsplash
Photo Coal train by Michael Bergmann

Following the Paris Agreement in 2015, repeated analyses have identified that OECD countries should complete the full phase out of unabated coal use for power generation by 2030.

A structural shift away from coal is already underway across the majority of OECD members and this is set to accelerate.The costs of renewables have significantly decreased in recent years, opening up new opportunities for smart, clean electricity generation. At the same time, ageing coal plants are increasingly heading towards retirement given the age structure of past investments. A growing number of national and regional governments are looking to develop phase out policies as a means of providing a managed transition that ensures energy security and a positive pathway for workers and communities.

Among the G7, Canada, France and the UK have all made national commitments to coal phase out, as has Alberta and the city-region of Berlin. Italy is now consulting on coal phase out scenarios as part of its National Energy Strategy. In the USA, states including California, Massachusetts, New York, Oregon and Washington are on track to be coal free by 2025, and are taking policy measures to achieve this and/or restrict coal generation from out of state.

Beyond the G7, an increasing number of OECD countries could complete a coal phase out over the next few years. Belgium became coal free in 2016. Finland has announced it will legislate to end coal use by 2030. In Denmark the leading utility DONG will cease coal use by 2023. Austria, Ireland, Israel, New Zealand, Norway, Portugal and Sweden all have just one or two coal power plants left in operation. The Netherlands and Spain are shutting some older coal power plants, but are yet to set out a comprehensive retirement plan. Most recently, South Korea has announced significant steps to close the dirtiest existing coal units, prohibit the construction of new coal plants, and convert those under construction to use gas.

It is in the interests of governments to provide a policy framework for this inevitable transition pathway. Proactive coal phase out policies can help provide a more orderly transition that attends to the needs of workers and regions while ensuring energy security is maintained.

By working together, governments can share best practice and insights into the transition from coal to clean energy. Cooperation can also provide mutual support for political commitments and provide a basis for aligned efforts to assist the shift from dirty coal to clean energy in emerging economies.

The full briefing can be read here