FIGURE 1. 36% Coal’s share of total global power generation 6,525 CFPP units in operation globally, totalling 2,125,527 MW250 Gt CO2 Emissions to 2050 if existing CFPPs operate for their full economic lives, equal to half the remaining carbon budget for 1.5ºC160 Gt CO2 Emissions avoidance needed from coal to achieve Net Zero by 2050, two-thirds from early retirement and 60% in EMDEs10 Gt CO2 Annual global emissions from coal power40% Increase in coal use in EMDEs during last two decades15% EMDE share of global clean energy investment in 2023Introduction Coal-fired power generation continues to play a major role in electricity markets around the world, providing more than one-third of the total global power generation and pumping over 10.3 gigatonnes of carbon dioxide (Gt CO2) into the atmosphere every year. This is equivalent to about 28% of total annual global CO2 emissions in 2023.4 This results in profound health impacts for people living near coal-fired power plants (CFPPs).5 Yet, despite the environmental, climate and health dangers posed by coal, many countries have been slow to transition given the ready availability and affordability of coal power, as well as its capacity to provide baseload power generation.6 The challenge is particularly profound for many emerging and developing economies (EMDEs). While coal use in advanced economies has declined by 40% over the last two decades, it has more than tripled in EMDEs.7 These countries now make up 85% of global coal consumption, with India and China alone accounting for over two-thirds.8 In addition to environmental and health costs, continued reliance on coal power could have a net negative impact on countries slow to transition. Not only will they forego the economic benefits of cleaner forms of energy – renewables are now cost-competitive with coal in almost all locations around the world – but trade competitiveness may also be undermined as climate policy instruments such as the European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM) impose tariffs on carbon-intensive exports. At the same time, international companies are also increasingly looking for clean energy to power their operations as a key criteria for investing in countries. Governments and companies may also find their access to affordable borrowing constrained if their coal operations prevent them from meeting borrowers’ increasingly ambitious environmental and climate requirements. The coal-to-clean challenge in numbers Scaling Financing for Coal Phase-out in Emerging Economies 5

Scaling Financing for Coal Phase out in Emerging Economies 2025