In a bid to accelerate global climate action, France, with support from the United States, is set to propose a plan to halt private financing for coal-based power plants during the upcoming U.N. climate conference, COP28, in Dubai.
Revealed in a report from Reuters, the plan, known as the “New Coal Exclusion Policy,” aims to curb private funding for coal-fired power projects and has been communicated to India, sparking divisions among participating nations.
Reuters’ sources said France’s Minister of State for Development, Chrysoula Zacharopoulou, conveyed the plan to the Indian government, outlining the objective of stopping private financing for coal power and prioritizing it as a key initiative during COP28.
The proposal suggests that the Organisation for Economic Co-operation and Development (OECD) establish coal-exit standards for private finance firms, with regulators, rating agencies, and non-governmental organizations monitoring their adherence.
While the U.S., European Union, and Canada advocate for expediting the phase-out of coal due to its impact on climate goals, India and China oppose attempts to hinder the construction of coal-fired power plants, crucial for their energy-intensive economies.
The plan seeks to address concerns that private international financing continues to support significant additions to coal capacity in developing nations, with about 490 gigawatts of new coal capacity planned or under construction, mainly in India and China.
Rick Duke, Deputy U.S. Special Envoy on Climate Change, highlighted the urgency of the power sector transition away from unabated coal power plants, emphasizing the need to meet clean power deployment goals. However, member countries remain divided on emissions abatement technologies, particularly for use in developing countries.
India, where approximately 73% of electricity is coal-generated, plans to resist setting a deadline for a fossil fuel phase-out at COP28. Instead, it may advocate for a focus on reducing emissions from other sources and encourage developed nations to achieve carbon negativity by 2050. The proposal introduces a contentious issue likely to shape discussions and negotiations during the climate conference.