France and the US plan to urge the restriction of private financing for coal-fired power plants at the COP28 UN climate conference, to be held from 30 November to 12 December 2023, Reuters has reported.
The new coal exclusion policy was communicated to India earlier in November.
This step is anticipated to expand divisions at the summit, with India and China expected to resist efforts to halt the development of coal-fired plants.
Countries attending COP28 hold different views on emissions reduction technologies, citing their commercial viability, especially in developing countries.
In India, more than 70% of the electricity is currently generated from coal and the country is projected to depend largely on fossils for several decades.
At the same time, non-fossil capacity has risen to 44% of overall installed power generation capacity in the country.
The new policy was conveyed to the Indian Government by the French Minister of State for Development, Chrysoula Zacharopoulou.
The policy aims to prevent private financial institutions and insurance companies from investing in coal plants.
Reuters reported that in an email reply to its query, the French minister’s spokesperson did not reveal details about the policy but stated that the idea has been discussed in the past across many multilateral forums.
The US, the EU and Canada have been firm supporters of a fast phase-out of coal from the energy mix, pointing to it as the number one threat to climate goals.
The urgency of the new policy is underscored by the presence of 490GW of coal power plants in the global development pipeline, mostly in India and China.
The policy is expected to allow the Organisation for Economic Co-operation and Development to outline coal-exit strategies for private finance companies.
Financing from these companies would be tracked by regulators, rating agencies and non-governmental organisations.
US Deputy Special Envoy on Climate Change Rick Duke was quoted by the news agency as saying: “We are pushing to set an expectation globally that countries need to join us in the fastest possible power sector transition, including all that clean power deployment.
“And countries need to stop digging a deeper hole by building new unabated coal power plants, because unfortunately, there is still some 500GW of new coal-fired power plants in the pipeline globally, and the IPCC and the International Energy Agency have both been quite clear that that needed to stop already.”
