The Coal to Clean Credit Initiative (CCCI) announced by The Rockefeller Foundation and Global Energy Alliance for People and Planet (GEAPP) aims to establish a new standard for using carbon finance to encourage a fair transition from coal-fired power plants to renewable energy in emerging economies.
This comprehensive initiative, supported by Climate Policy Initiative (CPI), RMI, and the South Pole, will initiate a consultative process to develop the methodology, setting a global benchmark for coal transition projects financed by carbon credits.
The methodology will be presented at the United Nations Climate Change Conference (COP28) in Dubai, endorsed by a leading carbon standard.
President of The Rockefeller Foundation, Dr Rajiv J. Shah, stated that emerging and developing countries have the right to provide opportunities, jobs, and electricity to their people without causing a climate emergency.
“The Coal to Clean Credit Initiative can assist these countries in retiring coal plants and replacing them with cleaner power, preventing the release of millions of tons of emissions per plant while still creating opportunities for their populations,” he noted.
According to GEAPP, the majority of coal plants, around 90%, are shielded from competition due to regulations or long-term contracts that ensure their financial returns. Consequently, many coal plants lack the financial incentive to retire early.
In response, CCCI is developing a methodology that will facilitate the managed and equitable phase-out of coal plants and incentivize their replacement with clean power.
“The revenue generated from selling ‘coal-to-clean’ credits through CCCI can provide incentives for coal plant owners to transition to renewable energy and support the workers and communities affected by the transition away from coal-fired power.”
CCCI has developed a detailed concept with input from leading experts and has identified suitable real-world cases for generating coal-to-clean credits. The initiative aims to begin signing transactions and applying the methodology to numerous plants by 2024, thus avoiding the emission of millions of tons of carbon dioxide.
GEAPP, leading the initiative, has formed a high-level partnership with the Republic of Indonesia to develop a roadmap for coal-to-clean credits and is also exploring partnerships in South Africa and Vietnam.
To ensure a successful transition, affected communities will play a crucial role in the shift from coal to clean power. CCCI’s just transition plans will be developed in collaboration with local communities for each project, including provisions for employment opportunities, entrepreneurship, and reskilling.
The goal is to prioritize the needs of coal workers and local communities throughout the process.
CEO of GEAPP, Simon Harford, highlighted that by 2030, the cost of renewables will undercut fossil fuels in most regions, creating approximately 25 million secure jobs in Asia and Africa.
GEAPP is proud to support countries like Indonesia in their participation in the Coal to Clean Credit Initiative, placing them at the forefront of energy transition and carbon market development.
The initiative not only provides financial incentives for emerging economies to rapidly transition from coal to renewable energy but does so in a just manner, considering the preservation of jobs and livelihoods.
The implementation of CCCI will be supported by the South Pole, with technical expertise from RMI and CPI, ensuring the highest level of environmental integrity, technical best practices, and stakeholder engagement.
CCCI aims to set a new benchmark for carbon-financed coal transition projects and expedite the global transition from coal to clean energy. By offering near-term project-level opportunities, CCCI’s methodology aligns with jurisdictional approaches and system-level decarbonization.
The initiative explores an innovative, system-integrated project approach to mobilize carbon finance and facilitate the phase-out of coal plants while incentivizing their replacement with clean power.
Recognizing that coal plants are strategic assets within national power systems, CCCI acknowledges the importance of consulting national authorities and considering the system-wide impacts when accelerating the retirement of coal plants. The initiative is intentionally designed to integrate with existing and future compliance markets and the voluntary market.
Managing Director for Power and Climate at The Rockefeller Foundation, Dr Joseph Curtin noted, “Tens of millions of tons of carbon dioxide emissions can be avoided if just one plant is retired and replaced by cleaner power decades ahead of its planned closure. Realizing this benefit requires compelling incentives and additional finance.’’