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A coal-fired power plant owned by Indonesia Power in Suralaya, Banten province. Photo: Reuters

COP26: ADB plan to phase out coal plants is ‘blah, blah, blah’, warn climate change activists as Greenpeace, Friends of the Earth write open letter

  • More than 60 civil society organisations have written an open letter opposing an initiative involving the Asian Development Bank, Prudential, Citi and BlackRock that would buy up coal plants and retire them early
  • The groups say the scheme is poorly thought out and risks encouraging both greenwashing and the continued operation of older coal plants. But the ADB defends the plan as a key part of its ‘bold action’ to fight climate change

More than 60 civil society organisations (CSOs) have written an open letter citing pressing concerns about an Asian Development Bank initiative, to be detailed at the COP26 summit on Wednesday, to phase out coal plants.

On paper, the proposal seems straightforward: the ADB and financial partners including Prudential, Citi and BlackRock Real Assets plan to buy coal power plants across Asia and retire them within 15 years, sooner than their usual shelf life. At the same time, they would fund greener alternatives.

The pilot for the initiative will begin with power plants in Indonesia, the Philippines and Vietnam.

More details of the project, named the Energy Transition Mechanism (ETM), are expected to be released at the Glasgow summit at an event attended by leaders including Indonesia’s Minister of Finance Sri Mulyani Indrawati.

Despite efforts to phase out coal, the use of the dirty fuel in the Asia-Pacific region accounts for about three-quarters of worldwide coal consumption.


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A recent report from non-profit financial think-tank Carbon Tracker found that five Asian countries – China, India, Indonesia, Japan and Vietnam – were responsible for 80 per cent of the world’s planned coal-fired power stations.

The CSOs that signed the letter, which included Friends of the Earth US, Greenpeace Indonesia and Mekong Watch Japan, said they agreed with the ADB’s effort to help countries move away from coal. However, they said civil society groups and community stakeholders had been given “little opportunity” to comment on the details of the scheme. “An announcement at COP26 risks making the ETM as it stands a ‘fait accompli’,” said the letter.

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In particular, the CSOs said it was not clear why it would take 15 years to wind down the plants, as this would mean continued exposure to pollution for communities. Neither was there any assurance that power generation capacity lost to the early retirement of coal plants would be replaced by renewable sources.

The CSOs are seeking assurances that electricity end users will not need to shoulder additional costs as part of the ETM, given the operators of coal plants would be compensated for retiring the facilities ahead of time.

Indonesian Greenpeace activists hang banners from ship unloaders as they block the loading of coal at a power plant in Cirebon, Indonesia. Photo: EPA

Nithi Nesadurai, the director and regional coordinator of the Climate Action Network Southeast Asia based in Kuala Lumpur, Malaysia, said that coal usage needed to end because it was the most polluting fossil fuel and one of the highest sources of mercury poisoning. He agreed with the CSOs that the ETM scheme had not been well-considered.

“When the ADB makes these announcements without granular details they amount to ‘blah, blah, blah’ to quote Greta Thunberg,” Nithi said. “The end-result could range from greenwashing to providing financing to coal mines, which … have already been the recipient of government subsidies. This will not end well.”

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According to the Institute for Energy Economics and Financial Analysis, the scheme, if not properly thought through, could encourage operators of older coal-fired power plants to continue in the hope of receiving funding.

Asked for a response to the open letter, an ADB spokesperson said the bank was “committed to taking bold action to fight climate change. And addressing emissions from legacy coal-fired power plants that could otherwise operate for decades into the future is a key part of that bold action. The Energy Transition Mechanism is something we, and others, believe has the potential to be one of the biggest carbon reduction programmes in the world.”


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The ADB denied that the scheme had not been properly thought through. It said it had recently completed “a pre-feasibility study that included fleet-level financial and technical analysis in three pilot countries – Indonesia, the Philippines, and Vietnam – as well as regulatory and institutional assessments to validate the ETM concept”. It was now in the early stages of a full feasibility study to conduct additional system-level analysis and a detailed evaluation of initial target coal plants, assess the structure of the country funds, and prepare the Southeast Asian regional partnership platform for a potential pilot programme.

In the letter, the CSOs said that after discussions between some of the signatories and the ADB, the bank acknowledged that it needed to continue with feasibility analyses and consultations of stakeholders. Yet, the CSOs said civil society groups and other stakeholders had “not had sufficient opportunity to scrutinise details [even though] far more detailed discussions meanwhile appear to have been afforded to private investors and even media”.

The ADB and its financial partners should delay plans to seek “finance and other commitments” at COP26, the CSOs concluded in the letter.

This article appeared in the South China Morning Post print edition as: green groups give critical reaction to adb plan to phase out coal plants across asia