Dubai Telegraph - Can carbon credits help close coal plants?

EUR -
AED 3.826681
AFN 70.327616
ALL 98.192804
AMD 406.067937
ANG 1.879076
AOA 951.190259
ARS 1045.840133
AUD 1.601828
AWG 1.877897
AZN 1.775245
BAM 1.957546
BBD 2.105077
BDT 124.589901
BGN 1.956284
BHD 0.392592
BIF 3016.094951
BMD 1.041829
BND 1.405287
BOB 7.204528
BRL 6.043693
BSD 1.04263
BTN 88.005286
BWP 14.243906
BYN 3.412124
BYR 20419.848375
BZD 2.101624
CAD 1.456946
CDF 2991.091432
CHF 0.930994
CLF 0.037254
CLP 1027.952249
CNY 7.54601
CNH 7.562783
COP 4605.144632
CRC 531.073558
CUC 1.041829
CUP 27.608468
CVE 110.75048
CZK 25.343745
DJF 185.15426
DKK 7.457312
DOP 62.978972
DZD 139.891631
EGP 51.726992
ERN 15.627435
ETB 128.155793
FJD 2.371151
FKP 0.822333
GBP 0.831468
GEL 2.855018
GGP 0.822333
GHS 16.464915
GIP 0.822333
GMD 73.970229
GNF 8992.026458
GTQ 8.048177
GYD 218.127645
HKD 8.109446
HNL 26.28575
HRK 7.431636
HTG 136.86204
HUF 411.533277
IDR 16610.452733
ILS 3.863061
IMP 0.822333
INR 87.968134
IQD 1365.316903
IRR 43834.955489
ISK 145.523076
JEP 0.822333
JMD 166.09811
JOD 0.738765
JPY 161.242873
KES 134.920816
KGS 90.122166
KHR 4220.449639
KMF 492.268155
KPW 937.645704
KRW 1463.259646
KWD 0.320727
KYD 0.868887
KZT 520.591707
LAK 22878.565176
LBP 93347.878651
LKR 303.450587
LRD 187.529583
LSL 18.888757
LTL 3.076251
LVL 0.630192
LYD 5.089375
MAD 10.49591
MDL 19.017231
MGA 4865.341785
MKD 61.54739
MMK 3383.819949
MNT 3540.134882
MOP 8.359474
MRU 41.574227
MUR 48.810083
MVR 16.10707
MWK 1807.573672
MXN 21.281613
MYR 4.654932
MZN 66.583684
NAD 18.888753
NGN 1767.675143
NIO 38.287608
NOK 11.531328
NPR 140.808938
NZD 1.78585
OMR 0.401107
PAB 1.042655
PEN 3.952739
PGK 4.194144
PHP 61.404399
PKR 289.423952
PLN 4.338074
PYG 8139.257775
QAR 3.792783
RON 4.976404
RSD 117.038068
RUB 108.671879
RWF 1427.305728
SAR 3.911717
SBD 8.734231
SCR 14.879628
SDG 626.663972
SEK 11.501974
SGD 1.402827
SHP 0.822333
SLE 23.68116
SLL 21846.638123
SOS 595.409088
SRD 36.978718
STD 21563.75683
SVC 9.123047
SYP 2617.626467
SZL 18.888745
THB 35.91223
TJS 11.103861
TMT 3.646401
TND 3.313541
TOP 2.440072
TRY 36.018972
TTD 7.081314
TWD 33.946439
TZS 2771.265486
UAH 43.133048
UGX 3852.435216
USD 1.041829
UYU 44.339112
UZS 13366.666402
VES 48.506662
VND 26482.251319
VUV 123.688032
WST 2.90836
XAF 656.558208
XAG 0.033274
XAU 0.000384
XCD 2.815595
XDR 0.793126
XOF 650.625955
XPF 119.331742
YER 260.379151
ZAR 18.862746
ZMK 9377.71492
ZMW 28.802098
ZWL 335.468513
  • RBGPF

    59.2400

    59.24

    +100%

  • BCC

    3.4200

    143.78

    +2.38%

  • VOD

    0.1323

    8.73

    +1.52%

  • RIO

    -0.2200

    62.35

    -0.35%

  • NGG

    1.0296

    63.11

    +1.63%

  • SCS

    0.2300

    13.27

    +1.73%

  • RELX

    0.9900

    46.75

    +2.12%

  • JRI

    -0.0200

    13.21

    -0.15%

  • CMSC

    0.0320

    24.672

    +0.13%

  • BCE

    0.0900

    26.77

    +0.34%

  • AZN

    1.3700

    65.63

    +2.09%

  • GSK

    0.2600

    33.96

    +0.77%

  • BTI

    0.4000

    37.38

    +1.07%

  • BP

    0.2000

    29.72

    +0.67%

  • CMSD

    0.0150

    24.46

    +0.06%

  • RYCEF

    -0.0100

    6.79

    -0.15%

Can carbon credits help close coal plants?
Can carbon credits help close coal plants? / Photo: JAM STA ROSA - AFP

Can carbon credits help close coal plants?

A few dozen kilometres from the Philippine capital Manila sits a coal plant that some hope could be a model for how developing countries can quit the polluting fossil fuel.

Text size:

An alliance led by The Rockefeller Foundation, a philanthropic group, plans to help close the plant 10 years early, avoiding millions of tons of emissions and monetising them as carbon credits.

The idea is "pretty simple", said Joseph Curtin, managing director of Rockefeller's power and climate team.

"What if the coal asset owner could, instead of selling this carbon-intensive energy to the grid, they could sell the avoided carbon emissions," he told AFP.

Carbon credits essentially allow a polluter to "offset" their emissions by paying for "avoided" emissions elsewhere.

They have been issued on everything from electric buses to protected forests, though investigations have found many projects overstating or improperly calculating avoided emissions.

Coal is the largest source of man-made carbon dioxide emissions, according to the International Energy Agency.

And while some developed countries have phased it out, it remains a cheap, reliable resource for rapidly developing economies facing growing energy demand.

Countries including Indonesia and South Africa have been offered billions of dollars in financing to shutter coal plants early, but with little success so far.

"There's not one coal plant, of all the 4,500 in emerging markets and developing countries, that has been shut down and replaced with clean power," said Curtin.

- Carbon credit problems -

The problem is complex.

Coal employs millions of people directly and indirectly, as well as offering affordable and reliable baseload power.

Government and industry heavyweights are often invested in coal, and in Asia especially plants tend to be young, meaning years of lost income if they close early.

Renewable energy is now often cheaper than coal, but many plants are protected from competition by long-term contracts.

"There simply is no economically viable off-ramp for these asset owners, and that's why we have zero retirements," said Curtin.

Enter the Coal to Clean Credit Initiative (CCCI).

It aims to cover both the cost of closing coal plants and converting them to renewable output, including wind and solar, by generating carbon credits.

And it has a test case: the South Luzon Thermal Energy Corporation (SLTEC).

It was scheduled to operate until at least 2040, but under the CCCI it would close a decade earlier, avoiding up to 19 million tons of CO2 emissions, according to Rockefeller.

Coal-fired operations would be replaced with a mix of renewable generation and battery storage, with workers and the local community compensated.

The Monetary Authority of Singapore -- which supports the initiative -- is keen on credits, and there is private sector interest too, Curtin said.

The idea has faced criticism however, particularly after revelations about problems with other carbon credit projects.

A recurring issue involves "additionality" -- proving that emissions would not have been avoided anyway, even without the carbon credit programme.

This has dogged many forest protection schemes, where developers have failed to show that tracts were at real risk of being chopped down.

Elsewhere, trees that were supposed to be protected have been felled even after credits were sold on protecting them.

- 'Realistic and pragmatic' -

As renewables become cheaper, critics argue market forces might force coal plant closures even with carbon credits.

"It's hard to know what are the forces pushing for and against coal phaseout today," said Gilles Dufrasne from the Carbon Market Watch think tank.

"These forces, economic and political, can change quite significantly over time," he told AFP.

Credits risk becoming a way to "reward investors who have ploughed their money into a highly polluting and often doomed technology," Dufrasne warned.

Other analyses caution that countries could "double count" reduced emissions from coal closures -- including them in their national calculations, even though they have been sold to offset emissions elsewhere.

Curtin acknowledges the criticisms, and says CCCI's methodology is designed to address them.

Only coal projects that are solvent, covered by long-term agreements, and connected to the grid are eligible.

Participating companies must have "no new coal" policies, and closures must involve conversion to renewables, with replacement energy output and provisions to support workers and communities.

"We spent a long time developing what we think is a very, very robust and fairly bulletproof methodology," he said.

It is being reviewed by Verra, a leading credit verifier that has been criticised for oversight failures in the past.

Curtin is sanguine, and says deals for credits priced in the "tens of dollars" could be signed by mid-2025.

"If we want decision makers to have a financially viable off-ramp... we just have to be realistic and pragmatic about that," he said.

"And if anyone's got a better idea, please let us know, because we're looking for new ways of approaching this problem all the time."

O.Mehta--DT