Power

Phase out coal and unabated fossil gas electricity generation

One of the most fundamental challenges to achieving climate goals is ending the current reliance on coal and fossil gas in the power system. These two fuels generate around 60% of the world’s electricity, but their use creates vast amounts of greenhouse gas (GHG) emissions. 

Burning coal contributes around 75% of total carbon dioxide (CO2) emissions generated by the global power sector, with the remaining emissions primarily from the use of fossil gas. And power sector emissions account for about 25% of total global GHG emissions — the single largest sectoral contribution. 

Coal- and fossil gas-fired power need to be rapidly phased out. 

Backed by mounting scientific evidence and economic analysis, the best course of action is to quickly phase out fossil fuels and replace them with clean zero-carbon power sources. Coal consumption is declining in certain regions, such as North America and Europe, but not quickly enough. At the same time, the use of unabated fossil gas is increasing globally, creating a barrier to achieving the goals of the Paris Agreement.

While burning of fossil fuels in conjunction with technologies to capture and store CO2 emissions is technically feasible, there remain large uncertainties and risks of these carbon capture and storage technologies at scale. They are not economically competitive and do not eliminate all emissions, such as methane emissions during production and transport. This means carbon capture and storage technologies cannot be viewed as an alternative to zero-carbon power in the global displacement of fossil fuels. 

Efforts need to accelerate in order to limit warming to 1.5 degrees C.

The carbon intensity of power supply needs to be reduced by about 85% before 2030 and reach zero by 2050. The current scale and pace of change is not enough to meet the ambitions set forward in the Paris Climate Agreement; countries need to dramatically increase their zero-carbon electricity ambitions and actions. For example, the decline of coal needs to accelerate sevenfold by 2030 in order to limit warming to 1.5 degrees C (2.7 degrees F).

Data Insights

What targets are most important to reach in the future?

Systems Change Lab identifies 4 targets toward which to track progress. Click a chart to explore the data.

What factors may prevent or enable change?

Systems Change Lab identifies 4 factors that may impede or help spur progress toward targets. Click a chart to explore the data.

Progress toward targets

Systems Change Lab tracks progress toward 4 targets. target. Explore the data and learn about key actions supporting systems change.

Share of coal in electricity generation

To align the power system with the Paris Agreement, efforts to phase out coal generation need to accelerate sevenfold to reach zero by 2050.

Of all the emissions generated by the global power sector, the burning of coal contributes the largest share. In fact, around 75% of power sector emissions are due to coal consumption. Therefore, the removal of coal from the global power fleet is fundamental to decarbonizing the power sector.

The percentage of power generated from coal increased until 2007. It then slowly began declining, falling by 4% during the COVID-19 pandemic, but then rebounded by 3% in 2021 before marginally decreasing in 2022 in continuation of recent trends. While recent rates of change have thus been heading in the right direction, progress still falls short of the 2030 target, and the indicator is well off track. To reduce the share of coal in electricity generation to 4% by 2030, the recent speed of decline must accelerate by seven times. However, with the rapid buildup of renewables and their decreasing costs, it is possible that the share of coal in power generation could decrease rapidly and nonlinearly.

Share of unabated fossil gas in electricity generation

Unabated fossil gas needs to fall to 5-7% of total power generation globally by 2030. From then on, this decline should continue so that unabated fossil gas use contributes no more than 1% by 2040 and is completely phased out by 2050.

Fossil gas is the second-most used fuel in the global power sector, generating 24% of electricity as of 2019 and contributing 22% of total carbon dioxide (CO2) emissions. In addition, the production and transport of fossil gas generates significant quantities of fugitive methane emissions, a potent greenhouse gas (GHG). Such methane emissions from oil and gas operations need to be reduced. 

The share of fossil gas grew from 18% to just over 23% of total electricity generation from 2000 to 2019. However, it has slightly decreased each year since then, including a decrease in 2022 to reach 23%. Unabated fossil gas’s share must be brought down to 5–7% by 2030 to align with 1.5 degrees C-compatible pathways, which requires an acceleration more than ten times faster than the current slightly decreasing linear trend. But with the rapid buildup of renewables, the share of fossil gas in power generation could decrease rapidly and nonlinearly.

Premature deaths from air pollution

Premature deaths from the world's leading environmental health risk factor, air pollution, are strongly correlated with fossil fuel use. As fossil fuels are phased out, premature deaths from air pollution will likely decrease.

Air pollution is the world’s leading environmental health risk factor. In 2019, about 7% of all deaths worldwide were attributable to exposure to fine inhalable particles — also known as particulate matter with a diameter of less than 2.5 micrometers (PM2.5). Nearly half of all exposure from fine particles is caused by unsustainable energy practices, including the combustion of fossil fuels.

The highest population-weighted concentrations of air pollution are found in Africa, the Middle East and South and East Asia. Children, residents of low-income areas and Black, indigenous and other communities of color are also disproportionately impacted by air pollution. Premature deaths from fine particulate matter exposure more than doubled from about 2 million in 1990 to over 4 million in 2019.

Premature mortality from exposure to PM2.5 is a proxy indicator of the global health impacts of a power system based on fossil fuel and traditional biomass combustion. As their use is phased out, related premature deaths from air pollution will also decrease. Because of its strong correlation with fossil fuel and biomass combustion, the reduction of premature mortality due to PM2.5 exposure is a reliable indicator of global progress in the power sector.

Achieving the United Nations’ Sustainable Development Goal 7, including phasing out biomass combustion for heating and cooking by 2030, would result in a 20% reduction in premature deaths from PM2.5 exposure from 2015 levels (authors’ analysis), reducing the total to about 3.1 million per year. Meeting three interrelated goals — phasing out internal combustion engines, thermal power generation (without pollution controls) and other fossil fuel combustion by 2050 — would translate to a 50% reduction from 2015 levels to about 1.9 million (authors’ analysis). Unfortunately, this indicator is headed in the wrong direction. Premature deaths from PM2.5 exposure must peak immediately and fall quickly to meet the 2030 goal.

Percent of displaced coal and gas workers that regained employment

Since renewable energy technologies are likely to progressively replace fossil fuels in the coming years, many coal and gas workers may lose their jobs. These workers will need assistance to reenter the labor force.

Since renewable energies are likely to progressively replace fossil fuels in the coming years, many coal and gas workers may lose their jobs. Workers who lose their jobs due to closures or reductions associated with the energy transition will need support and providing this type of support to workers will be a main component of a just transition.

Both public and private initiatives can help retrain workers. For example, in the gold mining town Ballarat, Australia, companies have funded a wind power training tower, providing a space for students and ex-coal workers to gain skills and knowledge for important jobs in renewable energy.

Although there is currently no defined target or comprehensive public data for the percentage of displaced coal and gas workers that regained employment, this percentage should be as high as possible.

Enablers and barriers

We also monitor change by tracking a critical set of 4 factors factor that can impede or help spur progress toward targets. Explore the data and learn about key actions supporting systems change.

Number of banks reducing lending for fossil fuel projects

All large banks need to halt financing for new fossil fuel exploration and production projects to limit global warming to 1.5 degrees C (2.7 degrees F). Financial data on lending by 59 of the world’s largest banks shows that only four of these banks have begun restricting financing for fossil fuels.

According to the International Energy Agency (IEA), all new fossil fuel exploration and production projects need to be halted to limit global warming to 1.5 degrees C (2.7 degrees F). Organizations have to restrict lending for projects exploring new fossil fuel reserves in order to prevent additional fossil fuels from entering the economy.

Data on economy-wide fossil fuel funding is scarce. However, one way to track fossil fuel financing is to focus on lending by major banks. This proxy metric provides an indication of wider trends in the economy.

Financial data on lending by 59 of the world’s largest banks shows that only four of these banks had begun restricting financing for fossil fuels as of 2021. By continuing to lend funds for fossil fuel projects, these organizations risk carbon lock-ins and stranded assets.

Number of countries with coal phaseout plans

As of 2021, only 35 countries had pledged to phase out coal power or to remain coal-free. Currently, the three largest consumers of coal — China, India and the United States — do not have phaseout pledges.

The evidence is overwhelming: coal power has no place in 1.5 degrees C-compatible pathways.

To meet the ambitions of the Paris Agreement, global coal power should account for around 4% of total power generation by 2030, 0-1% by 2040 and be entirely phased out by 2050. Because the required pace of change to meet this goal is immense, it is vital that countries make strong commitments to remove coal. Such commitments should be backed by robust strategies.

As a means of assessing governmental commitments to decommissioning coal, this indicator tracks the number of countries with strategies in place to phase out coal power. As of 2021, only 35 countries had pledged to phase out coal power or to remain coal-free.

Several European countries, such as France, Spain and the United Kingdom, are aiming to phase out coal power by 2030, as are Canada and New Zealand. Currently, the three largest consumers of coal — China, India and the United States — do not have phaseout pledges.

Meanwhile, other countries have targets that do not align with the Paris Climate Agreement. Germany, for instance, is the fourth largest consumer of coal and aims to phase out coal power by 2038.

Active programs to relocate workers from coal and gas industries to other jobs or areas

For a transition to be just and equitable, it is essential that workers in fossil fuel industries receive support in finding new jobs or skills. This support can be provided in different ways, including public or private initiatives.

Since replacing fossil fuels with renewable energy technology will displace oil and gas workers, new employment and training options should be part of policy commitments. For a transition to be just and equitable, it is essential that workers in fossil fuel industries receive support in finding new jobs or skills. This support can be provided in different ways, including public or private initiatives.

There are many different instruments that governments can use to improve employment opportunities and moderate the effects of demand shocks. These can include job search assistance and placement services, training programs, support for microenterprises and self-employment, subsidies for companies that hire unemployed individuals, and new job opportunities created by the government.

There is currently no global, comprehensive data on the number of active programs to relocate coal and gas workers to other jobs, so we are unable to assess progress for this indicator. It is likely that these programs are tracked at the country or local level, but this information has not yet been aggregated into a global database.

Investments in early coal phaseout

Phasing out coal power is an urgent global priority. However, many existing coal power plants have not reached the end of their economic life. Investments are therefore needed to shut off these power stations 10-25 years earlier than planned.

Removing coal power from the global electricity mix would have the single biggest impact on driving down emissions in the power sector. 

Analysis shows that coal power should account for around 4% of total power generation by 2030 and be completely phased out by 2050, in order to meet the ambitions of the Paris Agreement. Yet, many existing coal plants have not reached the end of their economic life, meaning their fixed costs may not have been recouped by investors. Since coal plants are major investments, companies stand to lose large sums through the early retirement of coal power plants. Financial support is therefore required to facilitate early coal phaseouts. 

There is no publicly available global-scale data on investments in early coal phaseouts, although G7 countries have committed $46.7 billion to support phasing out coal in Indonesia, South Africa, and Vietnam. However, to continue to drive out coal from the power sector, this indicator should follow an increasing trajectory globally in the coming years.

Photo credits

Photo by Arnold Paul

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