G20 countries continue to provide billions of dollars for the production and consumption of fossil fuels and have more than doubled the amount of support they provide to coal power plants in just three years, despite pledging to phase out the subsidies, a new report has found.
The report found G20 countries provide at least $63.9 billion USD per year in government support for the production and consumption of coal alone, with almost three-quarters of the support identified being directed to coal-fired power production.
The report was prepared by the Overseas Development Institute (ODI), Oil Change International (OCI), the International Institute for Sustainable Development (IISD) and the Natural Resources Defence Council (NRDC) and was published on Tuesday.
According to the report, G20 governments continue to support coal through $27.6 billion in domestic and international public finances, $15.4 billion in fiscal support and $20.9 billion in state-owned enterprise investments per year across the G20.
“This includes support through a wide range of instruments to prop up coal production, coal-fired power production, and other consumption of coal and coal-fired power,” the report reads. “As well as support which is justified as means of facilitating the transition away from coal.”
Further, the report’s authors say the figures are likely to “significantly underestimate” the actual amount of support provided, because many measures are difficult to identify or quantify.
“In reality, government support to coal is much larger than our report’s numbers show, because many G20 countries still lack transparency on the many ways they subsidise coal,” Ivetta Gerasimchuk, IISD Lead for sustainable energy supplies, said in a statement.
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The report also found that government support for the production of coal-fired power has increased in recent years.
The average for 2016 to 2017 was recorded at $47.3 billion, up from the $17.2 billion average recorded from 2013 to 2014.
“It has now been 10 years since the G20 committed to phasing out subsidies to fossil fuels, yet astonishingly some governments are actually increasing the amount they give to coal power plants,” Ipek Gençsü, lead author and research fellow at ODI, said in a statement. “Momentum is growing around the world for governments to take urgent action to tackle the climate crisis.”
“Ending subsidies to coal would bring environmental, social and economic benefits to all and help set a level playing field for clean energy,” Gençsü said.
According to the report, Japan, which is set to host the G20 Summit in the coming days, remains one of the largest providers for coal overseas, spending $5.2 billion per year.
“Other G20 governments may struggle to take Japan’s rhetoric on climate change seriously, as this year’s G20 host government continues to pour billions into propping up coal in Japan and around the world,” Han Chen, manager of international energy policy at NRDC, said in a statement.
“If Prime Minister Abe is serious about dealing with climate change, he should lead by example and end Japan’s government-backed finance for coal.”
The report found China is the world’s largest consumer of coal for power generation and industry, providing $9.5 billion in international public finance for coal mining and coal-fired power overseas.
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Canada, China and Germany are among the countries whose governments have been providing support for the rehabilitation of mining sites and for helping works and communities, the report says.
“However, there is limited information as to the beneficiaries of this support and any attached conditions regarding phase-out commitments and deadlines,” the report reads.
According to the report, from 2016 to 2017, Canada’s government provided $19,773,106 CA in fiscal support — which includes budgetary transfers and tax exemptions — for coal production and $23,382,390 in fiscal support for coal consumption.
Researchers also identified a number of mechanisms that were provided by governments purportedly for energy transition, but that actually continue to support coal-fired power.
According to researchers, these include subsidies for “capacity mechanisms,” in France, Germany, Italy, Russia, South Korea, Turkey and the U.K.
The report does say, however, that several G20 countries have taken “important steps in moving away from coal production and consumption” in recent years.
This includes Canada and the U.K., who created the Powering Past Coal Alliance (PPCA).
The PPCA was created to accelerate the global transition from coal to clean energy.
Canada has planned to phase-out coal by 2030.
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“Our analysis finds that the governments of Canada, the U.K. and France had dramatically scaled back their support for coal over the last decade, both domestically and internationally,” authors of the report wrote.
Researchers also found a fall in government support for coal production across the G20, a $9.8 billion per year average for 2016-2017, down from $21.7 billion per year average for 2013 to 2014.
However, the report says in order to avoid “dangerous climate change” and make good on their commitments to end fossil fuel subsidies, G20 governments “must commit to rapidly ending their support for coal.”
The report includes several recommendations, and calls on G20 governments to:
- urgently agree to a complete phase-out of government support to coal mining and coal-fired power
- complete peer reviews of coal and other fossil fuel subsidies by 2020
- establish country-level plans for ending government support to coal, to ensure that mechanisms with the aim of assisting the energy transition doesn’t support coal production or consumption and any remaining support facilitates a ‘just transition for workers and communities.
- establish a standing agenda item in G20 Energy Ministerial meetings to share lessons learned.
G20 leaders will meet in Japan this Friday and Saturday.
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