International banks support guidance on financing new coal-fired power plants
London -- CSRwire/ - The Climate Group today issued a Guidance Note on financing new coal-fired power plants (CFPPs), which was developed by The Climate Group with expert advice from BNP Paribas, Credit Agricole, F&C Asset Management, HSBC and Standard Chartered.
It is the first time that a group of financial institutions has collectively developed guidance to address the single largest source of man-made carbon emissions, coal-fired power generation.
The financial institutions involved will be developing their own policies on finance for new CFPPs, in line with the Guidance Note recommendations.
Mark Kenber, CEO, The Climate Group said: “Coal is likely to be part of the energy mix for the foreseeable future but we can only limit dangerous climate change by decarbonizing the power sector. For coal that means phasing out the most carbon-intensive power plants quickly and operating only the best available technologies. Looking forward ten years and beyond, coal-fired generation will only be feasible if carbon capture and storage or a similarly game-changing technology is rolled out across the sector. This Guidance Note will help banks and other financial institutions to drive that change and support their power generation clients towards a low carbon pathway.'
Jerome Courcier, Chief CSR Officer, Crédit Agricole, Chair of the Climate Principles Group said: “The financial institutions that have helped to develop this Guidance Note have realized both the importance of addressing the risks posed by climate change and the business opportunities in the low carbon economy. This is an important step forward which we hope will be followed by financial institutions all over the world.”
Coal remains the fuel of choice in many regions of the world due to its economic and energy security advantages, but deployment of the best available CFPP technologies could raise generation efficiency from today’s global average of 34% to as much as 50%, and banks can help accelerate uptake of the best technologies by stipulating emissions intensity ceilings that become progressively tougher between now and 2050.
The International Energy Agency (IEA) has set out how global carbon emissions from coal-fired power generation must fall by 2050 if atmospheric CO2 is to stabilize at 450 ppm and limit dangerous climate change. While CFPPs built today should only employ the best available technologies, the Guidance Note recommends much tougher CFPP emissions intensity limits from 2020 onwards to get on to a 450 ppm pathway.
The Guidance Note recommendations will be reviewed regularly as lessons are learned from the experience of banks putting policies into practice, and as CFPP technologies improve, circumstances in individual countries change, and the outlook for large-scale deployment of carbon capture and storage (or an equally efficient emissions reduction technology) clarifies.
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