G20 nations triple coal subsidies despite phase out pledges

G20 governments have almost tripled their subsidies for coal power plants in recent years, despite the current global drive to cut fossil fuel use.

The figures, published in a report by the Overseas Development Institute (ODI) and other bodies, reveal that the average annual amount G20 governments spent on coal-fired power production increased from $17bn to $47bn between 2014 and 2017, although their total investment in coal was reduced overall.

The revelation emerges even though the international forum collectively pledged to phase out subsidies for fossil fuels at their Pittsburgh summit held in 2009.

Lead author of the report, Ipek Gençsü, a research fellow at ODI, said: ‘It has now been ten 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.

‘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.’

The report, published ahead of the G20’s scheduled meeting in Japan this Friday, calculated the average amount G20 governments spent in support of fossil fuels across 2016 and 2017, comparing it with previous figures from 2013 and 2014.

Overall, G20 nations are spending at least $64bn a year to support the production and consumption of coal, with almost three-quarters of this going to coal-fired power production, the report found.

$28bn of this is via public finance institutions such as bilateral development banks, while $15bn is through budget allocations and tax exemptions and $21bn through state-owned coal companies.

China, India and Japan were revealed to be the top three coal subsidising nations over the past few years, followed by South Africa, South Korea, Indonesia and the US.

In India, where coal-fired power is one of the main causes behind air and environmental pollution, the banking system provides around $11bn for coal power via public finance.

The world’s largest coal consumer China is giving around $10bn of international public finance a year to coal industries abroad, while Japan is giving around $5bn.

This comes despite the Japanese prime minister Shinzo Abe urging countries to take ‘more robust actions’ on fossil fuel use last September.

Han Chen, manager of international energy policy at NRDC, said: ‘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 of dollars into propping up coal in Japan and around the world.

‘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 International Institute for Sustainable Development (IISD), who were also involved in the report, warned that government support for coal is much larger than the figures show due to nations’ lack of transparency in how they subsidise the industry.

Those behind the report have urged the G20 countries to make good on their pledges to phase out fossil fuels and establish country-level plans to ensure a ‘just transition’ for affected workers.

The UK is now able to run its electricity grid without using coal power at all but has been criticised for continuing to subside the construction of fossil fuel power plants abroad.