Global Coal Generation Declines, Even as China, India Race to Build New Plants

Abatify Summary

Nature & Climate Perspective

**The expansion of coal capacity, despite lower overall utilization, threatens long-term atmospheric stabilization and locks in significant potential ecological damage. **

Continued construction of coal infrastructure in China and India poses a persistent threat to global carbon sequestration targets by extending the timeline of fossil-fuel dependence.
Declining capacity factors indicate a shift toward renewables, yet the construction phase of these plants continues to disrupt local biodiversity and hydrological systems.
The mismatch between capacity and actual generation complicates long-term environmental stability projections, making climate modeling and mitigation planning more volatile.

Market & Policy Outlook

**Declining coal generation amid capacity growth highlights massive financial stranded-asset risks and shifts corporate compliance focus toward robust I-RECs and SBTi-aligned procurement. **

The growth of underutilized coal assets creates a high risk of stranded capital, distorting market pricing and hindering the financial liquidity needed for transition finance.
Corporate entities seeking alignment with SBTi guidelines must increasingly leverage I-RECs and virtual power purchase agreements to isolate their Scope 2 emissions from coal-heavy grids.
The divergence between capacity and generation complicates the baseline settings under Article 6.4, making it harder to prove additionality for clean energy transition projects in these jurisdictions.

The world added dozens of new coal power plants last year in what amounted to the biggest coal buildout in a decade, according to a new analysis. And yet, the amount of electricity generated by coal power plants globally declined. Read more on E360 →

Global Coal Generation Declines, Even as China, India Race to Build New Plants

Abatify Summary

Nature & Climate Perspective

Market & Policy Outlook

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