MAS launches consultation for coal phase-out criteria
Amongst criteria listed is that CFPPs must be phased out by 2040.
The Monetary Authority of Singapore has launched a public consultation on thresholds and criteria for financing the early phase-out of coal-fired power plants (CFPPs) under the Singapore-Asia taxonomy.
Amongst key criteria is that the CFPPs must be phased out by 2040 and not have a total operating duration exceeding 25 years; that the CFPPs must have a positive fair economic value remaining and demonstrate verifiable emissions savings, so as to ensure that CFPPs economically not viable, which would likely have been shut down naturally, are not eligible.
“Where a clean energy replacement is not feasible, it is still possible to demonstrate long-term emissions savings if there are national or regional level energy grid decarbonisation plans and commitments that are aligned to 1.5°C ambition levels,” MAS stated in a press release.
The CFPPs must also be replaced by clean energy capacity that is at least equivalent to the phased-out electricity capacity, to prevent ‘emissions leakage’ where the closure of a CFPP is offset by new CFPPs being built or by existing CFPPs being operated at increased capacity.
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The inclusion of managed coal phase-out under the Singapore-Asia Taxonomy aims to provide a credible standard to increase participation in projects for the early retirement of CFPPs that are aligned with a 1.5 degrees Celsius (1.5°C) transition pathway, MAS said.
“The early phase-out of CFPPs is critical to the energy transition of the Asia-Pacific region, where coal accounts for nearly 60% of power generation and about a third of greenhouse gas (GHG) emissions, and where CFPPs have relatively long remaining lifespans,” Singapore’s financial regulator stated in a press release.
MAS also laid out criteria for CFPP owners, to commit to zero new developments of CFPPs, and lay out a transition plan which has to reach full alignment to 1.5°C by 2030.
MAS invited interested parties to submit their comments by 28 July 2023 at this link.