Over the past three months, South Korea and Japan, the second- and third-largest financiers of overseas coal power have announced plans to end this practice in principle.
In April, South Korea said it would stop funding new overseas coal projects. In May, Japan signed on to a statement stating that Group of Seven members will phase out direct government support for unabated overseas coal by the end of 2021, with the exception of “limited circumstances at the discretion of each country.”
As Japan and South Korea formulate concrete steps to implement these policies, they must work to limit exceptions to their bans on overseas coal finance. Failing to close major loopholes would not only diminish the decarbonization impact of these commitments, it would also weaken multilateral efforts to persuade the world’s largest financier of overseas coal, China, to reduce its coal exports and damage the credibility of similar multilateral efforts to champion the adoption of cleaner energy.
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