How to close a coal plant early? Transition credits, explained | Videos | Eco-Business

To achieve net zero by 2050, Asia has to shutter at least two coal-fired power plants each week from now to 2040. 

Despite early coal retirement programmes launched in Indonesia, the Philippines and Vietnam by the Asian Development Bank (ADB) and other international organisations of late, it has been challenging to slow coal development and production in these three countries, which account for over 80 per cent of Southeast Asia’s planned capacity.

For the region’s first early phase-out deal in Indonesia, costs have ballooned from ADB’s previous estimate of US$300 million to some US$1.3 billion, after taking into account the need to fully replace foregone coal power with reliable renewable energy.

To offset some of the costs involved in prematurely replacing the region’s relatively young coal fleet with clean energy, Singapore’s central bank has mooted a novel class of carbon credits, known as “transition credits”.

The Transition Credits Coalition (Traction), convened by the bank, also released its latest interim …