Engie, the major energy company partly-owned by the French government, will terminate investments in new coal projects in a major bid to tackle climate change, the country’s energy and ecology minister, Segolene Royal has announced.
According to reports from Le Figaro and AFP, the decision came after government pressure and intense campaigns from local and international NGOs and communities, citing its potential reputational damage.
The company also cited economic benefits to exiting coal, particularly in light of potential carbon price implementation, which would penalise any future investments in the dirty energy source.
This week’s announcement follows a government decision earlier this year to end financing for coal plants overseas.
Currently, the pressure is high on France, the host country of the UN climate summit (COP21) in Paris in December, to demonstrate large-scale efforts to drastically reduce its carbon emissions and tackle climate change.
Engie is one of the major private sponsors of COP21.
In recent months, the company has been heavily criticised by French NGOs for its carbon-intensive operations which is at odds with the credentials of the sponsorship.
Last week, the French and European chapters of Friends of the Earth and Climate Action Network as well as NGOs in Turkey, where a number of Engie’s proposed coal power plants would have been built, mobilised local and international communities, particularly in Turkey and Mongolia, to campaign against the plans.
The groups delivered a letter to President François Hollande, asking him to end all overseas coal investments, and published a study on Engie’s new coal investments, especially in Turkey.
Royal told French TV stations the government was set to respond to the campaigners’ calls:
You cannot on one hand deplore the catastrophic impacts of climate change and continue to invest in fossil fuels on the other. It takes discipline and good order of things.
Campaigners’ attention will now shift to Engie’s existing coal and fossil fuel portfolio, and aim to up the pressure on the company to close – rather than sell off – its existing coal power plants, while expanding its renewable energy business.
Targets for closure will focus on Engie’s least efficient power plants, such as Hazelwood in Australia, with its high age and linkage to a particularly hazardous coalmine, and Vado Ligure in Italy, currently stopped due to legal intervention from local authorities.
According to Friends of the Earth, Engie’s 30 coal plants emit 81 million tonnes of carbon dioxide every year, equivalent to nearly 50% of France’s entire emissions.
Coal currently represents around 15% of ENGIE’s energy production business. At the same time, 20% of its production capacity stems from renewable energy.
Campaigners regard Engie’s announcement to abandon new coal power plant projects as a major step forward towards the end of new coal power plants worldwide, and as a signal to governments and other energy companies that they should commit to ending any new coal projects.