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The new carbon credit scheme aims to phase out coal in 60 plants by 2030

After receiving approval for its rulebook, the Rockefeller Foundation announced that it aims to sign 60 projects up by 2030 under a new carbon financing scheme to phase out coal-fired energy in developing countries.

The International Energy Agency estimates that 2,000 coal-fired plants will need to be shut down by 2040 to achieve global climate goals, but only 15% of them are covered by pledges.

The Rockefeller Foundation’s Coal to Clean Credits Initiative is one of many schemes in development which aim to use carbon financing to help them close them earlier than planned and replace them by renewable energy.

Joseph Curtin, the Rockefeller Foundation’s director of "coal to Clean" said, "That target is our overall aim, our ambition."

Verra, a carbon standards organisation, launched the CCCI methodology in Singapore on Tuesday. The method will determine which projects are eligible, and calculate emission reductions due to early coal plant closures, allowing for them to earn carbon credits.

The South Luzon Thermal Energy Corporation plant (SLTEC) in the Philippines will be the first to implement the new methodology. The transaction is expected to be complete next year.

"Obviously, if we close one transaction -- and we're much closer to doing so -- we think that would have a strong impact on the markets and hopefully send a message across the entire region that this was indeed possible."

Curtin stated that his team has identified approximately 1,000 coal-fired power plants in developing nations which would be eligible for the method.

He said that the 60 projects could bring in $110 billion of public and private investments by 2030. This was based on research commissioned by his foundation.

The early retirement is supported by the Philippine energy company ACEN, together with Singapore's clean investment group GenZero and infrastructure conglomerate Keppel.

The revenue from carbon credits would be used to pay for energy storage, support renewables, and protect local worker and community interests, according to Eric Francia, ACEN chief executive.

CCCI has gone through seven rounds of consultations to determine its methodology. This was done in part to address the concerns of environmental groups who believe that carbon finance shouldn't be used to bailout coal asset owners.

The risk is that you might be giving money to a stranded investment that won't be viable in the long run. Jonathan Crook, of Carbon Market Watch a research organization.

Curtin said that the criteria for the CCCI initiative will only include projects that are profitable, owned by countries or companies that have committed to "no new coal", and that they also belong to those who have made a firm commitment.

Although there is a ban on the construction of new coal-fired power plants in the Philippines for the time being, it's expected that new facilities approved prior to the ban will still be coming online in the next couple of years.

Francia, ACEN's Director of Energy Transition, said that the early retirement SLTEC could still lead to progress in the energy transition.

He said: "Ofcourse we need to manage perception, which admittedly is not good. But we look at substance and that's really the equation."

(source: Reuters)