Southeast Asian countries are preparing to speed up the retirement of coal-fired power plants, following the launch of a new carbon credit certification method that could bring in fresh funding to support the transition.
On May 6, Verra—a leading global carbon credit verification body—announced it had approved a new methodology that turns emissions cuts from early coal plant shutdowns into certified carbon credits. These credits can then be sold to help offset financial losses for companies and investors, making coal phaseout projects more attractive.
Known as the “VM0052 Methodology for Accelerating Coal Power Plant Retirement through Just Transition,” the framework was developed by the Coal to Clean Credit Initiative (CCCI), an effort led by the Rockefeller Foundation. Under this new approach, early coal plant closures must be tied to new renewable energy projects to ensure emission reductions are real and lasting.
Verra said the goal is to create high-quality “Transition Credits” that not only cut carbon emissions but also support a just energy shift—protecting workers and local communities affected by plant closures through social and economic support programs.
Joseph Curtin, Managing Director for Power and Climate at the Rockefeller Foundation, clarified that the new method only applies to coal plants connected to national power grids. It does not yet include captive power plants—those that serve only private industrial or commercial users.
Despite the limitation, the method has already gained interest from major banks and governments. HSBC and Standard Chartered began exploring related projects in 2023. In the Philippines, energy company ACEN is working with the Monetary Authority of Singapore (MAS) and corporate partners like Keppel Corporation and green investor GenZero to shut down one of its coal plants a decade early. ACEN estimates the early closure will cost around USD 1.5 billion.
Japan’s Mitsubishi Corporation and its energy subsidiary, Diamond Generating Asia, have also joined the initiative, adding momentum to regional coal phaseout efforts.
Meanwhile, U.S. companies are taking notice of the new carbon credit opportunities in emerging markets. On the same day as Verra’s announcement, U.S. think tank the Center for Climate and Energy Solutions (C2ES) launched the “Kinetic Coalition.” This new alliance aims to drive more corporate investment in clean energy projects across developing economies.
C2ES President Nat Keohane said the coalition includes 20 major companies that could become buyers of transition credits. Global firms like PepsiCo, Amazon, Mastercard, and McDonald’s are all exploring clean energy options across their supply chains.
Related Topics:
- Chinese Company Denies Allegations of Irregularities in Coal Bidding Process
- Vulcan South Mine Introduces Australia’s First Coal Extraction Technology
- Does Smokeless Coal Smell?