New tool to shutter Asia’s coal plants is gaining momentum

illuminem summarizes for you the essential news of the day. Read the full piece on Bloomberg or enjoy below:

🗞️ Driving the news: A new form of carbon credits, known as transition credits, is gaining support to facilitate the early closure of coal-fired power plants in Asia
• These credits aim to offset the revenue loss from shutting down coal plants ahead of schedule

🔭 The context: The Monetary Authority of Singapore and other entities advocate for transition credits to reduce emissions from coal, the largest contributor to power sector emissions
• This initiative targets Asia's developing economies, where coal consumption recently hit a record high

🌍 Why it matters for the planet: Transitioning from coal to cleaner energy sources is critical for meeting global climate targets
• Transition credits could provide a financially viable path for coal-dependent regions to reduce their carbon footprint

⏭️ What's next: Pilot projects, like those involving the Philippines-based Acen Corp., are testing strategies to accelerate coal plant closures
• The success of these projects could pave the way for broader implementation and trading of transition credits

💬 One quote: “The only real practical solution to this is to find a financially sustainable way to close them down early
• Then the question is — who’s going to pay,” said Tan Su Shan, head of institutional banking at DBS Group Holdings Ltd

📈 One stat: Closing down a 1 gigawatt coal plant five years early requires about $310 million of financing, according to McKinsey & Co. and Singapore’s central bank

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