Singapore, 6 May, 2025 - A major breakthrough in carbon markets and climate finance was unveiled today at the Ecosperity conference with the launch of the first-ever carbon crediting methodology designed to enable the early retirement of coal power plants and their replacement with renewable energy.
The methodology was developed under the Coal to Clean Credit Initiative (CCCI) – an initiative supported by The Rockefeller Foundation – with end-to-end technical leadership from global carbon asset developer South Pole, as well as technical expertise and stakeholder convening by the Climate Policy Initiative (CPI) and the Rocky Mountain Institute (RMI). It offers a high-integrity, market-based pathway to accelerating the global energy transition through transition credits.
Approved by Verra, one of the world's leading carbon standards organisations, the methodology is the product of a rigorous, multi-year, and multi-stakeholder development process. It sets a new benchmark for accurately quantifying emissions reductions from the early decommissioning of coal power plants. Uniquely, it also embeds just transition safeguards, requiring each project to design and implement comprehensive plans to mitigate socio-economic impacts on workers and communities. These plans must outline pathways to new employment, reskilling, and local economic development.
In a first for the carbon market, the methodology applies the same stringent monitoring, reporting, and verification (MRV) standards to the execution of these just transition plans as it does to the emissions reductions themselves—ensuring both environmental and social integrity.
South Pole supported the end-to-end technical process for CCCI – from initial feasibility assessments and stakeholder consultations to drafting the methodology in line with stringent requirements from Verra and the CCCI. This helped lay the groundwork for a scalable approach to harnessing the power of carbon markets for the coal-to-clean energy transition.
"This methodology is not just a carbon accounting tool - it's a blueprint for responsibly phasing out coal while unlocking finance for clean energy," said Frédéric Gagnon-Lebrun, Global Senior Director, Policy & Strategy, at South Pole. "By aligning with national climate targets and ensuring environmental and social integrity, we're demonstrating how carbon markets can support a just and accelerated energy transition."
"More and more countries and communities are choosing to transition to clean energy sources, because the economics work for them and provide additional health, economic, and security benefits. This week, we were proud to stand alongside our partners in bringing this methodology to market," said Dr. Joseph Curtin, Managing Director for Power and Climate at The Rockefeller Foundation. “The next step is to demonstrate how high-integrity transition credits can unlock tangible benefits for people living and working near coal facilities."
“To meet global climate goals, we need to do more than slow emissions—we need to rethink the very systems that produce them. Our new methodology empowers energy providers to make that shift in a way that doesn't leave workers or communities behind and doesn't inadvertently exacerbate energy poverty," said Mandy Rambharos, CEO of Verra. "With this launch, Verra is raising the bar for how carbon finance can drive real climate action while putting people and equity at the center of the energy transition."
"We laud the successful launch of the methodology, a first for coal to clean transitions. This is a critical step to enable initiatives such as ACEN's transition credits pilot project, which will involve the accelerated and just transition of a 246MW coal plant in the Philippines, and its replacement with clean, reliable and affordable energy," said Eric Francia, CEO of ACEN.
Coal remains the single largest source of global power emissions, yet more than 90% of plants are locked in by long-term contracts or regulations that guarantee returns — leaving little incentive for early retirement. The new methodology enables a new source of finance to support the energy transition, through the monetisation of avoided emissions from retiring these assets before their planned or expected end-of-life and their replacement by new renewable energy capacity.
Serving as a proof of concept, the CCCI urges carbon market participants, governments, and financiers to leverage this new tool – and to recognise its potential to support the achievement of the Paris Agreement goals and Nationally Determined Contributions (NDCs), and to drive a high-integrity transition from coal to clean energy that benefits local communities and economies.
Looking ahead, South Pole is focused on supporting the integration of transition credits into both voluntary and compliance markets, unlocking finance for a just, accelerated transition to renewables.
Frédéric Gagnon-Lebrun added: "The CCCi has shown that it's possible to apply the highest standards of environmental integrity to some of the hardest-to-abate sectors. For the carbon market to significantly contribute to shutting down coal plants, demand for transition credits must scale."
ENDS
Media contact:
media@southpole.com.
South Pole is the world's leading carbon asset developer and climate consultancy.
Since 2006, South Pole has been a trusted partner and advisor to governments, public sector organisations, and leading businesses on their decarbonisation journeys. South Pole serves over 1,000 clients across the world, and its global team of experts has helped many Fortune 500 businesses implement comprehensive strategies that help build resilience and turn climate action into long-term business opportunities.
In line with its mission to deliver true climate impact for all, South Pole has used the power of markets to help channel climate finance to over 850 projects in more than 50 countries across the globe. To date, these projects have helped reduce over 200 million metric tonnes of CO2 emissions, accelerated low-carbon transformations across several sectors, and provided measurable benefits to communities vulnerable to climate change.
The business is supported by world-class investors, including Temasek's GenZero, Lightrock, Corisol, and Salesforce Ventures.
South Pole is a social enterprise recognised by the World Economic Forum's Schwab Foundation, and committed to becoming a B Corp globally across all of its local entities.
For more information, visit www.southpole.com or LinkedIn.
The Coal to Clean Credit Initiative (CCCI) is a consortium of global experts, supported by The Rockefeller Foundation with end-to-end technical leadership from global carbon asset developer South Pole, as well as technical expertise and stakeholder convening by the Climate Policy Initiative (CPI) and the Rocky Mountain Institute (RMI). The consortium is focused on ensuring that CCCI's methodology is established according to the highest level of environmental integrity, technical best-practice, and credible, cross-societal stakeholder engagement.
The draft methodology, currently under review by Verra, has been developed in a transparent and inclusive manner over the past 18-months, with input from a technical advisory group of leading experts, and considering real-world cases that are most suitable for the generation of coal-to-clean credits. CCCI has already hosted five global and local consultations (two in Indonesia) on earlier versions of the methodology, where it received buy-in from a cross-section of energy market participants, NGOs, and civil society organizations. The draft methodology will invite two rounds of public comment through a consultation process led by Verra in 2024.
CCCI aims to set a new benchmark for carbon-financed coal transition projects, accelerating the managed and equitable phase-out of coal-fired power plants while incentivizing their replacement with clean power. By providing a nearer-term opportunity at a project level, CCCI's methodology can align with jurisdictional approaches and incentives for system-level decarbonization if they are introduced.
At the forefront of the methodology is the recognition that workers and communities will require investment and support to manage the coal-to-clean transition. To this end, CCCI's methodology will require that a share of carbon revenue is reserved to meet the needs outlined in a project-level just transition plan and ensure communities are not left behind.
CCCI's project approach recognizes that coal-fired power plants are strategic assets operating within a national power system, and that their accelerated retirement requires careful consultation with local and federal/national authorities and a consideration and evaluation of potential system-wide impacts. CCCI will also be intentionally designed to integrate with existing and future compliance and voluntary markets.
For this reason, CCCI complements other carbon market and public climate finance initiatives that are focused on delivering this same ambition, while working on an accelerated transition timeline. For example, CCCI can help to unlock the private financing needed for larger-scale initiatives, such as Just Energy Transition Partnerships. It can also promote broader carbon market development, by growing the supply of high-integrity credits and setting clear standards for buyers.
CCCI will continue to share expertise with stakeholders and other coal transition initiatives, including carbon standards, international finance institutions, and other organizations working on financial mechanisms. CCCI will continue to engage with stakeholders in developing this new benchmark for coal-to-clean projects.
