A new alliance of 19 nations committed to quickly phasing out coal has been launched at the UN climate summit in Bonn, Germany. It was greeted as a “political watershed”, signalling the end of the dirtiest fossil fuel that currently provides 40% of global electricity.

New pledges were made on Thursday by Mexico, New Zealand, Denmark and Angola for the Powering Past Coal Alliance, which is led by the UK and Canada.

“The case against coal is unequivocal,” said UK climate minister Claire Perry, both on environmental and health grounds – air pollution from coal kills 800,000 people a year worldwide. “The alliance will signal to the world that the time of coal has passed.” The UK was the first nation to commit to ending coal use – by 2025 – but the electricity generated by coal has already fallen from 40% to 2% since 2012.

“There is a human cost and an environmental cost but we don’t need to pay that price when the price of renewables has plummeted,” said Catherine McKenna, Canada’s environment minister. “I’m thrilled to see so much global momentum for the transition to clean energy – and this is only the beginning.” The alliance aims to have 50 members by next year.

Asked about Donald Trump’s US administration, whose only event in Bonn was to promote coal, McKenna pointed out that renewable energy already employs 250,000 people in the US, compared to 50,000 in coal, and said this is the clean growth century: “The market has moved on coal.”

But McKenna said it was very important that communities dependent on coal jobs received help. Mohamed Adow, at Christian Aid, said: “It is a rebuke to Trump from the UK and Canada, two of America’s closest allies.”

The current alliance includes a few nations like Fiji that do not use coal and does not include any Asian countries where much of the world’s coal is used. Australia, the region’s biggest supplier of coal, has refused to join. But Nick Mabey, chief executive of the E3G thinktank, said: “The launch of this new alliance is a political watershed moment. Governments have now grasped the reality that coal use can end, and fast. The only way for coal is down.”

Manuel Pulgar-Vidal, who led the UN climate talks in Peru in 2014 and is now at WWF, said: ‘We welcome the first steps countries have taken today but this is only the start.”

The alliance was also welcomed by the most vulnerable states. “I can’t stress enough that coal is by far the largest single barrier to staying within 1.5C of warming, and giving vulnerable countries like mine a chance of survival,” said David Paul, environment minister from the Marshall Islands.

Earlier the Marshall Island’s President Hilda Heine said the country was very disappointed in Australia’s continued pursuit of coal: “We’re neighbours: they should be aware of the issues that are facing small island countries.”

The Australian Greens MP Adam Bandt said the nation was “posing an existential threat to many of our neighbours” and that the countries backing coal phase outs came from across the political spectrum: “A door has been opened for the Australian government here.”

But Australia’s environment minister Josh Frydenberg, said coal was expected to remain the bedrock of Asia’s power supply, providing about a third of electricity in 2040. At the moment, coal generates about 75% of Australian power.

Greenpeace UK lauded the alliance, but Rachel Kennerley, from Friends of the Earth UK, said: “It’s a profound disconnect that the UK is positioning itself as a climate leader but simultaneously green-lighting fracking, which will open up a whole new fossil industry.”

Germany is not part of the new alliance and the pressure for it to announce the phase-out of its large fleet of heavily polluting coal power stations intensified on Thursday. New OECD data shows that its fossil fuel subsidies have increased each year from 2014-16, to €3.9bn. Another new report, part of the G20 peer review process, shows Germany believes only two of its many fossil fuel subsidies need to be removed – both are already being phased out under EU rules.

Shelagh Whitley, at the Overseas Development Institute in the UK, said: “Germany is subsidising climate chaos and is saying it won’t stop.” Alex Doukas, at Oil Change International in the US, said: “Germany should be ashamed of itself.”

Chancellor Angela Merkel addressed the climate summit on Wednesday, saying the response to climate change would determine the destiny of humankind and urging faster action. But she was heavily criticised for not announcing a coal phaseout. Michael Schäfer, at WWF Germany, said: “Internationally, Merkel is often still perceived as a climate champion. But she will lose that reputation if she does not finally act at home.”

That could happen imminently. Merkel’s CDU party is negotiating a three-way coalition to form a new government and talks are due to end on Thursday night. The CDU and Free Democrats have offered to close 10 coal power stations by 2020 but the Greens want 20 shut down to enable Germany to meet its carbon target.

Asked about Germany’s coal, Perry said: “We are not trying to tell other countries what to do, we want to show them it can be done. Every country is different [but] we all know we need to move beyond coal.”

The alliance will work by encouraging new commitments and using financing and shared technology and best practice to encourage others to phase out “unabated coal” – plants where carbon dioxide is not captured and buried below ground. Its national members are Angola, Austria, Belgium, Canada, Costa Rica, El Salvador, Fiji, Finland, France, Italy, Luxembourg, Marshall Islands, Mexico, Netherlands, New Zealand, Niue, Portugal, Switzerland and the United Kingdom.