Coal is declining sharply, as financiers and insurance companies abandon the industry in the face of shrinking demand, pressure from climate campaigners, and competition from cleaner fuels. After years of its predicted demise, the world’s dirtiest fossil fuel may finally be on the way out.

Any day now, New York State will be coal-free. Its last coal-fired power station, at Somerset on the southern shore of Lake Ontario, will shut for good as the winter ends. Remember when Donald Trump promised to bring back coal? Well, three years on, coal’s decline is accelerating — in the United States and worldwide. With the fuel unable to compete in most places with natural gas, nuclear , and renewables, the mining and burning of coal is increasingly toxic economically as well as environmentally. Coal mines are becoming “stranded assets” — unlikely ever to pay off the costs of their development. The risks for financiers are becoming too great. Now, even insurance companies are refusing to underwrite coal-fired power plants and coal mining ventures. And without insurance, say gleeful climate campaigners, coal is dead. Coal burning worldwide fell a further 3 percent last year, the biggest decline yet from a peak in 2013. That trend is unlikely to change. The number of new coal plants that began construction worldwide fell by 84 percent between 2015 and 2018, according to NGOs tracking the demise. Across the developed world, coal’s contribution to keeping the lights on is in freefall. Despite the Trump administration’s dismissal of the climate crisis, the U.S. is proving no exception. Twelve years ago, 45 percent of U.S. electricity was generated by burning coal. The figure is now 24 percent and falling fast. Since Trump arrived in the White House, 39,000 megawatts of coal-burning power plants have been retired across the U.S. and none commissioned. Starved of markets, eight U.S. coal mining companies filed for bankruptcy last year. They included the largest surviving private company, Murray Energy, owned by Robert Murray, a prominent Trump backer.

Insurers fear the growing risks from climate disasters facing almost every other business they insure.

The imperative to wean the world off coal is a no-brainer. Coal is the dirtiest major fuel. Burning it produces roughly twice as much CO2 for every unit of energy output as natural gas. It is currently responsible for around 30 percent of global energy-related CO2 emissions. Investors face growing pressure to pull the plug on coal from climate campaigners, many of whom see shutting off financing as the best route to hobble the fossil fuel industry. And investors see little reason to push back against the pressure since coal represents an escalating financial as well as reputational risk as demand shrinks, regulators turn up the heat on CO2 emissions, and rival cleaner fuels become cheaper. In the past year, insurance companies have increasingly been making a rush for the exits, too. European insurance companies have led the way, with the French giant Axa, Britain’s Aviva, Germany’s Allianz, and Zurich Insurance among more than a dozen major firms limiting their exposure to coal. Typically, they will no longer underwrite coal projects or companies that get more than 30 percent of their revenue from mining or burning coal. But some, such as Axa, promise a total exit by 2030 in developed nations and by 2040 globally. The insurers say that besides their concern about the future viability of coal companies, they fear the growing risks from climate disasters facing almost every other business they insure. In June, Zurich CEO Mario Greco explained that “as one of the world’s leading insurers, we see first-hand the devastation natural disasters inflict on people and communities. This is why we are accelerating action to reduce climate risk by driving changes in how companies and people behave and support those most impacted. It is simply the right thing to do.”

Demolition of the coal-fired Nelson Dewey Generating Station in Cassville, Wisconsin in December 2017. The power plant closed in 2015. Nicki Kohl/Telegraph Herald via AP

In recent months, two big U.S. insurers, Chubb and Axis Capital, have joined the Europeans. Axis said from now on it will not provide new insurance “for the construction of new thermal coal plants or mines.” As with most other companies, the ban extends to tar sands extraction and associated pipeline projects. Chubb said existing investments and insurance policies with coal mining companies —including industry giants such as Glencore and Anglo-American — would be phased out by 2022, after which it will begin cutting ties with coal-burning utilities. Other American insurance giants have lagged behind, including Berkshire Hathaway, Liberty Mutual , and AIG. But the number of insurance companies limiting their exposure to coal more than doubled in 2019, according to an analysis by Unfriend Coal, a campaign backed by Greenpeace and others. Its coordinator, Peter Bosshard , claims that coal is “on the way to becoming uninsurable.” Since only companies underwritten by the state can operate without insurance cover, that would be a death knell for the industry. The insurance companies appear to be taking their lead from the reinsurance companies — the people they go to in order to provide cover for themselves against financial ruin. The world’s three biggest reinsurers — Swiss Re, Munich Re , and Lloyds of London — have restricted their coal coverage since 2018. Following the move by Axis Capital, almost half the world’s reinsurance industry now places limits on their coal exposure.

With the financial squeeze tightening, the collapse of coal is happening more rapidly than many had predicted.

The coal blacklisters are getting strong backing from some of the world’s leading central bankers. Mark Carney, governor of the Bank of England, has been banging the drum for the financial industry to take the risks of climate change seriously since 2014, when he warned of the potential for a widespread collapse of the finance system if investors did not get out of both coal and oil. The insurance companies are also following the wishes of their senior officers in charge of evaluating risk. The officers’ public face, the Chief Risk Officer Forum, last year published a position paper declaring that the insurance industry had what William McDonnell, chief risk officer at London-based RSA Insurance, called “its responsibility to support the wider societal effort to transition to a lower-carbon world.” Other insurance companies may for now fill the gap left by the blacklisters, but there is little doubt that coal companies are feeling the squeeze. The trade magazine World Coal reported recently that “insurer action on coal is causing a tangible impact; insurance brokers report that the cost of insuring coal is increasing as the market shrinks.” The magazine quoted the London-based Willis Towers Watson, the world’s third largest insurance broker, describing an “increasing and worrying trend [that] leaves very few primary [insurance] markets for coal miners to turn to.”

New coal power plant capacity, both in construction (light blue) and in development (dark blue), has fallen by two-thirds since 2015. Data: Global Coal Plant Tracker. Chart by Carbon Brief.

With the financial squeeze tightening, the collapse of coal is happening more rapidly than even some staunch critics of the fossil fuel had predicted. The UK, where coal kick-started the Industrial Revolution 250 years ago, has led the way. Sixty years ago, it generated 80 percent of its electricity from coal, but will be coal-free by 2025. Its biggest power plant, the 4,000-megawatt Drax behemoth in Yorkshire, switches to burning American wood pellets in all its boilers in March 2021. As a result of the death of “king coal,” Britain’s CO2 emissions are now at their lowest in 120 years.

Meanwhile, Germany plans a phase-out of all coal burning by 2038. Even in Poland, which still relies on coal for 80 percent of its electricity, utilities recently abandoned construction of a new plant, Ostroleka C, citing a flight of capital from coal. South Korea is this month idling 28 coal plants, half its fleet, as part of an anti-pollution drive. The one big holdout among developed nations is Japan, where banks continue to back coal, and public fear of nuclear power in the aftermath of the 2011 accident at Fukushima seemingly exceeds climate concerns. Coal power plants are still being built in some fast-growing economies in Asia. China, India, Indonesia, and Malaysia headed the list last year. But even there, the ardor is fading. Take China. It built a reported 43,000 megawatts of new coal power-plant capacity last year, almost twice as much as the rest of the world put together. But even so, coal’s share of power generation is declining in China, as renewables, nuclear, and gas grow in importance. In recent weeks, as the coronavirus has stalled the Chinese economy, it is coal power plants that have been taken off-line first, with coal burning in recent weeks a third lower than during the previous four years.

India’s coal and mines minister has said that his government plans to end coal imports by 2024.

Vietnam, which in recent years has been one of the world’s most enthusiastic coal burners, is scaling back. On instructions from the National Steering Committee for Power Development, coal will provide only 37 percent of the nation’s power in 2025, compared to a previously planned 50 percent. In January, British bank HSBC pulled out of involvement in one 2 , 000-megawatt Vietnamese plant. Analysts said its key funders among Japanese banks were also getting cold feet. India, the world’s second-largest consumer of coal after China, could also be on the cusp of a downturn. Last year, coal burning fell for the first time in a decade, despite a 5-percent rise in GDP, while solar power generation rose by a quarter. The country’s coal mining has fallen behind demand, leaving power stations reliant on more expensive imports. But Pralhad Joshi, the country’s coal and mines minister, has said the government plans to end coal imports by 2024. That threatens to stymie one of the world’s last and biggest major coal mine projects, the Carmichael mine in Queensland, Australia, which is being developed by an Indian company mainly to supply India. The Adani Group, chaired by its billionaire-industrialist founder Gautam Adani, has won permission to remove 60 million tons of coal a year from Carmichael, located in the interior Galilee basin. To export the coal, Adani intends to construct a billion-dollar railroad from the mine to a coastal port adjacent to the Great Barrier Reef. With established Australian mining companies such as BHP pulling back on coal, the Adani proposal has become a test of the country’s continuation as one of the world’s largest remaining coal producers and exporters. Supporters, including the federal and state governments, believe the railroad would make viable a string of other proposed mega-mines in the Galilee basin that have until now been on hold. The cluster of mines has a collective potential output of 330 million tons a year.

The Carmichael mine in Queensland, Australia is one of the world’s last major coal mine projects. Tom Lawrence / Greenpeace

Even as the bushfires burned farther south in Australia last November, heightening Australians’ concerns about climate change, Adani told shareholders that it could be shipping coal from Carmichael by the end of 2021. But with banks cold-shouldering the project, the company said that it will self-finance the mine and railroad. That leaves open the question of insurance. Australia’s two major insurance companies, Suncorp and QBE, have joined a growing list of leading insurance companies around the world reported to have turned down a request to underwrite the project. The world’s largest insurance broker, Marsh, is reportedly reassessing whether to continue to act for Adani in finding an insurer for the project. As one Australian stock market newsletter reported a year ago, “the mine cannot legally proceed until it can acquire insurance.”