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New Coal Projects Surge Amid Cancellations

New Coal Projects Surge Amid Cancellations

Global coal expansion has picked up pace. According to new data from Urgewald, an environmental and human rights organisation, coal-related project announcements during 2025 outnumbered cancellations by more than three to one. The organisation's Global Coal Exit List recorded 257 newly announced coal projects worldwide. During the same period, just 76 projects were cancelled or shelved.

For UK businesses, this might seem distant. However, the scale of planned coal infrastructure affects global carbon markets, supply chain standards, and investor expectations. Companies with international operations or procurement links to coal-intensive regions face growing scrutiny. Moreover, the expansion trend signals that carbon pricing and climate risk reporting will remain material business concerns for years to come.

The pipeline now includes coal mines, power stations, processing facilities and transport infrastructure. More than 40% of the 1,500 parent companies tracked by Urgewald are developing new thermal coal assets. Consequently, the total number of projects under development has climbed to 1,510. This represents a reversal of the trajectory most climate analysts expected.

What Urgewald's database reveals about the coal sector

Urgewald's Global Coal Exit List covers companies involved across the thermal coal value chain. This includes mining, coal-fired power generation, coal chemicals and transport infrastructure. The latest update tracks more than 1,500 parent companies and approximately 1,150 subsidiaries. The database is used by investors, lenders and procurement teams to assess exposure to thermal coal.

Pacôme David-Mauduit, a senior researcher at Urgewald, noted the significance of the trend. He stated that instead of shrinking, the pipeline of new coal assets has grown substantially. For every project shelved, three new projects were announced. This ratio applies across mining, power, chemicals and infrastructure.

It is important to understand what these figures represent. An announcement does not mean construction has started. Many projects remain at planning or feasibility stages. Similarly, a cancelled or shelved project may have been abandoned, suspended or removed from active development rather than physically dismantled. Nevertheless, the direction of travel is clear.

The database identifies 335 companies planning 606 new coal-fired power projects. Combined, these projects represent more than 740 gigawatts of generating capacity. To put that in context, the planned capacity is roughly four times the size of the current coal-fired power fleet in the United States. Meanwhile, 357 companies are planning to open or expand thermal coal mines across 39 countries. Those proposed projects represent at least 3,271 million tonnes of annual production capacity. That is equivalent to approximately 41% of current global thermal coal output.

Timing matters for Australia and Türkiye ahead of COP31

Australia and Türkiye are preparing to co-host COP31, the 31st United Nations climate conference. Therefore, the findings carry particular political weight. Australia was identified as having the world's third-largest pipeline of thermal coal mining projects. The country has 49 new mines or mine extensions planned. Twenty of those are greenfield projects, meaning new mines developed on sites without existing operations.

Australia remains one of the world's largest coal exporters. As a result, its domestic project pipeline affects not only national emissions but also international coal consumption. Türkiye has also attracted attention over its coal expansion plans. Both countries will face scrutiny over their domestic energy policies during the conference.

For UK businesses with Australian supply chains or procurement relationships, this matters. Public sector suppliers in particular face increasing pressure to demonstrate supply chain transparency and carbon reporting. Private sector firms are also affected, especially those bidding for tenders that include environmental criteria or working with investors applying ESG screens.

Record coal demand complicates the transition picture

The expansion of coal project proposals is happening while global coal use remains at historically high levels. The International Energy Agency reported that global coal demand reached a record in 2024. Demand rose by about 1.2% in energy terms and approximately 1.4% in physical terms. Coal-fired electricity generation also hit a new high of around 10,700 terawatt-hours in 2024. The power sector accounted for roughly two-thirds of global coal consumption.

The IEA's 2025 outlook projected global coal demand to remain close to its 2024 level, at approximately 8.85 billion tonnes. Growth was expected to slow considerably. However, regional trends diverged. Weaker coal use in China and India was expected to be offset partly by stronger demand in the United States and the European Union.

This creates an important distinction between short-term demand and long-term project development. Flat or slowly declining consumption does not automatically prevent companies and governments from proposing new mines or power stations. Projects may be justified on grounds including energy security, expected electricity growth, export revenues, industrial policy or concerns about grid reliability. These justifications can persist even as renewable energy costs fall.

Separate tracking by Global Energy Monitor found 835 coal mine proposals under development. These represent approximately 2,521 million tonnes per year of potential capacity. The organisation said the pipeline was about 11% larger than in 2024. Notably, this growth occurred even though the number of new mine openings had declined and new mine capacity openings had fallen by nearly 40% since 2024. Furthermore, approximately 781 million tonnes per year of mine capacity was already under construction or in trial operation.

Why new coal projects continue despite climate commitments

Several factors explain why new proposals continue. First, electricity demand growth in emerging economies is adding industrial capacity and electricity-consuming infrastructure. This creates pressure for new generation. Second, governments continue to view domestic coal as a controllable source of electricity. Energy security concerns have intensified after fuel price volatility and supply disruptions in recent years.

Third, coal-producing countries may pursue new mines and transport links to protect export revenue and market share. Fourth, coal plants can provide dispatchable generation. However, their role is increasingly challenged by battery storage, transmission expansion and flexible gas or renewable systems. Finally, policy uncertainty matters. Changes in national governments and energy policy can revive projects previously considered unlikely to proceed.

At the same time, the economic case for new coal assets is becoming more contested. Renewable energy costs have fallen. Clean energy deployment is accelerating. Tighter climate policies can reduce the operating life and profitability of coal facilities. Therefore, a project can be announced for strategic or political reasons without becoming financially viable. This creates uncertainty for investors and lenders.

For UK businesses, the implications are both direct and indirect. Companies with operations in coal-intensive regions may face stricter reporting requirements. Investors are applying more rigorous ESG screens. Supply chain due diligence is expanding to cover Scope 3 emissions. Public sector suppliers must demonstrate compliance with PPN 06/21, which requires carbon reduction plans. As a result, understanding exposure to coal-related assets is becoming a material business risk.

Key details from the Urgewald data release

Commercial consequences for UK businesses and supply chains

The continued expansion of coal infrastructure has practical consequences for UK companies. First, carbon pricing mechanisms are likely to remain in place and potentially tighten. Businesses with energy-intensive operations or supply chains linked to coal-dependent regions should anticipate higher costs. Second, investor expectations around climate risk disclosure are hardening. Companies that cannot demonstrate credible emissions reduction plans may face higher capital costs or exclusion from certain funds.

Third, procurement standards are evolving. Public sector suppliers must meet the requirements set out in PPN 06/21, which mandates carbon reduction plans for contracts above certain thresholds. Private sector procurement teams are also incorporating carbon metrics into supplier assessments. Consequently, businesses without visibility of their supply chain emissions face commercial disadvantage. Fourth, reputational risk is increasing. Stakeholders including customers, employees and local communities are scrutinising corporate climate commitments.

For manufacturers, the expansion of coal power in certain regions affects the carbon intensity of imported goods. Products manufactured using coal-based electricity carry higher embedded emissions. This matters for companies reporting Scope 3 emissions or seeking to meet supply chain sustainability standards. Similarly, service providers with international operations need to understand regional energy mixes and their impact on overall carbon footprints.

Financial institutions are also tightening lending criteria. Banks and insurers are under pressure to align portfolios with net zero targets. This means reduced access to finance for coal-related projects and, by extension, for companies with significant coal exposure. UK businesses seeking finance or insurance should expect more detailed questions about energy sources, supply chain emissions and climate transition plans. ESG compliance and carbon reporting services can help companies navigate these requirements.

The long-term nature of coal infrastructure also matters. Coal plants typically operate for several decades. New mines require sustained demand to justify investment. As a result, projects announced today could still be operating in 2050 or beyond. This creates a risk of stranded assets if coal demand weakens faster than project developers expect. For businesses with exposure to coal-intensive regions, this represents a material financial risk that should be factored into strategic planning.

Reporting obligations and the role of Scope 3 emissions

UK businesses are facing more rigorous carbon reporting obligations. The Streamlined Energy and Carbon Reporting framework requires certain companies to disclose energy use and emissions. However, requirements are expanding beyond direct operations. Scope 3 emissions, which cover indirect emissions from supply chains and purchased goods, are increasingly material to corporate reporting.

For companies with supply chains linked to coal-intensive regions, Scope 3 emissions can represent the largest share of total carbon footprints. Therefore, understanding where goods are manufactured, how they are transported, and what energy sources are used is essential. This requires detailed supply chain mapping and engagement with suppliers. Many businesses lack the internal capacity to manage this work. Carbon reduction programmes tailored to SMEs can provide practical support for reporting and compliance.

Public sector suppliers face additional requirements. PPN 06/21 requires suppliers bidding for contracts above £5 million per year to publish a carbon reduction plan. This must include commitments to net zero, baseline emissions data, and evidence of emissions reduction measures. Suppliers must also demonstrate how they will reduce emissions across their supply chains. Consequently, businesses without credible carbon data and reduction plans are excluded from public sector opportunities.

The expansion of coal infrastructure globally makes Scope 3 reporting more complex. Suppliers may be based in regions where coal power is expanding. Tracking the carbon intensity of purchased goods and services becomes harder when energy mixes are changing. Businesses need systems to monitor these changes and update emissions calculations accordingly. This is particularly challenging for smaller companies without dedicated sustainability teams.

Strategic considerations for businesses with international operations

Companies with international operations face strategic choices. First, they need to assess exposure to coal-related risks. This includes direct operations in coal-dependent regions, supply chain links to coal-intensive industries, and financial exposure through investments or joint ventures. Second, businesses should evaluate the resilience of their energy supply. Regions with expanding coal infrastructure may face future carbon pricing, regulatory restrictions or investor pressure.

Third, companies should consider how their energy mix affects competitiveness. Products manufactured using renewable energy have lower embedded emissions. This can be a commercial advantage in markets with carbon border adjustments or where customers prioritise low-carbon goods. Fourth, businesses need transition plans that align with investor expectations and regulatory trends. This includes setting science-based targets, improving energy efficiency, and sourcing renewable electricity where feasible.

For UK manufacturers, the location of production matters. Manufacturing in regions with expanding coal power increases emissions intensity. Relocating production or switching to suppliers in low-carbon regions can reduce Scope 3 emissions and improve competitive positioning. However, this requires careful analysis of costs, quality, logistics and supply chain resilience. Similarly, service providers should assess whether operating in coal-dependent regions aligns with corporate climate commitments and client expectations.

Energy procurement is another area for action. Businesses with operations in multiple countries should evaluate opportunities to source renewable electricity. Power purchase agreements, renewable energy certificates and on-site generation can all reduce reliance on coal-based power. However, the feasibility of these options varies by region. Companies need local expertise to navigate energy markets and regulatory frameworks. Sustainable procurement support can help businesses identify and implement lower-carbon sourcing strategies.

Policy uncertainty and the risk of stranded assets

The gap between announced projects and actual construction creates uncertainty. Not all 257 announced projects will be built. However, the fact that announcements outnumber cancellations by more than three to one indicates that the coal pipeline is not shrinking as quickly as climate targets require. This has implications for policy, finance and corporate strategy.

Governments face pressure to reconcile energy security concerns with climate commitments. Policy changes can revive or shelve projects. For businesses, this creates regulatory risk. A project that appears unlikely to proceed may gain political support after an election or energy crisis. Conversely, projects with regulatory approval may be halted due to investor pressure or legal challenges. Tracking these policy shifts is essential for companies with exposure to coal-dependent regions.

Financial institutions are also reassessing coal exposure. Banks, insurers and asset managers are under pressure to align with net zero targets. This means reducing financing for coal projects and divesting from coal-related assets. However, the pace of this shift varies by institution and region. Some lenders continue to finance coal projects, particularly in markets where alternative energy sources are less developed. Businesses seeking finance should understand how lenders assess coal-related risks and what disclosures are required.

The risk of stranded assets is material. If coal demand declines faster than expected, new mines and power plants may become economically unviable. This can result in write-downs, early closures and financial losses. For businesses with investments in coal-related infrastructure, this represents a significant risk. Companies should model different demand scenarios and assess the resilience of their assets under tightening climate policies and falling renewable energy costs.

Where to find authoritative guidance and data

Businesses seeking detailed information on coal project pipelines can access Urgewald's Global Coal Exit List directly. The database is publicly available and includes company-level data on thermal coal activities. It is widely used by investors and lenders to assess coal exposure. The International Energy Agency's Coal 2025 report provides analysis of global coal demand trends, regional markets and policy developments.

For UK-specific guidance on carbon reporting and procurement requirements, the government's guidance on PPN 06/21 sets out the requirements for carbon reduction plans in public sector supply chains. The Department for Energy Security and Net Zero's environmental reporting guidelines cover mandatory greenhouse gas emissions reporting for UK companies.

Global Energy Monitor publishes regular updates on coal infrastructure, including detailed data on mine proposals and power plant pipelines. The organisation's reports are used by researchers, policymakers and civil society organisations. The Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 sets out the legal framework for corporate reporting on emissions and energy use in the UK. Businesses should ensure their reporting aligns with these requirements and reflects current best practice.

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