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Asian Civil Society Networks Raise Critical Questions and Concerns in New Report About the ADB’s Energy Transition Mechanism

Phnom Penh, Cambodia When Manila,Philippines , January 26, 2023 /PRNewswire/ — The NGO Forum on Fair Finance Asia (FFA) and ADB (Forum) has released a new report, “The Asian Development Bank’s Energy Transition Mechanism: New Social, Environmental and Rights-Based Considerations.” The report provides important insights into the Energy Transition Mechanism (ETM), which the Asian Development Bank (ADB) is promoting as a market-oriented solution to accelerate the process of removing coal from the national energy grid in certain Southeast regions. raises questions and concerns. , South and Central Asian countries and replace it with other power sources.

FFA and NGO Forum on ADB (December 2022). Asian Development Bank’s Energy Transition Mechanism: New Social, Environmental and Rights-Based Considerations.

The FFA and Forum will serve as an important source of information for groups monitoring how ETM is operating, and for communities living and working around coal project sites selected for ETM implementation. We have created this report to help you. As ADB moves forward with plans to pilot his ETM, Indonesia, Philippines, Pakistanand later Kazakhstan When VietnamThe report reiterates key risks and concerns raised by civil society, communities and workers’ organizations regarding the design and proposed implementation of ETMs.

as explained in Mr Rayan HassanExecutive Director, NGO Forum on ADB“By closely following the development of ADB’s ETM since it was announced in 2021, civil society groups in the region have become increasingly concerned that the ETM has design flaws, and that it The ETM is proposed to be piloted in the dark as terms for early plant decommissioning are negotiated under a non-disclosure agreement. , turn a blind eye to calls by broader social movements across the region to phase in a process of public accountability.Withdraw the coal and other fossil fuel industries without delay.”

In particular, a new report from FFA and Forum so far highlights that ETM has:

  • Does not require participating governments or companies to suspend the development of planned or under-construction coal-fired power projects and commit to phasing out coal power by 2040, in accordance with the Paris Climate Agreement. The sheer number of coal-fired power projects expected to be added to the national grid in the future (currently in the planning, pre-permission, permitting and construction stages) will overshadow the number of decommissioning. may hide. For example, while ETM is being piloted, Indonesia At the 660MW Cirebon 1 site, a 1000MW expansion unit (Cirebon 2) being developed by the same parent company, Cirebon Power, will enter commercial operation in the near future.

  • Scope of time for ADB social and environmental safeguards to be applied to coal-fired power project pilot sites (ADB estimates it will take 10-15 years) and surrounding communities to respond to complaints based on: lacks clarity as to whether a claim can be filed. ADB’s accountability mechanism. ADB’s ETM also does not require pilot coal plant operators to comply with internationally recognized human rights standards, such as binding UN conventions and the UN Guiding Principles on Business and Human Rights (UNGPs). .

  • Site-specific decommissioning negotiations are conducted behind closed doors so that community groups, labor rights groups/local union bargaining units, or other relevant civil society groups decide the terms (and thus future) of coal-fired power project decommissioning. We are running out of channels to meaningfully form. of IndonesiaFor example, in the Cirebon 1 coal-fired power project, the ETM pilot plan is underway, but it is being discussed without the involvement of community groups and workers, and there is not enough information or opportunities to express opinions. Not given.

  • The definition of the clean energy option to be developed and the parameters for reusing the project are not clear. Support for low-carbon/clean energy options can be broadly defined as waste-to-energy incinerators, woody biomass burning facilities, coal replacement projects or fossil gas, large hydroelectric dams, or carbon capture and storage It co-burns with hydrogen supplied by the infrastructure.

  • There is a lack of transparency regarding the actual terms of retirement of coal-fired power projects. The ETM model does not rely on payment caps to coal power producers, does not require early retirement, or requires disclosure of retirement terms. Compensation to coal companies is therefore at risk of being paid at very inflated rates.

“The simple energy transition is not as simple as moving from fossil fuels to less carbon-intensive energy sources. MS. Bernadette VictorioProgram Lead, Fair Finance Asia. “The fairness factor must be reflected in the quality and pace at which the transition takes place. Are the rights of communities, workers and indigenous peoples respected and protected? Do we ensure that there is no disproportionate benefit to the home? These are just some of the very basic factors that need to be considered in ADB’s ETM deployment process. The study details other key recommendations, which we share at this critical time as ETM pilot projects are being discussed.”

The report also provides a first set of recommendations for ETM implementing partners such as ADB and WBG to engage in supporting the coal sector and industry. In response, Hassan added: by communities whose health and livelihoods have been destroyed by his ADB investments in coal-related infrastructure. Philippines, Pakistan When mongoliaHow many more years will they have to wait? ”

“There is a real opportunity for ADB’s ETM to support. of Asia Transitioning from fossil fuels, but until key issues and gaps in social environmental protection are adequately addressed This seems like a normal deal for fossil fuel companies and their investors.‘ said Victorio.

To access the full report, here.

For more information, please contact:

Kyle Cruz

Communications Coordinator, Fair Finance Asia


Tanya Lee-Roberts Davis

Energy Policy and Campaign Strategist, ADB NGO Forum


About FFA

Fair Finance Asia (FFA) is a regional network of CSOs in Asia committed to ensuring that the funding decisions of financial institutions in the region respect the social and environmental well-being of their communities.

For more information on FFA, please visit: https://fairfinanceasia.org/

About ADB’s NGO Forum

The NGO Forum on ADB (Forum) is a network of civil society organizations (CSOs) that has overseen the projects, programs and policies of the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB).

For more information on the forums, please visit: https://www.forum-adb.org/

Source Fair Finance Asia



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