Denmark's largest energy firm to ditch coal by 2023

On the same day a new The Economist Intelligence Unit report concluded European coal generation is declining and will continue to face a "difficult outlook", Danish giant Dong Energy (CPH:DENERG) announced it would phase out the use of the fossil fuel.

As part of the plan, Dong Energy will stop using coal at all of its European power plants by 2023 while it moves ahead with a multi-billion dollar renewables investment plan, which includes developing the world’s largest offshore wind farm.

Dong Energy has already cut coal consumption by 73% since 2006, but by 2023 all its power stations will stop using the fossil fuel.

“The decision is in line with our vision to lead the way in the transformation to a sustainable energy system and create a leading green energy company," chief executive Henrik Poulsen said in the statement.

The company has already reduced its use of coal from 6.2 million tonnes a decade ago to 1.7 million tonnes last year, but by 2023 it said all its remaining power plants would run on sustainable biomass, or wood pellets, sourced from the Baltic states.

Today’s report from the Economist Intelligence Unit shows that across Europe coal-fired power generation has declined by more than 10% in the past three years, making up less than a quarter of the total electricity mix these days.

The drop has been steepest in the UK, where generators are under pressure from the Government to phase out coal power by 2025 and face higher costs for emitting carbon emissions due to the Treasury’s carbon tax.

Dong’s announcement also come only two days after Deutsche Bank said it would not grant new financing for greenfield thermal coal mining or new coal-fired power plants. The German lender also said it would "gradually reduce its existing exposure to the thermal coal mining sector,” adding that it was making the move in line with its commitment to the Paris Agreement and its goal of keeping global temperature increases well below 2C.