Understanding the Legal Implications of Early Decommissioning: Case Studies of Foreign-Invested Coal Power Plants in Asia

This research paper examines the legal and financial barriers host countries in Asia face when attempting the early decommissioning of foreign-invested, unabated coal-fired power plants (CFPPs) to meet climate targets.

• To limit global temperature rise to 1.5°C, unabated coal-fired power plants in all countries must be decommissioned early by 2040. However, in emerging markets and developing economies such as Indonesia, Pakistan, and Vietnam, the presence of relatively young CFPPs built with foreign investment complicates this process.
• The legal frameworks and contracts governing foreign-invested coal plants act as significant barriers to early retirement. Host countries risk facing large financial penalties and onerous fines from courts of arbitration if they break these contracts, which could threaten the financial stability of countries already in precarious positions.
• Host countries may be required to compensate project companies or foreign investors if they mandate early decommissioning, reduce plant utilization levels, or introduce policies that increase operating costs, such as mandatory carbon pricing. Meeting climate targets will likely require the renegotiation of contracts alongside international legal and financing support.

APA

World Resources Institute (n.d.). Understanding the Legal Implications of Early Decommissioning: Case Studies of Foreign-Invested Coal Power Plants in Asia. https://www.wri.org/research/understanding-legal-implications-early-decommissioning-case-studies-foreign-invested-coal

Chicago

World Resources Institute. Understanding the Legal Implications of Early Decommissioning: Case Studies of Foreign-Invested Coal Power Plants in Asia. n.d. https://www.wri.org/research/understanding-legal-implications-early-decommissioning-case-studies-foreign-invested-coal.

Wikipedia

{{cite report |author=World Resources Institute |title=Understanding the Legal Implications of Early Decommissioning: Case Studies of Foreign-Invested Coal Power Plants in Asia |url=https://www.wri.org/research/understanding-legal-implications-early-decommissioning-case-studies-foreign-invested-coal |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitutendunderstanding, author = {{World Resources Institute}}, title = {{Understanding the Legal Implications of Early Decommissioning: Case Studies of Foreign-Invested Coal Power Plants in Asia}}, institution = {World Resources Institute}, url = {https://www.wri.org/research/understanding-legal-implications-early-decommissioning-case-studies-foreign-invested-coal}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }