As the Asian Infrastructure Investment Bank (AIIB) goes through its final round of public consultations on its future energy sector strategy, there is intensive lobbying on behalf of the coal industry to preserve some level of support for projects involving clean coal.

A draft strategy was published on January 24 following a first round of consultation. Interested parties are invited to submit their comments by March 6. In the first consultation, the bank received over forty responses from government agencies, private sector companies, civil society organizations, and non-governmental organizations. These comments helped inform the current draft. In June, the strategy will be presented to the bank’s board of directors for discussion and final approval.

The bank is developing an energy sector strategy in order to guide its future engagement with, and investments in, the energy sector. The strategy will be consistent with the bank’s "lean, clean and green" core values.

According to the draft guidelines, the AIIB should not consider financing nuclear plants because the bank would, “have to develop the capacity to be involved in such complex and capital-intensive projects”. It says that the bank should prioritize renewable energy generation over fossil fuel power. Gas projects should be considered during the transition to lower carbon emissions power generation. Coal and oil-fired power plants could be considered, “if cleaner technologies are not available for well-founded energy security or affordability reasons”.

Asia has vast coal reserves, with a high concentration in China, Indonesia, Australia, India, and Kazakhstan. Australia will be particularly impacted by the direction taken by the AIIB, since it is a major coal exporter. Canberra has been lobbying hard to maintain support for certain types of coal-fired generation projects.

Australia joined the AIIB in June 2015, in spite of pressure from the Obama administration not to sign up to an organization which it viewed as a vehicle for the projection of Chinese influence. Australia has a US$3.7 billion stake in the AIIB, making it the sixth largest member.

The AIIB has only been in operation for one year, so it is still formulating its identity. But the Chinese government might be keen to use the opportunity to stress its green credentials. It has recently shown signs of taking a global lead against the new Trump administration, which has expressed scepticism about global warming, and wants to scale back environmental regulation in favour of an aggressive economic growth agenda.

The Minerals Council of Australia has been arguing in favour of support for projects based on high-efficiency low-emissions coal power generation. It also wants to see more investment in carbon capture and storage technologies to increase emissions savings. "Low emissions and coal use are not mutually exclusive," it says in a position paper.

In early December, the AIIB released a summary of comments from the first round of consultation. On the subject of nuclear power, it said that the current approach of no support was widely endorsed with a few exceptions.

With regard to coal, some respondents expressed a need for a general ban on support for coal ("not one dollar"), including mining and transportation. However, some expressed a need for support to coal in relation to energy security and accessibility. It noted that others advocated modern and clean generation of energy using coal, with support requested for high-efficiency low-emissions power plants, carbon capture, and storage.

Some coal producers had hoped that the AIIB would be more supportive of coal power than the World Bank. The Washington-based World Bank announced in 2013 that it will stop financing coal plants except in rare cases where no feasible alternatives are available. The Asian Development Bank, heavily influenced by Japan, now only supports coal projects that use high-efficiency and low-emissions technologies.

At a speech in Canberra on February 1, Australian Prime Minister Malcolm Turnbull argued that "a project that did involve coal that had the effect of reducing emissions, would be, or should be, eligible for finance,” though he added that whether it had the appropriate private sector backing was another matter.

“Part of the problem we've got into here is the way in which energy policy has been turned into an ideological battlefield,” Turnbull said.