Stranded Assets

Stranded assets are assets that suffer unanticipated or premature write-downs, devaluations, or conversion to liabilities due to the transition to a low-carbon economy. In the energy sector, this includes fossil fuel reserves that cannot be burned within carbon budgets, coal-fired power plants retired early, and pipelines with reduced utilisation. The Carbon Tracker Initiative estimates that up to 80% of proven fossil fuel reserves may become stranded under a 2°C scenario. Stranded asset risk is a core transition risk under TCFD/ISSB frameworks.