Australia's backing of the fossil fuel industry is expected to come under more scrutiny at the Bonn climate talks in Germany, as a global effort to reduce coal use gathers momentum.

Britain and Canada were expected to launch the Global Alliance to Power Past Coal at a Thursday media conference aimed at phasing out consumption of the high-emissions fuel.

The alliance was expected to announce nine more nations would sign up to the group, including Italy, France, Mexico and Finland, an at least one African nation, Reuters reported.

The Marshall Islands, one of the alliance members, stepped up its criticism of Australia's policies, with its President, Hilda Heine, saying every nation should seek to end burning coal to prevent dangerous climate change.

"We are very disappointed, I would say, in Australia because we are neighbours to them," President Heine said on Wednesday, adding that Canberra was well aware of the threat facing low-lying nations in the region.

"So we hope that maybe a new government can come in and change the position of the current government, which is continuing to promote coal," Dr Heine said.

Josh Frydenberg, the Minister for the Environment and Energy, did not directly address the Marshall Islands leader's concerns.

He cited, though, Bloomberg's New Energy Outlook 2017 report as concluding coal would remain "the bedrock of the region's power supply, providing 34 per cent of electricity in 2040", larger than other energy source.
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"The Turnbull government's National Energy Guarantee is technology neutral and will deliver the right mix of thermal and renewable generation to deliver an affordable and reliable energy system as we transition to a lower emissions future," he said.

Fairfax Media also sought comment from the Minerals Council.

'Coal huggers'

Adam Bandt, the Greens climate spokesman who is attending the Bonn conference, said Australia was emerging as one of the chief blockers at the talks.

"Instead of joining with other developed countries to announce a coal phase-out, Australia has aligned itself with [President Donald] Trump's US in a coalition of coal huggers," he said, adding the Marshall Island's call for a change of government was "unprecedented".

"The only praise Australia has received at this summit has been from a coal baron, brought out by Trump's US team, who lauded the Turnbull government for 'putting coal back on the table'."

Tim Buckley, a director of the Institute for Energy Economics & Financial Analysis, said nations like Marshall Islands were not likely to have much choice in campaigning against fossil fuel use.

"They're facing an existential threat to their country," he said. "It's not like they are trying to get a trade advantage."

Mr Buckley also pointed to this week's release of the World Energy Outlook 2017 by the International Energy Agency that had quietly cut estimates of coal demand out to 2040 by 5.1 per cent.

While the cut is not huge, the agency's repeated underestimates of renewable energy's expansion meant its coal demand would likely be too optimistic.

The IEEFA, for instance, expects global installations of new solar energy to be 50 per cent higher – at more than 100 gigawatts in new capacity – than the IEA is predicting for the annual uptake of 73 GW for the next five years.

CBA and coal

Anti-coal protesters, meanwhile, have applauded the latest sign that one of the big four Australian banks is seeking to cut its exposure to the fossil fuel.

Catherine Livingstone, chairman of Commonwealth Bank, told the bank's annual meeting its funding for coal "is comparatively small and has been trending down for some time".

"We expect that trend to continue over time as we help finance the transition to a low-carbon economy," she said in a speech.