In a report ‘Australia's Coal Sector Looks To Dig Itself Out Of A Funding Hole', S&P said coal was an increasingly dirty word and sources of funding would continue to change.
The pool of capital available to fund the coal sector is shrinking, which is increasing the cost of that capital.
"S&P Global Ratings believes these market forces will increase liquidity and refinancing risks for companies as debts mature," S&P Global Ratings credit analyst Richard Timbs said.
"They could also pressure ratings if the cost of debt continues to rise and issuers do not respond by reducing leverage.
"We also believe rising capital costs will cause asset owners along the coal chain to reduce investment in upgrading or enhancing physical assets to extend their operating life."
S&P said tensions between Australia and China only exacerbated the issue.
The firm said some companies would be financially stranded as investors fled the sector.
The company said the profitable Australian coal sector would not dissolve overnight, but would face increasing scrutiny as 2030 approached.