March 18, 2021
Issue 361  |  View Past Issues

Editor's Note

In the aftermath of the release of China’s five-year plan, views ranged from those who were disappointed at the lack of clear targets to reduce the role of coal to those who expressed optimism that more detail would be in forthcoming, lower-level plans. At a recent Chinese Communist Party forum President Xi emphasised the importance of carbon dioxide emissions peaking before 2030 and achieving carbon neutrality by 2060. In a separate forum a senior adviser to the party suggested China would no longer support coal plants and mines as part of the Belt and Road Initiative. A new study has pointed to over 100,000 megawatts (MW) of poorly performing coal plants in China that could be shut down to help the country achieve its greenhouse gas emission reduction goals.

In the world of finance and insurance, the shift away from supporting coal projects appears to be accelerating. In the space of a week there have been four major announcements. Swiss Re announced it will close a major loophole in the reinsurance market and end support for thermal coal in OECD countries by 2030 and globally by 2040. Citigroup has become the first major US bank to rule out supporting plans for coal plant expansions by new clients and the French insurance giant Axa will end its insurance policies with the German utility RWE. On top of those announcements HSBC has negotiated with a shareholder coalition to put a resolution on exiting support for thermal coal to shareholders at its forthcoming annual general meeting.

Bob Burton


The rock standing in the way of China’s climate ambitions: coal

Unusually sharp debate has arisen in China over how aggressively it should cut the use of coal, writes Chris Buckley in the New York Times.

Why US electricity utilities are resorting to dark money and bribes to resist renewables

With renewable energy on the rise, some US electricity utilities are resisting change in extreme ways, writes Susan Cosier in Audobon.

Top News

Speech by Chinese President seen as rebuke for critics of carbon limits: In a speech to the Communist Party’s Party Finance Committee, President Xi Jinping repeatedly emphasised the importance of China’s carbon dioxide emissions peaking by 2030 and achieving carbon neutrality by 2060. Xi emphasised these goals were a “major strategic decision” that had been adopted by the party’s Central Committee “after careful consideration”. “Achieving carbon peak and carbon neutrality is a tough battle and a big test of our party's ability to govern the country,” he said [translation]. The comments are seen as an indication that Xi wants to see far greater ambition on reducing emissions than was included in the recently released five-year plan. (People’s Daily [Chinese], Lauri Myllyvirta [Tweet])

Chinese official suggests end of coal in Belt and Road Initiative: After Premier Li Keqiang repeatedly referred to the Belt and Road Initiative (BRI) in his report to the recent National People's Congress, a senior government adviser suggested coal projects would no longer be supported as part of the initiative. Ding Yifan, a researcher at an advisory body to Chinese Community Party’s Central Committee and the State Council, said [translation] “we have stopped coal-fired power and thermal power projects” and would focus on solar, wind, and “even nuclear power projects” in the BRI. The Chinese Embassy in Bangladesh recently ruled out support for new coal plants and mines but it was unclear whether this policy extended to other countries. (Weixin [Chinese])

Study urges China to shut 100,000 MW of poorly performing coal plants: A study by University of Maryland researchers estimates 112,000 MW of Chinese coal plant capacity performs so poorly on economic and environmental grounds that the plants could be shut down rapidly. The paper, which was published in Nature Communications, argues the remaining plants could operate for 20 to 30 years but with declining rates of use and with their role shifting from catering for baseload demand to catering for peak loads. They argue that new coal plants are not compatible with the goals of the Paris Agreement and would risk becoming stranded assets. (Reuters, Center for Global Sustainability, Nature Communications)

Alberta opposition party proposes legislative ban on Rockies coal mines: The New Democratic Party (NDP), the opposition party in Alberta, has pledged to introduce a private members bill restricting coal mining in parts of the eastern Rocky Mountains. NDP leader, Rachel Notley, headlined her announcement as “a ban on coal mining in the eastern Rockies” and is promoting proposed legislation that would ban coal mines in part of the area and put a moratorium on coal projects in the remainder until regional land-use plans are legislated. Under the policy scrapped last year by the governing United Conservative Party (UCP), open cut mines were banned in part of the area and exploration generally allowed in other areas but with restrictions on the development of mines. A new opinion poll reveals the standing of the UCP has slipped well behind the opposition party. The next Alberta provincial election is due to be held by May 2023. (Global News, Rachel Notley, Calgary Herald)

Four Balkans countries investigated over breaching pollution standards: The secretariat of the Energy Community has initiated proceedings against Bosnia and Herzegovina, Kosovo, North Macedonia and Serbia over their failure to comply with their National Emission Reduction Plans. The plans set emissions standards to meet the obligations of the European Union’s Large Combustion Plants Directive. At issue are the reported emissions from coal plants in the four countries in 2018 and 2019 with Kosovo and Bosnia and Herzegovina breaching the standards for sulphur dioxide, nitrogen oxides and dust pollution. Serbia has not met the standards for sulphur dioxide emissions and North Macedonia exceeded limits for both sulphur dioxide and dust. The Energy Community Treaty covers members of the European Union and some neighbouring countries that participate in the pan-European power market. (Energy Community)

UK coal mine called in for review: The UK Secretary of State for Housing, Communities and Local Government, Robert Jenrick, has decided to initiate a Planning Inspectorate review of West Cumbria Mining’s proposed Woodhouse Colliery. The mine, which would produce metallurgical coal, has a proposed life of 29 years. In January Jenrick declined to initiate a review after Cumbria Council first approved it. However, the Climate Change Committee warned the project would “have an appreciable impact on the UK’s legally binding carbon budgets” and the government came under increasing domestic and international pressure as host of the United Nations Climate Change Conference in Glasgow in November 2021. The government’s U-turn has been welcomed by the Coal Action Network and Friends of the Earth UK. (Independent, Coal Action Network, Friends of the Earth UK)

Violent South African police response to peaceful mine protest: As representatives of a group of 40 protesters were negotiating with representatives of the Kliprand Colliery in KwaZulu Natal province, police opened fire with rubber-coated bullets, seriously injuring one protester. The group was conducting a two-day protest at the mine owned by the Australian company Ikwezi Mining over concerns about the impacts from coal dust pollution from the mine, effects of blasting on nearby communities and the lack of economic benefits. Nine protesters were initially arrested though one was released when it was discovered he was arrested by a mine security guard. Charges were dropped against five men after they had been held in police cells over the weekend. Three women were bailed to appear in court in April. (groundWork, groundWork)

FirstEnergy admits it provided bulk of funding behind Ohio bribery scandal: In a federal court filing FirstEnergy has admitted a subsidiary paid US$56.6 million to Generation Now, a dark money campaign group which has pleaded guilty to federal racketeering charges. Generation Now succeeded in campaigning for a US$1.5 billion bailout for two nuclear plants and two coal plants with FirstEnergy the main beneficiary. The company also confirmed it flew former Ohio Speaker, Larry Householder, to Washington DC on a company plane in January 2017. Householder also faces federal racketeering charges but has pled not guilty with a trial scheduled to commence in June. In a separate development AP revealed Governor Mike DeWine met Sam Randazzo, whom he had appointed to chair the Ohio Public Utilities Commission, and Householder for an “energy discussion” the day before the bailout bill was first introduced in April 2019. None of DeWine, Randazzo or FirstEnergy has been charged with any offences. (, AP)


Australia: Scientists urge the rerouting of a rail line for Shenhua’s proposed Watermark mine to avoid a colony of breeding koalas.

Czech Republic: The Ministry of Environment has overturned a decision allowing a weaker ‘best available technology’ standard for the 820 MW Chvaletice lignite plant.

India: Study by UK-based pro-coal group disputes need for weakening of pollution standards sought by Indian power utilities.

Japan: NGOs express alarm that Sumitomo Mitsui Banking Corporation, which provides support for coal plants around the world, is seeking accreditation by the Green Climate Fund.

Japan: Residents to appeal court ruling upholding environmental assessment of 1300 MW of new coal plant capacity at a Kobe Steel plant.

Pakistan: Government approves plan to increase the base power tariff by 34 per cent over the next two years as subsidy costs for fossil fuel plants grow.

US: Arizona Public Service Commission unveils plan to relegate one 818 MW unit at its Four Corners Power Station to summer duty from 2023.

Companies + Markets

Swiss Re to end coal reinsurance by 2030 in OECD countries: Swiss Re plans to phase out thermal coal from its treaty business in OECD countries by 2030 and the rest of the word by 2040. Swiss Re’s announcement follows Insure Our Future, a NGO, writing to leading insurance companies pointing out that the treaty business between insurance companies was a major loophole in coal underwriting. Swiss Re, the world’s largest reinsurer, has “set a benchmark that the rest of the industry needs to follow” said Lindsay Keenan from Insure Our Future. NGOs have called on Swiss Re to immediately exclude treaty cover for any companies developing new coal projects. (Reuters, Insure Our Future)

Citigroup becomes first US bank to restrict coal plant lending: Citigroup has become the first US bank to restrict financing for companies expanding coal power plants. In a revision of its Environmental and Social Policy Framework Citibank rules out lending, underwriting and advisory services to new clients with plans to expand coal-fired generation after the end of 2021. However, the policy does not rule out support for existing clients with plans for coal plant expansions. The policy was previously limited to ruling out support for new coal plants and thermal coal mines as well as the “significant expansion” of existing thermal coal mines. (Citibank, Rainforest Action Network)

French insurance giant dumps German utility: Axa, France’s biggest insurer, has refused to continue to insure the German energy utility RWE after the end of 2022 reportedly due to the company’s refusal to accelerate its transition away from coal generation. RWE’s policy excludes support for companies that produce over 20 million tonnes of coal a year. RWE produced 65 million tonnes in 2020 and has over 10,000 MW of coal plant capacity. Heffa Schuecking, a director of German NGO Urgewald, said there are likely to be knock-on effects from Axa’s decision with Allianz SE’s policy to exclude support for any company that has 25 per cent of its energy generation from coal or over 5000 MW of coal capacity. RWE breaches both thresholds. (Bloomberg, Urgewald)

HSBC shareholders to vote on coal financing exit: The board of HSBC has agreed to table a resolution proposing to phase out finance for coal plants in the European Union and OECD countries by 2030. The ban on coal finance will extend globally by 2040. The resolution follows ShareAction and a coalition of investors, which have US$2.4 trillion under management, proposing their own resolution. The Rainforest Action Network estimates that HSBC is Europe’s second largest financier of fossil fuels. The company’s resolution, which will be binding on the board if agreed to by 75 per cent of the shares voted, will be put to the company’s annual general meeting on May 28. ShareAction and the investor coalition have withdrawn their resolution but flagged they would resubmit a resolution next year if dissatisfied with HSBC’s implementation of its policy. (Guardian, ShareAction)

European carbon price surges, hitting coal generators: European Union carbon dioxide prices have climbed from under Є30 (US$36) per tonne to a record of Є43.14 (US$51) per tonne, with the costs of permits increasing by over 30 per cent in 2021. Argus estimates lower-efficiency lignite units in Germany have been losing money since the start of February and notes forward prices suggest half of the country's lignite plants will be unprofitable after 2024. The profitability of the most modern and efficient German lignite plants has halved since mid-December. Argus notes high carbon prices are pushing lignite plants away from catering for base load demand and increasingly being relegated to a support role in winter when generation from increasing solar capacity is reduced. (Balkan Green Energy News, Argus)

Vietnam’s draft energy plan to 2030 still backing new coal: A report by the Institute for Energy Economics and Financial Analysis (IEEFA) argues Vietnam’s recently released draft power development plan for 2021–2030 continues to back new coal projects even though projects are frequently delayed. IEEFA notes renewables have been commissioned at a far faster rate than estimated. The report states there is little prospect that coal technology costs will decline while renewables continue to benefit from falling technology costs. It also notes that global investors are looking for clean energy sources in their supply chain. In the draft plan the Ministry of Industry and Trade proposes 16,892 MW of new coal capacity to be built to 2030, a further 11,060 MW in the decade after that and only 1535 MW between 2041 and 2045. (Institute for Energy Economics and Financial Analysis)

Poland’s new energy plan fails to accelerate coal exit: The release of the Polish Energy Policy until 2040 includes a new high carbon price scenario in which Poland would still generate 75 terawatt hours (TWh) from coal plants in 2030, down from 115 TWh in the low carbon price scenario. Ember, a European climate policy think tank, says modelling for the European Union estimates that achieving the 2030 target of reducing emissions by 55 per cent will require electricity generation across all 27 countries to fall to about 55 TWh. This is a far lower EU-wide target than Poland’s estimate in either of its scenarios. As carbon prices rise Ember warns that Poland risks being deprived of the financial resources to invest in an accelerated energy transition. (Ember)

Investigation launched into US coal subsidy: The Government Accountability Office has launched an investigation into a tax credit subsidy of US$7.30 per US short ton of refined coal burnt in power stations. The tax credit was originally pitched as a policy to cut pollution but investigations by Reuters and Resources for the Future found coal plants burning treated product did not cut mercury, nitrogen oxide and sulphur dioxide pollution to levels required to qualify for the tax credit. According to the US Energy Information Administration, 150 million tons (136 million tonnes) of refined coal was burnt in the US in 2020. The program, which costs about US$1 billion a year, is due to expire at the end of 2021 unless Congress votes to extend the scheme. (Reuters)