May 13, 2021
Issue 369  |  View Past Issues

Editor's Note

The exodus of financial institutions from the coal sector continues apace. The Asian Development Bank has proposed a new energy policy to support countries’ exits from coal, though no hard timetables have yet been set. In Malaysia, the country’s largest bank has ruled out further investment in coal. In Japan, Sumitomo and Idemitsu have both ruled out further investment in thermal coal mining. In Germany, the recent Constitutional Court decision has spurred Chancellor Angela Merkel’s government to propose an accelerated emissions reduction target. Instead of an exit from coal by 2038, which was legislated just last year, coal power plants may have to close by 2030 under the revised target.

In Colombia, retrenched coal miners have blocked access to Cerrejon Coal Company’s mine and coal port, demanding their jobs be reinstated. The blockades come as protests against the government’s handling of COVID-19 and other issues sweep the country. In South Africa’s Mpumalanga province, where most coal mines and power plants are concentrated, the challenges from closures will be particularly acute. While the Slovenian Government is debating whether a plant it commissioned in 2014 could be strung out for as long as 2043, the recent rise in the European carbon price is likely to force a dramatic reassessment. Far from retirement in the 2030s or 2040s as some politicians want, senior officials consider it may be all over in just as few years.

All up, change to the coal mining communities is coming far faster than many political and community leaders have previously considered likely. The pattern of denial which propped up coal power and mining for so long risks making the social and economic impacts on affected communities more significant than should have been the case.

Bob Burton


Turow: the Polish coal mine at the centre of regional tensions

The approval by the Polish Government of the expansion of the Turow lignite mine near the border with Germany and the Czech Republic has fuelled tension over the impacts on water supplies, writes Kira Taylor in Euractiv.

Indonesia’s coal industry is on its last legs

Indonesia’s coal industry is running out of options and the pot of money for coal power is drying up, writes Tata Mustasya from Greenpeace Indonesia in Channel News Asia.

Not all blue-collar workers will find green-collar jobs

Policymakers need more than boosterism to manage the transition from carbon-intensive industries to the new energy economy, writes Sarah O’Connor in the Financial Times.

Death of the coal industry must bring new beginnings in South Africa’s Mpumalanga province

In South Africa’s Mpumalanga province, where most coal mining operations and coal-fired power stations are concentrated, a diversified strategy will be needed to support the phasing out of coal, write Gaylor Montmasson-Clair and Lauren Hermanus in the Daily Maverick.

Top News

Germany sets new emissions reduction target with pressure on coal: In response to a Constitutional Court ruling that the 2019 Climate Protection Act needs to be more ambitious Germany’s Finance Minister Olaf Scholz has proposed a new greenhouse emissions reduction target of a 65 per cent cut by 2030 and 88 per cent by 2040. In 2019 Chancellor Angela Merkel's Christian Democratic Union and the Social Democrats coalition partner legislated for a carbon dioxide emissions reduction target of at least 55 per cent by 2030 from 1990 levels. The new target will require a further 25 per cent emissions reduction in the 2020s, a 23 per cent reduction in the 2030s and a 12 per cent fall in the 2040s. Last year the German Government set an end date for coal generation of 2038. “The picture is crystal clear; the new climate targets cannot be achieved if we don’t phase out coal by 2030,” said Felix Heilmann from the climate think tank E3G. (Reuters)

Renewables eclipse fossil fuels in new capacity estimates by International Energy Agency: The International Energy Agency (IEA) estimates renewables will account for about 90 per cent of all new electricity generation capacity additions in 2021 and 2022. The IEA reports a 90 per cent increase in wind capacity additions was complemented with a 23 per cent increase in solar capacity to almost 135,000 megawatts (MW) in 2020. The report states 80 per cent of the increase in renewables capacity in the year to the end of 2020 were in China where project developers had to meet a deadline to qualify for a feed-in tariff. The IEA anticipates the high level of renewables deployment will continue with 270,000 MW becoming operational in 2021 and 280,000 MW in 2022, an installation rate 50 per cent higher than occurred between 2017 and 2019. (RenewEconomy, International Energy Agency)

Eskom stands down senior coal manager: South Africa’s publicly owned power utility, Eskom, has suspended a senior manager in its coal procurement division. This follows an investigation by the Special Investigating Unit, an anti-corruption agency, which revealed the Eskom official had a bank account with a balance of close to 12 million rand (US$854,000). Eskom stated “the funds have been deposited by some of Eskom’s suppliers in the coal division.” The utility said the account has been frozen pending a full investigation and criminal charges and prosecution. (Eskom)

Ohio Republicans return donations to utility that gained from bailout law: Eleven Republican members of the Ohio state parliament and the Governor have refunded US$29,500 to a political action committee of American Electric Power (AEP). The utility was granted a US$700 million bailout to two coal plants in Ohio and Indiana owned by the Ohio Valley Electric Corporation (OVEC). A further US$20,000 donated to the House Republican Campaign Committee has also been returned. AEP owns 43 per cent of OVEC with other minor shareholders including Buckeye Power, Duke Energy and Dayton Power and Light Company. The $61 million campaign for legislation bailing out OVEC’s two coal plants as well as two nuclear plants owned by FirstEnergy are at the heart of charges filed by federal prosecutors against former Ohio House Speaker Larry Householder and three others. Householder has pleaded not guilty while three of his alleged co-conspirators have pleaded guilty. No charges have been filed against FirstEnergy or AEP. (Ohio Capitol Journal)

Soaring carbon emissions cost puts pressure on Slovenia’s only coal plant: Focus, a Slovenian green NGO, has warned the recent increase in the European Union’s carbon price is likely to result in the Sostanj lignite power plant running up a loss of €870 million (US$1.1 billion) by 2030 unless it is retired early. The group warned the plant could lose €150 million (US$182 million) this year. The Sostanj plant was only commissioned in 2014 but has not made a profit since. Slovenia is currently contemplating whether to close the plant by 2033, 2038 or 2042. However, the head of the Energy Directorate at the Infrastructure Ministry, Hinko Solinc, has warned the high carbon price may force it to close as soon as 2024. “The government is making preparations for the coal phase-out, but faced with high prices of emission coupons, it is also trying to help the power station just to survive until then,” he said. (Euractiv, Balkan Green Energy News)

Sacked workers block access to Colombian mine and coal port: Two hundred former mine workers at the Cerrejon mine, which is jointly owned by BHP, Glencore and Anglo American, have blocked the railway to the Puerto Bolivar coal port and are demanding to be re-employed. Other workers have blocked roads that provide access to the mine site. The protests come after Cerrejon cut 223 jobs at the mine in February after export demand and prices slumped in the wake of the COVID-19 pandemic. A 91-day strike over pay and conditions at the mine came to an end in December 2020. In February the railway line was affected by an 11-day blockade by indigenous groups protesting against the social and environmental impacts of the mine. (Argus)

Australia’s largest coal plant polluter sues Greenpeace: AGL, Australia’s largest coal plant polluter, has launched legal action in the Federal Court of Australia alleging Greenpeace’s use of AGL logos in spoof ads constitutes an infringement of its trademark. The legal action comes as Greenpeace released a report detailing that AGL’s Liddell, Bayswater and Loy Yang A power stations, which represent over a quarter of Australia’s coal plant capacity, have breached their environmental licences 111 times since 2015. Greenpeace publicised the report with posters and online advertising using AGL’s logo with phases including “generating pollution for generations”. Greenpeace said it would defend the use of the company’s logo for the satirical purpose of highlighting the gap between AGL’s public relations claims and its actual performance. (Guardian, Greenpeace Australia [Pdf])


Cambodia: Ministry of Mines and Energy confirms 1665 MW of new coal units to be commissioned between 2022 and 2025.

India: Villagers claim North Chennai Thermal Power Station emits fly ash and other pollution with impunity.

Japan: Kobe Steel flags plan for hydrogen-based steel production but aims to press on with 1300 MW of new coal capacity.

New Zealand: Bathurst Resources subsidiary hopes to expand its Takitimu mine in Southland.

US: Federal court clears path for investors’ lawsuit against FirstEnergy directors and officers over Ohio coal and nuclear bailout scandal.

US: Whistleblowers allege that Colorado officials misled the Environment Protection Authority on pollution from coal plants.

Companies + Markets

European Union carbon price tipped to stay high: Analysts argue the carbon allowances in the European Union's Emissions Trading System (ETS) are likely to remain at over €50 per tonne (US$61 per tonne). They argue the recent price surge has been driven by banks and investors who estimate future prices will trend higher to meet the European Parliament’s target of cutting emissions by 2030 to 55 per cent of 1990 levels. The surge in ETS allowances from less than €10 per tonne (US$12 per tonne) in 2018 will have the effect of making most EU coal generation unprofitable. Refinitiv estimates European power emissions will be 50 million tonnes lower this year than they would be without a carbon price. However, as the allowances apply to industrial sectors as well as power generators, some analysts warn that some industry groups may lobby for loopholes to ease financial pressure on industries that are unable to switch quickly to low-carbon alternatives. (E & E News)

Sumitomo sets 2040 end date for role in coal: Sumitomo, a major Japanese trading house, has announced it will not pursue new coal-fired power projects but does not plan to exit its role in coal power plants until “the late 2040s.” However, the company flagged a possible exception to its policy on new plants is the potential 1200 MW expansion of the Matarbari plant in Bangladesh. The firm said it would not make any additional investment in its thermal coal mining interests and will abandon the sector by 2030. Between April 2020 and March 2021 Sumitomo sold 4.4 million tonnes of thermal coal from projects it holds a stake in. Idemitsu Kosan, a Japanese oil refining company, has also announced it will not invest in new mines and will reduce its thermal coal output. (Argus, Sumitomo, Reuters)

Standard Chartered warned over funding for Indonesia coal company: Market Forces has warned Standard Chartered it will consider filing a shareholder resolution for next year’s annual meeting if the bank doesn’t bring its lending into line with the Paris Agreement. The NGO said Standard Chartered had been involved in supporting a US$400 million five-year syndicated loan to Adaro Energy even though it knew the Indonesian coal mining company’s plans are incompatible with the goals of the Paris Agreement. Standard Chartered declined to comment on its support for Adaro Energy. NGOs Reclaim Finance and Urgewald recently estimated Standard Chartered provided over US$10 billion to coal companies in the two years to October 2020, making it the biggest supporter in the UK finance sector of the expansion of the coal sector. (Financial Times)

Malaysian bank cans coal funding: Malaysia’s largest bank by assets, Malayan Banking Berhad, known as Maybank, has ruled out any further financing of coal projects. The bank’s President and Chief Executive Abdul Farid Alias said, “There’s no new coal financing going forward for Maybank,” and that the exclusion covers all financial services. However, the bank has not set a date for its exit from support for existing coal projects. Late last year the Malaysian bank CIMB announced it would phase out support for coal projects by 2040. “We also want to see Maybank match or beat its competitor CIMB, which has committed to phase out coal exposure by 2040”, said Binbin Mariana, Market Forces Energy Finance Campaigner. (Reuters, Maybank, Greenpeace Southeast Asia)

Asian Development Bank backs coal power phase-out: In a draft energy policy statement the Asian Development Bank (ADB) has stated it will support its developing member countries “to reduce their dependence on coal and eventually phase out coal power generation.” The draft states this will be done by setting standards and requirements such as emission intensities and minimum efficiency levels and by providing support for low-carbon technologies including carbon capture and storage. The draft policy does not explicitly set an end date for coal power. The ADB’s draft energy policy will be finalised by the board of directors in October. (Reuters, Asian Development Bank [Pdf], Asian Development Bank)

Indonesian utility pledges 2050 carbon neutrality … after completing proposed coal plants: Zulkifli Zaini, the president director of Indonesia’s state-owned PLN, said the electricity utility would become carbon neutral by 2050 but only after building the coal plants originally proposed in the 2015 power plan. The 2015 plan proposed the utility would commission 35,000 MW of new capacity of which almost 20,000 MW was new coal capacity. Zulkifli said after the construction of these plants the utility would build only renewable projects and would look to co-fire coal plants with biomass. Executive director of the Institute for Essential Services Reform, Fabby Tumiwa, said the decarbonisation of PLN’s capacity would only be achieved if it stopped developing or entering into power purchase agreements for new coal plants starting 2025. He also said PLN needed to develop 10,000 MW of renewable power plants. (Jakarta Post, Kontan [Indonesian], Climate Change News)

Macquarie Group and Prudential announce new coal policy restrictions: The Macquarie Group has announced it expects its equity and lending support to the coal sector will cease by 2024. Macquarie said that while it will align its financing activities with a pathway to “net zero by 2050” it would continue to support oil and gas projects. Prudential, a major financial services company, has also announced it will have sold its stakes in any company that earns more than 30 per cent of its income from coal by the end of 2021. (Financial Times, Macquarie Group, Proactive)


“Economic and technological feasibility of using power-to-hydrogen technology under higher wind penetration in China”, Renewable Energy, May 2021. (Abstract; full article paywalled)

This article estimates hydrogen produced from wind generation in Western Inner Mongolia could be cost competitive with hydrogen currently produced from coal.

Renewable Energy Market Update: Outlook for 2021 and 2022, International Energy Agency, May 2021. (Pdf)

This 29-page report provides a detailed overview of the expected growth in renewables and wind and solar capacity in particular in 2021 and 2022.