August 18, 2021
Issue 382  |  View Past Issues

Editor's Note

The big announcement of the week is from the US Treasury, which said it wants multilateral development banks in which it is a major shareholder to rule out support for new coal-based projects including mining, transport and power generation. In South Africa, the CEO of Eskom commented that it is “becoming virtually impossible” to get finance for coal projects.

As the ability of coal companies to attract finance and insurance sours, some – such as the peak Australian coal industry lobby group – are pressing governments to fill the gap. This comes as the largest, dirtiest Australian power generator has reported a huge loss in large part due to low-cost renewables driving wholesale prices lower. In Brazil, the government is proposing funding support to keep its three coal plants operating. In Germany, government data submitted to a parliamentary committee effectively confirms all coal plants must close by 2030 to meet the new emissions reduction targets. In India, the government-owned coal company is discussing increasing the price of coal to cover its ever-increasing costs. This comes as Prime Minister Narendra Modi is promoting the prospects for green hydrogen.

In China, the National Development and Reform Commission has signalled it will reject a batch of proposed coal projects in provinces that have failed to cut energy consumption and intensity targets. A new study worryingly found proposals for 43 new coal plants and 18 coal-based steel mills had been announced in the first half of the year. Another study found China’s coal fleet could be capped at 1100 gigawatts (GW) and achieve both the target to hit peak greenhouse gas emissions by 2030 and carbon neutrality by 2060.

Bob Burton


The IEA needs to make a 1.5 degree target the centrepiece of its World Energy Outlook

Placing a 1.5 degree C-centred scenario at the heart of the International Energy Agency’s World Energy Outlook would model the pathways needed to allow countries, companies and communities to cooperate toward this goal, writes Rebecca M Peters in Scientific American.

China’s post-lockdown emissions surge shows signs of slowing

China’s carbon dioxide emissions slowed in the second quarter of 2021, which indicates that steps by the government to rein in real estate development and steel production are taking effect, writes Lauri Myllyvirta from the Centre for Research on Energy and Clean Air in Carbon Brief.

The beginning of the end for coal power in Romania

The closure of the polluting 1075 megawatt (MW) Mintia power plant is the beginning of the end for coal power in Romania, writes Raluca Petcu, Communication coordinator for Bankwatch Romania.

Top News

US will oppose multilateral development banks funding new coal projects: The US Treasury has released new guidance for the multilateral development banks (MDBs) it is a major shareholder in, ruling out support for new coal-based projects “across the entire coal value chain” including mining, transport and power generation. The new policy states the MDBs may consider coal plant decommissioning proposals as long as they don’t extend the life of the project or expand its capacity. The guideline also states the US is “open to support” carbon capture, use and storage, and methane abatement projects. The US is the largest shareholder in the World Bank, Inter-American Development Bank, Asian Development Bank, the African Development Bank and the European Bank for Reconstruction and Development. (Reuters, US Department of the Treasury)

China’s planning agency pressures regions breaching energy targets: China’s powerful National Development and Reform Commission (NDRC) has warned it has stopped reviewing new energy-intensive projects not supported by the national government in provinces and regions that are not meeting their goals to cut energy consumption and energy intensity. A spokesperson for the NDRC said nine provinces and regions had increased their energy consumption in the first half of the year. Only 10 out of 30 regions achieved their energy consumption and intensity targets. (Reuters)

Chinese companies propose more coal plants and steel projects: In the first half of 2021, Chinese companies proposed 18 new coal-based blast furnaces, more than was proposed in all of 2020. In the same period, 43 coal power plant units with a combined capacity of 25,000 MW were announced or re-activated. A report by Global Energy Monitor and the Centre for Research on Energy and Clean Air estimates that the projects, if built, would emit an estimated 150 million tonnes of carbon dioxide a year. While emissions growth slowed in the second quarter of 2021, only 30 per cent of the increase in power demand since mid-2019 has been met by solar, wind or nuclear capacity. In the steel sector the share of steel produced from low-emissions electric arc furnaces or direct-reduced iron production has remained unchanged in a decade. (Reuters, Centre for Research on Energy and Clean Air)

Report backs China coal capacity cap: Research by NDRC and the North China Electric Power University estimates that capping China’s coal generation capacity at 1100 GW in the next five-year plan would allow China to achieve its goals of peak greenhouse gas emissions by 2030 and carbon neutrality by 2060. The report states that even with electricity demand growth of four to five per cent per year during the plan period, additional demand could primarily be met by renewable generation. In this scenario, wind and solar power would have 430–530 GW and 450–600 GW of power capacity respectively, driving the average coal plant utilisation rate down to between 46 and 48 per cent. The study estimates that in a low growth scenario, 50,000 MW of coal capacity could be mothballed as backup supply for periods of peak demand. (NRDC, NRDC [Pdf])

Montenegrin Prime Minister says coal plant likely to close by 2030: The Prime Minister of Montenegro, Zdravko Krivokapic, stated that the 225 MW Pljevlja lignite plant is likely to close by 2030 as a result of economic factors. The plant was first commissioned in 1982 but under the terms of the European Union’s Large Combustion Directive had used up its allowance of 20,000 operating hours by early this year and must either close or be rebuilt to meet new pollution control standards. In June 2020 the state-owned utility EPCG signed an agreement to spend €54 million ($US63 million) to upgrade the plant by 2023 but planned to keep operating it in the meantime. The upgrade was originally planned to extend the life of the plant by 30 years. In 2013 plans were floated for the construction of a new 220 MW unit at the plant but, after years of negotiations and delay, the project was abandoned in late 2019. (Balkan Green Energy News, Global Energy Monitor)

German Government data reveals no space for coal plants after 2030: The German Government has told a parliamentary inquiry that tighter emissions targets required by the recent constitutional court ruling will require energy sector emissions to fall to 108 million tonnes a year in 2030. The previous 2030 target was 175 million tonnes, down from the current 280 million tonnes. The government estimates that in 2030, heating, refineries and other operations will account for 25 million tonnes of the allowable greenhouse gas emissions. Even if renewables generation met the 2030 target of supplying 65 per cent of generation, relying on gas generation alone for the balance would still see the power sector emissions cap exceeded. The government’s statement was in response to questions from the pro-business political party, the FDP. (Clean Energy Wire)

US court orders freeze on assets as part of Ohio cases: An Ohio court has granted a court order sought by Ohio Attorney General Dave Yost to freeze up to US$8 million in assets owned by the former Chair of the Public Utilities Commission of Ohio, Sam Randazzo. In a recent plea agreement FirstEnergy stated it paid a US$4.3 million to Randazzo in return for his support including on House Bill 6 which included a US$1 billion bailout for two nuclear plants owned by the utility. Bailouts for two coal plants were also ultimately included in the legislation. While Randazzo has not been charged with any offences and has denied any wrongdoing, Yost has added him to a civil lawsuit regarding the bailout scandal. Yost told the court Randazzo had sold four properties and there was a risk funds could be moved which would make it “harder to hold him financially accountable”. (Cincinnati)


Australia: Whitehaven Coal fined A$372,500 (US$270,000) for 19 breaches of exploration and mining licence conditions at its Narrabri coal mine.

Australia: Glencore’s Ravensworth mine in New South Wales estimated to have emitted methane equal to over a million tonnes of carbon dioxide since it closed in 2014.

Canada: Benga Mining seeks judicial review of Environment Minister’s August 6 decision to reject the Grassy Mountain mine.

Chile: Government plans to recall the 120 MW Ventanas 1 coal unit and accelerate commission of renewable projects to offset drought impacts on hydro generation.

Indonesia: Budget papers forecast 2022 coal production of 550 million tonnes, down from projections of 650 million tonnes in 2021.

Japan: Hokkaido Electric Power to undertake study on carbon capture and storage facility at its 1650 MW Tomatouatsuma plant.

Russia: President Putin seeks legislative amendments to allow Russian Railways to enter into three-year agreements with coal companies for exports to the Asia-Pacific market.

“It is becoming virtually impossible to secure funding for new coal generation projects, and insurance companies are targeting large carbon emitters with punitive premiums, or outright refusal to cover, as they seek to address the root cause of increased claims caused by climate change,”

said Andre de Ruyter, the CEO of South African utility Eskom.

Companies + Markets

As Eskom promotes green pivot, South African Government persists with coal: The CEO of the South African government-owned utility Eskom, Andre de Ruyter, has warned that shifting to green energy will create an advantage for South African exporters while “persisting with coal will lead to another era of isolation and punitive trade measures”. Despite the recent collapse of two proposed coal plants, South Africa’s 2019 power plan still includes a provision of 750 MW of new coal capacity being commissioned in each of 2023 and 2027. Energy Minister Gwede Mantashe has indicated he plans to press ahead for 1500 MW of new coal capacity by 2030 and a request for proposals will be issued by the end of 2021 for the first 750 MW plant. (Daily Maverick, Daily Maverick)

Australia’s largest coal generator reports massive loss: AGL Energy, Australia’s largest coal power generator, has reported an A$2 billion (US$1.45 billion) loss after tax in the 2020–21 financial year after incurring A$2.9 billion in impairments. AGL – which owns and operates the 2210 MW brown coal Loy Yang plant in Victoria, the 2640 MW Bayswater plant and the 1680 MW Liddell plant in New South Wales – reported a six per cent decline in generation and lower wholesale electricity prices. An increase in renewables generation, particularly from wind farms, has undercut wholesale electricity prices while rooftop solar generation has cut demand during peak summer periods when market prices are higher. AGL said it would seek to shift its coal plants to operate more flexibly as renewable generation increases. (RenewEconomy, AGL Energy [Pdf])

Brazil pledges to support coal: Brazil’s Mines and Energy Ministry has published a plan to invest up to US$3.9 billion to extend the life of the country’s three coal plants. The three plants – the 75 MW Sao Luis Alumar plant, the 104 MW Barcarena Alunorte plant and the 1085 MW Porto do Pecem plant – have all been commissioned since 2009 and generate just three per cent of the country’s electricity. Analysts argue the proposal is aimed at winning support from the coal lobby in Brazil’s southern state of Santa Catarina which is home to the country’s two operating mines, the Seival coal mine and the Mina do Butia Leste mine. Santa Catarina has been a part of the traditional strongholds of the increasingly unpopular President Jair Bolsonaro who faces an election campaign in October 2022. (Climate Change News, Argus)

Coal India seeks to increase coal prices: Coal India chairman Pramod Agrawal has confirmed the government-owned company is in discussions to increase coal prices to cover higher costs. Coal India, which produces about 80 per cent of India’s domestic coal, has a total workforce of 272,000 staff with the last five-year labour agreement expiring at the end of June. Unions had flagged they would seek a 50 per cent wage increase over the next five-year contract. They argued the cost of increased wages would be offset by the company’s plan to cut staffing levels. In March, Coal India foreshadowed it planned to cut about 5 per cent of staff a year through natural attrition over the next five to 10 years. It also plans a phased closure of 158 underground mines which employ 48 per cent of its workforce. (Telegraph India)

Modi promotes green hydrogen plan: India’s Prime Minister, Narendra Modi, has announced the target of India becoming “energy independent” by 2047 in a bid to cut the 12 trillion rupees (US$161 billion) spent a year on imported energy products including oil, coal and gas. While the largest component of India’s energy import bill is for oil, coal is the second-largest contributor. A key element promoted by Modi is the development of a green hydrogen industry both to substitute for imported oil and to export to the global market. In June, JSW Steel announced it had joined the India H2 Alliance aimed at commercializing hydrogen production. While India is a major producer of low-quality thermal coal it has relatively little metallurgical coal. Hydrogen can be used in the steel sector as an alternative to metallurgical coal. (Business Standard)

Australian coal miners ponder self-insuring to bypass insurance drought: The Minerals Council of Australia has endorsed a proposal for the government-funded Northern Australia Infrastructure Facility (NAIF) to establish an insurance mutual fund to provide coverage for the coal sector. Picnic Labs, a company that establishes mutual insurance funds, proposed the idea to a parliamentary committee inquiring into finance sector restrictions on the coal sector. Picnic Labs CEO, Charles Pollack, said an initial insurance pool would need between A$20 million (US$14.5 million) and $50 million (US$36 million) and the mandate of the NAIF would not be amended to allow it to operate beyond infrastructure investment. (Sydney Morning Herald)

US coal mine markets shrink as coal plants close: S & P Global estimates that 33.4 per cent of US coal production in 2020 was destined for coal power plants that have announced retirement dates, up from 25 per cent of 2019 production. The coal plants are slated for closure between 2021 and 2042 and bought 178.5 million US short tons (162 million tonnes) of coal in 2020. S & P Global estimated two-thirds of the coal is delivered to plants set to close by 2030. Of the nine US coal-producing basins, over 88 per cent of coal from the Four Corners basin and 77 per cent from the Uinta Basin is delivered to retiring plants. (S & P Global)


“Financing carbon lock-in in developing countries: Bilateral financing for power generation technologies from China, Japan, and the United States”, ScienceDirect, July 14, 2021.

This paper examines the financing of overseas power projects by the US, China, and Japan between 2000 and 2018.