November 7, 2019
Issue 298  |  View Past Issues

Editor's Note

Central to the future of global climate policy and the prospects of coal power is what happens in Southeast Asia. The International Energy Agency (IEA), which has a long history of underestimating renewables, has released a new report flagging that a tipping point may have been reached in Southeast Asia.
The IEA’s report came as the United Nations Secretary-General, Antonio Guterres, warned of the need to end the world’s coal “addiction” and for Southeast Asia to avoid building new coal plants.

The decision of the Singapore-headquartered Oversea-Chinese Banking Corporation to end its support for a new coal plant in Vietnam is an example that the shift away from coal is gaining momentum in the region. In the Philippines, the Department of Energy is pushing the utility Meralco to conduct a fair tender process for new generation rather than one which has the effect of excluding bidders and low-cost generation and ensuring only a coal plant can qualify. In South Asia, a new report highlights up to 29 new coal plants that are or have been promoted in Bangaldesh.

Elsewhere, national and regional governments are grappling with responding to the mounting challenges facing coal plants and mines. In Colombia, the global consortium operating the Cerrejon thermal coal mine is lobbying for reduced taxes and royalties to facilitate sales into the Asian market. In South Africa, the government is struggling to chart a course through Eskom’s economic meltdown which is dragging the country down with it. In Germany, Uniper is wrangling with the government over whether the almost completed Datteln coal plant is commissioned or not.

In the US, as a favour to the coal lobby, the Trump administration is looking to weaken water pollution and coal ash management standards. In Australia, Prime Minister Scott Morrison has vowed to ban environmental boycotts because of their effect on the coal industry.

Bob Burton


Uncertainty follows takeover of bankrupt US coal companies by unknown minnows

The takeover by new unknown companies of major coalmines in Montana and Wyoming poses major risks for government regulators, communities and industry suppliers, writes Ben Storrow in E & E News.

Coercion is coal’s only friend

With growing public support for climate action, the Australian Government plans to legislate against environmental boycotts and silence public protest against fossil fuels, writes Ketan Joshi, an energy policy analyst.

How Eskom is fuelling South Africa’s economic crisis

In the last two weeks, three key players in the South African Government have missed major policy opportunities to minimise the risks to the country’s economy and environment from Eskom, writes Mark Swilling from Stellenbosch University in South Africa in The Conversation.

A lawsuit against an Indonesian coal plant reveals permit irregularities

Hearings in a lawsuit filed by residents over a newly built Chinese-funded coal-fired power plant in Sumatra have revealed a litany of irregularities behind the permit that allowed it to go ahead, writes Ahmad Supardi in Mongabay.


Singaporean bank dumps Vietnamese coal project

The Singapore-headquartered Oversea-Chinese Banking Corporation (OCBC), which is the second largest bank in Southeast Asia, has backed out of supporting the proposed 1200 megawatt (MW) Vung Ang 2 coal-fired power station in Vietnam. OCBC’s April 2019 coal policy stated it would not finance new coal projects with the exception of two projects it was already involved with, one of which was the Vung Ang 2 plant. News of OCBC’s exit from the Vung Ang 2 has been welcomed by Market Forces, an NGO campaigning against finance sector support for coal and gas projects, as an example of “what it really means to implement a coal policy and stick to it”. However, Market Forces noted that DBS Bank and Standard Chartered Bank are still involved with the controversial Vung Ang 2 project and other coal proposals. (Eco-Business,  Global Energy Monitor)

Top News

South Korea brings coal plant closures ahead by a year to 2021: The South Korean Prime Minister, Lee Nak-yon, said that six coal units will be closed in 2021 as part of the government’s plan to reduce air pollution. The six units, which are estimated to have a combined capacity of 2600 MW, will be closed a year earlier than previously planned. In September the National Council on Climate Change and Air Quality, an advisory body appointed by the government, proposed halting 14 coal units between December and February, increasing to 27 units during March, when pollution levels normally peak. South Korea’s air pollution has become a significant political issue and is expected to feature prominently in the general election which is scheduled for April 2020. (Reuters)

UN head warns Asian leaders to avoid new coal plants to cut flooding risk: The United Nations Secretary-General Antonio Guterres renewed his call for the world to overcome its “addiction to coal” in the wake of a study in Nature Communications stating that even in a low-emissions scenario, 190 million people would be living in areas that are projected to be below high tide levels by 2100. Speaking at the ASEAN Summit in Bangkok, Guterres warned that 70 per cent of the global population most at risk of rising sea levels are ASEAN members. The study found that the ASEAN countries most at risk from rising sea levels are China, Bangladesh, India, Vietnam, Indonesia, and Thailand. The study warned that in a high-emissions scenario up to 340 million people are living on land below expected high tide levels in 2050 and 630 million by 2100. (UN News, Nature Communications, ChannelNewsAsia)

International Energy Agency flags big Asian coal power fall in Asian sustainable scenario: In a report on Southeast Asia’s energy demands to 2040, the IEA’s Stated Polices Scenario estimates that coal power in the region would double by 2040 with nearly all of the growth in the power sector. However, the IEA notes that coal plant proponents are facing “increasing difficulty to secure competitive financing” for their projects and that in 2019 renewable capacity additions exceeded the commissioning of new coal plants. The IEA acknowledges that the rapid growth in coal generation has “made air pollution a major risk to public health” and estimates the death toll from indoor and outdoor air pollution could increase from an estimated 450,000 people in 2018 to 650,000 in 2040. In its Sustainable Development Scenario the IEA estimates coal demand would peak after 2020 and fall by over 80 per cent compared to the Stated Polices Scenario to the point that it supplied just 4 per cent of electricity by 2040. (International Energy Agency)

US unveils plan to weaken coal ash and water pollution rules: The US Environmental Protection Agency (EPA) has unveiled proposed changes to the Coal Combustion Residuals rule to allow the continued use of some unlined coal ash dams up to 2028, five years later than the 2023 deadline set by the 2015 rule introduced under President Obama. The EPA is also proposing to weaken provisions of wastewater emission guidelines to allow higher levels of water pollutants to be discharged from coal plants. The rules are open for 60 days public comment and a single online-only public hearing on December 19. Earthjustice, an environmental law NGO, has foreshadowed further legal action over the proposed changes. On the same day that the EPA released the proposed rule changes the Trump administration initiated the year-long process of withdrawing from the Paris Agreement. (Inside Climate News, Earthjustice [pdf], US Environmental Protection Agency)

Australian Government proposes legislation to ban activist boycotts: Australian Prime Minister Scott Morrison told a Queensland Resources Council conference that his government is “working to identify mechanisms that can successfully outlaw” boycotts aimed at companies involved in projects such as Adani’s proposed Carmichael coal mine. Morrison’s proposal has been condemned by environmental and human rights groups as an attack on democracy. At the conference, a journalist was loudly booed for asking Morrison about the contradiction between the threat to the Great Barrier Reef and his support for opening up new coal mines. Later, the Australian Attorney-General, Christian Porter, specifically named the NGO Market Forces as a target of its proposed laws and flagged that it could also seek to revoke tax-deductible status of NGO groups promoting boycotts. (Guardian, Reuters, The Conversation, Australian Government)

Indonesia court finds utility head not guilty of coal plant corruption: The Jakarta Corruption Court has ruled that Sofyan Basir, the ex-President-Director of the government-owned utility PLN, was not guilty of involvement in bribery associated with the awarding of a contract for the 600 MW Riau-1 power plant in Sumatra. Indonesia’s anti-corruption agency, KPK, had alleged that between 2016 and 2018 Sofyan had solicited bribes in meetings held between PLN’s board and two politicians and a businessman who were subsequently sentenced to prison after convictions on corruption charges. (Jakarta Post)


Australia: Former NSW Supreme Court judge warns against NSW Government plan to legislate against offshore greenhouse gas emissions being considered in coal mine reviews.

Australia: Australian Pacific Coal will appeal against the decision of the Independent Planning Commission to reject extending the life of the Dartbrook mine beyond December 2022.

Australia: Queensland farmers lose legal challenge against expansion of New Acland mine.

Bangladesh: German company Oldendorff Carriers signs agreement to transport Indonesian or Australian coal for new Bangladesh coal plants.

Ethiopia: The head of the Public Enterprises Holding and Administration Agency is awaiting proposals for developing the proposed Yayu Fertilizer Complex and a captive 90 MW coal plant and associated coal mine.

UK: The UK Government has approved a new underground metallurgical coal mine in West Cumbria.

“Europe [demand for coal] is declining and declining much faster than we expected,”

said [paywall] Guillermo Fonsec, the President of Cerrejon, a joint venture between BHP, Glencore and Anglo American which operates the Cerrejon thermal coal mine in Colombia.

Companies + Markets

Indian agency flags appeal against ruling on Adani over-invoicing investigation: The Directorate of Revenue Intelligence (DRI) has filed an affidavit flagging that it will lodge an appeal with the Supreme Court of India against a recent Bombay High Court decision which rescinded all formal requests to foreign governments for records relating to the alleged overvaluation of Indonesian coal imports by Adani subsidiaries. The DRI alleges that between 2011 and 2015 Adani subsidiaries imported Indonesian coal to Indian ports but the invoices were made out to subsidiaries in Singapore, Hong Kong, Dubai and the British Virgin Islands. The DRI argues that the over-invoicing led to higher coal costs for Indian utilities while funds were shifted to lower-tax jurisdictions. (Indian Express, NewsClick)

Endesa writes off US$1.6 billion on Spanish coal plants: Announcing a €1.4 billion (US$1.6 billion) impairment on its coal plants, Jose Bogas, the Chief Executive of the Spanish utility Endesa warned that “the change has become structural so (the coal business) is not profitable now nor in the foreseeable future.” The company has announced, but not yet got approval for, the closure of its coal plants that run on domestic coal. However, it currently plans to operate its imported coal plants until 2021. (Platts)

Philippines energy agency wants broader tender terms: The Philippines Department of Energy (DOE) has called on the Manila Electric Company (Meralco) to expand the terms of its tender for additional generating capacity. Meralco had initially awarded the contract to a subsidiary, Atimonan One Energy which is proposing to build a 1200 MW coal plant in Quezon province. A successful legal challenge by environmental and consumer groups forced Meralco to restart the tender process. However, the company advertised restrictive terms for the tender which favoured a new coal plant. Meralco has rejected the DOE’s suggestion that the tender be open to both new and existing plants as well as for bids for only part of the 1200 MW target capacity. Meralco cannot proceed with the tender without the approval of the DOE. (Philippines Star, Business Mirror, Philippine Daily Inquirer)

Bangladesh’s proposed coal plant boom fuels alarm: A report by Market Forces, and Bangladeshi NGOs warns that proposals to build up to 29 new coal plants in the country would have devastating effects on the country’s environment and global climate targets. Bangladesh currently has 525 MW of coal plants, representing just three per cent of the country’s capacity. However, the proposed new plants would increase the country’s coal plant capacity to 33,200 MW, making it the country with the sixth largest pipeline of proposed coal projects. Over half of the proposed coal plant capacity is being proposed by Chinese-backed companies with UK and Japanese proponents accounting for much of the remainder. (Market Forces)

Debate over whether new German coal plant will be commissioned: Anonymous government sources have told Reuters that Uniper is clear to commission the 1100 MW Datteln 4 coal plant in mid-2020 if it wishes. However, sources involved with the coal exit commission warned that the statement could be part of compensation negotiations between the company and government. The German Government’s coal exit commission recommended the plant not be allowed to operate while Uniper said it would be open to complying if satisfactory compensation could be negotiated. The project has faced strong community opposition and legal challenges for over a decade. (Reuters, CleanEnergyWire, Global Energy Monitor)

Cerrejon lobbies Colombian Government for lower tax and royalty rates: The President of Cerrejon, Guillermo Fonsec, has confirmed that it is lobbying the Colombian Government to reduce the company’s royalty and tax rates for exports to the Asian market. “It would be in the interest of the government that production of coal in Colombia does not fall,” Fonsec said. “'This is the concept that it is better to have a smaller share of a larger pie, rather than a large share of a pie that is shrinking,” he said. Fonsec did not state what scale of reduced tax and royalties the company is seeking. Cerrejon, which has been very profitable due to its low mining and labour costs, has been hit by the rapid decline in European demand, which it failed to anticipate. Cerrejon is a joint venture between BHP, Glencore and Anglo American. The Cerrejon mine has the capacity to produce 40 million tonnes a year but is likely to produce 27–29 million tonnes in 2019–20. (Australian Financial Review [paywall])

Proposal to auction off Eskom coal plants dropped: In response to pressure from public sector unions South Africa’s Minister for Finance, Tito Mboweni, has dropped a proposal that Eskom’s coal plants be auctioned off to private investors. The minister’s latest document on South Africa’s economic strategy removes reference to Eskom’s business strategy being unsustainable. However, the document supports the reinstatement of Eskom’s policy of long-term ‘costs-plus’ agreements with coal suppliers rather than higher-cost agreements from smaller producers. Two weeks ago the South African Government rejected the ‘least cost’ energy supply option, instead including two new coal plants in a bid to pacify some unions. South Africa’s Minister of Mineral Resources and Energy, Gwede Mantashe, confirmed that he will soon release an “industrial plan” to soften the economic impact of the decommissioning of the Hendrina, Grootvlei and Komati coal plants. (Fin24, City Press)


Choked by Coal: the Carbon Catastrophe in Bangladesh, Market Forces, and others, November 2019. (Pdf) (The media release is here.)

This 22-page report outlines the massive expansion of coal plants being proposed in Bangladesh.

A New Horizon: Innovative Reclamation for a Just Transition, Reclaiming Appalachia Coalition, October 2019. (Pdf) (The media release is here.)

This 70-page report profiles 19 projects across Appalachia on how to clean up abandoned coal mine lands.

Banking on Asia: Alignment with the Paris Agreement at six development finance institutions in Asia, E3G, November 2019. (Pdf) (The media release is here.)

This 192-page report ranks the level of alignment with the Paris Agreement goals by Asian Development Bank, Asian Infrastructure Investment Bank, China Development Bank, Japan International Cooperation Agency, Korea Development Bank and the World Bank.