October 28, 2021
Issue 392  |  View Past Issues

Editor's Note

A slew of new announcements have been unveiled to impress observers as the Glasgow COP26 climate conference nears. The Dutch pension fund ABP, having derided divestment just a few months ago, has now announced it will dump all US$17.5 billion of its investments in coal, oil and gas companies by early 2023. The US company Axis has broken with the rest of the US insurance industry and unveiled a policy restricting its support for coal mining and power generation.

Meanwhile South Africa’s power utility Eskom has rewarmed its pitch for concessional international funding to retire coal plants and expand its renewables investment. It has also announced an agreement with two of its coal mining suppliers to build solar capacity at existing coal plant sites. In Canada, Montem Resources has dropped its proposal for a controversial new coal mine in favour of proposing the site be redeveloped as a pumped hydro project with hydrogen production.

Other announcements deserve to be viewed a bit more cautiously. The Asian Development Bank’s proposal to test financing the retirement of existing coal capacity in Indonesia, the Philippines and Vietnam has analysts nervous about the risks of an approach focussed on financial returns for investors. For example, Vietnam’s latest draft power development plan has proposed a significant expansion of coal generation and limiting new wind capacity. However, a senior official has conceded it will face significant challenges gaining funding. In Pakistan, the government has flagged an end to coal imports but this comes as the Sindh provincial government has announced a major new lignite mine to cater for new power stations.

Bob Burton


The Asian Development Bank’s proposed coal retirement plan lacks crucial details

A proposal by the Asian Development Bank to trial funding the early retirement of coal plants in Indonesia, the Philippines and Vietnam seems superficially attractive but crucial details remain obscured, writes Clara Ferreira Marques in Bloomberg.

Burning coal is a dirty and expensive habit, so why can't Asia quit?

Many Asian countries have great potential for switching to cleaner renewables but are slow to cut their heavy reliance on coal generation, writes Dominic Faulder in Nikkei Asia.

Opposition to South Africa coal mine persists a year after murder of activist

A legal application to prevent the expansion of the Somkhele coal mine, which was opposed by anti-coal mining activist Fikile Ntshangase who was murdered a year ago, has again been postponed by a South African court, writes Victoria Schneider in Mongabay.

Top News

Pitch to morph Canadian coal mine plan into renewables project: Montem Resources has proposed revamping its proposed Tent Mountain metallurgical coal project into a renewable energy project featuring a 320 megawatt (MW) pumped hydro project, a 100 MW electrolyser to produce hydrogen and an offsite 100 MW wind farm. The company said repurposing the former coal mine site to provide pumped hydro storage was made attractive by Alberta’s need for energy storage as it phases out “all coal fired power plants this decade”. The company had previously sought to develop an open pit mine at the site but faced considerable public opposition. In June 2021 both the federal and provincial governments rejected the nearby Grassy Mountain coal project. (CBC, Montem Resources [Pdf])

Pakistan touts cuts to coal imports but backs major mine expansion: The Chief Minister of Pakistan’s Sindh province, Syed Murad Ali Shah, has approved the Phase-III Coal Mine Expansion Project in Thar which is projected to produce a 12.2 million tonnes a year of lignite. The approval of the mine expansion is intended to supply a 1980 MW plant. Pakistan’s latest nationally determined contributions statement to the UN Framework Convention on Climate Change stated it would ban imported coal. Pakistan currently imports 11 million tonnes of coal, the bulk of which is sourced from South Africa. (Dawn, MenaFM)

Indian power generation crisis eases as coal production resumes: Central Electricity Authority data on coal stocks at 135 coal plants suggests fuel constraints affecting India’s power utilities are gradually easing. The plants have combined generation capacity of over 165,000 MW. The data indicates a marginal increase in coal stocks especially at pit-head power stations. An estimated 70 per cent of Jharkhand’s open cut coal mines were flooded during an extended monsoon season. After the COVID-19 shutdown last year stockpiles at mines grew to the point where mine production was curtailed and was unable to respond when power demand surged earlier this year. (Times of India, Business Standard)

Former NSW minister sent to goal over coal licence: The former New South Wales Minister for Mineral Resources, Ian Macdonald, has been sentenced to serve nine years and six months in gaol for his decision in 2008 to grant a coal exploration lease over land in the Bylong Valley owned by a family company of former Labor MP Eddie Obeid. Obeid and his son Moses have been sentenced to serve prison terms of seven and five years respectively for their role in the conspiracy. With the benefit of information from Macdonald, the Obeids gained a 25 per cent stake in the winning bidder of the coal licence, Cascade Coal. The Obeids subsequently received A$30 million (US$22.5 million) as part-payment for their stake in the company. Despite their conviction, the NSW Crime Commission said it has been unable to recover the funds from the deal. (Guardian, Sydney Morning Herald)

Texts reveal close ties between US utility and former Ohio regulator: Texts sent between former FirstEnergy CEO Chuck Jones and senior vice president Dennis Chack in March 2020 have revealed the chair of the Public Utilities Commission of Ohio (PUCO), Sam Randazzo, blocked an audit report which may have investigated whether ratepayers’ money had been used to fund the US$60 million campaign to pass the tainted House Bill 6. The bill supported subsidies for two nuclear plants, two coal plants and the gutting of the state’s energy efficiency program and renewable energy target. The texts, which were obtained by the Office of the Ohio Consumers’ Counsel, referred to Randazzo having helped “burn” an audit report on FirstEnergy charging customers US$456 million ostensibly for grid modernisation but which was used for other purposes. In July FirstEnergy stated it had supported Randazzo’s appointment to PUCO to “further” the utility’s interests. Randazzo has not been charged and has denied any wrongdoing. (Associated Press, Cleveland)

Australia wants IPCC report to drop mention of coal plants: Documents leaked to Unearthed, an investigative project of Greenpeace, reveal that an official from the Australian Department of Industry, Science, Energy and Resources wanted the draft report by the Intergovernmental Panel on Climate Change amended to delete a reference on the need to halt the construction of new coal plants and retire existing coal plants. The official argued carbon capture and storage “remains relevant to zero emissions.” Australia also sought the deletion of the statement that campaigns by oil and coal companies in the US and Australia had slowed action on climate change. (ABC News, Unearthed)

Turkey weakens sulphur content rules on imported coal: Turkey’s Ministry of Environment has proposed lifting the allowable sulphur content of imported coal from 1.2 per cent to 3 per cent on condition power utilities apply for a permit and meet emission standards. The proposed legislation also lowers the minimum calorific value for thermal coal from 6000 kilocalories per kilogram (kcal) to 5400 kcal. The measures will allow power utilities to import cheaper, lower-quality coal for blending with other coal. However, the risk is of increased pollution as higher sulphur content coal results in increased sulphur dioxide while lower calorific coal results in increased greenhouse gases and other pollutants per kilowatt hour of electricity. Turkey currently imports about 20–25 million tonnes of thermal coal a year with Colombia and Russia accounting for about 73 per cent and 19 per cent respectively. (Argus)

Indonesia pursues coal conversion plant with Chinese company: Indonesia’s Powerindo Cipta Energy has entered into a joint venture agreement with China National Chemical Engineering Corporation to undertake a feasibility study on the construction of a US$560 million coal-to-methanol plant near a coal mine in Meulaboh in Aceh province. It is proposed the coal gasification project would convert 1.1 million tonnes of coal to 600,000 tonnes of methanol a year. Indonesia has been promoting downstream processing of the country’s mineral resources. In May 2020 the US equipment supplier Air Products announced a proposal for a US$2 billion coal-to-methanol plant in Bengalon, East Kalimantan. (Jakarta Post)


China: Fine particle air pollution soars as coal generation surges after fuel shortages.

India: NTPC, the country’s largest generator, has called for bids to supply two million tonnes of imported coal.

India: Despite protests, the Chief Minister of Chhattisgarh has approved the Parsa coal block in the Hasedo Aranya forest.

Mongolia: COVID restrictions see thousands of coal truck drivers unable to deliver cargoes for months.

Vietnam: South Korea’s POSCO Energy to sell [Vietnamese] its 30 per cent stake in the 1200 MW Mong Duong II coal plant.

Vietnam: VAPCO, a consortium of KEPCO and Mitsubishi, says construction of the 1200 MW Vung Ang 2 plant will begin in December.

Companies + Markets

Dutch pension fund dumps fossil fuels: The Dutch pension fund ABP has announced it will divest all of its €15 billion (US$17.5 billion) investments in coal, oil and gas companies with the bulk sold by early 2023. ABP said in 2022 it will tighten its investment criteria in other companies including electricity utilities. In June the chairperson of ABP, Corien Wortmann-Kool, rejected divesting from fossil fuel investments dismissing it as “not the solution”. (Reuters, ABP [Pdf])

Axis charts thermal coal exit: Axis Capital has announced it will cease insuring, reinsuring and investing in thermal coal business in all OECD and European Union countries by 2030 and all other countries by 2040. The new policy, which is scheduled to take effect from January 2022, will end insurance support for new and existing thermal coal plants or mines and related infrastructure. However, policy renewals will be considered on a case-by-case basis until January 1, 2023. Insure our Future, an NGO campaigning to end insurance industry support for fossil fuel projects, welcomed the policy stating it set the benchmark for other US insurance companies such as AIG, Berkshire Hathaway and Travelers, which currently have no coal restrictions. The group also urged US insurance companies Chubb, The Hartford, and Liberty Mutual to remove loopholes in their policies and at least match the standards adopted by Axis Capital. (Business Insurance, Axis Capital, Insure our Future)

Questions raised over ADB’s coal buyout plan: Analysts have expressed concern that the Asian Development Bank’s (ADB) proposed scheme to trial buyouts for existing coal plants in the Philippines, Indonesia and Vietnam could be expensive, result in little reduction in coal generation and ignore local communities. Retiring half the coal fleet of the three countries could cost between US$30 and US$55 billion or about US$1 billion per 1000 MW of capacity. Alexander Hogeveen Rutter from the International Finance Corporation argues that a billion dollars could build 2000 MW of solar capacity. He said retiring existing coal plants being run at low levels first could just result in boosting use in the rest of the fleet. Justin Guay from the Sunrise Project said it would be “disastrous” if a coal buyout deal solely benefited the utility and the investors but “does nothing for the local communities or workers”. (China Dialogue)

Regulator steps up pressure on Chinese coal companies to cut prices: China’s domestic coal prices have plunged by more than 30 per cent in the days following the powerful National Development and Reform Commission (NDRC) warning coal producers it would impose severe penalties on companies profiteering from high coal prices. The NDRC warned major coal companies that investigators will visit major coal-producing regions to assess the cost of production and profit levels. In the days after the meeting the futures price of the most heavily traded domestic thermal coal contracts slumped from 1982 yuan (US$310) per tonne to 1365 yuan (US$213) per tonne. China’s power utilities recently cut generation when high coal prices made coal generation unprofitable. Since then the government has increased price caps to allow higher cost recovery on coal power generation and is pushing mining companies to increase production. It is also seeking increased imports ahead of the winter heating season but there is no indication the unofficial ban on Australian coal will be dropped. (Global Times, Reuters)

Vietnamese official concedes funding for coal plants will be a challenge: A senior official from Vietnam’s Ministry of Industry and Trade (MOIT) has conceded the latest draft power development plan’s proposal to build over 19,000 MW more coal capacity may be difficult to finance. “We are very worried about that,” he said. The official said the plan sought to achieve a balance between power sources and regions and avoid the construction of new transmission lines. At a MOIT seminar on the country’s energy transition, Patrick Jakobsen from the Danish Export Credit Institution said only about 10 per cent of the world’s financial institutions are financing coal plants and this is shrinking rapidly because “financial arrangements for coal power are now taboo”. (Thanh Nien Online [Vietnamese])

Eskom ups pitch for transition funding: Eskom is seeking 400 billion rand (US$27 billion) in concessionary funding with about half to build solar projects at a third of its 15 coal plants within the next two years. Eskom is also proposing to build a 3000 MW gas plant at Richards Bay and a 1000 MW gas plant as part of the redevelopment of the Komati power station. An Eskom official said the international banks were wary of supporting on the proposed gas plants. Some of the requested funding is required for upgrading distribution and transmission. Eskom has also entered into a memorandum of understanding with Exxaro and Seriti Resources, mining companies that supply the power utility with about 80 per cent of its coal, to invest in renewable power projects. The mining companies said renewable projects would also result in cost savings on electricity used at the mines. (Reuters, Engineering News, Eskom)


“Phasing out the blast furnace to meet global climate targets”, Joule, October 2021.

This paper claims that future emissions from current steel plant capacity have been overestimated and can be cut substantially by new technologies, renewable energy provision and a reduction of steel and energy demand.

1.5C Steel: decarbonising the steel sector in Paris-compatible pathways, E3G, October 2021. (Pdf)

This 62-page report outlines global and regional implications of steel decarbonisation in a 1.5°C compatible transformation pathway.

Repairing the Damage: Cleaning up Hazardous Coal Ash Can Create Jobs and Improve the Environment, Union of Concerned Scientists and Ohio River Valley Institute, October 2021. (Pdf) (The Executive Summary is here [Pdf]).

This 40-page report examines proposed clean-up plans for two coal ash dams, one in Ohio and another in Kentucky. The report recommends a ‘clean-closure’ policy which would provide more jobs and better protect public health and the environment.