March 9, 2023
Issue 456  |  View Past Issues
CoalWire
Published by Global Energy Monitor

Editor's Note

The latest International Energy Agency stocktake on greenhouse gas emissions has mixed news. The good news is that renewables are catering for the vast bulk of the increase in electricity generation. The bad news is that emissions from coal generation are still increasing, especially in Asia. Some financial institutions have added new elements to their climate policies. Citi and Deutsche Bank both announced modest new restrictions on coal lending. In South Korea, the National Pension Service has also amended its fund management policy to include consideration of climate.
 
The allegations by Hindenburg Research about the Adani Group and the increased scrutiny of the company continue to reverberate around the world. In India, the Supreme Court has appointed a panel to review securities regulation in the wake of Hindenburg Research’s allegations about Adani Group companies. Al Jazeera has also revealed that the Modi Government changed a policy announced after a 2014 Supreme Court ruling blocking private companies from operating coal mines. The change allowed Adani to continue mining the Parsa East & Kente Basan project. Central to the Adani empire is the huge Mundra coal plant, a loss-making project with even the company’s auditors mystified about its real value. In Australia, an Adani subsidiary has acknowledged the proposed underground section of the Carmichael coal mine would damage water supplies to the culturally and ecologically important systems of wetlands.

In Poland, the government continues with its heavy backing of the coal sector, extending the life of a coal mine and dragging its feet on cracking down on coal mine methane emissions and the poor management of wastewater emissions from mines.

Bob Burton

Features

Scandal at South Africa’s Eskom: the CEO and the cyanide-laced coffee

The attempted poisoning of Eskom’s then CEO, Andre de Ruyter, highlights the formidable challenges facing the state-owned power utility as it grapples with corruption, writes David Pilling in the Financial Times.

Modi government allowed Adani coal deals it knew were ‘inappropriate’

After Prime Minister Narendra Modi’s office was informed that a regulation handing over coal blocks to the private sector was ‘inappropriate’ and lacked transparency, his government made an exception, write Shreegireesh Jalihal and Kumar Sambhav for Al Jazeera.

Japan’s ‘green transformation’ would derail the energy transition in Asia

After decades of inaction on the climate crisis, the Japanese government is promoting a “Green Transformation” strategy that relies heavily on the expansion and use of fossil fuels, write Dwi Sawung from WALHI (Friends of the Earth Indonesia) and Gerry Arances from the Center for Energy, Ecology and Development in the Philippines.

Top News

International Energy Agency says coal emissions increase again: The International Energy Agency (IEA) estimates that greenhouse gas emissions rose by 0.9 per cent in 2022, with emissions from coal increasing by 1.6 per cent or 243 million tonnes to a record high of 15.5 gigatonnes. In 2021 total greenhouse gas emissions rose by 6 per cent as economies rebounded from COVID restrictions. Emissions from coal power generation grew by 224 million tonnes or 2.1 per cent in 2022 due to gas-to-coal switching in Europe and demand growth in Asia. Renewables accounted for 90 per cent of the change in electricity demand in 2022. In Asia - but excluding China - over half of the 4.2 per cent increase in emissions came from the coal power sector. In China, emissions from coal power are estimated to have increased by three per cent, partly due to the increased coal generation during heat waves. The IEA estimates that about 40 million tonnes of extra emissions, or about one-fifth of the total increase in 2022, came from additional cooling associated with extreme weather events. (International Energy Agency)

Adani modelling reveals risk to wetlands complex from Australian mine: Groundwater modelling submitted to the Queensland’s Department of Environment and Science by Bravus Mining, the Adani subsidiary developing the Carmichael coal mine, reveals potential impacts on the culturally and environmentally important Doongmabulla Springs wetlands. The department says the modelling indicates a possible reduction in water levels in the springs from the proposed underground mining development from 2034. In 2019 state and federal government agencies approved the development of the Carmichael mine, subject to further groundwater modelling. The springs are of great cultural significance to the Wangan and Jagalingou people and feed a network of 160 wetlands home to 56 endemic species, including several threatened species. Lock the Gate National Coordinator Ellen Roberts said the revelation highlighted how governments approved the project without fully understanding the threats to the springs complex. (ABC News, Lock the Gate)

Greenpeace says Polish coal mine pollution caused 2022 fish kill: Based on the results of water samples taken from the Oder and Vistula Rivers, Greenpeace Poland argues that polluted mine water caused the mass fish deaths that occurred in July and August 2022. The Polish Government blamed the fish kill on natural causes triggering blooms of golden algae. Samples taken by scientists and chemists for Greenpeace found high salinity levels occurred downstream from the hard coal mining areas of Upper Silesia compared to water immediately upstream. The test results indicate salinity levels in the Vistula River increased by 25 times downstream of tributaries carrying mine waste. Greenpeace warned that both the Oder and Vistula Rivers are at risk of more algal blooms unless government agencies take action to require stricter standards for wastewater. In 2021 Greenpeace revealed that nine hard coal mines in Poland had received 16 permits allowing them to operate without environmental impact assessments required by law. (Associated Press, Greenpeace Poland)

Polish mine faces legal challenge despite 21-year licence extension: Environmental groups have vowed to continue legal action against Poland after it granted a 21-year extension to PGE’s mining licence for the Turow lignite mine near the borders with the Czech Republic and Germany. The mine supplies lignite to PGE’s nearby 1948 MW Turow plant, with the utility aiming to continue the mine and power station operations until 2044. The company’s Environmental Impact Assessment claimed water drawdown from the mine would drop by between 3 and 15 metres in total by 2044. However, independent modelling in 2021 found that groundwater has already fallen by between 8 and 34 metres. A coalition of Polish, Czech and German NGOs have launched a legal challenge against the mining licence because of the current impacts on water supplies and the climate. (Expats.cz, Europe Beyond Coal)

European Union looks to weaken coal mine methane regulation: Ember, a climate policy think tank, argues that proposed changes to a European Union (EU) regulation on coal mine methane may only cut emissions by 47 per cent, below the stated goal of a 58 per cent reduction. In December, the EU weakened the draft coal mine methane regulation to increase allowable emissions from thermal coal mines and delay standards for metallurgical coal projects by five years. Ember notes that just seven Polish coal mines emit all of the country’s emissions from the thermal hard coal sector but account for less than half the production. They argue that Poland should prioritise the closure of the gassiest mines as coal production declines and substitute lower-emissions coal. Ember estimates this switch would cut the EU’s annual coal mine methane emissions by a quarter. The EU regulation also omits establishing a threshold for metallurgical coal mining, which is more methane-intensive than thermal coal. Ember estimates stricter regulation of metallurgical coal mine methane could halve emissions by 2050. (Euractiv, Ember)

European Union looks to weaken coal mine methane regulation: Ember, a climate policy think tank, argues that proposed changes to a European Union (EU) regulation on coal mine methane may only cut emissions by 47 per cent, below the stated goal of a 58 per cent reduction. In December, the EU weakened the draft coal mine methane regulation to increase allowable emissions from thermal coal mines and delay standards for metallurgical coal projects by five years. Ember notes that just seven Polish coal mines emit all of the country’s emissions from the thermal hard coal sector but account for less than half the production. They argue that Poland should prioritise the closure of the gassiest mines as coal production declines and substitute lower-emissions coal. Ember estimates this switch would cut the EU’s annual coal mine methane emissions by a quarter. The EU regulation also omits establishing a threshold for metallurgical coal mining, which is more methane-intensive than thermal coal. Ember estimates stricter regulation of metallurgical coal mine methane could halve emissions by 2050. (Euractiv, Ember)

News

Australia: Japan Suiso Energy has proposed the development of a A$2.35 billion (US$1.57 billion) hydrogen liquefaction unit with carbon capture and storage at the Port of Hastings in Victoria by the end of the decade.

Botswana: Mining contractor at Minergy’s Masama coal mine has stopped work in a dispute over overdue payments.

India: Five former senior officials at Tamil Nadu Generation and Distribution Corporation have been charged over allegations of a US$110 million scam involving two private coal handling companies at the Visakhapatnam dockyard.

Montenegro: Parliament has amended domestic laws to allow lignite plants to continue operating after the 20,000 hours limit set by the European Union for polluting plants has expired.

Pakistan: Six miners were killed and five injured in a methane explosion at a coal mine in the Harnai district in southwestern Baluchistan province.

Russia: The Ministry of Transport plans to export coal from the ports of  Krasnoyarsk and Lesosibirsk on the Yenisei River and then via the Northern Sea Route to Asia.

South Africa: President Cyril Ramaphosa has appointed Kgosientsho Ramokgopa to the new role of Minister of Electricity, leaving pro-coal Gwede Mantashe as the Minister of Mineral Resources and Energy.

US: The District of Columbia Circuit Court of Appeals has upheld an Environmental Protection Agency rule which requires upwind states to cut ozone-forming emissions from power plants.

Companies + Markets

Citi inches forward on coal lending restrictions, but loopholes remain: In its latest climate policy report Citi has made a new commitment to cut emissions attributable to its lending to the thermal coal mining sector by 90 per cent by 2030. The policy applies to all companies that earn more than five per cent of revenue from thermal coal production. Citi, one of the largest US-based banks, has also committed to cutting financed emissions from the steel sector but has not yet detailed a specific reduction target. Citi currently has US$506 million lent to companies in the thermal coal mining sector and US$3.55 billion to steel companies. Citi’s policy on thermal coal mining is the most ambitious of the US banking sector but lags well behind other global institutions. The Sierra Club welcomed the bank’s “modest” policy improvements but expressed disappointment that Citi has failed to detail how it will ensure its clients meet the targets. Citi, the second largest funder of global fossil fuel expansions, has not committed to ending funding of fossil fuel expansion projects. In a minor tightening of its policy, Deutsche Bank said it would no longer take on new clients that earnt more than 30 per cent of revenue from coal, down from 50 per cent. (Citi, Sierra Club, Reuters)

South Korean national pension fund moves to consider climate: The fund management policy of South Korea’s  National Pension Service (NPS) has been amended to include climate change. NPS is the world’s third-largest pension fund. “Now there exists a framework for the pension fund to get involved in companies’ climate change responses, and it will have to be monitored whether the fund carries out responsible investment activities based on the framework going forward,” said Han Soo-youn from Solutions for Our Climate. During the previous government’s term, the NPS announced it would limit investments in coal mining and power generation companies. However, no guideline restricting coal investments has yet been formalised. (Reuters)

Australian regulator launches legal case over response to whistleblower: The Australian Securities and Investments Commission (ASIC) has launched legal action against the Queensland coal company TerraCom and two senior executives and directors over its treatment of a whistleblower. The whistleblower alleged that coal quality certificates had been falsified by a laboratory services company. ASIC alleges the company failed to take reasonable steps to ensure statements to the Australian Stock Exchange were not false or misleading. Terracom had issued two media releases and published a full-page ad in two national newspapers denying the whistleblower’s claims and claiming his allegations had been independently investigated. ASIC obtained a copy of the investigation report by PricewaterhouseCoopers when it raided the company’s office in March 2021. Terracom had unsuccessfully sought to block ASIC from reviewing the full report. (ABC News, Australian Securities and Investment Commission)

Indian ministry sets renewables obligation for new coal plants: India’s Ministry of Power has announced that all new coal and lignite plants commissioned after April 1 are subject to a renewable generation obligation. The regulation requires plant owners to commission or purchase renewable power equal to 40 per cent of the coal plant’s capacity in megawatts, with the commitment to be met by April 1, 2025. The obligation does not apply to captive coal plants. The Global Coal Plant Tracker estimates India has 32,000 MW of new coal plants under construction. However, many of these plants are projects that are in financial distress. (Economic Times, Ministry of Power [Pdf])

Adani Power’s Mundra plant has the company auditors puzzled: Adani Power’s 4620 MW Mundra coal plant in Prime Minister Modi’s home state of Gujarat has racked up losses of US$1.8 billion since the first unit was commissioned in 2009. Adani Power’s auditors, SRBC & Co. has noted that there was “material uncertainty” about the financial viability of the company holding the plant. Writing down the asset’s value would have had knock-on consequences for the Adani family’s equity in the company, as the assets had been used as security for bank loans. Instead of writing down the asset’s value, a new entity within Adani Power provided US$600 million to Mundra on an interest-free basis with no date set for the repayment of the funds. On four occasions, Adani Power’s auditor has expressed concern about the value of the assets. Francine McKenna, an accounting lecturer at the University of Pennsylvania’s Wharton School, said that in the US, a company would have had to answer the auditor’s questions about the valuation, or the auditor would resign. (Moneycontrol)

Adani welcomes Indian committee to review corporate standards: The founder of the Adani Group, Gautam Adani, has welcomed the decision of the Supreme Court to appoint a six-person committee to propose measures to strengthen India’s current regulatory measures governing stock exchange-listed companies. The announcement comes in the wake of the Hindenburg Research report into the overstated value of Adani Group companies. Article14, a coalition of lawyers, journalists, and academics, have reviewed six previous committees appointed by the Supreme Court over the last 20 years, and argue they offer little hope of substantive change. They say that the recommendations of one committee were ignored, not delivered in another and not made public in three instances. In one case, the recommendations were shelved after stirring public unrest. (NDTV, Supreme Court of India, Article 14)

Chinese power sector companies pressure Pakistan over payments: The Chinese insurance company Sinosure has ruled out insuring new financing for power projects in Pakistan due to problems existing companies have in getting paid. Sindh Engro Coal Mining Company (SECMC ) has reported that its Chinese mining operations and maintenance contractor is threatening to stop work unless payments are expedited. SECMC supplies lignite to four power plants with a combined capacity of 1950 MW. Port Qasim Electric Power Company has claimed that its 1320 MW coal plant is about to shut down due to outstanding foreign exchange requests with the State Bank of Pakistan, resulting in the coal supplier ending coal shipments after January. Chinese diplomats are lobbying the Pakistan Government to resolve disputes over payments. (Business Recorder)

Resources

“Phasing out coal power in a developing country context: Insights from Vietnam”, Energy Policy, Volume 176, May 2023.

This article provides a good overview of some of the main drivers of Vietnam’s tentative transition from coal and significant barriers to an accelerated transition to renewables.

“Coal mine super emitters of methane”, visualizingEnergy: a project of the Boston University Institute for Global Sustainability, February 27, 2023.

This webpage takes Global Energy Monitor’s mine methane data and converts it into a series of interactive visualisations.

The Adani Group is the largest private developer of coal in the world, Climate Energy Finance, March 2023. (Pdf)

This 4-page briefing note provides an overview of Adani’s coal-related interests in India, Australia and Indonesia.

Adani: A $130 Billion Scandal, ColdFusion on YouTube, March 2023. (Video)

This 25-minute video delves into the rise of the Adani empire and the central allegations in the Hindenburg Research report.

Monitoring, reporting and verification of fossil methane in Australia, Energy and Resource Insights, March 2023. (Pdf)

This 24-page report examines the shortcomings in Australiaʼs approach to methane reporting and verification from fossil fuel projects.