April 14, 2022
Issue 413  |  View Past Issues
CoalWire
Published by Global Energy Monitor

Editor's Note

As Russia’s devastating war with Ukraine drags on, the repercussions continue through the global coal industry. The European Union and Japan have agreed to phase out imports of Russian coal. Chinese coal traders are beginning to bypass US and European financial restrictions by paying for Russian coal and oil cargoes with yuan rather than US dollars. In Greece, coal plants slated for retirement are likely to be run for several more years, and lignite production increased this year by 50 per cent to displace Russian gas. As one analyst noted, the Asian market is unlikely to soak up the volumes of Russian coal shunned by European buyers. Mongolia, which plans to complete several new coal railways, aims to benefit from the high prices for metallurgical coal by dramatically boosting exports to steel mills in northern China.

While the short-term shocks to the energy system have prompted a short-term revival of coal generation, longer-term, the emphasis on cutting coal, gas and oil is driving plans for a dramatic expansion of renewables. In the Philippines, one of the leading banks has revealed it will end all support for existing coal plants by 2031. A major financial consultancy notes the dramatic increase in interest in solar and wind projects and the vulnerability of new plant proposals to strong community opposition. Georgia Power has unveiled plans to retire the bulk of its fleet of coal plants in the US over the next six years.

CoalWire will take a short break with the next edition on April 28.

Bob Burton

Features

Asia unlikely to rescue Russian coal amid Europe ban

Russia is most likely being hopelessly optimistic if it thinks Asia will swing dramatically towards buying its coal and making up for exports shunned by European markets, writes Clyde Russel in Reuters.

Ukraine war a perfect storm to spark a global energy reset

The war has become a catalyst to rethink global energy supplies, with surging fossil fuel prices, intense competition and rising geopolitical risk. With climate change impacts intensifying, will the crisis unite the world in stronger climate action and spending on cheaper renewable energy? asks David Fogarty in The Straits Times.

As G20 chair, coal-heavy Indonesia sends mixed signals on green transition

Indonesia’s call as the chair of the G20 group of countries for funding for a green energy shift has increased pressure on it to cut fossil fuel use further, writes Beh Lih Yi in the Thomson Reuters Foundation.

Indian tribal protesters jailed for obstructing railway construction for Adani coal

Adivasi (tribal) protesters have been arrested and jailed in the eastern Indian state of Odisha for obstructing construction work on a railway line to carry coal mined by Adani in Australia to an Adani coal power station in India, writes a special correspondent for Adani Watch.

Top News

Japan to phase out imports of Russian coal: Japan’s Minister of Economy, Trade and Industry, Koichi Hagiuda, has announced the government will work with Japanese power utilities to seek alternative suppliers of coal and phase out imports of Russian coal in stages. Ministry of Finance data indicates Japan imported 19.7 million tonnes of Russian coal in 2021, representing 11 per cent of total imports. Prime Minister Fumio Kishida denounced the “unforgivable war crimes” of Russian military forces in Ukraine and said Japan would also cut Russian oil and gas imports. Power companies JERA and Tohoku Electric said Russian imports accounted for about 10 per cent of their imported coal. Kyushu Electric and Kansai Electric said they had no long-term supply contracts for Russian coal. (Reuters, S & P Global)

European Union agrees to phase out Russian coal imports: The European Union (EU) has decided to ban imports of Russian coal with a phase-out period of four months for existing contracts. The EU estimates this will affect a quarter of Russia’s coal exports and represent a loss of about €8 billion (US$8.7 billion) per year. The latest round of EU sanctions on Russia added Herman Gref, the CEO and Chairman of Sberbank, to the list of blacklisted individuals. The EU regulation states Gref is “one of the leading business persons involved in economic sectors providing a substantial source of revenue” to the Russian Government. However, the EU has not sanctioned Sberbank, which plays a crucial role in facilitating payments for Russian energy sales to EU customers. Britain announced it had frozen the assets of Sberbank. (European Commission, European Commission, EUR-Lex, Euronews)

Greece seeks to extend lignite plants to cut Russian gas imports: Prime Minister Kyriakos Mitsotakis has announced that Greece will increase lignite mining over the next two years as a “temporary” measure to cut its reliance on imported Russian gas. The government-owned Public Power Corp had initially planned to produce 10 million tonnes of lignite this year but aims to increase that to 15 million tonnes. Before Russia invaded Ukraine, Greece planned to close its existing lignite plants by 2023 and operate the 660 megawatt (MW) Ptolemaida V plant, which is scheduled to be commissioned later this year, until 2025 and then convert it to run on gas. Mitsotakis said the operation of existing plants might be extended with the conversion to gas for the Ptolemaida V delayed until 2028. (Reuters)

Chinese official jailed for 11 years over coal mining bribes: A former vice-governor of China’s Qinghai province, Wen Guodong, has been sentenced to serve 11 years in jail for accepting US$3 million in bribes from coal mining and construction companies. Wen was vice-governor of Qinghai from 2009 to 2020. It was alleged before the Chongqing First Intermediate People’s Court that Wen protected illegal mining operations in the Muli coalfield in return for the bribes. A 2014 report by Greenpeace East Asia described the Muli coalfield as having destroyed alpine meadows and natural drainage systems from glaciers in the mountains. (Radio Free Asia)

Manchin’s push for critical minerals masks pitch to help coal industry: West Virginia Democratic Senator Joe Manchin, who is Chair of the Senate Energy and Natural Resources Committee, recently convened a hearing about US Government measures to increase domestic production of critical minerals for renewable energy technologies such as cobalt, manganese and nickel. Recent developments have indicated that the three minerals can be produced from acid mine drainage from mining sites and rejected coal dumped at abandoned mine sites. In 2021 Manchin added a provision into the bipartisan infrastructure bill requiring the Department of Energy (DOE) to fund a US$140 million facility for recycling rare earth elements from mine waste which could be located at a DOE laboratory in Morgantown, West Virginia. Ethics experts have expressed concern about Manchin’s role in promoting an industry that could benefit his family company, Enersystems, which supplies waste coal from an abandoned coal mine near Morgantown. A spokesperson for Manchin dismissed concerns about his role in promoting coal reuse. (E & E News)

NSW Government approves major new Whitehaven mine: Farmers and environmental groups have denounced the decision of the New South Wales Independent Planning Commission to approve Whitehaven Coal’s proposed Narrabri Underground Coal Mine extension. The company estimates the mine approval will extend the life of the Narrabri mine by 13 years to 2044 and increase the total amount of coal produced by about 82 million tonnes. The mine expansion is estimated to add nearly half a billion tonnes of carbon emissions and lower the water table to the point that bores used by local farmers will be drained. The decision came a day after the NSW Land and Environment Court fined Whitehaven A$158,750 (US$117,878) for polluting a creek with styrofoam balls at its Maules Creek mine site. (Guardian, Lock the Gate)

South African Government appeals against ‘deadly air’ judgement: South Africa’s Minister for Environment, Barbara Creecy, has lodged an appeal in the North Gauteng High Court against sections of the recent landmark judgement that found communities have a constitutional right to a healthy environment. The court ordered Creecy to regulate clean-up plans for Eskom and Sasol’s polluting coal plants. Creecy said the appeal is against four orders by the court that interpret Section 20 of the Air Quality Act as saying that the Minister had a duty to act, not merely the discretion to meet clean air standards. The Centre for Environmental Rights said the appeal risked further delaying action to cut air pollution in Mpumalanga province. Creecy unveiled proposed regulations that could block NGO groups from appealing against environmental authorisations for major projects in a separate development. (IOL, MSN, Centre for Environmental Rights)

News

Australia: National Pollutant Inventory data reveals significant increases in pollution from AGL’s coal fleet despite declining energy generation at several plants.

Colombia: Colombia’s mining agency ANM has called for bids by May 25 on two thermal coal production areas with a combined area of 9300 hectares in Cesar province.

India: After High Court judges criticised the state of Meghalaya for lack of enforcement, officials seized over 45,000 tonnes of illegally mined coal in the East Jaintia Hills district.

Indonesia: To the alarm of local fisherpeople, a coal barge off the coast of Java has spilled its cargo into the ocean.

North Macedonia: A 10 MW solar farm has been commissioned at the 135 MW Oslomej coal plant site, which will be retired by 2027.

Poland: Parliament approves bill banning Russian coal imports.

UK: The Planning Inspectorate has set a July 7 deadline for the Secretary of Housing, Communities and Levelling Up, Michael Gove, to decide on West Cumbria Mining’s proposed Whitehaven coal mine.

US: New York State Comptroller, which oversees US$280 billion in assets, supports shareholder resolutions filed with six US banks calling for an end of support for new fossil fuel projects.

US: With US$9 million in federal funding Cleco Power will undertake a study on the options of a 95 per cent carbon capture unit on its 203.8 MW Unit 3 at the Brame Energy Center.

Companies + Markets

Mongolia targets jump in exports with completion of railways: Mongolia’s Vice-Minister at the Ministry for Mining and Heavy Industry, Nagi Otgonshar, has foreshadowed a significant expansion in coal exports to China with the completion of three new railways this year. Nagi said Mongolia aimed to export 36.7 million tonnes of metallurgical coal this year, up from 14 million tonnes sold in 2021 when COVID-19 restrictions at the border slowed the processing of coal trucks. Nagi said the Tavan Tolgoi–Gashuunsukhait railway will be commissioned in July and the Zuunbayan-Khangi/Mandal line later this year. (S & P Global)

Philippines bank to phase out coal lending by 2030: Rizal Commercial Banking Corporation (RCBC), one of the largest private domestic banks in the Philippines, plans to cease providing financial support for existing coal plants by 2031. In December 2020, RCBC became the first Philippines bank to announce it would no longer provide financial support for new coal power projects. (Business Mirror)

Analyst upgrades role of renewables in the Philippines: Fitch Solutions, a part of the financial services firm Fitch, has increased its forecast for non-hydro renewables – primarily wind and solar – due to increasing investor interest, a growing number of project proposals and new regulatory measures such as the Department of Energy’s recent 2000 MW renewables tender. Fitch Solutions notes proposed solar projects over US$30 million in value increased tenfold over the last year. The firm also stated it has downgraded its coal generation forecast “slightly amid strong opposition against the fuel source” and notes that while there is 16,000 MW of pre-construction projects in its database, they “may face a high risk of derailing”. (Philippines Star, Fitch Solutions [Reg. required])

Major US utility outlines a plan to retire most coal units by 2028: In its latest 20-year Integrated Resource Plan, Georgia Power has proposed the closure of nine coal-burning units with a combined capacity of 6171.6 MW by 2028. The affected units are Units 1 and 2 at Plant Bowen, Units 1, 2 and 3 at Plant Scherer and Units 1 and 2 at Plant Wansley. Georgia Power proposes closing the last two 952 MW coal units at Plant Bowen in 2035. A Georgia Power executive told the Georgia Public Service Commission, “it’s no longer economical to operate the company’s coal units.” The utility proposed meeting increased load growth by additional gas generation and some renewables. However, consumer advocates argue Georgie Power is proposing to freeze energy efficiency gains at the same level approved in 2019, two to three times lower than being delivered by other utilities. (Augusta Chronicle, CleanEnergy.org, Georgia Power)

China coal mine approved: Government officials have formalised approval for Lianhai Coal Industry Company’s Baijiahaizi mine in Inner Mongolia to produce 15 million tonnes of coal a year. The company estimates the 170 square kilometre lease area contains up to 2 billion tonnes of coal. The National Development and Reform Commission initially approved the mine in 2019, but the company illegally began production without the required local permits. China is aiming to increase coal production by 300 million tonnes this year. (Bloomberg)

Chinese coal importers pay for Russian coal in yuan: In the aftermath of US and European sanctions on Russian banks, Fenwei Energy Information Service reports that Chinese coal traders have negotiated to buy cargoes of Russian thermal and metallurgical coal paid for in yuan rather than US dollars. The first cargoes will arrive in China this month. Traditionally, coal purchases have been denominated in US dollars, but Chinese buyers suspended purchases after some Russian banks were excluded from the SWIFT inter-bank transactions system. After China instituted an unofficial ban on Australian coal, it turned to Russian exporters to fill the gap. (Bloomberg)

PriceWaterhouse Coopers’ role in making a Russian oligarch: Documents leaked to the International Consortium of Investigate Journalists have revealed PriceWaterhouse Coopers (PwC), the world’s second-largest accountancy firm, helped Russian coal and steel magnate Alexei Mordashov become Russia’s richest man. The documents reveal PwC assisted Mordashov’s holding company to operate 65 shell companies in low-transparency jurisdictions such as the British Virgin Islands. Mordashov owns Severstal, one of Russia’s largest steel plants, and over the last two decades, has diversified his investments into coal, logging and media. He is one of the oligarchs recently sanctioned by the EU. (International Consortium of Investigative Journalists)

Sri Lanka defaults on international debt, including loans for coal plant: Sri Lanka has defaulted on payments on its US$51 billion foreign debt as it struggles to preserve scarce foreign exchange for essential items and negotiate a financial restructuring. The financial crisis, which has caused shortages of essential foods, fuel and medicines, was triggered by debts incurred on projects that became white elephants, such as Chinese-backed ports and road projects. The default will also affect payments due on loans from the EXIM Bank of China to construct the unreliable 900 MW Lakvijaya Power Plant. The state-run Ceylon Electricity Board has been hit by the soaring cost of imported thermal coal, the depreciation of the rupee, delayed approval for an increase in power tariffs and reduced hydro generation due to a drought. (Times of India, Al Jazeera)

Resources

“The political economy of coal phase-out: Exploring the actors, objectives, and contextual factors shaping policies in eight major coal countries”, Energy Research & Social Science, August 2022. (Abstract and Introduction).

This paper surveyed energy experts in eight major coal countries – China, India, Indonesia, Vietnam, the Philippines, Turkey, South Africa and Japan – to identify the most influential political and economic actors affecting coal phase-outs.

Russian coal tracker, Twitter account.

This automated account, published by the investigations unit of Greenpeace Germany, publishes the name of coal ships leaving Russian ports and their destination.