April 22, 2021
Issue 366  |  View Past Issues

Editor's Note

Ahead of the US-hosted April 22–23 Leaders’ Summit on Climate, discussions between the US, Japan and China have fuelled hope more ambitious commitments may be in the offing, including the need to end financial support for new international coal plants. The summit comes as the International Energy Agency has flagged coal power generation has surged back in the aftermath of the COVID-19 shock last year.

While commitments made at the summit could accelerate the shift away from coal, projects continue to be cancelled. In Japan, J-Power has finally abandoned plans for a new 600 megawatt (MW) coal plant. In Australia, the New South Wales Government has bowed to a 13-year campaign by farmers and community groups to buy out Shenhua’s coal mining licence over part of the Liverpool Plains. Two more insurance companies, which are part of the Lloyd’s of London syndicate, have also ruled out support for Adani’s coal project.

In Germany the rising carbon price is forcing a reappraisal of the 2038 legislated end date for coal plants. This week the Minister for Environment, Svenja Schulze, told an energy industry conference she expects Germany’s coal power plants may all be closed by 2030. The growing support for the Greens ahead of the September election may also be a contributing factor.

Bob Burton


China, Japan and South Korea must work together to end coal use and funding

To meet the goals of the Paris Agreement we need to end the construction of all new coal plants, close a coal plant a day between now and 2040 and accelerate the expansion of renewable power, writes former United Nations secretary general Ban Ki-Moon in the South China Morning Post.

Energy financiers in Asia must stop supporting region’s costly addiction to LNG and coal power

Multilateral development banks’ support for coal and LNG plants in Asia will lead to unsustainable fossil fuel subsidies, rising power tariffs and undermine development, writes Simon Nicholas from the Institute for Energy Economics and Financial Analysis in the South China Morning Post.

How can NSW allow new coalmines while committing to net-zero emissions?

The New South Wales Government is simultaneously committed to a net-zero emissions target for 2050 and supporting the development of a raft of new coal mines in the Hunter Valley, writes Richard Denniss from The Australia Institute in The Guardian.


Japanese utility rules out new coal plant

Japanese NGOs have welcomed the decision of plans of Electric Power Development Company (J-Power) and Ube Industries to cancel the proposed 600 MW Nishiokinoyama Power Plant in western Japan. J-Power said the decision to cancel the project was made because electricity demand “is expected to remain flat and the introduction of renewable energy is expanding.” The plant was first proposed in 2014 as a 1200 MW project but the following year the then Minister for Environment, Yoshio Mochizuki, said it was incompatible with the country’s emissions reduction goals. In early 2019 Osaka Gas withdrew from the project consortium, resulting in J-Power dropping one of the two 600 MW units. Climate NGO Kiko Network has welcomed the decision but said the government should cancel Marubeni and Kanden Energy Solution’s proposed 1300 MW Akita Port power plant and the eight other plants currently under construction. (Nikkei Asia, Kiko Network, J-POWER [Pdf])

NSW Government buys out Shenhua lease to end mining plan

The New South Wales Government has paid A$100 million (US$77 million) to buy out Shenhua’s proposed Watermark coal mine in the Hunter Valley. In 2008 Shenhua paid A$300 million (US$232 million) for exploration rights over part of the rich Liverpool Plains farmland. After years of resistance from local farmers, in July 2017 the NSW Government agreed to buy just over half of the exploration lease back at a cost of A$267 million (US$207 million). Since then, opposition in the local community has remained while the market has dramatically weakened for the proposed 10 million tonnes a year of thermal coal the company planned to produce for export. Farmers want the Liverpool Plains permanently protected from mining. (Sydney Morning Herald, Lock the Gate)

Top News

US seeks commitments from China and Japan ahead of climate summit: Ahead of the April 22–23 Leaders’ Summit on Climate, US climate envoy, John Kerry, has discussed more ambitious climate commitments with both China and Japan. Officials advising President Biden are reportedly considering announcing a greenhouse gas emissions reduction target of up to 50 per cent by 2030 compared to a 2005 baseline. A joint statement issued after the US–Japan discussion emphasised co-operation of the two countries, including in the Indo-Pacific region, to “rapidly deploy renewable energy” along with other measures. The communique did not explicitly mention coal. A coalition of NGOs noted the Japanese Government had not specified any specific new measures or timelines beyond a commitment to net-zero emissions by 2050. The NGOs also called on the Japanese Government to rule out public support for the 1000 MW expansion of the Indramayu plant in Indonesia and the 1200 MW Matarbari 2 project in Bangladesh. John Kerry has also discussed with Chinese officials the possibility of China “enhancing” its commitment to peak greenhouse gas emissions by 2030 and to achieving carbon neutrality by 2060. (No Coal Japan, Whitehouse.gov [Pdf], Wall Street Journal, Washington Post)

International Energy Agency forecasts coal generation surge in 2021: The International Energy Agency (IEA) estimates coal demand could increase by 4.5 per cent in 2021, nearing its 2014 peak. The IEA’s Global Energy Review 2021 estimates three-quarters of the increase in coal demand is attributable to the electricity sector. The IEA estimates 80 per cent of the growth is in Asia with China accounting for much of the increase. Electricity generation from wind and solar are projected to increase by 17 per cent and 18 per cent respectively compared to 2020. However, the increase in coal generation is expected to be 60 per cent greater than the rise in renewables generation. (Guardian, International Energy Agency)

Two Lloyds syndicate members rule out backing Adani’s Carmichael mine: Tokio Marine Kiln (TMK), one of the major insurance companies in the Lloyd’s of London syndicate, has ruled out “any future underwriting” of Adani’s Carmichael coal mine. ERS Insurance, a Lloyd’s underwriter, has also stated it will not be involved “in any way with the Adani Carmichael Project.” Pablo Brait, from Market Forces, said TMK’s announcement implied it is an existing insurer “which, if true, would make this commitment a significant blow to Adani’s controversial plans”. With the latest announcements, 34 insurance companies, including 25 in the Lloyds of London syndicate, have ruled out support for Adani’s Carmichael coal project. (Insurance Times)

German Environment Minister tips end to coal plants by 2030: The Minister for Environment, Svenja Schulze, has told an energy industry conference she expects Germany’s coal power plants may all be closed by 2030. “The coal phase-out will come faster than previously planned,” she said [translation]. In July 2020 Germany legislated a coal phase-out but it allows the last plants to potentially remain online until 2038, a target date that has been widely criticised by environmental groups. With rising carbon prices likely to drive reduced coal generation, Schulze has proposed accelerating financial support for economic diversification projects in eastern Germany and the Rhineland and proposed increased solar and wind capacity. Schulze’s comments come as polls indicate growing support for the Greens, with their candidate for Chancellor, Annalena Baerbock, considered a potential contender at the September election. (Reuters [German])

Report estimates South Korean coal plants health toll: A report by the Centre for Research on Energy and Clean Air (CREA) estimates South Korea’s 43,000 MW of existing and under-construction coal plants could cause an estimated 16,000 premature deaths by the current phase-out date of 2054. CREA estimates the health and associated costs at US$21 billion with 45 per cent of the potential premature deaths concentrated in Gyeonggi-do province and the country’s capital city, Seoul. The study estimates coal plants have already caused about 9500 premature deaths since 1983 with an estimated cost of US$16 billion due to health and welfare costs. (Centre for Research on Energy and Clean Air [Pdf])

Protests over Alberta Government plan to limit comments on coal policy: The Alberta Government has been widely criticised by opposition parties, landholders, First Nations and NGOs for seeking to limit comments on plans for new coal projects on the Eastern Slopes of the Rocky Mountains to only topics within the authority of the Department of Energy. Alberta’s Minister for Energy, Sonya Savage, had previously stated the public consultation would be an “open conversation” where “the widest spectrum of views” would be heard. However, the guidelines released by the government would prevent the review panel from canvassing concerns over impacts on water, health, biodiversity, landscape values or recreation. (CTVNews, CBC)

Uniper challenges Dutch coal exit law: The German power utility Uniper has launched a legal challenge against the Dutch Coal Prohibition Act which requires the closure of the 1070 MW Maasvlakte coal plant by January 1, 2030. Uniper began construction of the plant in 2008 despite legal challenges and opposition by Dutch civil society groups. The plant was finally commissioned in 2016. Uniper originally touted the project as including a carbon capture and storage plant to be commercially operating by 2020 but, due to financial and other challenges, this was abandoned in 2017. Uniper is seeking a ruling on whether the law requiring the closure of the plant without paying compensation is valid. Uniper has also told the Dutch Government it will submit a request for arbitration to the International Center for Settlement of Investment Disputes in the US. (S & P Global, Uniper)


Australia: Aboriginal community and landholders unaware of area near Rylstone earmarked for possible coal exploration.

Australia: Stanwell, which owns three Queensland coal plants, flags the reduction in their use and a rapid shift to renewables.

Bangladesh: Five construction workers were killed and 21 injured after police opened fire at a protest over unpaid wages by contractors at the S. Alam Group’s 1224 MW Banshkhali power station.

India: Water shortages affecting municipalities in Odisha have been blamed on coal mining and power plants.

Romania: The European Environment Bureau has objected to plans for a €1.3 billion (US$1.6 billion) subsidy to extend the life of coal plants of state-owned Oltenia Energy Complex.

US: United Mine Workers of America backs President Biden’s climate plans if coal miners benefit with “good-paying jobs”.

US: The annual meeting of the insurance company Liberty Mutual was terminated after just seven minutes leaving questions on its support for fossil fuels unaddressed.

Companies + Markets

Report highlights troubled history of Canadian CCS plant: A report by the Institute for Energy Economics and Financial Analysis argues SaskPower’s statement that its Boundary Dam carbon capture and storage plant has captured over four million tonnes of carbon dioxide (CO2) since 2014 glosses over the numerous problems with the project. The plant was initially designed to capture 3200 tonnes of CO2 daily but has never achieved this for any extended period, resulting in it hitting the four million tonnes target two and a half years later than it should have. The plant was originally designed to capture 90 per cent of the CO2 emissions from the third unit at the Boundary Dam plant but SaskPower has now revised the target to only 65 per cent capture. (SaskPower, Institute for Energy Economics and Financial Analysis)

NSW Government agency projects declining coal demand: The New South Wales Government has been warned by Treasury that thermal coal demand will decline over the next 40 years and affect productivity growth unless the workers transitioned into “similarly productive industries.” The environmental impact statement by MACH Energy, which is proposing to expand the Mt Pleasant mine, estimates Hunter Valley mine production will peak at about 260 million tonnes a year in 2024–25 then decline steadily until ending in 2049. An analyst with Wood Mackenzie, Rory Simington, said the uncertainty over the future market for thermal coal meant that companies’ focus is on projects with a payback period of a decade or so in contrast to their previous far-longer timeframes. (Sydney Morning Herald)

Study finds cost of finance for coal project soaring: A study by the Oxford Sustainable Finance Programme has found investors in coal companies and projects now require returns of 40 per cent to offset stranded asset and other risks. In comparison, investors want wind and solar energy projects to earn returns over 10 or 11 per cent. The authors compared the financing costs between 2007–10 and 2017–20 for coal plants and mines and found they had increased by 38 per cent and 54 per cent respectively. The report also found financing costs for coal mines increased by 80 per cent in North America, 134 per cent in Europe, and 71 per cent in Australia when comparing 2000–10 with 2011–20. (Guardian, Oxford Sustainable Finance Programme)

Indian coal terminals hit by policy to cut imports: Privately owned Indian coal import terminals have been hit by the Modi Government’s policy of cutting thermal coal imports. Some operators are now pushing for changes to contracts to allowing them to handle other commodities for both imports and exports. One anonymous coal terminal operator warned that public ports financed by bank loans could become non-performing assets without a policy change. In the year to the end of March Indian thermal coal imports handled through 12 major port trusts declined from 105.8 million tonnes in 2018-19 to 78 million tonnes. KPMG stated Vedanta Group’s terminal at Visakhapatnam Port Trust would be unused in the near future while an Adani Ports subsidiary at the same port is seeking to terminate its contract. A bankruptcy court in Mumbai has initiated insolvency proceedings against Tuticorin Coal Terminal over its operations at the VO Chidambaranar Port. (The Hindu)

South African flounders after investor backs away: The board of Resource Generation (Resgen), which has been pushing for the development of the proposed Boikarabelo thermal coal mine in South Africa’s Limpopo province, has told the stock exchange it is considering the option of appointing administrators. The mine was first pitched as starting production in 2013 for the proposed 600 MW Boikarabelo power station. However, the plant has been cancelled and Resgen’s plan for the first stage plan to produce 6.5 million tonnes of thermal coal a year has stalled. In mid-March the commodities trader, Noble Resources, agreed to pay Resgen US$993,000 in three monthly instalments to cover an “austerity operating budget” and ensure the solvency of the company while alternatives for progressing the mine were considered. However, Noble Resources has now decided it would make no further payments beyond its March instalment. (MiningMX, Resgen [Pdf], Global Energy Monitor)

Singapore bank plans to keep financing coal until 2039: DBS Group announced it plans to provide finance to coal mining and power generation companies until 2039 and will only exclude new coal sector customers if they earn over 25 per cent of income from thermal coal. DBS said the threshold would decline over time. It also stated companies that earn over 50 per cent of revenue from thermal coal will be excluded from support after January 2026. (BNNBloomberg)

Polish plan to shuffle coal assets: The Polish Government has announced plans to shuffle coal and lignite plants held by utilities PGE, Enea and Tauron into a new company, the National Agency for Energy Security. The government’s aim is to allow private banks to fund renewables projects for fossil-fuel-free utilities. State Assets Minister Jacek Sasin said this separation would allow Poland to “speed up” its energy transition. However, the new entity would hold the coal and lignite plants and associated mines for up to 30 years, a plan dismissed by environmental groups who said it was incompatible with the European Union’s emissions reduction plans. “A hot potato is tossed from one pocket to another... It is difficult to imagine that the European Commission will approve such a plan,” said Joanna Flisowska from Greenpeace Poland. The proposal has also yet to be approved by Poland’s coal unions or the coalition government. (Reuters, MSN, Reuters)

Report argues it is cheaper for China to back away from coal: A report by TransitionZero estimates that replacing China’s fleet of coal plants with zero carbon alternatives could save U$1.6 trillion over 20 years at a negative cost of US$20 per tonne of carbon dioxide. The study models emissions from China’s 1058 coal plants. The authors estimate compliance with President Xi Jinping’s aim to be carbon neutral before 2060 requires the carbon intensity of power generation to halve by 2030, which would require the closure of 588 coal plants. The study argues China should cancel all new coal projects and reform its emissions trading scheme to make it consistent with Xi’s 2060 carbon neutrality goal. (BBC, TransitionZero)


End in Sight: How South Korea can force coal offline by 2028, Carbon Tracker Initiative, April 2021. (Pdf, registration required.)

This 42-page report outlines how accelerated deployment of renewables can provide 40 per cent of electricity by 2028 and allow for the early retirement of South Korea’s fleet of coal plants.

“Why coal? – The political economy of the electricity sector in the Philippines”, Energy for Sustainable Development, June 2021.

This paper, based on interviews with 50 people with an interest in the Philippines energy sector, finds support for new coal plants is limited to corporate conglomerates, President Rodrigo Duterte and the Department of Energy.

Last Chance for the Powering Past Coal Alliance, Reclaim Finance, April 2021. (Pdf) (The media release on the report is here.)

This 8-page report finds many members of the international Powering Past Coal Alliance, including governments and financial institutions, continue to support existing and proposed coal projects.