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March 21, 2024
Issue 506  |  View Past Issues
CoalWire
Published by Global Energy Monitor

Editor's Note

The decision of a Polish administrative court to annul a permit for the expansion of the Turow lignite mine is the latest twist in the long saga over the cross-border impacts on groundwater in the Czech Republic. While the mine continues operating for the moment, the ruling in another legal case is pending. In Bulgaria, a court has cancelled a permit for the Maritsa East 2 lignite plant. Ahead of local government elections, Turkish President Erdogan has cancelled an unpopular decision to expropriate thousands of hectares of land for the expansion of a lignite mine. In Canada, the last two coal units in Alberta will close before the end of June, ending coal generation in the province six years earlier than expected when the government enacted a carbon price.

A new report by Global Energy Monitor details how China could drive a significant reduction in greenhouse gas emissions from the steel sector by ensuring its fleet of electric arc furnaces (EAF) operate at a high utilisation rate. China could achieve deeper emissions cuts if the government promoted the rapid expansion of EAF capacity. In its latest annual assessment of global methane emissions, the International Energy Agency notes that emissions from coal mines reached a record high.

Bob Burton

Features

Two coal states, two very different futures

Colorado and Montana are grappling with the decline of coal mining and power stations in starkly different ways. Colorado is helping coal communities shift to a diversified economy while Montana is clinging to coal so tightly that any talk of transition is viewed as betrayal, writes  Elisabeth Kwak-Hefferan in Sierra.

How China completely redefined a key energy target

By shifting the meaning of “energy intensity”, China has reduced its overall ambition and made the 2025 carbon-intensity goal harder to achieve, writes Lauri Myllyvirta in China Dialogue.

Why Indian coal communities are more worried about land than jobs

Villagers in the coal mining districts of Chhattisgarh and Jharkhand want India’s just transition plan to focus on giving the land back to the locals, write Saloni Meghani, Debojit Dutta and Kumari Rohini in India Development Review.

Top News

Coal set to disappear from Canadian province six years early: Coal generation in Alberta will cease at the end of June, six years earlier than expected, with the conversion of Capital Power’s Genesee 1 and 2 coal units to run on gas. The two units, which both have a capacity of 430 MW, were commissioned in 1989 and 1994, respectively. Capital Power will complete the conversion of Unit 1 by the end of April and Unit 2 by the end of June. A decade ago, Alberta had 5509 MW of coal capacity that supplied 54 per cent of the province’s electricity. Alberta’s Technology Innovation and Emissions Reduction Regulation came into effect in January 2020, during the term of New Democratic Party Premier Rachel Notley. The regulation taxed coal generation at a higher rate than other sources of electricity generation. The Alberta Electricity System Operator estimates greenhouse gas emissions from the province’s power sector will decline to 16.5 million tonnes this year, down from 50 million tonnes in 2005. The closure of the Genesee units will also result in the closure of the Genesee coal mine, a joint venture between Capital Power and Westmoreland Prairie Resources. (Calgary Herald, Global Energy Monitor)

Turkish govt backtracks on mine expansion ahead of local election: The Turkish government has cancelled a March 12 decision by the General Directorate of Mining and Petroleum Affairs to expropriate more than 20000 hectares of land to cater for the expansion of a lignite mine. The mine supplies the 630 MW Kemerkoy power station. The government initially approved the allocation of 832 hectares of olive groves in the area for the mine expansion. Two days after gazetting the original decision, a mayoral candidate for Mugla from the ruling Justice and Development Party (AKP) announced the policy reversal after he spoke to President Recep Tayyip Erdogan. The mayoral election will occur on March 31. Mugla is considered an opposition stronghold, with the AKP party hoping to make gains. Residents have opposed the expansion of the mine and its impacts on the forest and olive groves, and they have supported action to curb air pollution from the Kemerkoy plant. (Hurriyet Daily News, Global Energy Monitor)

Polish court annuls Turow mine permit: The regional administrative court in Warsaw overturned an environmental permit issued in 2022 for the Turow lignite mine, which affects groundwater across the border in the Czech Republic. Judge Jaroslaw Luczaj ruled the permit was in breach of an agreement that Poland entered into with the Czech Republic to settle a legal challenge against the mine before the European Court of Justice. Poland paid €45 million (US$57 million) in compensation to the Czech Republic and agreed to protect the environment. However, the regulator approved the permit for the mine without considering the environmental protection obligations under the agreement. In 2023, the climate minister in the former Law and Justice government used the permit as the basis to extend PGE’s mining concession from 2026 to 2044. The judge ruled that the mine could continue operating until other legal challenges against the project are resolved. (Notes from Poland, Mining.com)

Study on Polish city finds big benefits for children in cutting air pollution: A study published in Environmental Research found that policies by municipal, regional, and national governments restricting the use of coal and other solid fuels for home heating resulted in substantial health benefits for children. The study found the policies cut PM2.5 and PM10 fine particle pollution in the city of Krakow between 2010 and 2019 by 39.1 and 39.2 per cent to 23.3 milligrams per cubic metre (µg/m3) and 34.6 µg/m3, respectively. The study found the benefits include fewer preterm births, higher birth weight and reduced cases of asthma. The authors estimate that if Krakow’s air quality met the World Health Organization’s 2005 guideline limits of 10 µg/m3 for PM2.5 and 20 µg/m3 for PM10 fine particle pollution in 2010, there would have been 780 fewer asthma cases in the 1–14 age group (a 54.5 per cent decrease), 138 less preterm births (a 28.3 per cent decrease), and 90 cases of low birth weight (21.2 per cent reduction) and 219 (54.2 per cent) fewer asthma hospitalizations in 0–18-year-olds. In 2021, the WHO lowered annual average limits to 5 µg/m3 for PM2.5 and 15 µg/m3 for PM10 and set the 24-hour limits to 15 µg/m and 45 µg/m3. (Environmental Research)

IEA estimates coal mine methane emissions hit a record high: The International Energy Agency (IEA) estimates coal mine methane emissions reached a record high of 40 million tonnes in 2023, up from the previous record of 39 million tonnes in 2022 and each year in the 2012-2014 period. The IEA notes that 25 million tonnes of methane emissions from the coal sector originate from underground mines. The IEA estimates the deployment of existing technologies to control methane emissions from the coal sector would cost US$70 billion, but that just 15 per cent of the emissions can be achieved at no net cost. The IEA argues that a 75 per cent cut in methane emissions from fossil fuels is required by 2030 to achieve the goals of the Paris Agreement. The IEA notes that there is considerable uncertainty about the level of methane emissions from abandoned coal mines but pointed out a recent study suggested old mines in China, the world’s largest emitter, could emit 4.7 million tonnes of methane a year. There are fewer options for controlling methane emissions from open-cut mines, which typically produce thermal coal. (International Energy Agency)

Bulgarian court rules permit for lignite plant is invalid: The Administrative Court in Stara Zagora has ruled in favour of a legal challenge brought by Greenpeace Bulgaria and other NGOs and quashed the 2018 permit that allowed the state-owned 1602 MW Maritsa Iztok 2 lignite plant to exceed European Union limits for sulphur dioxide and mercury emissions. The ruling culminates a 5-year legal process by Greenpeace - Bulgaria, Za Zemiata (Friends of the Earth – Bulgaria), ClientEarth, and Greek-based The Green Tank challenging the air pollution permit for the plant. The three oldest units at the plant are over 55 years old, with the nearby town of Galabovo exposed to the highest levels of sulphur dioxide in the European Union. In March 2023, the Court of Justice of the European Union ruled against the Bulgarian government’s 2018 decision to allow the plant to emit almost double the amount of sulphur dioxide allowed by the European Union. The latest court decision can be appealed. (BTA)

News

Australia: Port Waratah Coal Services has been fined A$15,000 (US$9850) by the NSW Environment Protection Authority over a minor coal spill from a wharf conveyor belt into the Hunter River.

Australia: The former company secretary of Continental Coal, Jane Flegg, was sentenced to two years in jail for her role in the theft of A$2.13 million (US$1.4 million) to prop up the Australian-listed South African mining company.

Canada: The Nova Scotia Department of Labour has approved the underground Donkin coal mine to restart after an eight-month shutdown caused by a series of roof collapses.

India: Dhariwal Infrastructure, which operates the 600 MW Chandrapur coal plant in Maharashtra, donated 1.1 billion rupees (US$21.2 million) to Indian political parties.

Japan: JERA and the engineering company IHI are preparing to test co-firing ammonia at one of the coal units at the 4100 MW Hekinan Thermal Power Station.

UK: Tata Steel announced it would immediately close the coke ovens at its Port Talbot steelworks in Wales, stating it did this because of a “deterioration of operational stability”. The closure was previously slated to occur in June and will affect about 200 jobs.

US: An email released as part of a legal case over the Ohio US$61 million bribery scandal reveals  American Electric Power insisted on including coal plant subsidies in House Bill 6.

US: Two of the three Court of Appeals judges expressed scepticism about claims made by Gavin Power and a coalition of power plant companies in a challenge against coal ash management rules released by the Environmental Protection Agency.

US: Call for Congress to increase black lung benefit after research indicated a miner with the disease and a dependent in 2024 are paid US$1159 a month, more than US$3,000 less than the average cost of living for two people in coal communities.

Companies + Markets

Australian farming lobby group challenges Glencore CCS project: AgForce, the powerful Queensland farming lobby group, has launched legal action in the Federal Court of Australia to block a proposal by a Glencore subsidiary to inject liquefied carbon dioxide into the Great Artesian Basin. AgForce has applied for a judicial review of a February 2022 decision by the federal environment department that the proposal by Carbon Transport and Storage Corporation (CTSCo), a Glencore subsidiary, did not need to be assessed under the provisions of the Environment Protection and Biodiversity Conservation Act. CTSCo has proposed a demonstration project to capture carbon dioxide from one of the two 440 MW coal units at the Millmerran coal power station and pump 330,000 tonnes of carbon dioxide to an injection point in the Surat Basin. (Guardian, AgForce)

Consultancy warns on flaws in South Africa’s draft power plan: Meridian Economics, a South African economic consultancy, argues in its submission that the  Department of Mineral Resources (DMRE) and Energy’s Integrated Resource Plan 2023 (IRP) is seriously deficient in its assessment of alternative power development pathways and ignores the impacts of air pollution. Meridian says the IRP lacks transparency about critical assumptions, such as technology costs, assumes Eskom’s current retirement schedule as fixed and does not assess a net-zero pathway in any scenario. DMRE suggests 10,000 MW of coal capacity will still be online in 2050. Meridian argues that DMRE set “seemingly arbitrary” limits on annual solar capacity additions of 900 MW in one scenario, even though 2500 MW was installed in 2023. Another scenario capped solar capacity at 18,000 MW by 2050. Public comment on the IRP closes on March 23. (Meridian Economics [Pdf])

Chinese thermal coal output declines in the first two months of 2024: Data from the National Bureau of Statistics indicates that China’s thermal coal production fell in the first two months of 2024 to 705 million tonnes, a 4.2 per cent decline compared to the year before. This is the first year-on-year decline since September 2021, reflecting the surge in domestic production promoted by the government after coal shortages that year resulted in blackouts. The decrease in domestic production occurred despite a 9.7 per cent increase in coal generation in January and February, underpinned by a reliance on imported and stockpiled coal. (Mining.com)

US agencies launch bribery investigation into Adani: The US Attorney’s Office for the Eastern District of New York and the Justice Department’s fraud unit have launched a bribery investigation into whether an Adani Group entity or people connected to the company, including its chairman Gautam Adani, paid Indian government officials for favourable treatment on an unspecified energy project. Bloomberg reported that one company included in the investigation is Azure Power Global, an Adani subsidiary that develops renewables projects in India. Adani said, “We are not aware of any investigation against our chairman”. In a stock exchange filing, Adani Ports and Special Economic Zone stated that the company had not received any notice from the Department of Justice about the allegation and claimed the report was false. The US Foreign Corrupt Practices Act allows investigations into allegations if US investors or markets are affected. (Livemint, Business Standard, Adani Ports and Special Economic Zone [Pdf])

Malaysian court told of US$9 million commission on Mongolian project: The Malaysian High Court was told that a US$8.99 million payment referred to as a “commission” was paid to Blackstone Asia Real Estate Partners (BVI), a shell company linked to the fugitive Malaysian businessman Jho Low. The transfer to BVI came from Gobi Coal & Energy (GCE), a Mongolian company that held the rights to two proposed coal mines that lacked a road connection to China. SRC International and Aabar, the United Arab Emirates investment fund, contributed US$60 million each to a joint venture that spent US$91 million on shares in GCE. GCE proposed to begin development work on the mines before floating the company on the stock exchange in 2012. No coal was produced from the mines. The new management of SRC International is suing former Prime Minister Najib Razak over allegations he breached statutory duties as SRC’s Emeritus Adviser between May 1, 2012, and March 4, 2019, and is seeking repayment of the US$1.18 billion transferred from Malaysia’s public employees pension fund, the Retirement Fund Incorporated (KWAP). Najib is currently serving a six-year jail term after his conviction in August 2022 over the transfer of 42 million ringgit (US$10.6 million) to his bank account from SRC International. Low and Najib were at the centre of a scandal over the transfer of funds from the country’s sovereign wealth fund, 1Malaysia Development Bhd (1MDB), to a network of offshore companies. The revelations of the 1MDB scandal resulted in the defeat of Najib’s government in the May 2018 election. (The Star, The Star)

Accounting firm disputes coal test results coverup: The accounting firm EY has rejected a statutory declaration by a Peabody Energy whistleblower that the firm knew about the alteration of coal export test results between 2003 and 2008 that boosted the sale price to Asian coal buyers. The whistleblower alleged EY staff told him that “other coal clients and your competitors do it also”. In response to questions, EY stated audit files from before 2008 had been destroyed in line with its records policy and that two people at EY Australia involved in auditing Peabody Energy’s Australian subsidiary had no recollection of the issue. EY said the issue about fake coal test results had initially been referred to its US parent company and that it was not aware of any disputes with coal customers. EY stated that coal samples are destroyed after 90 days, and customers cannot dispute coal quality test results after this. (Australian Financial Review [paywall])

NGO warns Bulgaria’s proposed coal-to-gas plan would be costly: CEE Bankwatch says Bulgaria’s plan to replace the current 1610 MW lignite unit at the Maritsa East complex with a 1000 MW combined cycle gas turbine is uneconomic and requires a rethink in favour of renewables. CEE Bankwatch estimates the Maritsa East project would cost about €800 million (US$870 million) and need a further €1.3bn (US$1.4 billion) in financial support until 2040, after accounting for gas prices, the cost of carbon and other factors. The NGO also said that the proposed 39 MW gas plant at the Bobov Dol site would require about €68mn (US$74 million) in capacity payments or other support to 2040. CEE Bankwatch said better replacements for the country’s coal capacity would be solar, wind, pumped storage hydro projects and other alternatives. (BNEIntellinews)
 

Green Steel Transition

China could cut emissions by greater use of electric arc furnaces: A report by Global Energy Monitor (GEM) estimates China could cut its greenhouse gas emissions from the steel sector by 11 per cent by boosting electric arc furnace production to account for 20 per cent of steel produced in 2025. China’s current target is to produce 15 per cent of steel from electric arc furnaces by 2025, which would cut emissions by 8.7 per cent. The capacity of China’s steel industry is currently over one billion tonnes, with coal-based blast furnaces accounting for 86 per cent of the total and EAF’s plants the remainder. GEM estimates that China could reach its 15 per cent target by increasing the current utilisation rate of EAF capacity. The report notes that achieving the 20 per cent target would require an additional 39 million tonnes a year of EAF capacity beyond the current 151 million tonnes a year capacity. Current industry plans are to add an extra 48 million tonnes of EAF capacity, but 21 million tonnes of old plant capacity will close. In comparison, China currently has 913 million tonnes per annum of blast furnace capacity, with another 97 million tonnes a year capacity under development. (South China Morning Post, Global Energy Monitor)