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May 9, 2024
Issue 513  |  View Past Issues
CoalWire
Published by Global Energy Monitor

Editor's Note

If the 2015 Paris Agreement was an emphatic signal for the financial sector that the days of coal generation were numbered, a new report finds many commercial banks have ignored it. While loans and underwriting of the coal sector declined in 2023, the bulk of the 638 commercial banks tracked by a coalition of NGOs haven’t changed direction. Some commercial banks even increased support for the coal sector. A separate report on Kohlberg Kravis Roberts reveals the company has far more significant carbon emissions than previously disclosed, including in a Bulgarian lignite mine.

A report by staff of a US Senate committee details many of the tactics and strategies used by the US oil and gas industry to block climate action, including the emphasis on promoting carbon capture and storage (CCS). The coal lobby was one of the early promoters of CCS technology. Despite this, there are only two commercial coal plants in the world with operational CCS plants. A new report details the ongoing underperformance of the CCS plant on Unit 3 of SaskPower’s Boundary Dam lignite plant.

Bob Burton

Features

The dog ate Japan’s plan to phase out coal power

At the recent G7 summit, Japan was only able to sign on to the statement with a “dog-ate-my-homework” strategy, depending on weasel words to cover up for the absence of any serious strategy to wean itself off coal, writes David Fickling in Bloomberg.

Is climate action China’s Trump card?

If former US President Donald Trump returns to the White House, there is a chance that China could fill the gap in global climate leadership by announcing bold emissions-reduction targets for 2035,  write Li Shuo and Lauri Myllyvirta in Project Syndicate.

Avalanche of aid could help Kentuckians reinvent the mountain economy

Eastern Kentucky is about to get an avalanche of federal and state money to help it transition from its largely disappeared coal economy, but some of its towns are already setting examples for the region, writes Al Cross in the Kentucky Lantern.

Campaigns

Top News

Queensland officials dismiss Adani’s water modelling: Sworn statements filed by Queensland Department of Environment and Science officials have highlighted that the Carmichael coal mine operated by Adani subsidiary Bravus Mining poses a potential risk to the nationally significant Doongmabulla Springs. Bravus has launched a legal challenge against an Environmental Protection Order issued by the department requiring the company to redo its modelling on the impacts of the mine on the groundwater resources by the end of May. One official stated in an affidavit that the department could not confirm that current open-cut mining operations are not damaging the springs, while the department’s chief hydrogeologist stated that he had “no confidence” in the company’s modelling. In a separate legal action filed in mid-February in the Supreme Court, the Nagana Yarrbayn Wangan and Jagalingou (W&J) Cultural Custodians are seeking a ban on further open-cut mining in order to protect the springs. (ABC News)

Report finds Canadian CCS plant continues to underperform: A report by the Institute for Energy Economics & Financial Analysis (IEFFA) has found that SaskPower’s Boundary Dam carbon capture and storage (CCS) plant continues to underperform compared to the original goal of capturing one million tonnes of carbon dioxide (CO2) a year. The CCS unit on the 115 MW Unit 3 at the Boundary Dam plant cost over C$1 billion (US$730 million) and was the first commercial coal plant to utilise the technology. IEFFA says SaskPower data shows that in the nine years of the plant’s operation, it captured less than 5.8 million metric tons of CO2 by the end of 2023 or just 63 per cent of the stated goal of capturing 90 per cent of the plant’s emissions. Captured CO2 from the plant has been used to boost oil production at a nearby oilfield. IEEFA notes that the US government estimates that a tonne of C02 used for Enhanced Oil Recovery can produce two to three barrels of oil, with each barrel producing about half a tonne of C02 when burned. IEEFA says that as a result of Saskpower’s use of C02 for oil production, it is likely the project “has led to an increase in global CO2 emissions”. (IEEFA)

US regulator downgrades role of hydrogen for co-firing in coal plants: The US Environmental Protection Agency (EPA) has backed away from its May 2023 proposal that co-firing coal plants with hydrogen would qualify as one of two “best” ways to meet the emissions reduction performance standard for fossil fuel power plants. The final standard identifies carbon capture and storage (CCS) with a 90 per cent capture rate as the “best” option, but co-firing with hydrogen remains allowed. The EPA initially suggested hydrogen co-firing could occur at 30 per cent of fossil fuel power plants by 2032 and hit 96 per cent of plants by 2038. Economic modelling for the agency found that the cost of green hydrogen would be higher in 2030 than initially estimated. (Hydrogen Insight)

Czech groups to file appeal against extension of pollution exemption: Regional government officials have granted a further exemption from mercury emission limits for the 2694 MW Pocerady power plant in the Czech Republic. The Pocerady plant comprises five 200 MW units built in the 1970’s, and two gas units commissioned a decade ago. In 2021, the Usti nad Labem regional council permitted Sev.en Energy to continue operating the first two units of the plant without upgrading pollution controls until June 30 this year. The latest decision allows the company to operate for another three years without pollution control upgrades. A spokesperson for the utility defended the exemption on the grounds that the costs of compliance would exceed the benefits. Greenpeace and a coalition of local groups plan to file an appeal against the regional council’s decision with the Ministry of the Environment. Earlier this year Sev.en Energy revealed it was lobbying the Czech government for subsidies to support the continued operation of the Pocerady plant, the 820 MW Chvaletice lignite power station and the two associated mines. (Seznamz Pravy [Czech], Greenpeace [Czech])

Former FirstEnergy executives dismiss utility’s treatment as victim: Lawyers for two former FirstEnergy executives, Chuck Jones and Michael Dowling, have objected to an Ohio prosecutor portraying the utility as a victim. Jones and Dowling face charges of paying a US$4.3 million bribe to Sam Randazzo just before Ohio Governor Mike DeWine appointed him as chairman of the Public Utilities Commission of Ohio. Randazzo was also charged but subsequently committed suicide. Lawyers for Jones and Dowling allege several current executives of the utility were offered non-prosecution deals if they testified against the two. Jones and Dowling’s lawyers argue that separate federal and state cases made clear that FirstEnergy was involved in the US$63 million scheme to support political candidates in return for legislation to authorise subsidies for two nuclear and two coal plants. The Public Utilities Commission of Ohio is currently seeking auditors to review subsidies paid to Ohio Valley Electric Corporation (OVEC) between 2021 and 2023 for the 1303 MW Clifty Creek coal plant in Indiana and the 1086 MW Kyger Creek coal plant in Ohio. OVEC – which is owned by subsidiaries of AEP Ohio, Duke Energy and AES Energy – has been paid US$500 million since 2020 for the plants under the terms of the legislation. (Toledo Blade, WOSU Public Media)

News

Australia: Bundaberg Regional Council has voted unanimously in favour of a motion to oppose all coal mining on land of high agricultural and environmental value.

India: The Rajasthan government wants to boost solar from currently supplying 12-14 per cent of electricity to over 40 per cent by 2030 to cut purchases of expensive imported power and reliance on coal plants.

India: The Rajasthan government wants to boost solar from currently supplying 12-14 per cent of electricity to over 40 per cent by 2030. This would cut purchases of expensive imported power and reliance on coal plants.

US: Joe Craft, the president and chief executive officer of Alliance Resource Partners, a major US coal producer, will co-host a fundraiser for Donald Trump on May 15.

US: The Energy Information Administration estimates US coal production will decline by 14 per cent in 2024 to about 500 million US short tons (454 million tonnes) and then fall by about 1 per cent in 2025.

Companies + Markets

Report finds coal funding from commercial banks declined in 2023: A report by Urgewald and a coalition of NGOs have found that commercial banks provided US$470 billion in loans and underwriting to the coal industry between January 2021 and December 2023. Commercial banks headquartered in China, the US, Japan, Canada, India, the UK and Indonesia accounted for 92 per cent of the financial support provided to the coal industry. Chinese banks alone accounted for US$321 billion in coal underwriting and a further US$3.2 billion in loans. US-headquartered banks are the next largest supporters of the coal sector, providing US$28.4 billion in loans and US$21.3 billion in underwriting between 2021 and the end of 2023. The report found that while financial support reached an all-time high in 2021 and declined to a record low in 2023, only 140 of the 638 banks tracked have significantly reduced support for the coal sector since 2016. However, 75 banks have increased their support for the industry since 2016. (Financial Times, Urgewald [Pdf])

Australian pension fund excludes thermal coal: Australian Retirement Trust, Australia’s second-largest pension fund, has ruled out investing after July 1 in any mining company that earns more than 10 per cent of its revenue from the mining and sale of thermal coal. Market Forces, an NGO that has mobilised superannuation fund members to pressure their funds to align investments with climate protection, welcomed the decision. The fund’s ‘socially conscious balanced’ option already uses a five per cent threshold. The trust notes in its product update that the exclusion does not apply to metallurgical coal, thermal coal produced for captive coal power plants by electricity utilities or coal trading. (Reuters,  Australian Retirement Trust [Pdf])

Slovenian Prime Minister says coal plant headed for early closure: Slovenia’s Prime Minister Robert Golob confirmed that financial losses are likely to force the early closure of the 945 MW lignite units at the Sostanj coal plants and the associated Premogovnik Velenje mine. Slovenia’s current energy strategy assumes the Sostanj plant continues operating until 2033, but Golob confirmed that a review of Holding Slovenske Elektrarne’s (HSE), the state-owned utility, includes options of closing or significantly reducing generation at the plant within the next three years. Local media reported HSE estimates the continued operation of the lignite plant and mine could result in losses of up to 2 billion (US$2.2 billion) by 2032. The Sostanj plant consists of two lignite units commissioned in 1977 and 2015 and four small gas units.  Slovenia is eligible for 259 million (US$278 million) from the European Union’s Just Transition Fund, including 174 million (US$187 million) for the Savinja and Salek coal region of the Sostanj plant and mine. (Balkan Green Energy News)

Adani companies served with notices by Indian securities regulator:  Adani Enterprises disclosed in its latest quarterly filing that it received two show-cause notices (SCNs) from India’s Securities and Exchange Board of India (SEBI) “alleging non-compliance” with regulations, including on related-party transactions. Adani’s quarterly report stated that it believed there was no “material consequential effect” on its financial position. Separate regulatory returns revealed SEBI had also issued notices to six other Adani entities, including Adani Power, which operates the company’s fleet of coal plants, and Adani Ports, the country’s largest coal importer. The Hindenburg report published in January 2023 accused Adani companies of breaching the related party transaction rules of the Indian stock exchange, claims rejected by the company. (Business Standard)

Report finds KKR underreporting climate impact: A report has found that Kohlberg Kravis Roberts (KKR) has investments in 188 assets across 21 countries with fossil fuel exposure, including the controversial Maritsa lignite mine in Bulgaria. The mine supplies lignite to ContourGlobal’s 908 MW Maritsa Itzok-3 plant. The report by Private Equity Risks Consortium and Global Energy Monitor found KKR owns 17 fossil fuel-based portfolio companies emitting 93 million tonnes of greenhouse gas emissions in 2023, including 5.6 million tonnes from coal power plants. The report estimates the emissions from KKR’s investments are 6500 times higher than the figure the company disclosed to investors in its latest Sustainability Report. (Private Equity Climate Risks)

Indian imports of Russian metallurgical coal surge: Indian imports of Russian metallurgical coal have almost tripled in the last three years. In 2021-22, India imported 5.1 million tonnes of metallurgical coal from Russia, representing eight per cent of the total compared to the 15.1 million tonnes imported in 2023-24. According to the research consultancy Big Mint, Russia currently accounts for about 21 per cent of the 73.2 million tonnes of metallurgical coal India imported in 2023-24. India produces little metallurgical coal domestically and, with rapid growth in steel production, has increased imports. (NDTV)

Demand collapses for Peabody Energy’s US coal: Peabody Energy has forecast that coal production in the quarter to June 30 from its Powder River Basin mines in Montana and Wyoming will be about 15.5 million US short tons (14 million tonnes), the lowest level in more than a decade. The company estimates that it will produce between 131.8 and 143.8 million US short tons (120-130 million tonnes) of coal for the year to June 30 from all its US and Australian mines. In 2019, Peabody Energy produced 164.7 million US short tons (149 million tonnes). (Cowboy State Daily)

Green Steel Transition

Resources

“Phasing out coal power in two major Southeast Asian thermal coal economies: Indonesia and Vietnam”, Energy for Sustainable Development, June 2024.

This paper identifies the key barriers hindering support for a coal phase-out in Indonesia and Vietnam. In Indonesia, stakeholders identified power prices as a critical factor, and in Vietnam, electricity shortages were the dominant concern.

The real cost of steel: environmental racism, sacrifice zones and impunity along the supply chain, Fair Steel Coalition, May 2024. (Pdf)

This 54-page report scrutinises the environmental and human rights impacts of steel production with a particular focus on ArcelorMittal and Ternium. The report includes case studies on steel and iron ore projects in Mexico, Liberia, South Africa and Brazil.

Denial, disinformation and doublespeak: Big Oil’s evolving efforts to avoid accountability for climate change, US Senate Committee on the Budget, April 2024. (Pdf)

This 65-page report documents what internal US oil and gas company records revealed about their strategies to oppose climate action. It includes an extensive section on the industry’s promotion of carbon capture and storage and algae-based biofuels, technologies also promoted by the coal industry.

Coal in Siouxland: MidAmerican Energy’s Legacy of Air Pollution and Health Impacts, Iowa Environmental Council, April 2024. (Pdf)

This 18-page report highlights the health impacts of two MidAmerican Energy coal plants on people living in three countries around Sioux City, Iowa.