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December 14, 2023
Issue 494  |  View Past Issues
CoalWire
Published by Global Energy Monitor

Editor's Note

The major divisions in the last days of the COP28 negotiations over what, if any, language to include on cutting fossil fuel use is hardly unexpected. The divisions illustrate that while the technologies to decarbonise power, heating, and transport are competitive, the major producers of coal, gas, and oil continue their fierce resistance to acknowledging that the era of fossil fuel decline is here. The outcomes of these conferences can be helpful in incrementally shifting domestic policies, but perhaps the most significant impact is in signalling the direction and speed of travel for public and private financial institutions.
 
In China, the release of a plan to cut PM2.5 fine particle air pollution by 10 per cent with specific emphasis on cutting coal consumption is big news. Other developments are more concerning. The South African Cabinet has approved a new plan to delay the decommissioning of Eskom’s old coal plants. The new plan’s details are not yet public, but if past indications are anything to go by, new renewables may be delayed in favour of more gas, nuclear, and perhaps even new coal capacity. Leaked UK government briefing notes suggest that Vietnam’s interest in limiting new coal capacity and phasing it out in the longer term is half-hearted, with some ministries engaging in “foot-dragging”.

Bob Burton

Features

Inside the battle to decarbonise the world’s dirtiest refinery

South Africa’s Secunda coal-to-oil plant has higher emissions than Portugal, but investors are piling on the pressure for change, write David Pilling and Joseph Cotterill in the Financial Times.

How coal baron Daniel Kretínsky’s EPH holding managed to mask more than half of its carbon emissions

EPH, the Czech Republic’s largest company, is far from being the European leader in decarbonisation it likes to portray itself as, writes Daniel Kotecky in VoxEurop.

Vietnam relied on environmentalists to secure billions. Then it jailed them.

The Vietnamese government has arrested several prominent environmentalists from those organizations who shaped policies that helped secure US$15.5 billion in funding for the Just Energy Transition Partnership, prompting concerns over sending money to countries that have violated human rights, writes [paywall] Sui-Lee Wee in the New York Times.

The race is on to make low-emissions steel. Meet one of the companies vying for the lead.

H2 Green Steel of Sweden estimates the additional cost of a car using low-carbon steel might be US$100, writes Dan Gearino in Inside Climate News.

Top News

Fossil fuels at the centre of COP28 wording disputes: After prolonged disagreements over possible wording from the COP28 climate conference, the United Arab Emirates Special Envoy for Climate Change, Dr Sultan Ahmed Al Jaber, won agreement for text that “calls on” parties to contribute to efforts “Transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050”. In the UN lexicon, “calls on” is the weakest option and equivalent of a request. The text retained the wording from the November 2021 COP26 in Glasgow that endorsed the need for “accelerating efforts towards the phase-down of unabated coal power”. However, the final text omits earlier wording Al Jaber proposed supporting “rapidly phasing down unabated coal and limitations on permitting new and unabated coal power”. A group of countries that includes China and India objected to any language suggesting a “phase-out” or “phase-down” of any specific energy source. The final vote on the text was taken by Al Jaber when the Alliance of Small Island States, the strongest advocates for a 1.5 degree target, criticised the significant loopholes in the final text. (Politico, Guardian, Alliance of Small Island States, United Nations Framework Convention on Climate Change)

IEA says climate pledges are insufficient to meet 1.5 degrees target: An International Energy Agency (IEA) review undertaken towards the conclusion of the COP28 conference found that all governments’ climate commitments would deliver just 30 per cent of the necessary greenhouse gas emissions reductions to reach the Paris Agreement pathway. The IEA review assumed the full implementation by the 130 governments that pledged to triple renewables capacity by 2030, double the rate of energy efficiency improvements by 2030, and achieve promised methane emissions reductions by eliminating routine flaring and ceasing emissions by 2030. (International Energy Agency)

China releases plan to cut air pollution: China’s State Council, the country’s cabinet, has released an air quality plan that targets a 10 per cent reduction in concentrations of PM2.5 fine particle pollution from 2020 to 2025. The targets apply to all 337 Chinese cities. The plan also specifies that coal consumption in the Beijing-Tianjin-Hebei region and neighbouring areas should fall by 10 per cent by 2025 compared to a 2020 baseline. In the Yangtze River Delta, the target is for a five per cent fall by 2025 compared to 2020 and negative growth in coal use in Fenwei Plain, one of the most polluted regions in China. The plan also bans the construction of new steel mills and backs the need to limit the construction of significant new energy and emissions-intensive projects. (Reuters, Global Times, State Council [Chinese])

Incoming Polish Prime Minister names cabinet: Donald Tusk, the leader of Civic Coalition (KO), has been sworn in as Poland’s new Prime Minister after the Law and Justice (PiS) leader, Mateusz Morawiecki, lost a motion of confidence on December 12. Tusk’s Civic Coalition has joined with two other political groups, the Third Way and New Left parties, to form a government. The outgoing right-wing PiS party had vowed that a coal phase-out would not occur until 2049. The new government will support a rapid expansion of renewables, build new transmission capacity, increase energy efficiency, and reduce the use of coal for home heating. Tusk has named Paulina Hennig-Kloska from the centrist Third Way as Minister for Climate and Environment. However, the new government may face opposition from President Duda, a former PiS MP whose term runs until late 2025 and who has the power to initiate and veto bills. According to the Global Coal Plant Tracker, Poland has 42 operating coal plants with a combined capacity of 29,130 megawatts (MW) and a 100 MW unit under construction. (BBC, Notes from Poland)

Indian parliament expels Adani critic as MP: A majority of India’s Lok Sabha, the lower house of parliament, has expelled Mahua Moitra, a member of the All India Trinamool Congress, just over two hours after tabling a 495-page report alleging ethical breaches by the MP. Moitra, a former investment banker, has challenged the Modi government over its close ties with the Adani Group and criticised the failure of government agencies to conclude investigations into the company’s overseas shareholders and alleged over-invoicing of imported coal. Moitra’s former partner, who is in a legal battle with the MP over custody of a dog, alleged she had accepted cash and other gifts from businessman Darshan Hiranandani in return for asking questions critical of Adani Group operations. The Adani Group said the claims by Moitra’s former partner confirmed the claim that “some groups and individuals have been working overtime to harm our name, goodwill and market standing”. While Moitra acknowledges she shared the password to her parliamentary account with Hiranandani, no evidence of any payments has been revealed. Moitra has filed a legal challenge against her expulsion with the Supreme Court of India. (Financial Times, The Wire, The Hindu)

Few Indian coal plants operate with sulphur dioxide controls: A review by the Centre for Research on Energy and Clean Air (CREA) has found that just eight per cent of India’s 842 coal units have installed flue gas desulfurisation (FGD) units as recommended by the Ministry of Environment, Forest and Climate Change (MoEF&CC). In December 2015, the ministry unveiled emissions standards to slash sulphur dioxide, nitrogen oxides, and mercury pollution from power plants, with the new standards to take effect by the end of 2017. Since then, the compliance deadline has been extended four times for units in Delhi and the National Capital Region (NCR) and three times for most other units across the country. CREA found that as of October 2023, only 2600 MW of the 13,400 MW of coal capacity within a 300-kilometre radius of Delhi meet the current standards, with pollution control units for 3400 MW being contracted or under construction. At a national level, only 16,500 MW of the country’s 202,000 MW of coal capacity have FGD units and only 5900 MW use circulating fluidised bed combustion, a technology that slashes emissions. (Down to Earth, Centre for Research on Energy and Clean Air)

Coal companies sue a Canadian province over mining policy changes: Five coal mining companies have launched legal actions against the government of Alberta and are seeking C$10.8 billion (US$8 billion) in compensation over the cancellation of exploration leases on the Eastern slopes of the Rocky Mountains. The five companies – Cabin Ridge Project, Atrum Coal and its subsidiary Elan Coal, Black Eagle Mining Corporation and Montem Resources – stood to benefit from Alberta’s shock 2020 decision to scrap its 1976 coal policy, which restricted the development of new coal projects on exploration on the eastern slopes of the Rocky Mountains. Following a massive public backlash, the province reinstated the 1976 Coal Policy, cancelled some exploration licences, and instituted a moratorium on new leases pending the conclusion of a review. The case is slated for trial early next year. (Globe and Mail [paywall])

US groups call for ban on use of coal ash in soil fill: A recently released US Environmental Protection Agency (EPA) risk assessment report identified potential health risks associated with exposure to radioactive coal ash from disposal sites. The report identified potential risks where coal ash dams are repurposed for residential developments, finding that cancer risks exceeded US health standards when coal ash comprised as little as one or two per cent of a soil mix. The study found the cancer risk exceeded the threshold for regulation when coal ash exceeded eight per cent of a soil mix. Following the release of the report, a coalition of 153 environmental and public interest groups called on the EPA to issue a public advisory recommending an immediate end to the use of coal ash in fill used in residential areas and commence the regulatory process to ban the use of coal ash as structural fill. The coalition’s letter to the EPA noted that coal ash can be used as fill without mixing with soil or covering with a significant layer of soil to minimise radiation from gamma rays or radon gas. (Earthjustice, Environment Protection Agency [Pdf])

News

Australia: The derailment of an empty coal train near Muswellbrook sparked a 40-hectare bushfire.

Australia: The Mining and Energy Union has called for charges against three of Sojitz Blue’s Gregory Crinum coal mine staff for turning off ventilation and gas monitoring systems in December 2022.

Germany: The German government has allocated €2.6 billion (US$2.8 billion) to support companies in the state of Saarland to decarbonise steel production.

South Africa: A Gupta family lawyer wants the Gauteng High Court to remove the business rescue practitioners of Gupta-owned companies Tegeta Exploration and Resources, Koornfontein Mines, Optimum Coal Terminal, and Optimum Coal Mine.

South Africa: Glencore has been added to a class action against coal mining companies seeking compensation for mine workers who contracted lung diseases.

South Africa: Data reveals that Eskom customers have endured 331 days of rolling blackouts in 2023, 127 days more than in 2022.

Vietnam: The Ministry of Industry and Trade wants Vinacomin to expedite an agreement for Dong Bac Corporation to import coal from Laos for supply to Electricity of Vietnam’s coal power plants.

Companies + Markets

European Commission approves €2.6 billion for German coal closures: The European Commission has approved Germany’s decision to pay €2.6 billion (US$2.8 billion) in state aid to RWE to cover the rehabilitation and closure costs of RWE’s lignite mines. The agreement was initially agreed to in 2020 to cover the costs of the 2038 coal end date. RWE has decided to bring forward the closure of its lignite units to 2030 partly due to the doubling of European Union (EU) carbon prices to €68 per tonne (US$73 per tonne). Rising EU carbon prices mean coal is unlikely to remain profitable for much longer. Germany’s energy regulator estimates EU carbon prices could increase to about €125 per tonne (US$135 per tonne) by 2030, rendering the remaining lignite plants uneconomic. LEAG, a subsidiary of the Czech-owned EPH, is seeking €1.75 billion (US$1.9 billion) in compensation for closing operations by 2038. (Bloomberg [Paywall], European Commission, RWE)

UK government notes reveal concerns about Vietnam’s transition deal: UK government briefing notes have revealed internal concerns about Vietnam’s US$15.5 billion Just Energy Transition Partnership (JETP) backed by the G7 and a coalition of countries. The notes showed frustration in negotiating the deal, complaining that Vietnam’s powerful ministries of energy, finance and planning had engaged in “persistent obstructionism” and “foot-dragging” and slowed negotiations with “blockages and bureaucracy”. The JETP was negotiated through Vietnam’s Ministry of Natural Resources and Environment, which the briefing notes referred to as “politically weak” and warned that the “cross-government consensus” for action on climate change is “increasingly fragile”. The notes also noted the “worsening situation” in Vietnam with the jailing of climate and other NGO leaders. The UK government’s formal announcement said, “It is vital that civil society is actively involved in a transparent manner at all stages of the JETP to make sure the necessary transition will be just and inclusive”. The Resource Mobilisation Plan developed as part of the plan was unveiled on December 1 at COP28 with the hope it would “bolster the progressive elements” of the Vietnamese government, including Prime Minister Pham Minh Chinh. (Politico, Republic of Vietnam [Pdf], UK Government)

South African government proposes delaying coal plant closures: The South African Cabinet has agreed on an updated Integrated Resource Plan (IRP) that the Minister for Electricity, Kgosientsho Ramokgopa, confirmed includes changes to the delaying the closure dates of some of Eskom’s old coal plants. The 2019 IRP included a decommissioning schedule for Eskom’s Camden, Hendrina, Grootvlei, Arnot, Kriel, and Komati coal plants by 2030. Only the Komati plant has subsequently been closed, a decision which Mineral Resources and Energy Minister Gwede Mantashe criticised. The IRP also sets out plans for increased generation based on cost and other factors. Ramokgopa said the latest version of the IRP will soon be published by Mantashe, after which it will be open for public comment. (Engineering News, News24)

Study finds high reliance on CCS would cost trillions more: A study by Oxford University’s Smith School of Enterprise and the Environment has found that achieving net-zero emissions targets by 2050 by renewable energy, energy efficiency, and electrification would be at least US$30 trillion cheaper than relying on carbon capture and storage (CCS). The study reviewed the cost estimates of projects with CCS over the last 40 years and found no evidence of declining costs, unlike competing renewable technologies. “Our findings indicate a lack of technological learning in any part of the process, from CO2 capture to burial, even though all elements of the chain have been in use for decades,” said Dr Rupert Way. While the authors agree CCS may be necessary to decarbonise some industries, study co-author Richard Black said that “seeing it as a way to compensate for ongoing fossil fuel burning is economically illiterate”. (Down to Earth, Smith School of Enterprise and the Environment [Pdf])

Plans emerge for new Zimbabwe coal plants: The Zimbabwe Electricity Supply Authority (ZESA), the state-owned electricity utility, revealed it is aware of two proposed new private coal plant proposals with a combined capacity of 1600 MW. ZESA executive chairman Dr Sydney Gata attributed the new interest in independent power projects to a recent increase in tariffs paid to power producers. In late November, Prestige Massive announced it is seeking an electricity generation license from the Zimbabwe Energy Regulatory Authority for a 1200 MW captive coal plant to supply a proposed ferrochrome smelter proposed by Xintai Resources, with surplus electricity for export to the grid. Xintai Resources also proposes expanding production at the existing Tuli coal mine, establishing a coal washery and a coking plant and exporting coal to the international market. (Bulawayo24 News, The Chronicle)

Resources

How to get coal country to vote for climate policy: the effect of a “Just Transition Agreement” on Spanish election results, Cambridge University Press, December 4, 2024.

This paper argues that the “Just Transition Agreement” (JTA) negotiated by the Socialist Party government with affected unions and businesses proved electorally popular in coal mining municipalities.

“EPH’s transition plan faces heightened scrutiny after new bond issuance”, Institute for Energy Economics & Financial Analysis, December 0, 2023.

This article reviews the increasing reliance by the Czech energy group EPH on international bonds and flags the risk that the company’s long-term funding access may be constrained by its lack of a transition plan away from fossil fuel generation, including coal plants in Italy and France.

What are green cement and concrete? Definitions and scopes from standards, initiatives, and policies around the world, Global Efficiency Intelligence, December 2023.

This 118-page report provides an overview of various standards and initiatives to decarbonise the global cement and concrete industry.

Global Coal Phase-out: Tracking Coal Plant Retirements, Global Energy Monitor.

This webpage uses an interactive approach to presenting data on coal plant retirements.

An Equitable Phase Out of Fossil Fuel Extraction, Civil Society Equity Review, December 2023. (Pdf) (The Executive Summary is here [Pdf]).

This 20-page report proposes a science- and equity-based framework for phasing out fossil fuel extraction to limit warming to 1.5°C. The report identifies dates by which countries should end coal, oil and gas extraction.