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June 22, 2023
Issue 471  |  View Past Issues
CoalWire
Published by Global Energy Monitor

Editor's Note

How fast should a transition away from existing coal plants be? Poland, which has long resisted measures to clean its air and expand renewables, is pushing for reforms to the European Union’s (EU) energy market to include an extension for subsidies for coal plants. In the Philippines, the Asian Development Bank is modelling the feasibility of an accelerated transition away from coal power. In South Africa, renewables may be the cheapest source of new generation, but influential players are seeking to stall or slow a transition away from coal.

In South Korea, the steel industry wants the government to push the EU to slow down the implementation of measures to prevent exporters selling high-emissions steel and undercutting domestic producers facing higher costs because of emissions-reduction measures. A new report outlines what it would take to shift the global steel industry away from reliance on coal-intensive production by 2043. Some coal-reliant steel producers and many power utilities have touted the potential of carbon capture and storage (CCS) as the preferred pathway to cut emissions. A new report examined the challenges encountered by two long-running CCS projects in Norway’s oil and gas sector and concludes there are substantial questions about the feasibility of the technology safely sequestering significant amounts of carbon dioxide.

Bob Burton

Features

Why a huge coal power plant in Bangladesh keeps running out of coal

The problems encountered with a new plant in Bangladesh serve as an early warning for countries, especially poorer ones, investing in new coal-burning plants even as solar and wind get cheaper, write Somini Sengupta and Julfikar Ali Manik in the New York Times.

South Africa’s coal lobby is resisting a green transition

Coal lobbyists defending industry interests have met with politicians and are opposing South Africa’s transition to renewables, writes Thabo Molekwa in Oxpeckers.

Big batteries storm the fossil fuel citadels and spell the end for coal and gas

The rapid emergence of big batteries will accelerate the decline of coal and gas plants, writes Giles Parkinson in RenewEconomy.

Indonesian coal giant Adaro’s ‘sustainable’ smelter slammed as ‘greenwashing’

Indonesia’s largest coal miner, PT Adaro Energy, faces claims of greenwashing over its plan to build coal-fired power plants on the island of Borneo to provide electricity for an aluminium smelter,  writes Hans Nicholas Jong in Mongabay.

Top News

Eskom coal plant manager confirms his life was threatened: Sello Mametja, the former general manager of Eskom’s Tutuka coal plant, told the South African parliament’s Standing Committee on Public Accounts (Scopa) that his “safety circumstances are quite challenging” and the two years he spent at the plant “have been hell”. Mametja confirmed “theft, fraud, corruption and sabotage” existed at the power station stating employees had attempted to drive him out of the plant. Eskom’s Group Executive responsible for Legal and Compliance, Mel Govender, told the committee staff named in the Zondo Commission report into state capture were no longer working for the utility and that it was awaiting responses from government regulators on briefs compiled on four former directors. She said the utility’s state capture task force currently has action underway against 76 suppliers. (EWN, Mail & Guardian, TimesLive)

Protests interrupt Newcastle coal port operations: A Blockade Australia activist blocked railway access to the Newcastle coal terminal for several hours until removed by police. Twenty-two-year-old Raffi said the protest at Australia’s largest coal export terminal was against Australia’s lack of climate action. The following day the port was temporarily closed by another protest. The latest data indicates Newcastle Port, which primarily exports thermal coal, shipped almost 117 million tonnes of coal in the 11 months to the end of May. Coal exports through the port fell from a peak of 164 million tonnes in the year to the end of June 2020 to 154 million tonnes in each of the last two years. Declining prices, labour shortages and significant rainfall events have hit coal exporters. (Guardian, Blockade Australia, Australian Financial Review [Paywall])

US power utilities revealed as big donors to ‘dark money’ groups: An analysis by Floodlight and the Guardian that revealed 25 US for-profit power utilities have made political donations of at least US$215 million to ‘dark money’ groups that aren’t required to disclose the sources of their funding. Since 2002 federal regulators have not required power utilities to disclose detailed disclosure of political spending, and few states require disclosure. Twenty-three utilities self-disclosed contributions of US$100m to groups between 2014 and 2020. Regulators and the Department of Justice discovered a further US$115 million in utility funding. The groups funded by utilities have participated in campaigns to approve increased power prices, backed the campaigns of political candidates and blocked or slowed the rollout of solar. (Guardian)

US agency to reconsider climate impacts of Utah mine expansion plan: The US Bureau of Land Management (BLM) has begun the process of revising key elements of the environmental impact statement that was relied on in the 2019 approval of an expansion of Alton Coal Development’s Coal Hollow mine in Utah. The reassessment of the project follows a 2021 court ruling in a case brought by Utah Physicians For A Healthy Environment and a coalition of environmental groups. The proposed mine is near Bryce Canyon National Park. The company is seeking permission to access 30 million US short tons (27.2 million tonnes) of coal from public lands. The court ruled the BLM had failed to take proper account of the cumulative impacts of increased carbon emissions from the mine and similar projects. The court also found the BLM had failed to account for the social costs of climate damage from the project’s emissions. In early 2022 Utah regulators shut down the company’s existing mine over the failure to post a valid US$23.4 million reclamation bond. (Bureau of Land Management)

UK government aims to remove a ban on new coal mines from energy bill: The UK government is planning to amend its own Energy Bill to remove provisions added by a narrow majority of the House of Lords banning the opening of new coal mines and preventing the Coal Authority from licensing them. The move to enshrine a ban on new coal mines in legislation followed the decision by Michael Gove, the Secretary of State for Levelling Up, Housing and Communities, to grant planning permission in December 2022 for West Cumbria Mining’s proposed Whitehaven metallurgical coal mine. Even if the government succeeds in amending its bill, the project faces a further legal hurdle, with the UK High Court set to hear a challenge against Gove’s decision by Friends of the Earth and South Lakes Action on Climate Change. The three-day hearing is scheduled for 24-26 October. (BBC)

“Let’s face facts. The problem is not simply fossil fuel emissions. It’s fossil fuels – period. The solution is clear: The world must phase out fossil fuels in a just and equitable way -- moving to leave oil, coal and gas in the ground where they belong – and massively boosting renewable investment in a just transition,”

said Antonio Guterres, the United Nations Secretary-General.

News

Australia: West Australian government will pay A$23.2 million to keep the Griffin coal mine operating to supply local coal power stations.

Germany: Low water levels in the Rhine River are hampering coal delivery to power plants reliant on barge transport.

India: A fire, fanned by strong winds from Cyclone Biparjoy, ripped through a coal stockpile at Okha Port in Gujarat.

Japan: Hokkaido Electric Power will restart its 700MW Tomato-Atsuma No.4 coal unit in August. The unit was shut down in March after cracked steam pipes were discovered.

US: The 1300 MW Pleasants coal plant in West Virginia has been mothballed since June 1 as state officials and energy companies try to prevent the closure of the 43-year-old plant.

US: Ohio Republican leadership has moved to block a bill repealing subsidies for two coal plants.

Vietnam: Vinacomin aims to increase coal production to 39.7 million tonnes, a 15 per cent increase over 2022.

Companies + Markets

Report says flagship oil and gas CCS projects illustrate risks: A report by the Institute for Energy Economics & Financial Analysis (IEEFA) argues two long-running carbon capture and storage (CCS) projects in Norway highlight significant challenges with the technology. The  Sleipner and Snohvit projects have been operating since 1996 and 2008, respectively. The two CCS projects, which together have stored 22 million metric tonnes of carbon dioxide in underground reservoirs, are frequently cited by CCS advocates as success stories. IEEFA’s report highlights that, despite extensive geological research, stored carbon dioxide had migrated to a previously unknown layer in the formation three years after the Sleipner project began. Eighteen months after the Snohvit project began storing carbon dioxide, it was discovered that the geological formation had only six months of storage capacity instead of another 16 years. The consortium had to urgently switch to use another geological formation. IEEFA argue problems at the two projects raise questions about whether the world has the technical prowess, regulatory oversight, and long-term resources needed to ensure carbon dioxide from CCS projects remains safely sequestered. (IEEFA)

Proposal for development of ‘coal-to-clean’ carbon credits: The Rockefeller Foundation and Global Energy Alliance for People and Planet (GEAPP) has launched the Coal to Clean Credit Initiative (CCCI) to finance the early closure of coal plants in countries such as Indonesia, Vietnam and South Africa through the sale of ‘coal-to-clean’ credits. CCCI says about 90 per cent of coal plants are insulated from competition due to long-term contracts and have no incentive to retire early. CCCI said its proposed methodology is open for comment at local consultations and aims to present it at the COP28 climate conference in November this year. CCCI noted that if the proposed methodology is accredited, it could have credits for sale in 2024. CCCI said it aims to use funds from selling “high integrity” ‘coal-to-clean’ credits to finance clean energy and other projects identified in just transition plans developed with local communities. (Rockerfeller Foundation)

ADB to model accelerated Philippines coal retirement plan: The Asian Development Bank’s (ADB) principal energy specialist, David Elzinga, said the bank is aiming to complete its full feasibility study by mid-2024 on accelerating the retirement of the Philippines coal fleet. The Philippines has 25 operating coal plants with a combined capacity of 11,893 MW and two more projects under construction. Elzinga said the ADB is working with the Philippines government to submit an investment plan for consideration under the Climate Investment Funds Accelerating Coal Transition program by November. He said the aim is to identify coal-to-clean energy projects the ADB and the World Bank can support. (GMA Network)

Poland pushes to extend the end date for coal subsidies: Sweden, with the backing of Poland, has proposed allowing European Union countries to continue providing subsidies for coal plants in capacity mechanisms. The proposal would allow subsidies for coal plants if capacity schemes introduced before July 2019 failed to attract sufficient interest from low-carbon generation. The proposal emerged as EU energy ministers sought to reform the bloc’s energy market rules to increase renewables’ capacity to avoid an overreliance on imported gas. The EU also bowed to the threat by France to block the EU reforms unless nuclear was included alongside renewables, a change Germany, Austria and Luxembourg initially objected to over concern it would divert investments away from expanding renewables. The European Commission agreed to France’s proposed change. (Reuters, Financial Times, Guardian)

Call to enforce sanctions against Australian company with Russian mine: A coalition of Australian and Ukrainian NGOs, including both Transparency International Australia and Ukraine, has called on Australia’s Foreign Minister Penny Wong to rule out granting a permit that would allow Australian-headquartered Tigers Real Coal to continue developing a metallurgical coal project in Russia’s Far East. In April, the Department of Foreign Affairs and Trade warned Tigers Realm Coal it could breach Australian sanctions on Russian entities. Subsequently, the company said it may seek a permit to allow it to continue operating or could delist from the Australian Stock Exchange and become a private company. Melissa Chen from the Australian Centre for International Justice said the sanctions laws would still apply if the company opts to go private. She noted that RDIF Investment Management LLC holds a 7.93 per cent stake in the company and asked if it was related to the Russian Direct Investment Fund (RDIF), a Russian government-owned agency that the Australian government has sanctioned. RDIF funded Tigers Real Coal in 2014 when it first developed its mining project. (SBS, Australian Centre for International Justice)

New questions over Adani family ties as the group seeks debt refinance: The Adani Group is seeking support from global and other banks to refinance up to US$3.8 billion of a loan facility established for its takeover last year of Ambuja Cement, a prominent Indian cement producer. Anonymous sources said that Adani is considering converting the short-term loan into a debt with an extended maturity period. The proposed deal would be the first test of the degree of financial industry support for the Adani Group after the US short-selling firm Hindenburg Research accused the company of not disclosing numerous related party transactions. Adani Group is facing new concerns as Bloomberg reported that Adani Group subsidiaries had a law firm undertake independent reviews of the transactions referred to in Hindenburg’s report, but the company did not respond to a specific inquiry about whether it used Cyril Amarchand Mangaldas (CAM), a firm headed by Gautam Adani’s daughter-in-law, Paridhi Adani.  (Times of India, Economic Times)

Green Steel Transition

Report says feasible for coal-based steel plants to be gone by mid-2040s: More than 90 per cent of the steel industry’s existing blast furnace fleet can be phased out by 2040 without premature shutdown, according to a report by two German think tanks, Agora Industry and the Wuppertal Institute for Climate, Environment and Energy. The report estimates it is possible for all coal-based steel plants to close by 2045 if the right mix of policies and technologies are adopted. Carbon capture and storage, once touted as a likely pathway to cut emissions from coal-based blast furnaces, were found to be unlikely to play much of a role due to the rapid growth in interest in hydrogen-based steelmaking. The report finds other critical elements in a 1.5°C compatible steel sector are increased material efficiency and greater production from scrap-based electric arc furnaces. The report argues that it will be cheaper for steel producers to import iron produced from locations with access to low-cost renewables-based hydrogen than to cover the additional cost of importing ammonia or hydrogen by ship. However, the think tanks warn there is a considerable risk the proposed rapid growth of new coal-based steel plants in countries such as India, China and Southeast Asia could become stranded assets or lock-in high emissions for their average 40-year life span. (RenewEconomy, Agora Energiwende [Pdf])

South Korean steel industry wants changes to EU carbon plan: Major South Korean steelmakers have called on the government to press the European Union to relax parts of its proposed Carbon Border Adjustment Mechanism (CBAM). The mechanism aims to protect European industry from unfair competition from emissions-intensive international producers that are not subject to the EU measures that penalise greenhouse gas emitters. The EU has proposed that international producers can use their own methodology to calculate embedded emissions of their goods until 2024 rather than the EU’s methodology. The South Korean steel producers want this grace period extended. The EU has proposed the CBAM will come into effect in 2026. South Korea exported US$4.4 billion of steel and US$960 million of steel products to Europe in 2022. Coal-based blast furnaces account for nearly 70 per cent of South Korea’s steel production. (The Korea Herald)

Resources

“Adani Group hasn’t been the same after Hindenburg research report: Paranjoy Guha Thakurta”, Vartha Bharat, June 14, 2023.

The Indian investigative journalist Paranjoy Guha Thakurta reflects on the impact of the Hindenburg Research report on the Adani Group and the growing threats to India’s independent media sector.